of the requirements for the award of the Degree of BACHELOR OF BUSINESS ADMINISTRATION (Industry Integrated) II Semesters
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CERTIFICATE
This is to certify that Kamal Kant, a student of the Maharshi Dayanand University, Rohatak, has prepared his training report on CUSTOMER RELATIONSHIP MANAGEMENT IN PRIVATE SECTOR BANKS, under my guidance. He has fulfilled all requirements leading to award of the degree of BBA (Industry Integrated).This report is the record of bonafide training undertaken by him and no part of it has been submitted to any other University or Educational Institution for award of any other degree/diploma/fellowship or similar titles or prizes.
Name of Faculty Guide: AMIT Designation: Lecturer Qualification: MBA Seal of the ELC
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KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE ltd, Bikaji Cama Place, New Delhi 110066
Under the guidance of Mrs. Neeti Chopra Submitted in Partial fulfillment of the requirements for the Degree of BACHELOR OF BUSINESS ADMINISTRATION (Industry Integrated) TO MAHARASHI DAYANAND UNIVERSITY, ROHTAK is my original work and the same has not been submitted for the award of any other Degree/diploma/fellowship or other similar titles or prizes.
CERTIFICATE
This is to certify that Mr. Kamal Kant, who is pursuing BBA (Industry Integrated) course of Maharshi Dayanand University, Rohtak, at Trinity Institute Of Advance Study has undergone Mmanagement Training at our organization from May 30, 2011 to July 10, 2011.
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ACKNOWLEDGEMENTS
Its a great pleasure to present this report of summer training in Kotak Mahindra Old Mutual Insurance Ltd.(Bikaji Cama Place) in partial fulfillment of Bachelor of Business Administration Programme under Indian Institute of Technology and Management(Janakpuri), affiliated to Maharishi Dayanand University, Rohtak. At the outset, I would like to express my immense gratitude to my training guide guiding me right from the inception till the successful completion of the training. I am extremely thankful to them for extending their valuable guidance about market and customer relations, their support for literature, their critical reviews of project and the report. I would also like to thank my fellow mates and all my group members for their sincere efforts and cooperation throughout the training. Above all I would like to thank everyone for the moral support I have been provided with in all stages of this training. I feel short of words to thank my parents and friends who had directly or indirectly been instrumental in the completion of the project. I am indebted to all respondents for their time & passion during the long conversations. I give my regards and sincere thanks to Mr. Sheel Avasthi (Assistant Branch Manager, Kotak Mahindra) who has given me the chance to undergo the Training & all other staff members of IITM without whose efforts, work could not have been accomplished on time.
KAMAL KANT
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CONTENTS
CHAPTER 1: INTRODUCTION 1.1 General introduction about the sector 1.2 Industry Profile a. Origin and development of the industry b. Growth and present status of the industry c. Future of the industry
CHAPTER 2: PROFILE OF THE ORGANIZATION 2.1 Origin of the Organization 2.2 Growth Development and present status of the Organization 2.3 Organization Structure and Organization chart 2.4 Product and Service profile of the Organization 2.5 Market profile of the organization
CHAPTER 3: DISCUSSIONS ON TRAINING 3.1 Students work profile (Roles and responsibilities) 3.2 Description of live experiences
CHAPTER 6: SUMMARY AND CONCLUSIONS 6.1 Summary of learning experience 6.2 Summary of live Experience and Recommendation
APPENDICES
BIBLIOGRAPHY
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CHAPTER 1: INTRODUCTION
Insurance is the most effective risk mitigation mechanism to reduce the vulnerability of the people from the impacts of disease, disability, untimely death, and natural catastrophes. Insurance provides the equitable transfer of the risk of a loss, from one entity to another, in exchange for consideration, payment, in the form of a risk premium. The insurance premium develops at an actuarially-determined rate. This rate is a factor used to determine the amount of premium to charge for a certain limit, and type, of insurance on the scarce resource. The premium can further be viewed as a guaranteed, known, relatively small financial loss to the insured, paid to the insurer, in exchange for the insurer's promise to compensate the insured in the case of a loss to the insured resource(s). Insurance sector started with covering marine related risks, namely 1 2 3 Loss of ship by sinking due to bad weather in high seas Goods in transit by shop robbed by sea pirates Loss of or damage to the goods in transit by ship due to bad weather in high seas
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Insurance started in India in 1818 with life insurance business being transacted by an English company named Oriental Life Insurance Co. Ltd. The first Indian insurance company was the Bombay Mutual Life Assurance Society Ltd., formed in 1870 followed by quite a good number of Indian companies in various parts of the country In 1956, life insurance business was nationalized and LIC of India was formed on 1st September 1956 giving it exclusive privilege of going life insurance business in India. In 1999, relevant laws were amended and insurance business was made open to private players also. With such a large population and the untapped market area of this population, insurance happens to be a very big opportunity in India. Today it stands as a business growing at the rate of 15-20% annually. Together with its banking services, it adds about 7% to the countrys GDP. In spite of all its growth the statistics of the penetration of Insurance in the country is very poor. Nearly 80% of Indian population is without Life Insurance cover and/or Health Insurance cover. This is an indicator that growth potential for the Insurance Industry is immense in India. It was due to this immense growth that the regulations were introduced in the insurance sector and in continuation; the Malhotra Committee was constituted by the government in 1993 to examine the various aspects of the industry. The key element of the reform process was participation of overseas insurance companies with 26% capital. Creating a more efficient and competitive financial system suitable for the requirements of the economy was the main idea behind this reform. The insurance industry has gone through many changes since it first came into existence. The competition LIC started facing from these companies were threatening to the existence of LIC. Every since its liberalization, the industry has never looked back and stands as one of the most competitive and exploring industry in India.
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What is insurance?
Insurance is a contract between two parties, the insurer or the insurance company, and the insured, the person seeking cover. With this contract, the insurer agrees to pay the insurer for financial losses arising out of any unforeseen event to risk in return for a regular payment of premium. These insurance plans are also called Risk Cover Plans, which means to financially compensate for losses that occur uncertainly through accidents, illness, theft, natural disaster, etc. Insurance policies cover the risk of life as well as other assets and valuables, such as home, automobiles, jewelry, etc. On the basis of the risk they cover, insurance policies can be classified into two categories: 1. Life Insurance 2. General Insurance
As the terms suggest, Life Insurance covers the risk involved in a persons life, while General Insurance provides financial protection against unforeseen events, like accidents, floods, earthquakes, disease, etc. The Insurance sector in India governed by Insurance Act, 1938, the Life Insurance Corporation Act, 1956, and General Insurance Business (Nationalization) Act, 1972, Insurance Regulatory and Development Authority (IRDA) Act,1999 and other related acts
Need for insurance 1. Risks and uncertainties are part of lifes great adventure. Accidents, illness, theft, natural disaster, etc, they are all built into the working of the Universe waiting to happen. 2. Insurance then is mans answer to the vagaries of life. If you cannot beat manmade natural calamities at least be prepared for them and their aftermath.
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3. Insurance is a contract between two parties, the insurer (the insurance company) and the inured (the person of entity seeking the insurance cover), where in the insurer agrees to pay the insured for financial lossed arising out of any unforeseen events in return for a regular payement of premium. 4. These unforeseen events are defined as risk and that is why insurance is called a risk cover. Hence, insurance is essentially the means to financially compensate for losses that life throws at people, corporate and otherwise. 5. The principle of insurance works on the concept of a large number of people exposed to a similar risk making a contribution to a common fund. Those who suffer losses due to the occurrence of these events are compensated of the losses from this fund.
Life Insurance was born in England when the first policy providing temporary cover for a period of 12 months was issued. The Amicable Society started granting fluctuating sum on death since 1705 and a fix sum since 1757, with the development of mortality tables,
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Life Insurance acquired scientific character. The Equitable Society founded in 1762 was the first Society Established on Scientific basis. In India, after failure of the British companies, the European and Albert in 1870, attempted writing business on Indian lives, first Indian Life Assurance Society was formed in the same year called Bombay Mutual Assurance Society Ltd. The Oriental Life Assurance Company Limited in 1874, Bharat in 1896 and Empire of India in 1897 followed it. The idea of insurance was born out of a desire of the people to share loss of an individual by many. Originally it restricted to forms than life insurance. It started with Marine Insurance and has reference even in the Vedas.
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Indias life insurance market has grown rapidly over the past six years, with new business premiums growing at over 40% per year. The premium income of Indias life insurance market is set to double by 2012 on better penetration and higher incomes. Insurance penetration in India is currently about 4% of its GDP, much lower than the developed market level of 6-9%. In several segments of the population, the penetration is lower than potential. For example, in urban areas, the penetration of life insurance in the mass market is about 65%, and its considerably less in the low-income unbanked segment. In rural areas, life insurance penetration in the banked segment is estimated to be about 40%, while it is marginal at best in the unbanked segment. The total premium could go up to $80-100 billion by 2012 from the present $40 billion as higher per capita income increases per capita insurance intensity. The average household premium will rise to Rs 3,000-4,100 from the current Rs 1,300 as will penetration by the existing and new players. Indias ratio of life insurance premium to its GDP is around 4 per cent against 69 per cent in the developed world. It could rise to 5.1-6.2 by 2012 in tandem with the countrys demographic profile. India has 17 life insurers and the state owned Life Insurance Corp. of India dominates the industry with over 70 percent market share, though private players have been growing aggressively. Considering the worlds largest population and an annual growth rate of nearly 7 per cent, India offers great opportunities for insurers. US based online insurance company ebix.com plans to enter the Indian market following deregulation of its insurance sector. Online insurer ebix.coms expansion into India is a major step for the company to become a global supplier of internet-based insurance tools for consumers and insurance professionals. In a diverse country such as India it is imperative that a universal insurance infrastructure be created to maximize efficiency in the insurance industry. Online insurer ebix.com can offers the Indian market a business-to-consumer internet portal where consumers have more choice while purchasing insurance and an internet-based agency management system that will help agents work more efficiently with multiple carriers. Foreign holding in Indian
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insurance companies is limited to 26 per cent. The government wants to increase the cap to 49 percent, but its communist allies oppose such a move. The market is moving beyond single-premium policies and unit linked insurance products which are easier to sell. The agency model is the dominant sales channel accounting for more than 85 per cent of fresh premiums but overall inactivity and attrition is much higher at 50-55 per cent than the global average of 25 per cent. Opportunities include health insurance and pensions, the report said, adding only 1.5-2 per cent of total healthcare expenditure in India was currently covered by insurance. A life insurance policy covers ones personal self. Unlike with general insurance, it is not like insuring a vehicle. Having said that, if we consider that Indias population is over one billion and growing, we get a picture of the true potential of the Life Insurance sector. It has been in business for 50 years now and has not covered the entire population base yet. About 250 to 300 million Indians are still insurable. LIC has issued about 120 million policies till now, with new premium income of US$ 1 billion. Its assets have been estimated at $37 billion and in the last quarter it reported a 60 per cent growth in new business. LICs business is growing at the rate of 20 per cent every year. That is the kind of potential one is talking about in life insurance in India. It would not be wrong to say that a lot of the advantage of advertising by new private sector insurance companies has by default gone to LIC. While they have created a lot of awareness through private insurers advertisements, LIC has benefited. Why? Because LIC has a much wider branch network, and buyers are surer of LIC because it has been in existence for long; they are more comfortable about its safety. Some LIC agents continue to follow the unethical practice of offering discounts from their commissions to new policy buyers; this makes a difference.
Penetration- Lower than potential Management consultancy firm McKinsey has forecast that Indias life insurance industry will be double in the next five years from $40 billion to $80-100 billion in 2012. This growth would improve the level of insurance penetration from 5.1% of gross domestic
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product to 6.2% in 2010-2012. The Indian life insurance industry could witness a rise in the insurance sector premiums between 5.1% and 6.2% of GDP in 2012, from the current 4.1%. Total market premiums are likely to more than double during this period, from about $40 billion to $80-100 billion. This implies a higher annual growth in new business annual premium equivalent (APE) of 19% to 23% from 2007 to 2012. The large part of the growth would come from second- and third-tier cities and small towns. Based on MGI forecasts, 26 tier-II cities with population greater than one million and 33 tier-III towns with a population of more than 5 lakhs, will account for 25% of the middle class and newly bankable class in 2025. Over 5,000 tier-IV small towns will account for as much as 40% of these two classes in 2025. However, if an insurer decided to be a niche player and concentrated on metros and their suburbs, they will have a big market, since 60% of the very rich (annual income over Rs 10 lakh) would be concentrated in the top eight cities. Although these consumers will be highly accessible, players will have to reckon with intense competition that is only going to increase and extend to other segments as well.
LIC- Ahead of all LIC of India has mobilized Rs 12,361 crore of new business premiums in March 10 the highest recorded by the corporation in any single month. This has enabled the corporation post new business premium of Rs 55,934 crore in 08-09, a 118% growth over the previous years. The rise in premium gives LIC a market share of over 74% of the total new business premium mobilized in India, which is substantially higher than the 72% as on March 106. The rise in premium is on the back of unit-linked policies which account for nearly 70% of the total individual premium. The surge in sales in March attributed to higher sales of unit linked insurance and group insurance business. In March the corporation booked over Rs 4,826 crore in group insurance, which accounted for nearly 30% of total collections. Collection from single premium plans amount to Rs 24,927 crore, which is nearly 44% of the premium raised by the corporation during the
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current fiscal. Single premium plans are a demand of the market. There are a large section of people who do not want to commit premium payments for every year. Meanwhile, the private life insurance industry has recorded a growth of 89% with total new business premium for the year standing at Rs 19,471 crore as against Rs 10,252 crore in the corresponding period last year. ICICI Prudential continues to be the largest private life insurance player with a market share of 7% followed by Bajaj Allianz Life Insurance which has a market share of 5.7%. The companies that have recorded the fastest growth in the current year include Reliance Life Insurance, which grew 381% recording new business premium of Rs 931 crore, followed by SBI Life Insurance which grew 209% to Rs 2,566 crore. The high growth has enabled SBI Life to move into the number three positions after Bajaj Allianz Life Insurance.
New Joint Venture Set Ups Canara Bank, Oriental Bank of Commerce (OBC) and HSBC Insurance (Asia-Pacific) Holdings Ltd have signed an agreement to jointly establish a life insurance company in the country. The company has been christened Canara HSBC Oriental Bank of Commerce Life Insurance Company Limited. Canara Bank would take a 51 per cent stake in the company, while HSBC and OBC will hold 26 per cent and 23 per cent stake respectively. The new life insurance company will be capitalised at Rs 325 crore, of which Canara Bank will contribute Rs 102 crore, HSBC Rs 177 crore and OBC Rs 46 crore. Under the terms of the agreement, HSBC would provide a range of management services, which would include nominating executives for certain senior roles. While both Canara Bank and OBC offer an extensive client base, complementary distribution networks and broad local market knowledge, HSBC brings to the partnership its considerable insurance experience, product range and proven banc assurance capabilities. IRDA gave clearance to a joint venture between Kishore Biyanis Pantaloon Retail India and Italian insurance firm The Generali Group to start insurance businesses. The joint venture, Future Generali India Life Insurance Company Ltd, would transact life insurance
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business. Besides, it also granted approval to Future Generali India Insurance Company to transact general insurance business. Generali is one of the largest insurance groups in the world, operating in 40 countries through 107 companies. It ranks 22 in the list of Fortune 500 companies and is the largest corporation in Italy with an asset base of over 300 billion euro
Agents A remarkable achievement is that Indias third largest private sector insurance company SBI life Insurance has been ranked fifth across the world in terms of number of MDRT members, which is 801. Life insurance agents from India are moving fast into the realm of global insurance. The total number of Indian agents registering with the Million Dollar Round Table, a prestigious international trade association of insurance agents, has more than tripled to, 931 agents for 2007 compared with 532 in 2006. The MDRT has a total of 35,781 qualifiers. Which is 1% of the total insurance agents or advisors in the world? Within the MDRT, there are three levels such as the basic MDRT, the Court of Table (CoT) and Top of Table ( ToT). To qualify for that MDRT, an Indian insurance agent has to get a premium of Rs. 23.92 lakh to his insurance company or earn a commission of Rs. 5.98 lakh. For the agent to qualify for the CoT, he has to do thrice the MDRT business, while to qualify for the TOT, insurance agent has to do six times the business required for the MDRT. On the other hand IRDA has taken the first step to crack the whip on agents misleading customers on unit-linked insurance plans. To start with, it has tightened the norms for sale of actuarial-funded unit-linked products which are on their way out. The Regulator intends asking customers and agents to sign illustrations on the entire gamut of ULIP products offered by insurers. While the features of ULIPs vary from product to product, the onus will be on agents to indicate the explanation that customers have been given on the nature of investment. Agents will also have to give a break-up of the money spent on various expenses. The objective is to enlarge the scope of disclosures made by agents and such transparency will be in the
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interest of the entire insurance sector. IRDA appears to be taking the UK route to tackle miss-selling of policies. In the UK, if an agent is accused of miss-selling, the onus is upon the insurer to prove that the policy was explained. Similarly, insurers in India will now have to retain documentary evidence to prove that the policy was properly explained to the insured. In the UK, the experience has been the complaints of mis-selling emerge after a period when policyholders discover that their investments were performing far worse than they were told to expect. Acturial-funded products have a complex structure, where the insurance company Bimaquest - Vol. VIII Issue I, January 2008 q 53 allocates significant sums to the policyholders account in the first year. However, these initial allocations are notional i.e. in the form of actuarial units, which convert into real money only in the future. The downside of such products is that there is not much balance in the Policyholders account in the initial years.
The new insurance companies used all channels of advertising from newspapers and the television to insurance agents and direct mailers. The new companies focused their campaign primarily on building an image of trustworthiness and reliability for themselves. Their advertisement focused on insurance as an investment option and not a mere tax saving tool. Most of these advertisements carried messages like the familys happiness etc. It has been more than 5 years since private insurance companies launched operations in India.
Various private players in the Indian insurance market are: Birla Sun Life (Aditya Birla Group)
ICICI Prudential
ING Vysya
Dabur Aviva
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ULIP products The regulator had given an indication that checks would be in place to prevent misselling of ULIPs, which have become popular investment instruments. IRDA is understood to have extended the deadline for Bajaj Allianz to phase out its actuarialfunded product or capital unit. This is set to be replicated in other ULIPs as well in due course. The regulator has asked private insurer Bajaj Allianz Life Insurance to ensure that policyholders investing in the actuarial-funded products sign on sales illustration given out by agents. This will form part of the policy document, and IRDA will have the authority to inspect it at a later stage, if need be. The entire exercise is aimed at ensuring that the customer is fully aware of the features of the product. Aviva Life Insurance is the other company that has been asked to withdraw actuarial-funded products. IRDA justified the withdrawal of these products, saying that its objective was to enable the policyholders of ULIP products to compare features and charges across products and companies. However this order of IRDA is stayed by the High Court of Chennai. The regulator has also introduced safeguards to see that actuarial-funded products are not sold aggressively while they are being phased out. In the case of Bajaj Allianz, for instance, the regulator has stipulated that the total premium collected under this product between August 2007 and September 15, 2007 should not exceed the average growth in sales posted in the previous quarter of July 31, 2007.Although ULIPs may have become popular for more wrong reason that right ones, the segment does have its fair share of positives. The right reasons includes multiple benefits to the customers like Life protection, Investment and Savings, Flexibility, Adjustable Life Cover, Investment Options, Transparency, Options to take additional cover against, Death due to accidents, Disability, Critical Illness, Surgeries, Liquidity and Tax Planning. The Regulator is in the process of modifying the guidelines for ULIPs so that products with high concentration of investments will be treated as mutual funds and term products if the proportion is tilted
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transparency standards and understanding of such products among customers. Customers should have an idea as to what the risk and the return in the policy are when they subscribe to them. IRDA has also proposed to make it mandatory for insurance
companies to issue sales of document with illustration as a part of the over all policy document. This would give an idea to policyholders about the instruments they are investing in and risks are taking. The company, in this document, will have to explain what component actually goes towards life cover and what towards investment. The Regulator has clarified that the 54 q Bimaquest - Vol. VIII Issue I, January 2008 policyholders in the unit-linked scheme could remain invested in the policy for another five years after the maturity, but could not withdraw any amount. The decision to continue with the scheme after maturity will be purely at the option of policyholders. The objective was to ensure that the insurance companies cannot act as a fund manager while it can only provide the option to the policyholder for waiting for a better NAV. The Regulator has observed that the proportion of unit linked insurance plans in the total product portfolio has gone up by 65-70 per cent, which ties the fortunes of the insurance company and its investors to the vagaries of the stock market. Meanwhile, all companies are well above the solvency margin of 150%. The life insurance industry is growing at 30 per cent each year; its one of the fastest growing industries in the country. Private players have captured a sizeable chunk of the market in these six years, with the Life Insurance Corporation of Indias (LIC) share in the new business falling to 74 per cent. The upside includes improved service, riders with policies, unit linked insurance policies health care for as little as Rs100 per month, need-focused products with flexibility, and sales channels to suit the customers convenience. Theres a wide range of products and services competing to deliver the best value to customers, which has increased the market. Expansion coupled with a rapidly growing business is the big reason for the fresh capital infusion at regular intervals. Most private insurers have stabilized their operations in the last five years and fine-tuned their business models. Now is the time for expansion and launching their services beyond metros and big cities, to get the real benefits of mass business and exponential growth. Pension and health are two areas that have tremendous
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growth potential in the future. Almost 90 per cent of the people in the country have no old age benefits or health cover. New products are launched targeting niche markets. Pension products are developing in a big way, and will benefit a large section of people in the organized and unorganized sector. The annuity market has also started growing, and new players are offering a plethora of new and innovative products. Alternate channels of distribution like corporate brokers, online selling and banc assurance are increasing their share in the business of all the companies. Increasing the insurance sector FDI limit to 49 per cent is the foremost issue, to provide financial flexibility to the existing players and make the Indian market attractive for foreign investment. Also, the fringe benefit tax (FBT) needs to be eased, especially for group products like superannuation schemes. FBT has caused this market to stagnate, and most companies have withdrawn this product, as companies find it increases their costs by more than 30 per cent. Now FBT restricted to more than Rs. 1 lakh contribution per member per year. The prospects for Indias insurance sector are good on the back of expected buoyant economic growth and rising levels of wealth in society. The new insurance companies aims to fulfill the needs of high net worth individuals, professionals, small and medium enterprises, farmers and also rural and semi-urban masses. Private insurance ventures, allowed to compete with state owned Life Insurance Corporation and non-life companies beginning 2000, are trying to tap Bimaquest - Vol. VIII Issue I, January 2008 q 55
expanding demand for insurance in an economy growing nine percent a year. The demand, which has seen annual premiums double to more than 20 billion dollars since 2000, is being driven by the absence of a social security system and low penetration dating back to the decades when government-owned insurers enjoyed a monopoly. Dismally low life insurance penetration rates, a growing need for social and old age security, strong GDP growth and the expected rise in savings. The life insurance industry is close to eclipsing the mutual fund sector in terms of its total investment in equities through the success of unit-linked products. The MF industry registered a total AUM of Rs 4.86 lakh crore till July 2007, while the investment in equities stood at Rs 1.59 lakh crore. As per figures compiled by the Life Insurance Council, The life insurers total investment in equities was close to Rs 1.5 lakh crore as of March 2007, while total AUM
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stood at about Rs 6.1 lakh crore. As much as 75% of investments made in ULIPs get routed to the stock markets at SBI Life. At least 60% of the funds from unit-linked products are invested in the equity market. With the growth in ULIPs, the total investment in equities rose sharply over the last few years. ULIPs are sold like hot cakes but still they are under constant scrutiny. ULIPs have given Life Insurance market a big boost to grow and expend. The reason behind foreign companies making a beeline to enter the insurance business in the country is pretty obvious: Insurance in India is only 3.14 per cent of its GDP compared with the global average of 7.52 per cent. And this is expected to rise to only 4 per cent. This means a vast majority of Indian population is left to be covered by insurance. At present, there are 16 companies providing life insurance in the country. In India, insurance is seen with an improper perspective. Insurance products are sold rather than bought, as most people do not realize that insurance is for the security and benefits of their dependants. While the objective of life insurance is to provide a lump sum amount in the eventuality of untimely death of the insured, most Indians buy insurance to save taxes. This is evident from that around 40 per cent of the insurance business of any insurer takes place in March, which marks the deadline for submission of investment details for computation of income-tax liabilities. The IRDA is currently toying with the idea of allowing insurance companies to issue composite policies for micro-insurance Buyers will soon be able to insure their life as well as their motor pump by buying a single policy. In India micro-insurance is defined by the size of the policy (Rs 5,000-Rs 50,000 sum assured) and covers health, household, fire and motor insurance portfolios that are non-commercial or of lower asset value. As per the new regulation, individual companies will now be allowed to design composite products within broad parameters. They will be branded as micro-insurance products for file and use. A single agency system can sell these packaged composite products. The IRDA will soon issue broad guidelines authorizing composite products for micro-insurance.
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ORIGIN OF THE ORGANIZATION The Kotak Mahindra Group is a financial organization established in as Kotak Capital Management Finance Ltd. by a group of visionaries namely Uday Kotak (executive vice chairman and managing director (current)), Sidney AA Pinto and Kotak & Company. Started off in a very small office, Kotak Mahindra Finance Ltd first in 1986 started th e activity of bill discounting. It entered the lease and hire purchase market in 1987. Later in 1990 started its auto financing division. In 1991, the investment banking division was started. In the same year, Kotak Mahindra Finance Ltd took over FICOM, one of the Indias largest retailing marketing networks. It entered the funds syndication section in 1992. In 1995 Kotak Mahindra incorporated its brokerage and distribution business into a separate company called Securities. The investment banking division in the same year was incorporated into Kotak Mahindra Capital Company. In 1996 the auto finance business was hived off into a separate company called Kotak Mahindra prime Ltd. in 1998 it entered the mutual fund market with the launch of Kotak Mahindra Asset Management Co. In the year 2000 Kotak Mahindra tied up with Old Mutual Plc, in a 7426 joint venture. Kotak Mahindra is one of Indias leading banking and financial service organizations, offering a wide range of financial services that encompass every sphere of life. From commercial banking to car finance, to stock broking, to asset management, to life insurance, to investment banking, the group caters to financial needs of individuals and corporate. The group has a net worth of Rs 10,060 cr. and has a distribution network through branches and franchisees across the country and offices in New York, San Francisco, London, Dubai, Mauritius and Singapore, servicing close to 8 million customer accounts. Old Mutual Plc, is an international long-term savings, protection and investment group originating in South Africa in 1845. The group provides assurance, asset management, banking and general insurance to more than 15 million customers in
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Europe, America, Africa and Asia. Old Mutual Plc. is listed on the London Stock Exchange and the Johannesburg Stock Exchange, among others. In the year end 2010, the group reported adjusted operating profit before tax of 1.5 billion (on IFRS basis) and had pound 309 billion of funds under management, from core operations. The company combines its international strengths and local advantages to offer its customers a wide range of innovative life insurance products, helping them to take important financial decisions at every stage in life and stay financially independent. The company covers over 3 million lives and is one of the fastest growing insurance companies in the country.
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GROWTH AND DEVELOPMENT and PRESENT STATUS O THE ORGANIZATION With over 1200 corporate tie ups across India, NIAM has been mentoring and building careers of students through a broad spectrum Industry Integrated programs. Over the years, NIAM has successfully built a force of efficient and experienced students. These students are both mentally robust and educationally empowered with all the prerequisites of the corporate environment. NIAM has become the focal point and household name for all students who look out for quality education and career assurance. The unique combination ensures that the students acquire both strong theoretical base and pragmatic view of the relevance of theory in modern industrial practices.
The Institute has been striving hard to design programs and creating a new and improved breed of managers who can sail through the highly competitive and complex environment of today and emerge as winners. It also aims at creating an amiable environment through its unique infrastructure and activities for the overall personality development of the student by inculcating a spirit of healthy competition, team work and cooperation for positive contributions towards the family and the community at large.
NIAM is a market leader in providing latest practical and interactive training courses customized to specific requirements of the institutions and industry. Responding to clients demands for high caliber and professionally competent human potential, the centre offers skill development opportunities to individuals, learning practitioners, educators and students through a host of training programs and certification courses. A distinguishing feature of the centre is to provide sector-focused, and cutting edge training courses tailored for career growth. As a result of continuous dialogue and interaction with the industry experts, the content and structure of the programs are of
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excellent quality and depth, ensuring that each course is applicable to current business concerns.
Industry requires human resources for the reasons highlighted as under: y y The demand for sales. Marketing and CRM executives is increasing day by day The most sought after personnel are both qualified and possess good communication skill
What is the Industry Requirement? y Professionals with relevant work experience and proven organizational achievements are welcome. y Professionals with creativity, self-motivation, logical analysis, personal effectiveness and the ability to welcome change appreciated in an organizational environment. y Effective communication skills are a must coupled with an ability to present and analyze problems and simultaneously suggest solutions.
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Excellent interactive skills with a clear understanding of the principles and functions of an organization.
y y
Role of NIAM The dynamic global business scenario has necessitated a tremendous proliferation on alternative systems of redefined education. At the fore-front of this effort, MaharshiDayanand University, Rohtak, offers Industry Integrated graduate and post graduate regular degree Programmes under Public Private Partnership with NIAM, New Delhi, and through its widely recognized Extended Learning Centres. As a Training and Research Institute of MaharshiDayanad University, Rohtak, NIAM arranges, coordinates, and monitors on-the-job training of the student enrolled into the BBA (Industry Integrated) and MBA(Industry Integrated) Programmes.Besides this, NIAM also act as an interface between the extended learning centers and the university and coordinates with the university for all the matters related to the institutes, students orProgrammes.
GOVERNING COUNCIL
Shankar acharya
ORGANIZATION CHART
ceo
Cio
FINANCE OFFICER
ADMINISTRATION OFFICER
secretary
Risk manager
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PRODUCTs and service profile of kotak mahindra NIAM offers Undergraduate and Post Graduate courses based on Industry Integrated Pattern.
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Institutional
Investment Banking Institutional Equities Treasury Private Equity International Business Offshore Funds Realty Fund
Corporate agencies of kotak Mahindra Kotak consulting pvt. Ltd Marvell insurance services Kotak Mahindra bank Om sanchay insurance agency Kotak securities ltd Corporate services Kotak Mahindra prime ltd. Secure investments The ratnakar bank ltd.
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Dhfl bysya housing finance ltd. Sree charan souharda co-operative bank Lokmanya multipurpose co. op soc ltd. Inventure wealth management Apex associates Secure line insurance services ltd. Tej investment The malkapur urban co-op bank limited Investors paradise Geo financial services Dolphin associates Dombivili nagari shakari band ltd. Polo setco tie-up private limited Prudent corporate advisory Shivajirao bhosale sahakari bank ltd.
Recent awards:
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Kotak Bond Regular received the Lipper Fund Award 2010 for Best Fund over 10 years Bond Indian Rupee Best Private Banking Services Overall in India - Euromoney 2011
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Best Range of Advisory Services Category - Euromoney 2010 Best Family Office Services Category - Euromoney 2010 Best Domestic Equity House by Asiamoney in 2010 Best Private Bank in India 2010 - Finance Asia Country Awards Our other awards include: 2009 Kotak Mahindra Bank was adjudged the Best Private Bank in India at the Finance Asia Country Awards 2009. Kotak Mahindra Asset Management Company (KMAMC) adjudged Best Wealth Creator (Best Debt Fund House category) - Outlook Money NDTV Profit Awards 2009. Ranked amongst the Top 25 Employers by Hewitt. Kotak Mahindra (UK) Ltd. was awarded the Asian Asset Manager of the Year at the Global Investor Editorial Awards 2009 held in London. Kotak Group swept the Euromoney 2009 awards* by winning in multiple categories which included :#1 - Best Private Banking Services Overall #1 - For High Net Worth 1 (US$ 1 million to US$ 10 million) #1 - For High Net Worth 1 (US$ 10 million to US$ 30 million) #1 - Range of Investment Products #1 - Specialised Services for Entrepreneurs
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Kotak Investment Banking was named Best Investment Bank and Best Equity House in India by FinanceAsia Best Bank Awards 2008 and was named Best Domestic Equity House by Asia Money Best Bank Awards 2008. Awarded the Best Domestic Investment Bank and the Best Equity House in The Asset Triple A Country Awards for the period October 1, 2007 to September 30, 2008. 2008 Kotak Investment Bank was awarded the Best Investment Bank in the domestic category in India by Finance Asia for the second year in a row. Kotak Mutual Fund-Kotak Bond Short Term won ICRA Mutual Fund Gold Award in the short term Debt category for 1 year & 3 year 2008 Kotak Mahindra Bank was awarded as Best Security Strategist by Microsoft India and Best IT Implementation for Information security by PCQUEST Kotak Bank emerged in top 3 in 23 categories, including No.1 in 11 categories in the Euromoney Private Banking Poll 2008. Kotak Mahindra Bank IT team got 4 awards (including Best IT Team of the year for the 3rd consecutive year, at the annual BANKING Technology Awards 2008. Kotak Securities was awarded Best Performing Equity Broker in India - CNBC TV 18" Optimix Financial Advisory Awards, 2008 Kotak Mahindra Bank was in the Top 5 for Corporate Governance amongst companies by technical criteria by IR Global Rankings 2008 for the Asia Pacific / Africa region. Kotaks Investor Relation website was adjudged the most voted company in Asia Pacific / Africa by IR Global Rankings 2008 in five categories; Corporate Governance Practices, Financial Disclosure Procedures, IR Team, IR Program and IR Website. Housing Finance Division of the Bank won the award for Best in Customer Information and Responsiveness among all HFIs and Banks in the award hosted by Maharashtra Chamber of Housing Industry (MCHI). Kotak Investment Banking was ranked No. 1 for FY08 by Prime Database for two league tables (a) India Domestic IPOs, (b) Qualified Institutional Placements including Government Divestments. Kotak Mutual Funds three equity schemes (Kotak 30, Kotak Opportunities and Kotak Balance) have been ranked CPR 1 by CRISIL for Q4 FY08.
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Corporate profile
Kotak Mahindra is one of India's leading financial institutions, 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 Rs.7,911 crore and employs around 20,000 employees across its various businesses, servicing around 7 million customer accounts through a distribution network of 1,716 branches, franchisees and satellite offices across more than 470 cities and towns in India and offices in New York, California,San Francisco, London, Dubai, Mauritius and Singapore. Kotak Mahindra Asset Management Company Limited (KMAMC), a wholly owned subsidiary of KMBL, is the Asset Manager for Kotak Mahindra Mutual Fund (KMMF). KMAMC started operations in December 1998 and has over 10 Lac investors in various schemes. KMMF offers schemes catering to investors with varying risk - return profiles and was the first fund house in the country to launch a dedicated gilt scheme investing only in government securities.
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PITAMPURA, NEW DELHI RAJKOT SHIMLA THANE (W) MUMBAI UDAIPUR VIJAYAWADA
Contact Details
Kotak Mahindra old mutual insurance limited 2nd floor, somdutt chambers bikaji cama place, new delhi-110065 Call Centre : 91-22-66384400 - 1800222626 (Toll Free)
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vision and mission Apart from common beliefs, values and objectives the company we believes in the vision of a better tomorrow. It is this deep veneer of faith that has brought the company together and fortified its bond.
Mission The mission of kotak Mahindra is to 1. to be the global Indian financial service brand
the Customers sholud enjoy the benefits of dealing with a global Indian brand that best understands their needs and delivers customized pragmatic solutions across multiple platforms. The companys mission is to be a world class Indian financial services group. The technology and best practices will be benchmarked along international lines while the companys understanding of customers will be uniquely Indian. It will be more than a repository of the customers' savings. It hopes to be a single window to every financial service in the customer's universe one day.
the culture of empowerment and a spirit of enterprise attract bright minds with an entrepreneurial streak to join and stay with the company. Working with this home-grown, professionally-managed company, which has partnerships with international leaders, gives the people a perspective that is universal as well as unique.
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the company hopes to create an ethos of trust across all its constituents. Adhering to high standards of compliance and corporate governance will be its integral part of building trust.
value creation
value creation rather than size alone will always be the companys business driver
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STUDENTS WORK PROFILE I had undergone management training at Kotak Mahinra Old Mutual Life Insurance Ltd. as a Management Trainee for a period of two months. The association provided me many responsibilities to handle, which I performed effectively and efficiently. The following responsibilities were performed by me.y To maintain internal records of the clients that I talked to reguarding products of Kotak Mahindra
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Research on various insurance companies and their profiles. Handling clients on Phone and in person. Fixing up appointments with the clients that may be interested to take up Kotak Mahindra Life Insurance products.
Updating and maintaining clients information in a separate diary for quick reference.
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Preparing daily and weekly policy goals for self estimation. Coordinating with the enterprise to fulfill the necessary requirements of the University.
Learnings y y Learnt about the Insurance Sector in India and its changing interface Learnt about customer relations and its importance in the growth of an organization y y y Exposure to different fields, people and knowledge Developed computer skills required for conducting administrative and office tasks Developed verbal skills required for conducting administrative and office tasks
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Understood the culture of team work Learnt Time Management skills Developed Inter-personal skills Developed communication skills Learnt various marketting gimmicks used in corporate sectors Learnt the purpose of coordination and self-management Learnt the importance of self discipline in personal and professional life
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The main objective of the project is To learn the study the performance of the kotak dynamic growth fund, the kotak pension fund and the kotak aggressive growth fund and their performance
Statement of research objective Exploratory in nature. I have to study the performance meter, the aggressive growth, the performance of kotak dynamic growth, aggressive growth and pension fund allocation by sector.
SCOPE OF THE STUDY:This study will help me understand the growth scale and percentage growth and the relative success of the organization.
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Research design and methodology The data after collection has to be processed and analysis in accordance with the outline laid down for the purpose at the time of developing the research plan.
This is essential for ensuring that we have all relevant data for making contemplated comparison and analysis. As has been stated above, the data is being collected through questionnaire. Here the analysis is done through graphical representation. The answer to the questionnaire will be evaluated thoroughly and well show the complete Analysis of data. Finally, it will provide the complete picture of results.
various statistical charts were referred to for collecting information about the project and to know the benefits funding with kotak mahindra. The responses were further tabulated as per the weightage statistics.
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ANALYSIS AND REPORTING THE FINDINGS:y y y Compilation of data through tabulation Presentation findings through graphs Suggestions and conclusions
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Comparison Study of Industry Integrated program with the traditional two month Summer Training Internship
Summer Training Internship Trainee manages only one project It focuses on single aspect of working Time frame is very less for practical knowledge Managers are not able to guide the trainee through day to day activities
Industry Integrated programme This enables quality education and invaluable industry experience are the highlights of the program This programme multiplies the skill set of students and enhances job potential It helps the student to gain practical job knowledge as he works on daily activities and not on one project
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It helps the student to develop their creative and innovative mindset as they have to handle core job
Chapter-5
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Summary of FINDINGS Working conditions of the organization:The study shows that the majority of the employees are satisfied. This is because there is an assumption that working conditions and satisfaction are interrelated contradicts the two factor theory of motivation.
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An appropriate level and well meaning designation is definitely a positive motivated. Because the study shows that 50% of the employees are satisfied and 30% are not satisfied with their designation. Higher designation is perceived by the employees to raise their social status..
Satisfaction level of responsibility and authority:The study shows that the employees are satisfied with the authority and responsibility given to them. Because responsibility without adequate authority, may most of the times, leave an employee confused and indecisive, because in the absence of authority he may at times, not be able to take prompt decision resulting in delayed action on his part.
Working environment in the organization:It is important that the atmosphere in which the employee works is very friendly and cooperative. The study shows that the positive result that the environment is friendly, encouraging and competitive.
Communication with superiors:The importance of communication has increased with the increase in the size of business, growing competition and advancement in technology. Like the study shows that some of the employees are so satisfied. So there should be an effective, clear and two way communications between superiors and subordinates. Attitude of superiors towards the problems subordinates:Page | 49
The attitude of superiors should be friendly and understanding towards their subordinates. They should help them in solving problems. The study shows that the most of the employees indicate that the Attitude of superiors towards their problem is Hostile and problem solving and help their employee who wants to learn more about his job.
Superior involves subordinates while taking decisions:The study shows that the (50%) of the employees are involved in taking decision and remaining are not satisfied. So the employees are allowed to given their ideas, suggestion. This can increase employee commitment to work, productivity, goals and motivation. Higher level should take interest in the problem of the lower level.
Relationship with colleagues:There should be a cordial relationship between the employees. The study results that the employees are having good relations with their colleagues.
Employees are allowed to take decision to solve their problems:Employees are given authority to take decision to solve their problems. The study shows that some of the employees are not satisfied because they have not much authority to take decision.
Satisfied with the salary package:The study shows that some of the employees are satisfied and some of them are not satisfied because the job responsibilities are more and the salary paid is not
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accordance with it. It is one of the most important motivating factors. So the salary should be given on time.
Present performance appraisal procedure:Performance appraisals are done to translate feedback on past performance for future improvement in an employees performance. It can be used for promotions, transfers, evaluation of an employee. Because some of the employees are satisfied so it should be done on regular basis-half yearly or annually.
Satisfaction level of welfare schemes:Benefits are often perceived as indirect pay by the employees. The company is providing medical benefit scheme, marriage gift scheme and death relief fund. Due to the schemes most of the employees are satisfied but some of them are not so satisfied.
Satisfaction from training and development programme:The study shows that the employees are not so satisfied with training programme and growth opportunity. So the training programmes and growth opportunity are directed towards maintaining and improving current job performance, while development programmes, seek to develop skills for future jobs. It is the responsibility of the management to identify the training needs of its employees and done initiate, appropriate training efforts.
Rewards are given on valid reason:When an employee does his work well, he naturally wants it to be praised and recognized by their superiors. Whenever an employee does his work well recognized
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in the form of praise and assignment of more interesting task is being given to the employees which motivates them. The study shows that the most of the employees are satisfied.
Self development and career development:The study shows that the employees are not satisfied with career development and self improvement programme. So the companys duty is to organize these programmes on regular basis to develop the career of their employees.
Grievance handling procedure:The superiors listen to grievances of his subordinates and tries to remove them as soon as possible. If he unable to solve the problem, he takes up the matter with higher level of management.
CHAPTER 6
The golden phase of the Insurance Industry has begun with growing population as well as the growing demands of the customers and the organizations. During the time recession hit the country the insurance sector was still booming in the country. And now again as the market is growing faster day by day the industry will gain new heights. With the growing population and the growing needs the demands of the customers and the organizations have increased and the companies are reaching out to the remotest areas of the country. Insurance industry is performing well in these days keeping itself growing and evolving to match its course with the rest of the world.
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1.The DAR (daily ACTIVITIES report) should be recorded on daily basis. This would give better results to the organization.
2.The data of the Companies should be collected from the date of inception for better analysis.
4.To analyze the organizations need and to fulfill the same with all the possible options available.
APPENDICES
QUESTIONNAIRE
NAME
:-
DESIGNATION
:-
QUALIFICATION
:-
DEPARTMENT
:-
EXPERIENCE
:-
a. Highly satisfied b. Satisfied c. Neither satisfied nor dissatisfied d. Dissatisfied e. Highly dissatisfied
2. According to the project done by you during the Training, were you satisfied with the responsibility given to you?
a. Highly satisfied b.Satisfied c. Neither satisfied nor dissatisfied d.Dissatisfied e. Highly dissatisfied
3. Were you considered to be part of the team ? a. Highly satisfied b. Satisfied c. Neither satisfied nor dissatisfied e. Dissatisfied e. Highly dissatisfied
5. What is the attitude of superiors towards your problems? a) Hostile b) Indifferent c) Encouraging d) Understanding e) Problem Solving
6. Did you get an opportunity for showing your innovation and creativity? f. Almost always g.Mostly h.Sometimes i. Rarely j. Not at all
7. Were you given all types of benefits as given to a regular employee? a. Highly satisfied b. Satisfied c. Neither satisfied nor dissatisfied d. Dissatisfied e. Highly dissatisfied
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8. Was reward and recognition part of your training programme? a. Almost always b. Mostly c. Sometimes d. Rarely e. Not at all
9. Did you receive proper guidance from your Reporting Manager? a. Almost always b. Mostly c. Sometimes d. Rarely e. Not at all
10. Are you satisfied with the experience gained during the training? a. Highly satisfied b. Satisfied c. Neither satisfied nor dissatisfied d. Dissatisfied e. Highly dissatisfied
Bibliography Following are the sites from which data has been recovered 1. www.Justdial.org 2. www.goggle.com 3. www.grotal.com 4. www.fundoodata.com 5. www.sulekha.com
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