Customer Relationship Management in IDBI
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Description
A Summer Training Project Report On Customer Relationship Management in IDBI Federal Lie Insurance L!C"#O$
Submitted in partial fulfillment of the requirements for Award of Master o Business Administration
With Specialization In MAR"%TI#&
Su'mitted '( S!#IL C)O!DAR*+" Reg #o,
Under the Guidance of COMPA#* &!ID%
I#STIT!T% &!ID%
SA#TOS) "!MAR B+R
RO)IT) C "ALAS"AR
C!STOM%R %-%C!TI.%
S%CR%TAR* &%#%RAL )%T,IMS )!BLI
B.N. College of Engineering and echnolog! "uc#now 1
Declaration
I hereb! declare that the pro$ect entitled /C!STOM%R R%LATIO#S)IP MA#A&%M%#T0 underta#en at I%BI &E%E'A" "I&E INS('ANCE C). "%.*"(C+N)W submitted in partial fulfillment of the requirement for the award of the degree in ,aster in Business Administration to the B.N. College of Engineering and echnolog!* -une. It is m! srcinal wor# and is not submitted for the award of an! other degree or diploma.
Place Date
S!#IC L)O$DAR*+"
2
AC"#O$L%D&%M%# As I loo# bac# after the completion of m! pro$ect I feel it would not hae been possible without the guidance. I am er! grateful to all the people who hae lent their precious time and adice for rendering this pro$ect successful. I ta#e this opportunit! to than# them all. &irstl!* I am grateful to /IDBI F%D%RAL LIF% I#S!RA#C% CO+ LTD+1 L!C"#O$0 for giing me an opportunit! to underta#e this pro$ect in their
organization. I sincerel! e/press m! than#s to m! compan! pro$ect guide
SA#TOS) "!MAR B+R
for his strong support and inspiration during m! pro$ect period. I heartl! than#ful to all the e/ecuties of the compan! for their aluable guidance and for sharing their e/perience in completing this pro$ect successfull!* I am than#ful to our Chairman Dr+ "AL%%L A)M%Dfor the strong inspiration during the pro$ect period. I would li#e than# our institute guide RO)IT) C "ALAS"AR for haing gien me this opportunit! and for his aluable eer0patient guidance eer endeaoring support* timel! help and constant encouragement and also I am than#ful to all facult! members of m! institution for their aluable guidance in completing this pro$ect successfull!. I also e/press than#s to m! parents* m! famil! members* and all m! friends for their aluable support in completion of this pro$ect successfull!. "ast but not least I am than#ful to all those people who helped us directl! and indirectl!. -lace1
%ate1
S!#IL C)O$DAR*+"
3
CO#T%#TS
Chapter 2 Chapter 3
'ationale for the stud! )b$ectie of the stud! •
2 3,4
itle of the pro$ect
)b$ectie of the stud! Scope of the stud! -rofile of the compan! heoretical -erceptie 'esearch ,ethodolog! • •
Chapter 4 Chapter 5 Chapter 6
5,67 62,68 97,93
'esearch %esign %ata collection methods 2 sources Sampling plan which should include sampling unit* sampling size and sampling methods ia questionnaire methods* interiew methods* obserations etc Chapter 9 Chapter : Chapter ; Chapter 8
%ata anal!sis and interpretations using arious charts and graphs &indings "imitations if an! E/pected contribution from the stud! Appendi/ and Bibliograph!
94,:: :;,:8 ;7 ;2,;3 ;4,;8
O.%R.I%$ OF I#S!RA#C% S%CTOR With largest number of life insurance policies in force in the world* Insurance happens to be a mega opportunit! in India. It3s a business growing at the rate of 45067 per cent annuall! and presentl! is of the order of 's 857 billion. ogether with ban#ing
4
serices* it adds about 9 per cent to the countr!3s :%-. :ross premium collection is nearl! 6 per cent of :%- and funds aailable with "IC for inestments are ; per cent of :%-. ; and the I'%A Act0 4===. he insurance sector in India has come a full circle from being an open competitie mar#et to nationalization and bac# to a liberalized mar#et again. racing the deelopments in the Indian insurance sector reeals the >?70degree turn witnessed oer a period of almost two centuries. Indian Insurance Industr(< Insurance ma! be described as a social deice to reduce
or eliminate ris# of life and propert!. (nder the plan of insurance* a large number of people associate themseles b! sharing ris#* attached to indiidual. he ris#* which can be insured against include fire* the peril of sea* death* incident* @ burglar!. An! ris# contingent upon these ma! be insured against at a premium commensurate with the ris# inoled.
5
Insurance is actuall! a contract between 6 parties whereb! one part! called insurer underta#es in e/change for a fi/ed sum called premium to pa! the other part! happening of a certain eent.
Insurance is a contract whereb!* in return for the pa!ment of premium b! the insured* the insurers pa! the financial losses suffered b! the insured as a result of the occurrence of unforeseen eents.
With the help of Insurance* large number of people e/posed to a similar ris# ma#e contributions to a common fund out of which the losses suffered b! the unfortunate few* due to accidental eents* are made good -otential "argel! untapped mar#et1 49 of the world3s population o
Nearl! ;7 of the Indian population is without "ife* ealth and Non0life insurance
o
"ife insurance penetration is low at 8.4 in 677?079
o
Non0life penetration is een lower at 7.? in 677?079
o
he per capita spend on life and non0life insurance is (S>>.6 and (S5.6 D677?079* respectiel! compared to a world aerage of (S>>7 and (S668
o
Strong economic growth with increase in affluence and rising ris# awareness leading to rapid growth in the Insurance sector
o
Innoatie products such as (nit "in#ed Insurance -olicies are li#el! to drie future industr! growth
o
Inestment opportunities e/ist in both "ife and Non0life segments
o
otal estimated inestment opportunit! of (S48045 billion
STR!CT!R%
6
Indian Insurance mar#et was opened to priate @ foreign inestment in 4===06777
he Indian Insurance industr! consists of a total of >4 pla!ers
"ife1 4 -ublic sector pla!erF 45 priate pla!ers
Non0"ife1 ? public sector pla!ersF = priate pla!ers
,a$or international pla!ers li#e AI:* Aia* ,et"ife* New 8 of the mar#et in 677? to 79.
POLIC* &%I up to 6? is permitted under the automatic route sub$ect to obtaining a license from the Insurance 'egulator! and %eelopment Authorit! DI'%A -lans to increase &%I up to 8= Insurance 'egulator! %eelopment Authorit! DI'%A is the regulator for the Insurance industr! In a landmar# moe the goernment detariffed the :eneral Insurance business on 4st Ganuar! 6779
$hat is Lie Insurance= "ife insurance is a guarantee that !our famil! will receie financial support* een in !our absence. -ut simpl!* life insurance proides !our famil! with a sum of mone! should something happen to !ou. It thus permanentl! protects !our famil! from financial crises.
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In addition to sering as a protectie coer* life insurance acts as a fle/ible mone!0saing scheme* which empowers !ou to accumulate wealth0to bu! a new car* get !our children married and een retire comfortabl!.
"ife insurance is a contract that pledges pa!ment of an amount to the person assured Dor his nominee on the happening of the eent insured against.
he contract is alid for pa!ment of the insured amount during1 •
he date of maturit!* or
•
Specified dates at periodic interals* or
•
(nfortunate death* if it occurs earlier
he functions of Insurance can be bifurcated into two parts1 4. -rimar! &unctions 6. Secondar! &unctions >. )ther &unctions
he primar! functions of insurance include the following1
Pro>ide Protection 0 he primar! function of insurance is to proide protection against
future ris#* accidents and uncertaint!. Insurance cannot chec# the happening of the ris#* but can certainl! proide for the losses of ris#. Insurance is actuall! a protection against economic loss* b! sharing the ris# with others.
8
Collecti>e 'earing o ris? 0 Insurance is a deice to share the financial loss of few
among man! others. Insurance is a mean b! which few losses are shared among larger number of people. All the insured contribute the premiums towards a fund and out of which the persons e/posed to a particular ris# is paid.
Assessment o ris? 0 Insurance determines the probable olume of ris# b! ealuating
arious factors that gie rise to ris#. 'is# is the basis for determining the premium rate also
Pro>ide Certaint( 0 Insurance is a deice* which helps to change from uncertaint! to
certaint!. Insurance is deice whereb! the uncertain ris#s ma! be made more certain.
he secondar! functions of insurance include the following1
Pre>ention o Losses 0 Insurance cautions indiiduals and businessmen to adopt suitable
deice to preent unfortunate consequences of ris# b! obsering safet! instructionsF installation of automatic spar#ler or alarm s!stems* etc. -reention of losses cause lesser pa!ment to the assured b! the insurer and this will encourage for more saings b! wa! of premium. 'educed rate of premiums stimulate for more business and better protection to the insured. Small capital to co>er larger ris?s 0 Insurance reliees the businessmen from securit!
inestments* b! pa!ing small amount of premium against larger ris#s and uncertaint!.
Contri'utes to@ards the de>elopment o larger industries 0 Insurance proides
deelopment opportunit! to those larger industries haing more ris#s in their setting up. Een the financial institutions ma! be prepared to gie credit to sic# industrial units which hae insured their assets including plant and machiner!.
9
E )E' &(NCI)NS )& INS('ANCE INC"(%E E &)"")WIN:1
Means o sa>ings and in>estment 0 Insurance seres as saings and inestment*
insurance is a compulsor! wa! of saings and it restricts the unnecessar! e/penses b! the insuredHs &or the purpose of aailing income0ta/ e/emptions also* people inest in insurance.
Source o earning oreign echange 0 Insurance is an international busin ess. he
countr! can earn foreign e/change b! wa! of issue of marine insurance policies and arious other wa!s.
Ris? Free trade 0 Insurance promotes e/ports insurance* which ma#es the foreign trade
ris# free with the help of different t!pes of policies under marine insurance coer.
#eed or Lie Insurance oda!* there is no shortage of inestment options for a person to choose from. ,odern da! inestments include gold* propert!* fi/ed income instruments* mutual funds and of course* life insurance. :ien the plethora of choices* it becomes imperatie to ma#e the right choice when inesting !our hard0earned mone!. "ife insurance is a unique inestment that helps !ou to meet !our dual needs 0 saing for lifeHs important goals* and protecting !our assets. "E (S "))+ A ESE (NI(E BENE&IS )& "I&E INS('ANCE IN %EAI".
Asset Protection &rom an inestorHs point of iew* an inestment can pla! two roles 0 asset appreciation or asset protection. While most financial instruments hae the underl!ing benefit of asset appreciation* life insurance is unique in that it gies the customer the reassurance of asset protection* along with a strong element of asset appreciation.
10
he core benefit of life insurance is that the financial interests of one3s famil! remain protected from circumstances such as loss of income due to critical illness or death of the polic!holder. Simultaneousl!* insurance products also hae a strong inbuilt wealth creation proposition. he customer therefore benefits on two counts and life insurance occupies a unique space in the landscape of inestment options aailable to a customer.
&oal 'ased sa>ings Each of us has some goals in life for which we need to sae. &or a !oung* newl! married couple* it could be bu!ing a house. )nce* the! decide to start a famil!* the goal changes to planning for the education or marriage of their children. As one grows older* planning for oneHs retirement will begin to ta#e precedence. Clearl!* as !our life stage and therefore !our financial goals change* the instrument in which !ou inest should offer corresponding benefits pertinent to the new life stage. "ife insurance is the onl! inestment option that offers specific products tailor0made for different life stages. It thus ensures that the benefits offered to the customer reflect the needs of the customer at that particular life stage* and hence ensures that the financial goals of that life stage are met. he table below gies a general guide to the plans that are appropriate for different life stages. Lie
Lie Stage
Insuranc e
Primar( #eed
Product
Asset creation
Wealth creation plans
?70degree turn witnessed oer a period of almost 4=7 !ears.
he business of life insurance in India in its e/isting form started in India in the !ear 4;4; with the establishment of the )riental "ife Insurance Compan! in Calcutta.
16
Some of the important milestones in the life insurance business in India are 2823 0 he Indian "ife Assurance Companies Act enacted as the first statute to
regulate the life insurance business.
283; 0 he Indian Insurance Companies Act enacted to enable the goernment to collect statistical information about both life and non0life insurance businesses.
284; 0 Earlier legislation consolidated and amended to b! the Insurance Act with
the ob$ectie of protecting the interests of the insuring public.
2869 0 685 Indian and foreign insure rs and proident societies ta#en oer b! the
central goernment and nationalized. "IC formed b! an Act of -arliament* iz. "IC Act* 4=5?* with a capital contribution of 's. 5 crore from the :oernment of India.
he :eneral insurance business in India* on the other hand* can trace its roots to the riton Insurance Compan! "td.* the first general insurance compan! established in the !ear 4;57 in Calcutta b! the British.
Some of the important milestones in the general insurance business in India are1
287: 0 he Indian ,ercantile Insurance "td. set up* the first compan! to transact
all classes of general insurance business.
286: 0 :eneral Insurance Council * a wing of the Insurance Association of India*
frames a code of conduct for ensuring fair conduct and sound business practi ces.
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289; 0 he Insurance Act amended to regulate inestments and set minimum
solenc! margins and the ariff Adisor! Committee set up.
28:3 0 he :eneral Insurance Business DNationalization Act* 4=96 nationalized
the general insurance business in India with effect from 4st Ganuar! 4=9>.
27: insurers amalgamated and grouped into four companies iz. the National Insurance Compan! "td.* the New India Assurance Compan! "td.* the )riental Insurance
Compan! "td. and the (nited India Insurance Compan! "td. :IC incorporated as a compan!. Before insurance sector was opened to the priate sector "ife Insurance Corporation D"IC was the onl! insurance compan! in India. After the opening up of Insurance sector in India there has been a glut of insurance companies in India. hese companies hae come up with innoatie and fle/ible insurance policies to cater to ar!ing needs of the indiidual. )pening up of the Insurance sector has also forced the "IC to tighten up its belt and delier better serice. All in all it has been a bonanza for the consumer. he life insurance business in India started since 4;4;. ill 4=5?* the insurance business was mi/ed and decentralized. In 4=5?* the life insurance business of all companies was nationalized and a single monolithic organization* the "ife Insurance Corporat ion of India D"IC* was set up. he Insurance
'egulator! and
%eelopment Authorit! DI'%A Bill was passed b! Indian parliament in %ecember 4===. he I'%A become a statutor! bod! in April 6777 and has been framing regulations and restrictions the priate sector insurance companies. he insurance sector was opened up to the priate sector in August 6777. Consequentl!* some Indian and foreign priate companies hae entered the insurance business. here are about 4? life insurance companies operating in the priate sector in India.
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he insurance sector in India has come a full circle from being an open competitie mar#et to nationalization and bac# to a liberalized mar#et again. racing the deelopments in the Indian insurance sector reeals the >?7 degree turn witnessed oer a period of almost two centuries.
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PROFIL% OF T)% COMPA#*
IDBI Federal Lie Insurance Co Ltd
is a $oint0enture of I%BI Ban#*
India3s premier deelopment and commercial ban#* &ederal Ban#* one of India3s leading priate sector ban#s and Ageas* a multinational insurance giant based out of Europe. In this enture* I%BI Ban# owns 8; equit! while &ederal Ban# and Ageas own 6? equit! each. At I%BI &ederal* we endeaor to delier products that proide alue and conenience to the customer. hrough a continuous process of innoation in product and serice delier! we intend to delier world0class wealth management* protection and retirement solutions to Indian customers. aing started in ,arch 677;* in $ust fie months of inception we became one of the fastest growing new insurance companies to garner 's 477 Cr in premiums. he compan! offers its serices through a ast nationwide networ# across the branches of I%BI Ban# and &ederal Ban# in addition to a sizeable networ# of adisors and partners. As on >4st ,arch* 6746* the compan! has issued oer >.9? la#hs policies with oer 64*59; Cr in Sum Assured.
Management<
•
•
&. #age s@ ara Rao is the ,% @ CE) of I%BI &ederal "ife Insurance. Aneesh Sri>asta>a is the CI) o IDBI &ederal "ife Insurance.
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•
Michael $ood is the appo int ed actuar( of I%BI &ederal "ife
Insurance
The sponsors o IDBI Federal Lie Insurance Co Ltd+
E
IDBI Ban? Ltd+ continues to be* since its inception* India3s premier
industrial deelopment ban#. It came into being as on Gul! 74* 4=?8 Dunder the Companies Act* 4=5? to support India3s industrial bac#bone. oda!* it is amongst India3s foremost commercial ban#s* with a wide range of innoatie products and serices* sering retail and corporate customers in all corners of the countr! from =99 branches and 4588 A,s. he Ban# offers its customers an e/tensie range of diersified serices including pro$ect financing* term lending* wor#ing capital facilities* lease finance* enture capital* loan s!ndication* corporate adisor! serices and legal and 21
technical adisor! serices to its corporate clients as well as mortgages and personal loans to its retail clients. As part of its deelopment actiities* I%BI Ban# has been instrumental in sponsoring the deelopment of #e! institutions inoled in India3s financial sector KNational Stoc# E/change of India "imited DNSE and National Securities %epositor! "td* SCI" DStoc# olding Corporation of India "td* CA'E DCredit Anal!sis and 'esearch "td.
Federal Ban? is one of India3s leading priate sector ban#s* with a
dominant presence in the state of +erala. It has a strong networ# of oer =57 branches and 4776 A,s spread across India. he ban# proides oer four million retail customers with a wide ariet! of financial products. &ederal Ban# is one of the first large Indian ban#s to hae an entirel! automated and interconnected branch networ#. In addition to interconnected branches and A,s* the Ban# has a wide range of serices li#e Internet Ban#ing* ,obile Ban#ing* ele Ban#ing and An! Where Ban#ing* debit cards* online bill pa!ment and call centre facilities to offer round the cloc# ban#ing conenience to its customers. he Ban# has been a pioneer in proiding innoatie
technological
solutions
to
its
customers
and
the
Ban#LhasLwonLseeralLawards.
Ageas is an international insurance compan! with a heritage spanning more
than 4;7 !ears. 'an#ed among the top 67 insurance companies in Europe* Ageas has chosen to concentrate its business actiit ies in Europe and Asia* which together ma#e up the largest share of the global insurance mar#et. hese are grouped around four segments1 Belgium* (nited +ingdom* 22
Continental Europe and Asia and sered through a combination of wholl! owned subsidiaries and partnerships with strong financial institutions and #e! distributors around the world. Ageas operates successful partnerships in Belgium* (+* "u/embourg* Ital!* -ortugal* ur#e!* China* ,ala!sia* India and hailand and has subsidiaries in &rance* :erman!* ong +ong and (+. It is the mar#et leader in Belgium for indiidual life and emplo!ee benefits* as well as a leading non0life pla!er* through A: Insurance* and in the (+* it has a strong presence as the third largest pla!er in priate car insurance and the oer 573s mar#et. It emplo!s more than 4>*777 people and has annual inflows of more than E(' 49billion. .ISIO#<
o be the leading proider of wealth management* protection and recruitment solutions that meets the needs of the customers and adds alues to their lies. MISSIO#< •
o continuall! strie to enhance customer e/perience through innoatie product offerings* dedicated relationship management and superior serice delier! while striing to interact with the customers
• •
in the most conenient and most cost effectie manner. o be transparent with the customers and to act with integrit!. o inest in and build qualit! human capital in order to achiee our mission.
.AL!%S 23
ransparenc! Malue to customers &inancial strength %elier! on -romise Customer friendl! -rofit to Shareholders
At I%BI &ederal "ife Insurance Co. "td.* the Endeaour is to delier products that proide alue and conenience to the customer. hrough a continuous process of innoation in product and serice delier!* the intent is to delier world class wealth management* protection and retirement solutions to Indian customers. TRAC" R%CORD •
India3s fastest growing life insurance compan! with -an India
•
presence. ,odal premium 's.>4? crores in the first !ear of operation. Aboe 's.>777 crores of sum assured* =7777 policies and 9777
•
• •
• •
distributors. ,oed into 4>th position from 4;th as on >4st ,arch 677=. &astest 's.477 crores and fastest 's.>77 crores business targets met since inception. &unds performing in the top quartile consistentl!. Achieed one of the lowest cost ratios in the industr!.
PROD!CTS OFF%R%D B* IDBI F%D%RAL LIF% I#S!RA#C% CO+ LTD+
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• • • • • • • • • • •
Childsurance "ifesurance Wealthsurance :roup ,icrosurance Incomesurance ealthsurance Bondsurance omesurance ermsurance "oansurance 'etiresurance
I%BI &ederal "ife Insurance Co. "td. proides its serices through three means. he! are1 Bancassurance Channel* Agenc! Channel and Alliance Channel. he "uc#now branch of I%BI &ederal "ife Insurance Co. "td. deals with plans li#e childsurance* lifesurance* wealthsurance* termsurance and incomesurance. PROD!CT PROFIL%
I%BI &ederal "ife Insurance -roduct able 'etirement2-ension -lan erm-lan Saings @ Inestment -lan Saings @ Inestment -lan Saings @ Inestment -lan ealth-lan
'etiresurance ermsurance Wealthsurance Bondsurance Incomesurance ealthsurance
PROD!CTS I# D%TAIL
25
Childsurance<
I%BI federal3s childsurance is for the parents who are loo#ing to ma#e their child3s future shoc#0proof is its powerful insurance benefits. Childsurance allows to !ou to protect !our child plan with triple insurance benefits so that !our wealth0building plan remains unaffected b! unforeseen eents and !our child future remains secure. I%BI &ederal Childsurance %reambuilder Insurance -lan is a (nit lin#ed plan which is loaded with lots of benefits which will help !ou to build* create and manage !our inestment with great fle/ibilit! so that !our plan meets !our specific needs. he following are the #e! benefits Childsurance
%reambuilder Insurance
-lan.
•
Contribute mone! in a fle/ible wa! to suit customer3s saings habit A wide choice of inestment options* based on customer3s return
•
e/pectations and ris# tolerance Inestment strateg! according to customer3s profile
•
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• • • • •
elps to boost customer3s saings. Customers can decide on how to manage their inestments. elps to secure child3s future goals a/ benefits on contributions and benefits &unds can be withdrawn in case of need* after fie !ears
)ealthsurance<
I%BI federal ealthsurance ospitalization and surgical plan offers host of features and benefits that is designed to help the customers to manage e/tra burden that comes with hospitalization. his plan targets the customers within the age limit of 4; !ears K 55 !ears. he following diagram shows the reasons behind wh! healthsurance plan should be included in the financial plan of eer! indiidual.
BENE&IS (N%E' EA"S('ANCE I%BI &ederal ealthsurance ospitalization and Surgical -lan is a power pac#ed plan with loads of benefits that aim to #eep !ou tension free. 27
•
%ail! hospital cash benefit paid for each da! D68 hours spent in an eligible hospital Dfrom da! 6 onwards1 's. 577* 's. 4*777* 's. 4*577 or 's. 6*777 depending on customer3s choice of benefit leel
•
igher dail! hospital cash benefits of 's >*777 and 's. 8*777 aailable* sub$ect to suitable proof of income
•
Additional dail! benefit equal to the dail! hospital cash benefit* from da! 6 onwards for hospitalization in an Intensie Care (nit* Dup to an oerall ma/imum dail! benefit of 's. 5*777
•
Additional lump sum surger! benefit paid if customer undergo an! of the wide range of surgical procedures specified in this brochure1 either 57 or 477 times customer3s chosen dail! benefit* depending on the seerit! of the surger!
•
hree times customer3s dail! hospital cash benefit paid as a lump sum conalescence benefit Dma/imum once per !ear if
customer3s
hospital sta! is at least 4?; continuous hours Dat least 9 consecutie da!s •
:enerous total benefit limits. (p to 577 times customer3s dail! hospital cash benefit each !earF up to 6*777 times customer3s dail! hospital cash benefit oer the lifetime of customer3s polic!
•
Coer lasts until customer are aged ?5 !ears* proided customer continue to pa! their premiums in the agreed manner and as long as their lifetime benefits limit D6*777 times !our dail! hospital cash benefit has not been reached
•
Customer3s choice of nominee* to whom an! outstanding benefits will be paid* in the eent of the death of the insured person
28
•
"ow0cost monthl! premiums that depend on customer3s age at the outset. Customer3s premium will neer increase because of an! changes in their age* health* or the number of claims the! ma#e. oweer* I%BI &ederal "ife Insurance Co. "td. does resere the right Dsub$ect to I'%A approal to increase premiums in the future across all its specified plans.
%cluded occupations under )ealthsurance
Applications for coer will not be accepted from an!one wor#ing in an! occupation described below at the time of appl!ing. In the eent of a claim whilst the insured person is actie in an! of these occupations* the claim will onl! be considered with the proision of proof that the insured person was not wor#ing in an! of these occupations at the commencement date. •
Wor#ing in confined spaces in essels* tunnels* underground ciil wor#s* mines* rigs Dincluding offshore rigs or ships
•
Industrial wor# using hea! machiner! or wor#ing as a welder
•
Wor#ing in the agricultural sector or as a forestr! wor#er or as timber camp personnel
•
Wor#ing with to/ic chemicals or e/plosies or in weapons manufacture or trading* or in the demolition trade
•
Wor#ing in transport business Dunless onl! doing clerical wor#
•
Wor#ing at heights Dat least 67 metres aboe the ground or floor leel
•
Wor#ing as a fireman* securit! guard or patrolman* or as a member of the police force or sering in the armed forces
29
Liesurance<
I%BI federal "ifesurance -lan is a saing insurance plan that helps !ou to safeguard !our wealth at the same time will present better opportunit! to earning better return.
30
"%* F%AT!R%S OF LIF%S!RA#C% SA.I#&S I#S!RA#C% PLA#
Maturit( Beneit
)n the maturit! of !our "ifesurance polic!* proided all premiums hae been paid in full when due we will pa! !ou the sum insured along with the ested guaranteed additions* ested reersionar! bonuses and terminal bonus*
if
an!*
in
a
lump
sum.
,aturit! Benefit O Sum insured P Mested guaranteed additions P Mested reersionar! bonuses P erminal bonus Death Beneit
)n the death of the life insured during the polic! term* proided all premiums hae been paid in full when due we will pa! the beneficiar!* the
31
sum insured along with the ested guaranteed additions* ested reersionar! bonuses* interim bonus* if an! and terminal bonus* if an! in a lump sum. %eath Benefit O Sum insured P Mested guaranteed additions P Mested reersionar! bonuses P Interim bonus Dif an! P erminal bonus &uaranteed Additions
:uaranteed additions at the rate 57 per 4*777 sum insured will be added to !our polic! for each full annual premium that is due and paid in the first 5 !ears of the polic!. In the case of premiums paid more frequentl! than annuall!* the guaranteed additions will be added on a pro rata basis as the due premiums are paid in the first 5 !ears of the polic!. he ested guaranteed additions will become pa!able along with the sum insured at the time of a claim or maturit! of the polic!. Bonuses
After the fifth polic! !ear !our "ifesurance polic! will participate in an! profits of our participating polic!holders3 life fund b! wa! of reersionar! bonuses and possibl! terminal bonus. he amount of an! profits* and hence of an! bonuses will depend on the future e/perience and performance of the fund. he bonuses will be declared b! the Board of I%BI &ederal "ife Insurance Compan! each !ear* and once added the! will form part of the guaranteed benefits of the polic!. he Compan! ma! declare an interim bonus in the eent of a claim before the ne/t bonus declaration. he compan! ma! also declare a terminal bonus to be paid on maturit! or death proided all the due premiums hae been paid.
32
Ta Beneits
Deduction under Sec ;7C< he premiums that !ou inest in
"ifesurance are eligible for deduction under Sec ;7C of the Income a/ Act up to the limit of 's. 4* 77*777 Dalong with other eligible inestments.
Ta,ree Beneits under Sec 2727DG< he maturit! benefit as well
as death benefit are ta/0free under Sec 47D47% of the Income a/ Act
here is also no ta/ deduction at source.
Flei'le Premium Pa(ment Term PPTG H Polic( Term PTG Polic( Term< .7= Dincluding education cess of the premiums paid for the first !ear and 4.585 for the renewal premiums. Serice ta/ and education cess are as per the e/tant laws. 6. &or "ifesurance Suidha Saings* the ma/imum aggregate sum insured limit for an indiidual life is limited to 's. ?* 77*777 for each 46 month period and to 's. 67* 77*777 in total. hese limits will be calculated after including all indiidual and group policies of I%BI &ederal "ife Insurance Co. "td* e/cept the full! underwritten policies. >. :uaranteed %eath Benefit is Sum insured plus ested :uaranteed Additions. 35
Bondsurance<
Bondsurance is designed for customer loo#ing for guaranteed returns which will not get affected b! financial mar#et conditions. It offers guaranteed return on inestment along with life insurance coer. Bondsurance Ad>antage Insurance Plan
he I%BI &ederal BondsuranceQ Adantage Insurance -lan is a single premium plan where !ou need to ma#e $ust a one0time inestment. er Amount reduces o>er time
)utstanding home loan amount normall! reduces oer time as customer repa! b! wa! of monthl! installments. Accordingl!* the coer amount under the omesurance -rotection -lan also reduces with time to reflect the outstanding loan amount. At the time of the plan* customer will receie a
42
-olic! Schedule based on the amount and terms of loan* which will show them the reducing coer amount oer time. 3+ Beneit Amount is paid on death
In the eent of death of the insured* insurer will pa! either the coer amount as per the omesurance -rotection -lan -olic! Schedule as on the date of death* or the actual outstanding balance in the insured loan account as on the date of death* whicheer is higher. %eath due to an! cause including illness or accident is coered under the plan. %eath* whether in India or abroad is also coered under the plan. )omesurance Plan
I%BI &ederal omesurance -lan Domesurance is a mortgage reducing term plan which offers protection to a person and his famil! from their home loan liabilit!. he plan proides a coer equal to the outstanding balance of home loan in the unfortunate eent of e/pir! of the insured. A+ Protection against Loan Lia'ilit( omesurance coers life for an amount equal to home loan liabilit! as per the home loan schedule. In case of an unfortunate eent of e/pir! of the insured* the outstanding balance amount is paid to the nominees in one lump sum* who ma! then settle the loan liabilit!. B+ Co>er or Terminal Illness
A unique feature of the omesurance
plan is that it pa!s an accelerated
pa!ment of death benefit upon the diagnosis of a terminal illness* where the insured has a medical prognosis of a life e/pectanc! of si/ months or less.
43
his helps to settle the home loan liabilit! should an unforeseen terminal illness occur. C+ Optional Insurance Beneits
o protect customer and his famil! from unforeseen eents* the! can opt for optional insurance benefits as an addition to omesurance base plan. he )ptional Insurance Benefit is aailable onl! with the regular premium plan. Additional premiums should be paid for the term of the optional insurance benefit depending upon the sum insured chosen. Incomesurance<
I%BI &ederal Incomesurance Endowment and ,one! bac# -lan is a plan which is designed for the customers to reach their goals with confidence. he main features of this plan are1 • • • • • • • •
-remiums paid for a limited period :uaranteed annual pa!out ,inimum annual pa!out declared at the beginning Additional annual pa!out is declared each time the premium is paid. Additional annual pa!out is lin#ed with :0 sec interest rates Customers can ta#e periodic pa!ments or accumulate till maturit! "ump sum coer or waier of premium a/ benefits under Sec ;7C and Sec 47D47%
I%BI &ederal IncomesuranceQ Endowment and ,one! Bac# -lan DIncomesuranceQ not onl! gies unmatched transparenc! and fle/ibilit! but there are lots of other features which are inbuilt in the product li#e
44
conenient premium pa!ment options* a/ benefits and double adantage of Endowment and ,one! Bac# plan.
Adantage of Endowment and ,one! Bac#
a/ Benefits
-remiums waied in case of death
Conenient premium pa!ment options
Complete transparenc!
45
Termsurance<
eramsurance protection plan of I%BI federal offers unique increasing coer option that can automaticall! increase the coer eer! !ear without increasing the premium. ermsuranceSeniors Insurance -lan Customers oer the age of 57 can enroll for this plan till the ma/imum age of ;5. he entr! to the plan is guaranteed without an! questions of the state of the health condition. In the unforeseen eent of demise in the first two !ears of the polic!* 465 of total premiums paid shall be returned. After two !ears* customers are insured for the amount of sum insured for life. he amount of premium and coer remain the same throughout the life of the polic!* e/cept after age =7. At age =7 the polic! gets een better as premiums will stop* but life insurance coer will continue. here are no maturit! benefits. ermsurance -remier Insurance -lan I%BI &ederal ermsurance -remier Insurance -lan* a term insurance plan that gies insured the power and fle/ibilit! to ta#e complete charge of the financial future of their loed ones. ermsurance is designed with a host of benefits and options aimed at satisf!ing needs. It has choice of polic! term* fle/ible premium pa!ment options and lots more. It also allows to create a plan as per insured and his famil!3s needs and ob$ecties* thus offering them a trul! fle/ible protection plan. 46
Termsurance Protection Plan
I%BI &ederal ermsurance -rotection -lan Dermsurance comes with three coer options which insured can select on the basis of their requirement. ermsurance is designed with a host of benefits @ options aimed at satisf!ing eer! need. It not onl! allows to customise plan as per indiidual and famil!3s needs* it also comes with a host of benefits li#e conenient insurance coer options* fle/ible premium pa!ment terms* choice of polic! term and lots more fle/ible options.
Major 'eneits o Multiple Co>er options
,ultiple coer options gie !ou tailor0made protection
&le/ibilit! in the polic! term to suit !our lifestage.
&le/ibilit! in premium pa!ment terms to suit !our wallet.
Attractie discounts to encourage additional coer o
Adantage Women o
igh Sum Insured 'ebate
47
a/ benefits to help !ou grow !our wealth faster
ermsurance :roup "ife -lan he I%BI &ederal ermsurance :roup "ife -lan is a pure term plan designed to cater to a wide ariet! of formal and informal groups such as the Emplo!er0Emplo!ee groups* ban# 0K depositor2customers groups* customer0 supplier groups* professional and affinit! groups. It is a group term insurance plan that proides basic life insurance protection to the members of the plan. "ife insurance benefit for all members of the plan is proided b! one polic! document that is issued to the polic!holder. he polic!holder ma! differ for different groups. E.g. In the case of a Ban# proiding life insurance coer to their deposit account holders* the Ban# will be the ,aster -olic! older and the deposit account holder2 ban# customer shall be a member of the polic!. Similarl!* for an emplo!er0 emplo!ee group* the emplo!er will be the ,aster -olic! holder and the emplo!ees shall be the members of the polic!. ermsurance :rameen Bachat !ears* 5 !ears and 47 !ears. he customer has the fle/ibilit! of getting the sum assured ranging from 's.
48
5777 to 's. 477777 in the multiples of 's. 4777. I%BI &ederal is also proiding another R:rameen Sura#sha -lan in rural area which is similar to this plan. Loansurance
"oansurance is a cost effectie wa! to ensure that the outstanding debt is settled in the unfortunate eent of death of the insured. his plan proides coer to a person directl! liable for loan repa!ment. here are two coer options aailable under this plan. 'educing Coer (nder the option* the insurance coer reduces as per benefits schedule. he premium amount is computed oer a period of time* ta#ing into account initial loan interest rate* the loan term and outstanding loan amount. "eel Coer his option proides a coer for the sum assured as specified b! the insured and can be to the e/tent to the full agreed loan amount plus accrued interest as chosen b! the insured member. his remains unchanged throughout the coer term. hus een if the loan liabilit! declines oer time* the plan coers is the sum assured throughout the coer time. Microsurance
I%BI &ederal :roup ,icrosurance -lan proides affordable life insurance coer to groups. his plan is e/tremel! useful to micro finance institutions*
49
self help groups and N:)3s to insure the lies of their group members and thus proide securit! to the group member3s families. he plan can also be used for proiding loan protection to the group member3s families. Retiresurance
his is a zero death benefit pension plan* wherein the insured can accumulate a corpus to en$o! pension after retirement. he plan is open for ages between 4;097 !ears* with esting age between 87 and 95 !ears. his plan offers aried inestment options spread between 477 debt to 477 equit! to choose from. &le/ibilit! to reduce future annual premium after completion of one !ear to at least 95 and not less than 's. 47777 here is no switching cost under this plan. he plan also offers ta/ deduction under Sec. ;7C and ta/ free returns under Sec. 47D47%
Financial Inormation<
he total premium earned for the half !ear ended September >7* 6747 was 's.>869 million. he profit after ta/ for the same period is 's.54> million. here hae been 4>6 death claims reported during the period out of which 8> claims were settled and 4= claims were re$ected.
Mar?eting Campaigns<
I%BI &ederal "ife recentl! launched teleision commercials focusing on its frontline products li#e Wealthsurance and Incomesurance. he campaign taglines are Risne 'hi suna ?hareed li(a0
and R&uaranteed Income
"i Bha>isha>ani0. Whereas the first adertisement reflects that the product
50
is so great that whoeer hears about it* bu!s it instantl!* the second adertisement promises to be clear and transparent on the issue of returns in the inestment product. I%BI &ederal has also introduced two animation characters b! the name of )a pp ( an d Luc?( to promote the brand. o create an awareness of the products of the organization among the households* a painting competition /Bright Spar?s0 was conducted and certificates were awarded to all participants.
COMP%TITIO# A#AL*SIS
I%BI &E%E'A" "I&E INS('ANCE Co. "td. is in a highl! competitie segment i.e.* insurance sector the! are haing large number of rial companies fighting along with them in ta#ing control of the industr!.
•
Threat o intense segment ri>alr(
he ma$or plus point for I%BI &E%E'A" "I&E INS('ANCE Co. "td. is the brand alue of its partners. he competition in this mar#et is a er! difficult or tough. he mar#et condition is oligopol! where a few number of big competitors are proiding identical product and serices differing onl! in qualit! of them. Each competitor has their own trademar# attribute. As we #now "IC3s attribute is their hold in rural mar#et. But when we sa! about population growth* economic growth* or goernment policies insurance segment is er! attractie because onl! 65 insurable person are insured secondl! ;7 population are under age of 85.
51
•
Threat o ne@ entrance
%ue to aggressie competition and high entr! e/it barrier* this is not attractie segment for new pla!er. &or entering in insurance field* mandator! capital is 477 crores. Secondl!* foreign sta#e limited with 6?* third Indian compan! hae no e/perience in insurance business. E/it barrier are also er! high because* no compan! can leae mar#et after entering due to loss because firstl!* 477 crores will be lost secondl!* their compensation Dcustomer or other compan! will be er! high or more than deposited mone!. So in long run* compan! will tr! to less their business but the! will not leae mar#et. So this is good factor for I%BI &E%E'A" "I&E INS('ANCE Co. "td. Because* where entr! or e/it barrier are high* profit potential are also high.
Threat o su'stitute product his is not attractie mar#et in iew of substitute goods because there is •
man! substitutes in mar#et but onl! serice st!le is different. %ifferent insurance compan! proides at least same product but presentation is different. In case of lower substitute Dmeans inestment purpose man! product in India for e/ample* share* mutual fund* fi/ed deposit. Substitute place a limit on price and on profit.
•
Threat o 'u(erKs gro@ing po@er
In India bu!er3s growing power are increasing because the! hae more concentrated or organized towards mar#et. :oernment has established
52
insurance regulator DI'%A in India for growing bu!er3s barging power. %ue to lowest switching* bu!ers are er! price sensitie and bu!ers hae man! sources for #nowing about different compan! product. %ue to education bu!er can anal!sis that* which product is good for him. So due to growing bu!er3s power this segment is not good for new pla!er.
•
Threat o supplierKs gro@ing po@er
%ue to oligopol! mar#et condition insurance compan! cannot raise price but the! can increase their profit from selling more policies in mar#et. In India* suppl!0growing power Dagent* bro#er* bancassurance are growing due to lot of compan! aailabilit! in I%BI &ederal "ife Insurance Co. "td.
53
IC
OR&A#IATIO# STR!CT!R%
CHAIRMAN
CEO
ZONAL MANAGER
REGIONAL MANAGER
AREA MANAGER
BRANCH MANAGER
54
MARETING
SALES MANAGER
INSURANCE ADVISOR
ADMINISTRAT ION
BRANCH SUPERVISIOR
ASISTANT BRANCH SUPERVISOR
CUSTOMER SUPPORT EXECUTIVE
CUSTOMER SUPPORT REPRESENTATIVE
55
PADP
IC
Departments of the company: )uman Resource Department The success o an organiation depends upon theualit( o its @or? orce+ )R department is responsi'le or the recruitment and selection o emplo(ees 'ased on a'ilit(1 s?ills and ualiication+ The )R department is also responsi'le o certain acti>ities concerned @ith the emplo(ees+ Objectives of Human Resource Department:
To maintain a health( relationship and act as a mediator 'et@een the emplo(er and emplo(ees+ To recruit and select prospecti>e candidate1 arrange or an inter>ie@ and ill >acancies in the concerned department+
To ta?e care o the acti>ities done '( the other departments+
Personnel department is responsi'le or all the good and 'ad @or?s done '( the @or?ers+
)R department has to maintain the good relationship @ith all the other departments+
Recruitment<
It handles the recruitment and the appointment o the reuired sta or >arious department o an organiation+
Induction<
Later the induction programmed o the emplo(ees @ill 'e arranged or to introduce all the department o compan( '( the la'or oicer as @ell as the concerned department head+ Thereore1 the emplo(ees can come in terms @ith the o'jecti>es o the compan( a nd his participation in ulillment o the compan( o'jecti>es considering himsel as an essential ingredient o the compan(+
Training<
56
This is also one o the important unctions o the department1 ?eeping in >ie@ to update hisher ?no@ledge and to increase hisher eicienc(1 so ater sometime such programs are arranged '( this department and emplo(ees o the compan( are ?ept in touch @ith the least @a(s o the morale 'ooster and ondness to@ards the compan( is injected in the 'lood o emplo(ees+
On the o' Training<
%mplo(ees are couched and instructed '( training instructions1 the( learn the jo' '( personal o'ser>ation and practice+ It is learning '( doing+
)R Policies H Procedures
he policies and procedures laid down here philosoph!
promote the
of the compan! with regard to standards of e/cellence* erms of
emplo!ment. Emplo!ee deelopment and emplo!ee serices. he ob$ectie of this section is to inform !ou of the polices related to rael* compensation*,edi claim* and ransfers etc. We recommend that !ou ma#e !ourself aware of the entitlements Compensation Components
he compensation that is gien in !our appointment letter comprises of base
Salar!* &C- D&le/ible Compensation -lan* and Emplo!ers
contribution to proident &und and Emplo!er s contribution to :ratuit!. Base salar! is as per compan! polic! is not fle/ible amount since a lot of statutor! and non0statutor! benefits are lin#ed to the base salar!.
Statutor( Beneits
he -roident &und and :ratuit! are goerned b! Acts of "aw and are mandator!.
57
Pro>ident Fund
he -roident &und is a one of the mandator! schemes established b! the goernment of India to proide social securit! to the serice class. It is a scheme* which is bearing on the emplo!er and the staff member and proides securit! to the staff member and 2 or his dependants on retirement* disabilit! or death. &ratuit(
he :ratuit! &und is regulated b! the gratuit! fund Act* 4=96. At present* the following benefit is aailable. All -ermanent staff members of the compan!* who hae completed fie !ears continuous serice* are eligible for pa!ment of gratuit! at the time of retirement.
FI#A#C% D%PARTM%#T C)ART
Financial head
Fund Manager
Portolio Manager
Sta
Financing and Accounting Department
58
Accounting Department< In thissection accounts are maintained+ Accounts are maintained in traditional methods onl(+ This is ledger+
The main unctions are recording all the accounts including emplo(eesK and @or?ersK salar( and their PF etc+
It records all the pa(ments o the compan(+
It records all the transactions o the compan(+
Accounting process<
Recording the transactions<
Classi(ing the transactions
Summariing the transactions
Anal(ing and interpreting the results+
Finance Department
-lanning @ ,IS K monitoring of organization performance 0 sales* qualit!* rends0 on a continuous basis. With insights into ,IS* socio economic factors @ competitor behaioral patterns* we contribute to sales targets* strategic initiaties pro$ected branches* and pro$ected wor# force the road ahead. Internal Audit K 'is# ,anagement* Business Continuit! -lan* Best -ractices* polic! manuals are not mere words on paper adhere to them. We ensure T-ractice what !ou preach.
Corporate
planning
and
he Accounts function
,IS
proide
includes preparation
feedbac#
on
business
and maintenance of financial records*
&unds management* and e/pens e processing and treasur! operat ions.
59
strategies.
Compliance
ensures that eer! action is within the regulator! framewor#. his includes reiewing compliance requirements and supporting the ethical framewor# of 'I". Internal audit proides assurance to the management oer the organizations3 control framewor# and includes process ris# management*
information securit! assessment and
business
continuit! assessment.
MAR"%TI#& D%PARTM%#T
,ar#eting
at
I%BI &E%E'A"
"ife
Insurance coers an arra!
of
actiities0
adertising* branding* channel support* direct and alliance mar#eting and corporate communication. he people in each of these sub0functions perform a unique $ob. he adertising and branding section has schedules of adertising campaigns and a detailed on what BA"IC corporate identit! stands for* wh! it3s important to be consistent and guidelines that must be adhered to. his section also details the branding across training* adisor and adertising collaterals with references. ,ar#et deelopment has lucid presentations about our products and how the! compare to those of competition. *777 agents* =77 offices in ;87 towns* 677 corporate agents @ Banc assurance partners. 9. "ife insurance industr! is a rapid growing and a nobler serice industr!. $%A"#%SS%S he! hae to compete with the :oernment Companies li#e "IC and (I who has been er! established in this field. So the! will hae to attain the same trust of the public as it is in case of "IC and (I. OPPORT!#ITI%S
4. "ife insurance has captured its mere45 K 67 growth therefore a wide open untapped mar#et is open to the compan! to deelop* grow and measure its success.
6. Still the numbers of companies are few and compan! has eer! capabilit! to grow and forward its performance areas to the widest.
>. %istinguishable product. T)R%ATS
4. -eople are hesitant to inest and put their hard earned mone! to the priate life insurance compan! with the fear of getting lost.
6. Belief towards "IC as it is a goernment corporation phobia is continue to surmount the people of India despite lots of flaws and deelopment and liberalization of life insurance.
>. Alternatie financial serices such as mutual fund* ban#ing serices* share and securities also pose problems and threats to the wor#ing of the life insurance sector.
69
8. Illiterac! and unemplo!ment also pose threat.
6+ 'ising real estate industr! also pose threat as people are inesting a bul# of their
mone! oer to that industr!.
9+ -resence of er! strong competitors.
70
Customer Relationship Management
Customer 'elationship ,anagement focuses on acquiring* deeloping and creating satisfied lo!al customerF achieing profitable growthF and creating economic alue in compan!3s brand. Customer 'elationship ,anagement stries to improe the customer3s e/perience of how the! interact with the compan! and produce high customer equit! .the more lo!al customer* the higher are the customer equit!.
'ecentl! C', has ta#en a center stage in the business world with businesses concentrating on saing mone! and increasing profits b! redefining internal processes and proce dures. It costs a compan! dram aticall! less to retain and grow an e/isting client* than it does to court new ones. It is said that RIt is seen times more e/pensie to acquire a new customer than to #eep an e/isting one ”, therefore the alue of customer information and management should neer be underestimated
Customer euit( comprises o three dri>es •
Malue equit!
•
Brand equit!
•
'elationship equit!
71
CRM DCustomer 'elationship ,anagement is something that is not restricted to an!
countr! or culture. Whereer customers are there* business cannot afford to #eep them unhapp!F and that is where C', comes in as a strong requirement.
In India* the trend is positie. When compared to about twent! !ears ago * people hae more choice and eer! compan! #nows it can3t ta#e customer for granted .,a! be the moement is slow *but we see a stead! progress towards an increased focus on the customer rather than merel! on the products and price . oda!3s era is of serice because customers are ultimate base line for an! business to sustain in this competitatie world &or e/ample1 Ban#s started proiding Tgold3* Tsiler3 cards to its alued customer* depending on their needs the customer get faster serices. he concept of C', is relatiel! simple and familiar to insurers. he two points of the concept are1 (nderstand !our customersH unique requirements. •
•
)ffer them the serices and products oer their lifetime that will maintain or increase their profitabilit! and retain them as !our customers.
hese are the some supporting strategies that implement these concepts to !ield significantl! greater results and a true competitie adantage. hese supporting strategies generall! fall into three groupings1 anal!tical* mar#eting and operational. he anal!tical path focuses on mining the data !ou hae on !our e/isting customers* and marr!ing that data with e/ternal data when possible to deelop a scoring inde/. his inde/ can then be reliabl! applied to indiidual customers to indicate their leel of profitabilit!* tendenc! to remain a customer* and propensit! to acquire other products and serices.
72
he current trends in corm followed b! insurance companies
While the C', mar#et in India is still nascent* bigger pla!ers such as ICICI -rudential "ife Insurance Compan! are adopting it in a big wa!. he compan! was earlier using :old ,ines Da sales and mar#eting tool and EA Dan operational C', solution from &ront 'ange Solutions. "ast !ear it too# a decision to inest in C,> from era data and SAS3s statistical tool for BI. Anil i#oo* head0I at ICICI -rudential "ife Insurance Compan! sa!s* RAs a forward loo#ing compan!* we see C', pla!ing a significant role in acquiring new customers. C', lets us obtain granular details about our customers* helping us to design better products* improe serice leels and reduce operational costs. C', has helped ICICI -rudential "ife capture fie lac# customers through effectie eent0based mar#eting and lead trac#ing to cross0 and up0sell products.
Business dri>ers or CRM ,argins are under pressure1 A couple of !ears ago* "IC dominated the insurance mar#et with the help of its sales force and channels and margins were reasonabl! high. oda!* there are close to 67 companies offering both life and general insurance products. All of them hae equall! strong international and local partnersF all are focusing upon similar geographies and target audiences. he new firms selling life insurance and non0 life insurance pensions* insurance as saing* etcX hae failed to emulate the "IC model because margins are getting squeezed. here are seeral pain areas that new insurance firms faceYacquiring new customers* retaining them* cross0selling products and controlling rising costs while proiding comprehensie support. Insurers hae added a ariet! of products and serices to their #itt!. hese range from insurance as an inestment option to pension plans. he! target the !ounger generation in the 67 to >7 !ears age group. Rhe conergence of four factorsYprotection* saing Dinestment option* loans and pensionYhae compelled insurance companies to align with ban#s in reaching out to a larger audience* sa!s i#oo. his trend has led to anotherYinsurance companies are $oining hands with ban#s b! becoming channel 73
partners for insurance. ata AI: has a mar#eting alliance with SBC* Birla Sun "ife has one with Citiban# and I%BI and "IC all! with Corporation Ban#* while +ota# "ife Insurance has an arrangement with +ota# Ban#. his strateg! helps insurance firms increase their footprint to coer a larger part of the customer base in the 670>7 !ears demographic. C', helps connect a ban#3s high net worth customers with insurance firms.
74
$here to 'eginNoperational CRM or anal(tical CRM= he choice between operational and anal!tical C', as a starting point depends upon the insurer3s needs. :artner sa!s that insurance companies with multiple financial products and a big customer base* such as integrated insurance solution proiders* will leerage their customer base to cross0 and up0sell different financial products* including insurance. Such proiders will benefit from adopting anal!tical C',. ,ar#et segmentation* campaign management and data mining applications will benefit them in man! wa!s. •
Call center te/t mining1 his tool can help improe the customer e/perience b! resoling complaints rapidl!. Insurers are using these tools to mine te/t from call center transcripts to identif! issues faced b! customers. e/t mining tools also help detect and capture other useful pieces of information around a customer3s life stage* financial needs and product interest s. hese can be used to generate leads and trigger cross0selling. oweer* to be full! effectie* customer serice representaties must be trained to probe for information that will help in cross selling during the te/t0mining phase. e/t mining tools are leading edge toda!* but are predicted to ta#e off quic#l!.
•
Eent0triggering and profiling1 RInsurers can use eent triggers to generate leads that can be acted upon quic#l!* usuall! within 68 hours* sa!s i#oo. Eent0 triggering tools monitor incoming transaction and contact data in near0real0time to recognize changes in a customer3s behaior or profile to trigger actions or alerts.
"ead management gets sophisticated1 )ften the abilit! of an insurer to generate leads b! means of eent0triggering* re0engineered touch points and cross line0of0business referral can outstrip their abilit! to manage said leads. In such a situation* though the number of leads generated rises* the conersion rate does not. It ma! een drop. C', can help proide sales representaties with a mechanism to prioritize and manage leads.
75
Changing customer 'eha>ior in insurance 'u(ing In insurance bu!ing* most customers would probabl! describe their leel of understanding of insurance contracts in the aboe manner. Customers #now generall! what a polic! coersF the! also #now that there are seeral fine prints in insurance contracts* which the! do not #now* or perhaps care to #now* at the time of bu!ing. And the! also seem to generall! conclude that when it comes to ma#ing a claim under an insurance polic!* there could be seeral issues of which the! are $ust unaware at the time of bu!ing the polic! in the first place.
Changing epectations A remar#able trend in the insurance industr! in the last three !ears is the rapid change in the #nowledge leel as well as e/pectations of the customers. A stud! conducted last !ear b! &orte* a collaboratie effort between &ICCI and IN: M!s!a Insurance Co. about the consumer behaior in the pre and post liberalization da!s of the industr! had reealed stunning changes in consumer e/pectations. It loo#s as though the docile* uninformed* insurance consumer has suddenl! been transformed into an aggressie and highl! demanding species. While the fresh air of competition in eer! sector of the econom! bring s in ma$or changes in consumer e/pectations Dwitness the sea change in the attitude of automobile bu!ers in India in the last fie !ears* the insurance industr! has witnessed a few unique aspects* such as regulation0inspired efforts to educate insurance bu!ers* and a ast change in the s#ills and capabilities of the intermediaries inoled in distribution.
Moti>ating actors In respect of life insurance* potential bu!ers are drien to bu!ing a polic! for one or more of three ma$or reasons1 securit! of the mone! inested* saing for one or more
76
specific purposes* and the aailabilit! of ta/ benefit. Customers are increasingl! #nown to place less I%BI &ederal on the ta/ benefit factor* and stress more on the securit! aspect and the end0use ob$ectie. he challenge of the insurance companies is to address the motiating factors imaginatiel! and come up with genuine solutions. a#e for e/ample* the consumer3s ob$ectie of ta#ing a polic! to sae mone! for higher education of a child. his has been a driing force in the sale of new insurance contracts in seeral other countries too* notabl! in Asia. A potential bu!er primaril! e/pects that the saing should be a painless process and that the mone! saed should be absolutel! safe. he challenge is to proide not onl! conenient pa!ment options* but also mechanisms that could offer some measure of protection and relief to the customer if he is forced to disrupt the pa!ment arrangement for unforeseen reasons. )n the issue of the consumers3 perception of securit! of the mone! inested* there are two important aspects. )ne is how the features of the insurance contract are put across to the bu!er Dwhether it is a unit0lin#ed polic! or endowment oriented. he second is how to address more effectiel! the question about the dependabilit! of the new generation companies that potential new insurance bu!ers raise during sales calls especiall! outside metros and in small towns Dreferred to in publicit! $argon as bu!ers in the SEC B and C categories. Both insurance companies and the 'egulator need to address this behaioral challenge more actiel!.
ConsumerKs eperience here has been a ast change in the approach of the insurance agent from the pre0 liberalization da!s. While the agent in the past established informal contacts with potential bu!ers and often depended on referrals from friends and famil! members* the new age companies insist on a professional* and often aggressie stance on the part of the
77
sales staff. Customer e/pectations in this regard reole around two #e! aspects1 first* whether the customer is getting truthful adice from the agent* or if he is pushing a product that !ields him the highest commission rate. Inariabl!* the customers toda! e/pect the insurance agent Dand other intermediaries such as the banc assurance sales staff to proide a read! comparison of competitors3 products and how the product the agent is suggesting is superior to the others. ow far is the need0based anal!sis of insurance requirement* that the new age sales staff are trained to offer* found to be releant and useful to potential insurance bu!ersV he answer aries from the metro cities and small towns. oweer outside metro cities* customers tend to ta#e a clear iew that saing0oriented policies are more needed. here is also mar#ed reluctance to disclose the true personal financial status and the corresponding insurance needs to insurance salespersons. he second aspect of customers3 perception about the new generation of insurance agents is the leel of continuing commitment of the agent to arrange post0sale serice. -otential insurance bu!ers are unsure that the! would continue to deal with the same agent who sold the polic! throughout the term. he! would tend to place more I%BI &ederal on the compan!3s general promises of serice and commitment. his is an important message for the insurance companies. As insurance customers increasingl! ma#e arrangements to pa! periodical premiums directl! through the electronic medium* or though automatic transfers from their ban# accounts* thereb! b!passing the need for regular post0sale serice b! the agents* customers would tend to place more I%BI &ederal on the direct standard of serice from the compan! concerned. Instances of customers requiring agents to arrange for loans against their policies* or change nominations etc. are rare. herefor e companies need to gear themseles to proide high serice standards directl!.
78
Premium shopping Is pricing or the premium rate for a polic!* a deciding factor for bu!ing insuranceV It is indeed so in a price sensitie mar#et such as ours. In seeral forums* customers hae oiced the general feeling that as insurance products become more comple/* and the! get bundled with seeral riders* it is becoming impossible to ma#e price comparisons between different companies. An increasingl! larger segment of customers now questions wh! the premium rate should be the same for a polic! if bought direct from the compan! oer Internet* or through a channel considered simpler* such as the banc assurance channel. here is logic in the insurance companies passing on the cost saing to customers in such cases. It is time the 'egulator seriousl! considered the customer e/pectations of differential premium rates for the same polic! bought through different channels and allowed the practice. It should therefore be conceiable to offer premium rebate to insurance bu!ers who consciousl! decide to approach the compan! directl! for bu!ing a polic! Dafter presumabl! ta#ing the trouble of educating themseles about the product features and other aspects* and choose to deal with the compan! directl! for future sericing needs.
)igh epectations )ne aspect of customer serice from new age insurance companies that a remains to be tested widel! is the claim pa!ment record. While consumers seem to be satisfied that the surial benefits under a life insurance polic! would get paid rather promptl! from the tech0sa! new companies* obiating the need for interlocution b! the insurance agent* insurance bu!ers are not !et coninced about hassle0free pa!ment in the eent of a claim* whether under a life polic! or a general insurance polic!. his is especiall! so in respect of rider benefits such as critical illness or hospitalization benefits. 79
he leel of consumer s#epticism on claim pa!ment is mar#edl! high in respect of non0life insurance products* such as ouseholders3 -ac#age or ,edicaid policies. here is considerable wor# to be done to boost the leel of confidence both b! insurance companies and the 'egulator. B! the time a compan! completes the deelopment of a strateg! and ma#es inestments to pursue the strateg!* the opportunit! often ceases to e/ist. It is therefore important that the new age insurance companies become T#inetic3 enterprises* which can ta#e adantage of unpredictable customer demands and une/pected mar#et eents immediatel!. his is astl! releant for the Indian mar#et where the insurance consumers are rapidl! coming of age.
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Rationale or the Project
I%BI &ederal "ife Insurance Compan! "imited is a part of I%BI &ederal Capital "td. of the I%BI &ederal 0 ANI" %I'(BAI A,BANI :roup. I%BI &ederal Capital is one of India3s leading priate sector financial serices compani es* and ran#s among the top > priate sector financial serices and ban#ing companies* in terms of net worth. I%BI &ederal Capital has interests in asset management and mutual funds* stoc# bro#ing* life and general insurance* proprietar! inestments* priate equit! and other actiities in financial serices. e (ou tried to understand needs o the customers
yes
Frequency 31
Percent 6".0
Valid Percent 6".0
no
19
3#.0
3#.0
Total
50
100.0
100.0
Cumulatie Percent 6".0 100.0
Figure< :+ )a>e (ou tried to understand needs o the customers
Findings no 3#.0!
&rom the 57 yes 6".0!
respondents sure!ed ?6 Adisor sa! that the! tried to understand needs of the customers
>; adisor sa! that the! don3t tr! to understand needs of the customers Ta'le< ;+ )o@ man( times (ou ha>e contacted the eisting customer
93
Percent 14.0
once in mont*
15
30.0
30.0
once in 6 mont*s
1#
36.0
36.0
#0.0
once in a year
10
"0.0
"0.0
100.0
Total
50
100.0
100.0
once in +ee/
Valid Percent 14.0
Cumulatie Percent 14.0
Frequency 7
44.0
Figure< ;+ )o@ man( times (ou ha>e contacted the eisting customer
once in +ee/ once in a year
14.0!
"0.0!
once in mont* 30.0! once in 6 mont*s 36.0!
Findings
&rom the 57 respondents sure!ed >? Adisor sa! that the! hae contacted the customers once in ? months >7 adisor sa!s that the! tr! to contact once in a month to customer 67 Adisor sa! that the! hae contacted once in a !ear to customers 48 adisor sa!s that the! hae contacted customers once in a wee#. Ta'le< 8+ Do (ou prepare (oursel or an( sales call
94
yes
Frequency "9
Percent 5#.0
Valid Percent 5#.0
no
"1
4".0
4".0
Total
50
100.0
100.0
Cumulatie Percent 5#.0 100.0
Figure< 8+ Do (ou prepare (oursel or an( sales call
no 4".0!
yes 5#.0!
Findings
&rom the 57 respondents sure!ed 5; Adisor sa!s that the! prepare for sales call 86 adisor sa!s that the! don3t prepare for sales call
Ta'le< 27 $hat ?ind o assistance do (ou need to generate more 'usiness
95
Frequency
Percent
Valid Percent
Cumulatie Percent
Training a'out customer *andling
"6
5".0
5".0
el$des/ at t*e 'ranc*
16
3".0
3".0
#4.0
#
16.0
16.0
100.0
50
100.0
100.0
enerating leads 'y t*e com$any Total
5".0
Figure< 27+$hat ?ind o assistance do (ou need to generate more 'usiness
enerating leads 'y 16.0!
Training a'out cust 5".0! el$des/ at t*e 'ran 3".0!
Findings
&rom the 57 respondents sure!ed 56 Adisor sa!s that the! want training about customer handling >6 adisor sa!s that the! want help des# at the branch 4? adisor sa!s that the! want generating leads b! the compan!
Ta'le< 22+ %tent o ad>isor satisaction in RIL @ith Monetar(
96
.satis&ied satis&ied Total
Frequency 7
Percent 70.0
Valid Percent 70.0
3
30.0
30.0
10
100.0
100.0
Cumulatie Percent 70.0 100.0
Figure< 22+ %tent o ad>isor satisaction in RLIC @ith Monetar(
satis&ied 30.0!
.satis&ied 70.0!
&indings 97 of the adisors are highl! satisfied with monetar! benefits* and >7 of the adisors are satisfied with monetar! benefits .
97
Ta'le< 23+ %tent o ad>isor satisaction in RIL @ith re@ards
.satis&ied
Percent 30.0
5
50.0
50.0
#0.0
" 10
"0.0 100.0
"0.0 100.0
100.0
satis&ied neutral Total
Valid Percent 30.0
Cumulatie Percent 30.0
Frequency 3
Figure< 23 %tent o ad>isor satisaction in RIL @ith re@ards
neutral "0.0!
.satis&ied 30.0!
satis&ied 50.0!
&indings >7 of the adisors are highl! satisfied with the rewards. 57 of the adisors are satisfied with the rewards* and 67 of the adisors are feeling normal about the 'ewards
98
Ta'le< 24+ %tent o ad>isor satisaction in RIL @ith recognition
.satis&ied
Percent 40.0
4
40.0
40.0
#0.0
" 10
"0.0 100.0
"0.0 100.0
100.0
satis&ied neutral Total
Valid Percent 40.0
Cumulatie Percent 40.0
Frequency 4
Figure< 24+ %tent o ad>isor satisaction in RIL @ith recognition
neutral "0.0! .satis&ied 40.0!
satis&ied 40.0!
Findings
87 of the adisors are highl! satisfied with the recognition 87 of the adisors are satisfied with the recognition. 67 adisors are feeling normal about the recognition.
99
able1 48 %o !ou find difficult! in handling adisers
Frequency 6
yes 2 Total
Percent 60.0
Valid Percent 60.0
4
40.0
40.0
10
100.0
100.0
Cumulatie Percent 60.0 100.0
&igure1 48 %o !ou find difficult! in handling adisers
2 40.0! yes 60.0!
&indings he sales officer found about ?7 difficult! in handling the adisor he sales officer found about 87 No difficult! in handling the adisor
100
able1 45. What #ind of assistance do !ou need to generate more business
Frequency
Percent
Valid Percent
Cumulatie Percent
$resentation 'y t*e insurance coma$ny
1
10.0
10.0
10.0
'rie&ing 'y managers
"
"0.0
"0.0
30.0
*el$des/ at t*e 'ranc* meeting +it* adisers
" 5
"0.0 50.0
"0.0 50.0
50.0 100.0
10
100.0
100.0
Total
Figure< 26+ $hat ?ind o assistance do (ouneed to generate more'usiness
$resentation 'y t*e 10.0!
'rie&ing 'y manage "0.0! ng +it* adiser 50.0!
*el$des/ at t*e 'ran "0.0!
Findings
57 sales officers feel that generating business can be done through meeting with adisor 57 sales officers feel that generating business can be done through help des# at the branch 67 sales officers feel that managers can do generating business through briefing 47 sales officers feel that managers can do generating business through presentation
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FI#DI#&S 4. Een though the sales officers and adisors proide sufficient information to customers* while selling the product 6? of the total customers feel that the! had not receied sufficient information. -roided was comple/* rest of the respondents feel that the information proided was less. 6. &ound that I%BI &ederal "ife Insurance has large ariet! of products in its portfolio* it is obsered that >9 of the customer feel that the product purchased b! most the customer and their need are not matching. >. As compared to the Adisors* Sales people perform more than adisors. In instance sales people hae motiated the most of the customers to purchase the product. 8. he male were the dominating categor! in adisors 5. %ue to lac# of the effectie training* most of the adisors were not able to handle the customer properl!* and ma! not sole the customer3s queries.
?. here are not satisfactor! isits made b! the adisors to the customer3s doorstep. )nl! 48 of the adisors hae been isiting the customer at their doorstep at once a wee#. So that the! can find the need in the e/isting customers or can be able to build a new customer for the I%BI &ederal "ife Insurance 9. ,ost of the adisors do not prepare themseles for the sales callF in turn the! ma! not perform better at the call of the customer. ;. o generate more business* most the Sales officers feel that there should be a meeting to be #ept with the adisors. =. he serices proided b! adisor to the customer are most of about 58 of the customer receie information of premium date reminding* while >8 receie information of new policies and 46 of customer get serice of soling the doubts.
102
47. ?6 of the adisors hae tried to understand the customer3s needs* which in0turn will help in suggesting a suitable product to the customer. But >; of the adisors haen3t tried in understanding the customer needs. 44. About >6 of the adisors feel that the compan! should proide help des# at the branch. And 4? of the adisors feel generating leads b! the compan! is necessar! for generating more business. 46. 97 of the adisors are highl! satisfied with monetar! benefits* and onl! >7 of the adisors are satisfied with monetar! benefits. 4>. >7 of the adisors are highl! satisfied with the rewards. 57 of the adisors are satisfied with the rewards* and 67 adisor are feeling normal about the 'ewards
48.87 of the adisors are highl! satisfied with the recognition* about 87 of the adisors are satisfied with the recognition* and 67 adisor are feeling normal about the recognition.
45. he adisors who are wor#ing with the I%BI &ederal "ife Insurance fall under the age group between* 65 to >7
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