A STUDY ON RISK AND RISK MANAGEMENT

IN INSURANCE INDUSTRIES AT THE BRANCH

LEVEL WITH SPECIAL REFERNCE TO KOTAK
Mahindra LIFE INSURANCE, DIBRUGARH
BRANCH
PRESENTED BY

Ankita Das (02)

Anupal Goswami (04)
Bipasha Borkakoty (07)
Sanjib Bosumatary (34)
Sunil Kumar Gupta (38)
Urmi Bhuyan (44)
 RISK
Risk can be defined as an uncertainty concerning the
occurrence of a loss. Risk is a probability or threat of
damage, injury, liability, loss, or any other negative
occurrence that is caused by external or internal
vulnerabilities, and that may be avoided through pre-
emptive action.
RISK MANAGEMENT
Risk management is a process of identification,
assessment and prioritization of risk followed by
coordinated and economical application of
resources to minimize, monitor and control the
probability or impact of unfortunate event.
STEPS IN THE RISK MANAGEMENT PROCESS

Identify Loss Exposure

Analyse the Loss Exposure

Select the Appropriate Techniques for Treating

the Loss Exposures

Implement and Monitor the Risk Management

Programme
METHODS OF HANDLING OF RISK
RISK CONTROL
A. Risk Avoidance:
B. Risk Prevention
C. Loss Reduction

RISK FINANCING
D. Risk Retention
E. Non-insurance transfers
F. Commercial insurance
 INSURANCE
Insurance is a contract between the insurer and
insured in which insurer agrees to make good the loss
of insured on happening of an event in consideration
of a regular payment called premium.
Insurer refers to an individual or firm known as
insurance company which agrees to compensate the
loss of insured.
Insured refers to the individual or firm who gets
compensation of loss. Insured pays regular amount of
premium.
Happening of the Event refers to the subject matter
of policy or the kinds of losses covered under the
policy
 FUNCTIONS OF INSURANCE
Protection
Distribution Of Risk
Competitiveness
Specialisation
Better Utilisation of Capital
Promotes Foreign Trade
Credit Facility
Capital Formation
Social Welfare
 OBJECTIVE OF THE STUDY
To understand the concept of risk of insurance
companies at branch level.
To understand the risk management process of
insurance companies at branch level.
METHODOLOGY
This research is a descriptive research.
Primary data has been obtained through
questionnaire and personal interview with the
Employees and Branch Manager of Kotak
Mahindra Life Insurance, Dibrugarh Branch.
Secondary data has been obtained from the
different articles, websites and books.
KOTAK MAHINDRA LIFE INSURANCE
Kotak Mahindra Life Insurance is a leading life
insurance company of India. It is a joint venture
between Kotak Mahindra Bank ltd. and old Mutual
Fund. The company was founded in 2001. Company’s
headquarter is located in MUMBAI.
The company has presence of 232 branches in around
167 cities and towns in India and has agency strength
of 99,275 agents. The company offers various
protection plans, savings and investment plans, child
plans and retirement plans. It is a fastest growing
insurance company in India, trusted by more than 4
million policyholders nationwide.
 ANALYSIS
Statements Strongly Agree Disagree Strongly Undecided
Agree Disagree
1 3 1
2 3 1
3 1 2 1
4 4
5 2 2
6 1 3
7 4
8 4
9 3 1
10 4
11 2 2
12 3 1
13 3 1
14 4
15 3 1
OBSERVATIONS FROM QUESTIONNAIRE
The degree of risk involve in insurance
company is very high because 75% of the
respondents agreed that the degree of risk
involve in insurance company is very high.
The respondents also agreed that the risk of
the branch is associated against the policies of
insurance companies.
All of the respondents agreed that amount of
premium is determined on the basis of risk
associated.
The risks are need to be explained to the buyers of
policies as 50% were strongly agreed and other
50% were agreed to this.
It can be understood that reinsurance is a method
of reducing risk as 75% respondents were agreed
and remaining are strongly agreed to this
statement.
The entire respondent agrees that risk is measured
by using certain mathematical & statistical
methods.
The entire respondent strongly agrees that “law of
large numbers” helps to reduce the risk.
It can be understood that risk can be minimized
by educating the assured as 3 out of 4 respondents
agreed that risk can be minimized by educating the
assured.
The respondent disagreed that identification of
risk is usually not taken up at branch level.
The respondent agrees that there should be
educative programmes regarding risk reduction for
existing and prospective assured.
It has been observed that some financial risk
cannot be reduced by transferring them through
the insurance companies as 75% of the respondent
agrees to it.
“Mortality Rate Table” is an important
document for determination of life
insurance premium as 3 out of 4
respondents think it a important one for
determination of life insurance premium.
All of the four respondents disagreed that
the intentional losses are the major risk
faced by insurance companies.
Investment in government securities by
Insurance Companies is necessary to reduce
the risk as 3 of them are strongly agreed to
it.
OBSERVATIONS FROM PERSONAL INTERVIEW
WITH THE MANAGER:
All the branches of insurance companies are
operating unit but it has financial limits.
The dealing of claims in the insurance
company moves in a hierarchy status starting
from the branch level to the central office. It is
also found that each level has its own financial
limits. If the claim exceeds the financial limits
in a particular level.
Branch manager and assistant branch manager
investigates the claimed policies.
There were some expenses of management,
which are incurred out of assured sum.
Investment to reduce the financial risk is made
by the Central Office especially in government
securities.
There were some small financial risks like in
case of health insurance if the amount was
directly given to the medical unit, they may take
advantage of that.
Sometimes it is difficult to know or examine if it
is a pre-existent disease or not at the time of
insurance agreement.
The rate of collection from premiums is much
higher than the payments to the claims by
insured.
 SUGGESTIONS
The company may offer life insurance seminar
or Q&A sessions hosted by educated experts to
the customers and employers.
The employees need to be trained about
various risk factor involved in the insurance
company at the branch level.
There should be a risk management
committee in the branch level to handle and
minimize short term risk related to insurance.
The company can start blog writing about
topics that are commonly on the minds of
those looking for life insurance to
understand them better about the policies.
The company should also take necessary steps
to increase the profit and reduce the claims in
an effective manner.
The agent of the insurance company may
approach their client in time, so that policies
may be renewed as and when due and thus
kept in force.
 CONCLUSION
Insurance is a large investment where policies are
purchased through out a life. It is a means of
protection from the financial loss. It is a form of
risk management primarily used to hedge against
the risk of a contingent uncertain loss. Every
insurance industry deals with certain risk and this
process is called risk management. The risks are
not handled at the branch level rather they are
transferred to the divisional and central offices. The
receipts from policy holders by an insurance
company is very huge as compared to insurance
claims which shows that the risks associated with
insurance companies are not very high.
THANK YOU. . .