Final Sectoral Prj

IDENTIFYING VARIOUS DISTRIBUTION CHANNEL & FRAMING CUSTOMER BASE THROUGH P.N.B. A Thesis submitted in partial fulfillment of the requirements for The award of the Degree of

MASTERS OF BUSINESS ADMINISTRATION By

DEPT. OF MASTER OF BUSINESS ADMINISTRATION BIRLA INST. OF TECHNOLOGY, LALPUR EXT. RANCHI-834001.

PREFACE

As a part of MBA student curriculum every student is required to submit the project report for the partial fulfillment of the course. It is also very necessary to acquire practical knowledge on the specialized field against the theoretical base.

My project on “IDENTIFYING VARIOUS DISTRIBUTION CHANNEL & FRAMING CUSTOMER BASE THROUGH P.N.B.”.

The report consists of the theory related to my project as well a practical analysis of the theory to my project as well as practical analysis like tables and graphical representations of data gathered by the survey. The survey consisted of the following segments :

    

ENGINERS BUSINESSMAN CHARTERTED ACCOUNTANTS HOUSE WIVES STUDENTS

The report also contains various important aspects by which we achieved our primary & secondary objectives.

EXECUTIVE SUMMARY

I was given the task for expansion of distribution channel of Kotak Mahindra Life Insurance company Ltd & in this task focus on expansion through advisors.

I mainly worked by collecting data , making telephone calls to prospects, having an appointment with them and presenting an impressive personality. I collected data on the basis of survey for expansion & the survey was divided into following segments.

ENGINEERS  BUSINESSMAN  CHARTED ACCOUNTANTS  HOUSE WIVES  STUDENTS 

Before selecting the prospect I evaluated every pros & cons of the prospect & then filtering out the efficient prospect. Finally, I submitted the report to the unit manager/ Sales manager for profiling of the respective prospects.

CONTENTS

1. INTRODUCTION 2. INDUSTRY PROFILE 3. HISTORY 4. COMPANY PROFILE 5. ACHIEVEMENTS OF THE COMPANY 6. INTRODUCTION TO DIFFERENT INSURANCE POLICIES 7. OBJECTIVES OF THE STUDY 8. RESEARCH METHODOLOGY 9. DATA SOURCES 10. RESEARCH APPROACH 11. METHODS OF DATA COLLECTION 12. RESEARCH DESIGN 13. ABOUT INTERACTION WITH CUSTOMERS 14. LIMITATIONS 15. RECOMMENDATIONS 16. BIBLIOGRAPHY

INTRODUCTION

INSURANCE Security against a contingent loss.

Where ever there is uncertainty there is risk. The risk cannot be averted. The risk is uncertainty of the financial loss .we don’t have any command on uncertainties. This makes it is essential that we think in favor of advice that becomes instrumental in spreading the loss. It is in this context that we think about Insurance, which is considered to be a social device to accumulate funds to meet uncertain losses. The Main Functions of Insurance Is To Provide

 To provide protection against the possible changes of generating losses.  It eliminates worries to miseries of losses of poverty and death.  It provides capital to national economy since the accumulated funds are invested in productive heads.

INTRODUCTION TO THE TOPIC

The report disciusses the work done by the trainee Miss Archana Choudhary and Samridhi Samyak in Masters of Business Administration BIT Lalpur Ext. [Ranchi] .

The purpose of this training was to have practical experience of working in an organization , in the field of marketing and to have exposure to the various management practices in the field of Insurance.

The main purpose of the project was basically for expansion of distribution channel of Kotak Mahindra & focus on expansion through advisors based on extensive market survey & prospects meeting.

HISTORY

1912: The Indian Life Insurance Companies Act Enacted Us the first regulate the we insurance business.

1928: The Indian insurance companies act enacted to enable the government to collect statistical information about both life and non life insurance business .

1938: Earlier legislation consolidated and amended by the insurance act with the objective of protecting the interest’s o fetch insuring public.

1956:

Indian as well as foreign insurance and provident societies taken by the central Govt. are nationalized. LIC formed by an act of parliament, LIC act, 1956 with a capital contribution of us. 5 cores form the Govt. of India. The general insurance business in India ,on the other hand can trace its roots to the Triton insurance company ltd., the first general insurance company established in the year 1850 in Calcutta by the British .

INSURANCE SECTOR REFORMS In 1993 Malhotara committee headed by former finance secretary and rbi governor Malhotra was formed to evaluate yhe Indian insurance industry and recommend to evaluate the Indian insurance industry and recommend its future direction. The Malhotra committee was set up with the objective of complementing the reforms initiated in the financial sector . the reforms were aimed at “ creating a more efficient and competitive financial system suitable for the requirements of the economy keeping in mind the structural changes currently underway and recognizing that insurance I san important part o the overall financial reforms . In 1994 the committee submitted the report and some of the key recommendation s included.

•

STRUCTURE :

Government stake in the insurance companies to be 50 %.

•

Competition:

brought down to

Private companies with a minimum paid up capital of Rs. 1bn. should be allowed to enter the industry. No company should deal in both life and general insurance through a single entity. Foreign companies may be allowed to enter the industry in collaboration with the domestic companies. Postal life insurance should be allowed to operate in the rural market. Only one state level life insurance company should be allowed to operate in each state.

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REGULATORY BODY : The insurance act should be changed .

An insurance regulatory body should be set up. controller of insurance (currently a part of from the finance ministry) should be made.

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INVESTMENT : Mandatory investment of LIC life fund in Govt securities to be reduced from 75% to 50%.

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CUSTOMER SERVICE : LIC should pay interest on delays in payments beyond 30 days .insurance companies must be encouraged to set up unit linked pension plans.

ENTRANCE OF PRIVATE PLAYERS IN INSURANCE SECTORS

India still has a low insurance penetration of 1.95 % 51st in the world .despite the fad India boasts a saving rate of around 25 %, less than 5% is spent on insurance.

The insurance landscape in India is undergoing major changes , close to foreign completion since nationalization in 1956 ,the life insurance industry had been protected from competitive players have entered the scene .

Beside ICICI prudential life insurance there are others 11 private players working in life insurance sector, which are following.

1. Allianz Bajaj Life insurance company ltd. Allianz Bajaj life insurance company ltd is a joint venture between allianz Ag (largest sector) and Bajaj auto ltd incorporated on 12th march 2001.

2.

AMP Sanmar assurance company Ltd.

AMP Sanmar assurance company ltd is a joint venturebbetwen Amp , largest life insurance in Australia and Newzeland , Sanmar is one of the largest industrial groups in south India .

3.

Birla sun life insurance company Ltd .

Birla sun life insurance company is a 74:26 joint venture between Adiyta Birla group and sun life financial services of Canada.

4.

Aviva sun life insurance company Ltd .

Aviva sun life insurance company ,a joint venture. Between Dabur India and CGU is a wholly owned subsidiary of Aviva plc.

5. HDFC standard life I nsurance company ltd ; HDFC standard life insurance compny Ltd was one of the first companies to be granted license by IRDA to operate in life insurance sector. It was incorporated on the 14 aug 2000. HDFC is majority stake holders in insurance Jv with 81.4%and standard life (largest mutual assurance company in Europe) has a stake of 18.6%.

6.

ING Vysya life insurance compny Ltd.

ING Vysya life insurance compny Ltd is expect to be the first bank assurance venture in the country .Together they have roped in GMR group which has wid e-rangin interest sin the fields of infra structure ,manufacturing ,software & banking. ING (Europe, Dutch origin) 26% and GMR group would hold 25% of the stake.

7.

MAX New-York compny Ltd . It’s a partnership between MAX India and New York life a fortune 100 companies.

8.

SBI life insurance company Ltd :

India’s largest bank SBI and CARDIF S.A, a leading insurer in France came together to SBI Life.

9.

Met Life India Insurance company Ltd.

It was incorporated in April 2001 as a joint venture between Met Life International Holdings. Inc Jammu &Kashmir bank and M.Pallonji and company private Ltd.

10.

TATA Life insurance company Ltd :

TATA Life insurance company Ltd is a joint venture between TATA sons 74% and 26 % of American paruner.

11.

Om Kotak Mahindra Life insurance company Ltd :

Om mutul plc is a financial leading service provider in South Africa. kotak Mahindra bank Ltd is the holding compny and flagship of Kotak Mahindra group .The joint venture of Om kotak mahindra life insurance consists of 74:26 stakes between KMBL and Om .

COMPANY PROFILE Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture between Kotak Mahindra Bank Ltd.(KMBL), and Old Mutual plc. At Kotak Life Insurance, 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. The Kotak Mahindra Group Kotak Mahindra is one of India's leading financial conglomerates, offering complete financial solutions that encompass every sphere of life. From commercial banking, to stock broking, to mutual funds, to life insurance, to investment banking, the group caters to the financial needs of individuals and corporates. The group has a net worth of over Rs. 5,609 crore, employs around 17,100 people in its various businesses and has a distribution network of branches, franchisees, representative offices and satellite offices across 344 cities and towns in India and offices in New York, London, Dubai, Mauritius and Singapore. The Group services around 3.6 million customer accounts. GROUP COMPANIES

This is a non-participating plan. Who can avail of this plan? HOW OLD DO YOU HAVE TO BE TO AVAIL OF THIS PLAN? FOR WHAT TERM CAN I AVAIL OF THIS PLAN? WHAT IS THE PREMIUM THAT I NEED TO PAY ? WHAT IS THE MAXIMUM AGE THAT THE PLAN CAN COVER YOU TILL? What are the advantages of this plan? • • • • • •

Minimum age- 18 years Maximum age- 45 years 15 years Minimum – Rs.200 Maximum – Rs.20,000 70 years

The Kotak Gramin Bima Yojana combines the benefits of a fixed deposit and an insurance plan. Easy one-time premium payments. Guaranteed returns on maturity of the plan. Increasing death benefit cover. No medical tests required. 15 day free-look period.

What do you receive on the maturity of the policy? With the Kotak Gramin Bima Yojana, your money grows 1.5 times on maturity, i.e. you get back 150% of the single premium. What do the beneficiaries receive in the event of death? In the event of your death the beneficiary would receive the guaranteed death benefit. Depending upon the year of the event, the death benefit payable is as follows: 100% of the single premium paid THIRD YEAR ONWARDS TILL THE 500% of the single 15TH YEAR premium paid What happens if you need money before maturity? In case of an emergency, where you need your money before the maturity date of the policy, the plan offers you an option to surrender the plan. The surrender value payable is as follows: FIRST 2 YEARS OF THE TERM

YEAR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 % OF NA 80 80 80 80 80 80 90 90 90 90 100 110 120 135 SP

OBJECTIVES OF THE STUDY PRIMARY OBJECTIVE: Study of distribution channel of Kotak Mahindra and focus on the customer’s demand. SECONDARY OBJECTIVE:

• To have interaction with the customers • To know the customers viewabout the industry • To make the customers aware about the company • To make the customers aware about the company’s new products

RESEARCH METHODOLOGY INTRODUCTION

Research is an active, diligent and systematic process of inquiry in order to discover, interpret or revise facts, events, behaviors, or theories, or to make practical applications with the help of such facts, laws or theories. The term "research" is also used to describe the collection of information about a particular subject Research means a systematic investigation, including research development, testing, and evaluation, designed to develop or contribute to generalizable knowledge. Research comprises defining and redefining problem formulating hypothesis or suggested solutions , collecting organizing and evaluating the data making deduction and researching conclusion and at last carefully testing the conclusion and to determine whether they fit the formulating hypothesis . Adoption of appropriate methodology is an essential characteristic of quality research studies, irrespective of the discipline with which they are relative

STEP 1

Define the objective

The objective clearly defines “IDENTIFYING VARIOUS DISTRIBUTION CHANNEL & FRAMING CUSTOMER BASE THROUGH P.N.B.”I had tried to target most of the segments ,which had been instructed by the company

to be targeted. For ex : housewives, students , C.A, Businessman , Engineer, Shareholders .

STEP 2

Develop the Research plan

The second step was to develop more efficient plans call for precise decision on the collected data from the data sources , research approaches, research instrument ,sampling plans and contact methods .

Data sources:

Both primary and secondary data are taken into consideration.

[Primary data are the data that are collected freshly for the specific purpose or for a specific research project. Secondary data provide a starting point for the research and offer the advantages of low cost and ready availability. It is very difficult to collect as they are based on abstract information ‘s. even if they can b recollected, they are never specific, they are always some approximate values. ]

RESEARCH APPROACH Primary data can be collected in five ways through interview, focusing a group survey and experiments. I had collected my primary data through a few cases through interview technique.

RESEARCH INSTRUMENT

Marketing researchers has a choice of three main research .instrument in collecting the primary data: questionnaires, psychological, tolls and mechanical; devices. Questionnaire is by far most common instrument used to collect primary data. A Questionnaire consists of a set of question presented to respondents. Since it is flexible I had adopted the questionnaire method for collecting the primary data.

SAMPLE PLAN

After deciding on the research approach and instruments the marketing researcher must design sampling plan . It has three decisions. :

SAMPLING UNIT Who is to be surveyed? The target population to be sampled must be clearly defined.

SAMPLE SIZE: How many people should be surveyed? Larger sample give more reliable results than smaller. However it has not necessary to sample the entire target population or even a substantial portion to achieve reliable results. In my case the sample size is 400 respondents of various segments .

SAMPLING PROCEDURRE: How should the respondents be chosen? To obtain a representative sample, a non probability sample of the population should be drawn. I had done convenient sampling, ensuring that the more or less the whole area of chinch wad was covered.

CONTACT METHOD:

Once the sampling plan had been determined, the marketing researcher must decide how the subject is contacted: telephone, mail, personal interview, and in some cases telephonic interview was done.

STEP 3 :

Collection of information : The data collection phase of marketing research is generally the most expansive and most subjected to error. In the case of the most surveys, few major problems arise. Some respondents. Some respondents might not be available and must e contacted or replaced. Other respondents may refuse to cooperate and finally some interviews might be biased or dishonest.

STEP 4 .: Analyze the information :

Before last step in marketing research is to extract findings from the collected data. Then, these data must be tabulated and averaged and measures of dispersion are computed from various variables.

STEP 5 :

Present the findings : The last step is to present the findings that are relevant to the objectives.

METHODS OF DATA COLLECTION Primary data : This data on the basis of hit and trial method, as the researcher first selects an area and then makes calls in that area randomly. If the persons called are found to be fit as per company’s criteria, there names and address are to be noted down and are further used for meeting purpose .

Secondary data: The sources of secondary data are following: 1. 2. 3. 4. 5.

LIC Agents Telephone Directory Promotional Activities Direct sale Agency Reference

RESEARCH DESIGN

Research design has divided in tow important form

1. Necessity of study 2. Sampling Unit

NECESSITY OF THE STUDY: The study is all about findings necessities of today’s customers for the Kotak Mahindra Life insurance company. The advisors and front line staffs need it show their excellence in the process of offering. The Kotak Mahindra is doing aggressive marketing in selecting quality advisor so that advisors can give the best results for the company . Kotak Mahindra Life Insurance Company is number one among the private players having large market share. Kotak Mahindra is in expanding mode.

SAMPLING UNIT This combines all those segments of the society who have the insurance policy. Some of them are students, engineer, C.A, Housewives, Businessman, Teacher ,Doctors etc residing in Ranchi. Each of these segments has been targeted as per the convenience. As instructed from the company Kotak Mahindra Life insurance co Ltd following are the segments to be targeted:

• Service man : • • • •

Railways employess Private company Professor /Teachers Office staffs

• Agents and other sources • • • • • • •

Life insurance agents General insurance agents Travel agent Mutul fund agents Businessman Students Housewives

NOTE : The required data for the above segments should be such that it is helpful to know the background and the creativity of the prospects . • Name • Age • Address • Occupation • Education • Family income The above information‘s have been collected from : • Primary data • Secondary data

ABOUT OUR INTERACTION WITH THE CUSTOMERS The Kotak Mahindra life insurance company has a tie up with the Punjab national bank. So, we use to visit Punjab national bank for the purpose of interaction with the customers. We had to deal with those customers who hold account with the Punjab national bank. We had to survey about the customer’s expectation about the policies and the insurance companies. We asked them that whether they knew about the different investment plans and insurance policies. We also made them aware about the kotak Mahindra company and their different policies. We approached them about what are the policies they already know and what are the policies they hold right now. We also asked about the various benefits they derive from the existing policies and whether they are satisfied from it or not. Through this survey we also came to know what are the peoples view regarding kotak and other competitors. Our survey was not exactly to sell the policies but to create an awareness among the customers about the the company and its policies.

LIMITATIONS As for as limitations has concerned limitations can be divided in four parts because of some reasons . These reasons are given in following four parts.

1. Lack of interests on respondents. Many of respondents didn’t well as interests to the questionnaire.

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2. Geographical problem: Sample size of my data was restricted in chinch wad so it is difficult to contact outside because o time problem so sample size was limited. 3. Biased response of the respondent: Most of the response were biased that they have no time or contact later.

4. Language Barriers: At the time of my project it was very difficult to understand or convince local people.

RECOMMENDATIONS AND SUGGESTIONS Before approaching to the prospect there are some important things that should be kept in mind. These things are following.

1. NO PRESSURE BUT POSITIONING: There should not be any pressure but make a positioning about the benefits in the mind of the prospect.

2. PRESENTATION: Presenting proper concepts to the client Is also a very important thing.

3. CLEARIFICATIONS AND ACCURACY: Quarries of the prospect should be clarify and should be answered accurately and in a proper manner.

BIBLIOGRAPHY

Www. Kotaklifeinsurance.Com • RESEARCH METHODOLOGY : BY C.R. KOTHARI • LIC Book •