Project Report 2 Akshit Dube Idbi Federal Life Insurance

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A REPORT ON Customer satisfaction and retention of IDBI Federal Feder al life Insurance Company LTD

By (AKSHIT DUBE, ID- 13A3HP011) A report submitted in partial fulfillment of the requirements of MBA program of IMT HYDERABAD

(IDBI Federal Life Insurance Co Ltd.)

Faculty Guide

Company Guide

DR.Sridhar vaithianathan

MRS.C.Shanthi

Associate Professor

Asst. Branch manager

IMT,Hyderabad

IDBI Federal Life Insurance Ltd

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Customer satisfaction and retention of IDBI Federal Life Insurance Company LTD By (AKSHIT DUBE)

Company Guide Mrs.C.Shanthi Asst. Branch manager IDBI Federal Life Insurance Co Ltd. Coimbatore

Faculty Guide Dr.Sridhar Vaithianathan Associate Professor IMT, Hyderabad

IMT Hyderabad

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ACKNOWLEDGMENT I sincerely thank Mrs.C.Shanthi (Asst. Branch head), Jay Mala and

Mr.Sankeerth

(Coordinator)

for

providing

me

this

wonderful opportunity of working on this particular project. I have been provided help and got the chance to learning a lot throughout this project. I am also thankful to my faculty guide Mr. Sridhar Vaithianathan for guiding and encouraging me throughout the internship.

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EXECUTIVE SUMMARY

Customer retention and satisfaction are 2 of the most important factors regarding long term success of the company. These factors are known to be huge influencing factors in the economic growth of a company. The aim of the research is to determine the current customer satisfaction and retention scenario of IDBI Federal Life Insurance Company Ltd. The report contains brief introduction about the insurance industry in India and IDBI Federal Life Insurance Company Ltd. The sample size of the report is 100 respondents and the data is collected through phone interview and questionnaire method.

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TABLE OF CONTENTS The insurance industry .................................................................................................................................. 6 Company profile............................................................................................................................................ 7 Introduction of the project ........................................................................................................................... 8 Problem statement ................................................................................................................................. 10 Research objective .............................................................................................................................. 10 Scope of the project ........................................................................................................................ 10

PERIOD OF STUDY ....................................................................................................................... 11 Sample design  ......................................................................................................................... 11 Limitation  ............................................................................................................................ 11 CUSTOMER RETENTION .............................................................................................................................. 12 Questionnaire ............................................................................................................................................. 15 REFERENCES ................................................................................................................................................ 17

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The insurance industry The insurance sector has gone through a number of phases and changes. Insurance in India used to be tightly regulated and monopolized by state-run insurers. Following the move towards economic reform in the early 1990s, various plans to revamp the sector finally resulted in the passage of the Insurance Regulatory and Development Authority (IRDA) Act of 1999.Significantly, the insurance business was opened on two fronts. Firstly, domestic private-sector companies were permitted to enter both life and non-life insurance business. Secondly, foreign companies were allowed to participate, albeit with a cap on shareholding at 26%. With the introduction of the 1999 IRDA Act, the insurance sector joined a set of other economic sectors on the growth march. During the 2003 financial year, life insurance premiums increased by an estimated 12.3%in real terms to INR 650 billion (USD 14 billion) while non-life insurance premiums rose 12.2%to INR 178 billion (USD 3.8 billion). Growth in insurance premiums has been averaging at 11.3% in real terms over the last decade. There are strong arguments in favor of sustained rapid insurance business growth in the coming years, including India’s robust economic growth prospects and the nation’s high savings rates.

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Company profile IDBI Federal Life Insurance Co Ltd. is a joint-venture of IDBI Bank, India's premier development and commercial bank, Federal Bank, one of India's leading private sector banks and Ageas, a multinational insurance giant based out of Europe. In this venture, IDBI Bank owns 48% equity while Federal Bank and Ageas own 26% equity each. Having started in March 2008, in just five months of inception, IDBI Federal became one of the fastest growing new insurance companies by garnering Rs.100 Cr in premiums. Through a continuous process of innovation in product and service delivery IDBI Federal aims to deliver worldclass wealth management, protection and retirement solutions that provide value and convenience to the Indian customer. The company offers its services through a vast nationwide network 2,308 partner bank branches of IDBI Bank and Federal Bank in addition to a sizeable network of advisors and partners. As on 31st December 2013, the company has issued nearly 5.5 lakh policies with a sum assured of over Rs. 32,110.48 crores Currently it is offering 7 products in the market  – lifesurance, childsurance, incomesurance, termsurance, microsurance, loansurance, wealthsurance.

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Introduction of the project Customer is the king of any business whether it may be big, medium or small. Customer satisfaction is a measure of how services/products supplied by a company meet or surpass the expectations. Customer retention and satisfaction are 2 of the most important factors regarding long term success of the company. These factors are known to be huge influencing factors in the economic growth of a company. In today’s world it is essential to effectively manage customer

satisfaction

and

retention.

Many

institutions

including

insurance companies spend a lot of resources, time and energy to keep and enhance their customer base. There are many factors such as courteous employees, problems being

solved

fast,

service

quality,

usefulness

of

the

product/service which helps in measuring how satisfied a customer is with the company and only a satisfied customer will

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purchase another product of the company and recommend it to others. The process of measuring customer satisfaction and obtaining feedback on organization performance is a important tool quality and continuous improvement. Customer retention is of the main factor of profit growth. Following are some of the benefits of customer retention  – 1. New customers cost more than keeping existing ones. 2. Companies already know how to do business with the existing customers. 3. Long term customers initiate free promotion through word of mouth and referrals. My research aims to study the current customer satisfaction and retention scenario of IDBI federal life insurance and suggest ways to improve it.

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Problem statement IDBI Federal Life Insurance Co Ltd. Is a joint venture company among three financial companies  –  IDBI Bank, Federal Bank, European insurance company AGEAS. It has grown remarkably in the last 6 years but it still has a long way to go and customer satisfaction and retention are 2 factors which will help the company in the long run.

Research objective 1. To identify the current scenario of IDBI Federal Life Insurance Ltd. 2. To identify ways to improve the customer satisfaction and retention levels.

Scope of the project Successful companies are continuous working in the field of customer satisfaction and retention. It is not possible to be successful without keeping the customers happy and retaining them for future business. This study will help IDBI Federal Life Insurance in knowing the relinquishment level and how to retain the customers.

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PERIOD OF STUDY The period of the report project is 14 weeks.

Sample design The research will be carried out among the customers of IDBI Federal Life Insurance. The sample would be around 100.

Limitation Survey will have a sample size of 100 people and therefore may not be entirely accurate and not depict the views of the whole.

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CUSTOMER RETENTION In today’s challenging economy and c ompetitive business world, retaining their customer base is critical to organization success. If the company doesn’t give their customer some good reason to stay, organization’s competitors will give the customer a reason to leave. Customer retention and customer satisfaction drive profits. It’s far less expensive to cultivate organization existing customer base and sell more service to the customer than to seek new, single-transaction customers. Most surveys across industries shows that keeping one existing customer is five to seven times more profitable than attracting one new customer. A customer-focused approach among its employees is still not present. In this era of intense competition .it is very important for any service company to understand that merely acquiring customer is not sufficient because there is a direct link between customer retention over time and profitability & growth.

Customer retention to a great extent depends on service quality and customer satisfaction. Complaints are natural part of any service activity as mistakes are an unavoidable feature of

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all human endeavor and thus also of service recovery. Service recovery is the process of putting things right after something goes wrong in the service delivery. Customer retention is the maintenance of continuous trading relationships with customers over the long term. Customer retention is the mirror image of customer defection or chum. High retention is equivalent to low defection. In an industry where there are a multiple purchases over the years, organization’s entire team should be very focused on retaining those customers. Following are some of the ways 1. Delivering service that’s consistent with your value proposition and brand. 2. Cross-selling, up-selling and asking for referrals from existing customers 3. Developing programs to increase customer loyalty and decrease turnover 4. Prioritizing retention as a major focus in your annual marketing plan.

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Customer retention occurs when a customer is loyal to a company, brand, or to a specific product or service, expressing long-term commitment and refusing to purchase from competitors. Of critical importance to such strategies are the wider concepts of customer service, customer relations, and relationship marketing. Companies can build loyalty and retention through the use of a number of techniques, including database marketing, the issue of loyalty cards, redeemable against a variety of goods or service, preferential discounts, free gifts, special promotions, newsletters or magazines, members’ clubs or customized products in limited editions. Following are few of the advantages of a satisfied customer -: 1. The cost of acquisition occurs only at the beginning of the relationship, so the longer the relationship, the lower the amortized cost. 2. Long-term customers tend to be less inclined to switch. 3. Long-term customer may initiate free word of mouth promotions and referrals. 4. Long-term customers are more likely to purchase ancillary products and high margin supplemental products. 5. Customer that stay with company tend to be satisfied with the relationship and are less likely to switch to competitors, making it difficult for competitors to enter the market or gain market share.

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Questionnaire

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REFERENCES 1. 2. 3.

http://www.idbifederal.com/ http://www.ibef.org/industry/insurance-sector-india.aspx http://www.irda.gov.in/ADMINCMS/cms/NormalData_Layout.a spx?page=PageNo4&mid=2

4.

http://www.accenture.com/SiteCollectionDocuments/PDF/Acce nture-Maximizing-Customer-Retention.pdf

5.

http://www.customer-retention.co.uk/advantages-of-customerretention.html

6. The Antecedents of Customer Loyalty: An Empirical Investigation in Life Insurance Context Alok Kumar Rai, Srivastava Medha 7.

http://www.thefreelibrary.com/A+study+of+customer+satisfact ion+with+life+insurance+in+Chandigarh...-a0297309481