“An Analysis of Customer Relationship Management in Insurance

Sector”

A Project submitted to
University of Mumbai for partial completion of the degree of
Master in Commerce
Under the faculty of Commerce and Accountancy

By
Reena Kanwar Devi Singh
Seat No.

Under the Guidance of

Mohd. Nishat S.A. Ansari
M. Com, B. Ed .

M. A. (Economics)

Ismail Yusuf College of Arts, Science & Commerce.

Jogeshwari (East), Mumbai - 400 060.

March
2019-20

Page 1 of 107
 Ismail Yusuf College of Arts, Science & Commerce.
Jogeshwari (East), Mumbai - 400 060.

Certificate
This is to certify that Miss KANWAR REENA DEVI SINGH has worked and duly
completed his Project Work for the degree of Master in Commerce under the faculty of
Commerce and Accountancy and his project is entitled “Customer Relationship
Management in Insurance” under my supervision. I further certify that the entire work
has been done by the learner under my guidance and that no part has been submitted
previously for any Degree/Diploma of any University.

It is his own work and facts reported by his personal findings and investigations.

Mohd. Nishat S.A. Ansari

Guiding Teacher

Date of submission:

Page 2 of 107
 DECLARATION

I, the undersigned Miss KANWAR REENA DEVI SINGH hereby declare that the
work embodied in this project work titled “Customer Relationship Management in
Insurance”, forms my own contribution to the research work carried out under the
guidance of Mohd. Nishat S.A. Ansari is a result of my own research work and has not
been previously submitted to any other university for any other Degree/Diploma to this or
any other University.

Whenever reference has been made to previous works for others, it has been clearly
indicated as such and included in the Bibliography.

I, hereby, further declare that all information of this document has been obtained and
presented in accordance with academic rules and ethical conduct.

KANWAR REENA DEVI SINGH

Certified by

Mohd. Nishat S.A. Ansari.

Page 3 of 107
 ACKNOWLEDGEMENT

To list who all have helped me is difficult because they are so numerous and the depth is
so enormous.

I would like to acknowledge the following as being idealistic channels and fresh
dimensions in the completion of this project.

I take this opportunity to thank the University of Mumbai for giving me chance to this
project.

I would like to thank my Principal, Dr. Swati Wavhal for providing the necessary
facilities required for completion of this project.

I take this opportunity to thank our Coordinator Shri. N. G. Gokani , for his moral
support and guidance.

I would also like to express my sincere gratitude towards my project guide Mohd. Nishat
S.A. Ansari whose guidance and care made the project successful.

I would like to thank my College Library for having provided various references, books
and magazines related to my project.

Lastly, I would like to thank each and every person who directly and indirectly helped me
in the completion of the project especially my Parents and Peers who supported me
throughout my project.

Page 4 of 107
 INDEX

Page No.

Chapter No.1 Introduction

1.1 Introduction to CRM 7

1.2 Meaning of CRM 8
1.3 Definition of CRM 11
1.4 Benefits of CRM 12
1.5 Introduction to Insurance 14
1.6 Characteristics of Insurance 15
1.7 History of Insurance 15
1.8 CRM in Insurance 18
1.9 History of Topic 22
1.10 Brief Profile of Study Area 34
1.11 Different Concepts 35

Chapter No.2 Research Methodology

2.1 Hypothesis 46
2.2 Objectives of Research 46
2.3 Aim & Scope of Research 47
2.4 Limitations of the Research 47
2.5 Sample data 48
2.6 Sample Size 48
2.7 Research Area 49
2.8 Tabulation of data 49
2.9 Reason for Selection of Topic 50

Page 5 of 107
Chapter No.3 Literature Review 55

Chapter No.4 Data Analysis, Interpretation and Presentation 57

Chapter No.5 Conclusions and Suggestions

5.1 Conclusion 99
5.2 Suggestions 100

Chapter No.6 Bibliography 103

ANNEXURE: QUESTIONNAIRE

Page 6 of 107
 INTRODUCTION

CUSTOMER RELATIONSHIP MANAGEMENT:

INTRODUCTION TO CRM:
What is CRM? People make buying decisions. People have loyalties. Relationship only
can be developed between people. Your Customer Relationship Management program
must be structured around this well-known fact. CRM is about people. CRM is an
approach to organizing yours company’s interaction with customer that starts with
customer- centered point of view. It’s an entire discipline, not a single activity. Customer
relationship management (CRM) is no longer a buzzword, but a necessity for business in
the knowledge age we live in. Customer relationship management (CRM) solutions
provide customer-oriented services for planning, developing, maintaining, and expanding
customer relationships, with special attention paid to the new possibilities offered by the
Internet, mobile devices, and multi- channel interaction. CRM enables a company to
capture a consolidated customer view through multi-channel interactions in a data
warehouse solution.
Sophisticated analytical techniques are then applied to this customer information to better
understand and predict customer behavior. CRM can then be used to strategically
implement acquired customer knowledge in every area of the company, from the highest
management level to all employees who come into direct contact with customers. CRM
thus enables an organization to address its customer’s preferences and priorities much
more effectively and efficiently. CRM is a tool that can help organizations to profitably
meet the lifetime needs of customers better than their competitors. Creating a definition

Page 7 of 107
for CRM is both critical & dangerous. It is critical because your organization need to
have a common understanding of what you are doing. It is dangerous because so many
definitions & misconceptions are already lodged in people’s minds. One of the first
things that any company should do when launching a CRM initiative is to the rest what
the organizations current understanding of CRM is. This definition of CRM covers many
but not all activities of the company. CRM is limited to activities that take place in the
customer- facing functions, including marketing, sales, customer services, & product
support.

MEANING
Customer Relationship Management (CRM) is to create a competitive advantage by
being the best at understanding, communicating, delivering, and developing existing
customer relationships, in addition to creating and keeping new customers. It has
emerged as one of the largest management buzzword. Popularized by the business press
and marketed by the aggressive CRM vendors as a panacea for all the ills facing the firms
and managers, it means different things to different people. CRM, for some, means one to
one marketing while for others a call centre. Some call database marketing as CRM.
There are many others who refer to technology solutions as CRM. If so, what is CRM?

Merchants and traders have been practicing customer relationship for centuries. Their
business was built on trust. They could customize the products and all aspects of delivery
and payment to suit the requirements of their customers. They paid personal attention to
their customers, knew details regarding their customers tastes and preferences, and had a
personal rapport with most of them. In many cases, the interaction transcended the
commercial transaction and involved social interactions. Even today, this kind of a
relationship exists between customers and retailers, craftsmen, artisans – essentially in
markets that are traditional, small and classified as pre-industries markets. These
relationship oriented practices have changed due to industrial revolution. Businesses
adopted mass production, mass communication and mass distribution to achieve
economies of scale. Manufactures started focusing on manufacturing and efficient
operations to cut costs. Intermediaries like distributors, wholesalers and retailers took on

Page 8 of 107
the responsibilities of warehousing, transportation, distribution and sale to final
customers. This resulted in greater efficiencies and lower costs to manufacturers but
brought in many layers between them and the customers. The resulting gap reduced direct
contacts and had a negative impact on their relationships.
The post-industrial era saw the re-emergence of relationship practices.
(a) Rapid advances in technology: More information, communication and production
technologies have helped marketers come closer to their customers. Firms operating in
diverse sectors ranging from packaged goods to services started using these technologies
to know their customers, learn more about them, and then build stronger bonds with them
through frequent interactions. Marketers could gain knowledge about customers, which
helped them respond to their needs through manufacturing, delivery, and customer
service. Technology also enabled ordering and product-use related services.
Though the emergence of CRM in recent times coincided with the information age, one
must remember that technology is just an enabler. Technology enabled marketers
overcome several long felt shortcomings of mass marketing. Some of these included:
- Inefficiencies of mass marketing: 1980s and early 1990s witnessed some of the most
radical business transformations that resulted in cost reductions in almost all functional
departments except marketing. Manufacturing and related operations costs were reduced
through business process reengineering, human resource costs were reduced through
outsourcing, restructuring and layoffs, financial costs were reduced through financial
reengineering but marketing costs kept increasing due to increased competition and
product parity in virtually every industry.
- Lack of fast, effective and interactive models of customer contact, feedback and
information.
- Lack of consolidated information about customer interactions, purchase behavior and
future potential.

(b) Intensive competition in most markets: In competitive markets, especially the ones
that were maturing and witnessing slow or no growth, marketers found it more profitable
to focus on their existing customers. Studies have shown that it costs up to 10-12 times
more to attract a new customer than to retain an existing customer. Marketers have now

Page 9 of 107
started focusing on the lifetime value of customers. They are moving away from just
trying to sell their products to understanding, customers needs and wants and then
satisfying their needs. This has led to a relationship orientation which creates
opportunities to cross sell products and services over the lifetime of the customer.

(c) Growing importance of the service sector: The service sector contributes to over two-
third of the GDP of most advanced economies. In India, the services sector contributes to
over 50 per cent of the economy. One of the characteristics of the service industries is the
direct interaction between the marketer and the buyer. In services, the provider is usually
involved in the production as well as delivery directly. For example, professional service
providers like a doctor or consultant are directly involved in production as well as
delivery of their services. Similarly, the customers are directly involved in production in
the purchase and consumption of these services. These direct contacts create
opportunities for better understanding, a better appreciation of needs as well as
constraints and emotional bonding all of which facilitate relationship building. Therefore
it should come as no surprise when you see the service firms pioneering many of the
customer relationship initiatives. Firms operating in the financial services, hospitality
business, telecom, and airlines are the early adopters and extensive users of CRM
practices.

(d) Adoption of total quality management programs: Total quality management programs
help companies offer quality products and services to customers at the lowest prices. To
enable this value proposition, organizations needed to work closely with their customers,
intermediaries as well as suppliers thus fostering close working relationships with
members of the marketing system. Companies such as Intel, Xerox, and Toyota formed
partnering relationships with suppliers and customers to practice TQM. Other
developments such as an increase in the number of demanding customers, increased
fragmentation of markets, and generally high level of product quality forced business to
seek sustainable competitive advantages. A competitive advantage is sustainable only
when it is not easily replicated. One such sustainable competitive advantage is the
relationship that a firm develops with its customers.

Page 10 of 107
DEFINITION

The preceding discussions highlight the range of perspectives adopted by researchers in

understanding and explaining relationships. Similarly in marketing literature, the terms
customer relationship management and relationship marketing have been used
interchangeable to reflect a variety of themes and perspectives.

Some of these themes offer a narrow functional marketing perspective while others offer
a perspective that is broad and somewhat paradigmatic in approach and orientation. A
narrow perspective of customer relationship management is database marketing
emphasizing the promotional aspects of marketing linked to database efforts, Another
view point is to consider CRM only as customer retention in which a variety of after
marketing tactics are used for customer bonding or staying in touch after the sale is done.
A more popular approach with recent application of information technology is to focus
on individual or one to one relationship with customer that integrates database knowledge
with a long-term customer retention and growth strategy.

Jackson applied the individual account concept in industrial market to suggest markets
CRM to mean, marketing oriented toward strong, lasting relationship with individual
accounts.

McKenna offered a more strategic view by putting the customer first and shifting the
role of marketing from manipulating the customer (telling & selling) to genuine customer
involvement (communicating & sharing the knowledge).

Berry, in a broader term stressed that attracting new customers should be viewed only as
intermediate step in the marketing process. Developing closer relationships with this
customers and turning them into loyal is an equally important aspect of marketing. Thus,
he defined relationship marketing as attracting, maintaining, and, enhancing customer
relationships.

Page 11 of 107
By focusing on the value of interaction in marketing and its consequent impact on a
customer relationships, a broader perspective espouses that customer relationship should
be the dominant paradigm of marketing. As Gronroos stated:
Marketing is to establish, maintain and enhance relationship with customers and other
partners, at a profit, so that the objectives of the parties involved are met.
This is achieved by a mutual exchange and fulfillment of promises.
The implication of Gronroos definition is that customer relationships should be devoted
to building and enhancing such relationship. Similarly, Morgan and Hunt suggested that
relationship marketing refers to all marketing activities directed towards establishing,
developing and maintaining successful relationships.

BENEFITS OF CRM

a) Customers are Profitable over a period of time: Studies by the US-based Bain and
Company have shown that a customer becomes more profitable with time because
the initial acquisition cost exceeds gross margin while the retention costs are
much lower. When an organization retains the customer, it gets a larger share of
the customers wallet at a higher profit-one percent increase in sale to existing
customer increase profits by 17 per cent while the same amount of sale to new
customer increased profit by only 3 per cent. This huge different is explained by
the fact that for most companies the cost of acquiring the customer is very high. It
costs six to eight times more to sell to a new customer than to sell to an existing
one. The same study also highlighted that a company can boost its profit up 85 per
cent by increasing its annual customer retention by only 5 per cent.

Similarly, studies have shown that the probability of selling a product to a

prospect is 15 per cent while it is 50 per cent to a existing customer. Thus, the
time, the effort and the costs of selling are much lower for an existing customer.

b) Marketing Benefits: CRM will gradually reduce organization‘s dependence on

periodic surveys to gather data. Collection of data related to buying and

Page 12 of 107
 consumption behavior will be an ongoing process. In many cases, the transaction
data is automatically collected sometimes real time as in the e-commerce
transaction. This rich repository of customer information and knowledge updated
through regular interactions and actual customer transactions and purchase
behavior will help marketers to develop and market customer centric products
successfully. Customized promotions-based customer preferences and purchase
patterns will substantially reduce the wasteful expenditure of mass
communication and even direct mailing. As a customized promotion are more
focused and are based on a deeper insight of existing customers, they have a

greater chance of conversion to sales.

c) Service Benefits: Research findings conducted across industries as a part of a

Technical Assistance Research Project (TARP) indicate that:
- 95 per cent of the customers do not bother to complain, the just take their
business elsewhere.
- Most loyal customers take time to complain. This enables the product / service
provider to improve and ensure that such mistakes do not recur.
- A typical dissatisfied customer will tell an average of 14 others about a bad
experience while she will tell only six about a satisfying experience with an
organization.
- 70 per cent of customers who complain will do business with a company again if
it quickly takes care of a service problem.

Page 13 of 107
INSURANCE: AN INTRODUCTION

Insurance may be described as a social device to reduce or eliminate risk of loss

to life and property. Under the plan of insurance, a large number of people associate
themselves by sharing risks attached to individuals. The risks which can be insured
against include fire, the perils of sea, death and accidents and burglary. Any risk
contingent upon these, may be insured against at a premium commensurate with the
risk involved. Thus collective bearing of risk is insurance.

In today’s intensely competitive, rapidly changing and highly complex business

environment characterized by diminishing customer loyalty, the need to be market–
focused and customer–centric is more critical than any other time in the past with
increased globalization and presence of a large number of players in the market. CRM, as
is well known, stands for customer relationship management. It is perceived by Common
man as basically an I.T. solution to ensure a better customer service. But obviously it
goes much beyond that. It is a business approach that tries to integrate the Employees, the
process and technology to improve an organizations relationship with its Customers –
both the existing and prospective; as well as internal and external. The current scenario in
the insurance industry is a complex and competitive environment tinged with little
stability. The major hassle the industry faces is obtaining clients. This is due to the fact
that the big fish in the insurance industry dominate the sector. It has become increasingly
difficult for this particular sector to gain profits while curtailing costs. Since most
insurance companies are not adequately equipped to help their agents deal with customer
centered problems CRM insurance enables insurance organizations to survive in a tough
economic climate by using the data the insurance company has on the existing customers
and then use it to increase the level of profitability. Customer Relationship Management
is a catalyst in insurance industry growth. Replacing the traditional in person encounter of
door-to-door sales, the CRM system engages solid business relationships to meet
customer demands for better results. Customer relationship management technology is
proficient in qualifying leads, policy administration and streamlines various work
functions to successfully service an insurance business. Continuing developments are

Page 14 of 107
providing the insurance industry with customized solutions to satisfy consumers and
increase profits. This research paper presents a critical aspect of CRM in insurance
industry.

CHARACTERISTICS OF INSURANCE:

1. Sharing of risks.
2. Cooperative device.
3. Evaluation of Risk.
4. Payment on happening in a special effect.
5. The amount of payment depends on the nature of loss incurred.

HISTORY OF INSURANCE IN INDIA:

Insurance has a long history in India. Life Insurance in its current form was
introduced in 1818 when Oriental Life Insurance Company began its operations in
India. General Insurance was however a comparatively late entrant in 1850 when
Triton Insurance company set up its base in Kolkata.
History of Insurance can be bifurcated into 3 eras:
1. Pre Nationalization
2. Nationalization and
3. Post Nationalization.
Life Insurance was the first to be nationalized in 1956. Consolidating the operations
of various insurance companies formed Life Insurance Corporation of India. General
Insurance followed suit and was nationalized in 1973.General Insurance
Corporation of India was set up as the controlling body with New India, United
India, National and Oriental as its subsidiaries. The process of opening up the
insurance sector was initiated against the background of Economic Reform process,
which commenced from 1991.
For this purpose Malhotra Committee was formed during this year who submitted
their report in 1994 and Insurance Regulatory Development Act (IRDA) was

Page 15 of 107
passed in 1999. Resultantly Indian Insurance was opened for private companies and
Private Insurance Company effectively started operations from 2001.

Fig: Market Share of Indian Life Insurance companies.

INSURANCE MARKET - PRESENT

The insurance sector was opened up for private participation a decade back. For years
now, the private players are active in the liberalized environment. The insurance
market has witnessed dynamic changes, which include presence of a fairly large
number of insurers both life, and non - life segment. Most of the private insurance
companies have formed joint venture partnering well-recognized foreign players
across the globe. The Indian life insurance market generated total revenues of
$41.36 billion in 2007, thus representing a compound annual growth rate
(CAGR) of 11.84% for the period spanning 2000-2007. Life insurance market had
a growth of $22.46 billion within a period of 7 years with a growth rate of
118.24%. Estimated life premiums rose to INR 1,470,800 million ($36.77 billion) in
2006 from INR 1,301,540 million ($32.54billion) in 2005. We envisage that life
premiums in 2011 will be $65.96 billion, a growth larger than they were in 2007.
The performance of the market is forecast to accelerate, with an anticipated CAGR
of 9.78% for the four -year period 2007-2011 expected to drive the market to a

Page 16 of 107
 value of $65.96 billion by the end of 2011. There would be a growth of $24.6
billion i.e. 59.48% in the next 4 years. Non -life premiums in India were $6.53
billion in 2007. Gross written premium (GWP) in the Indian non -life insurance
market reached a value of $5.75 billion in 2006, this representing an annual
growth of 13.55% for the period spanning 2006-2007. Estimated non-life
premiums rose from INR230 billion ($5.75 billion) in 2006 to INR261 billion
($6.53 billion) in 2007. We anticipate that non -life premiums will grow by a
CAGR of 9.40% between 2007-2011. We are looking for non-life premiums to
rise by $405 million over the five years to the end of 2011 with a growth rate of
62.02%.

Fig: The trend of Indian Insurance Industry ($Bn.) 2000-2011.

With a huge population base and large untapped market, insurance industry is a big
opportunity area in India for national as well as foreign investors. India is the fifth
largest life insurance market in the emerging insurance economies globally and is
growing at 32 -34% annually. This impressive growth in the market has been driven
by liberalization, with new player significantly enhancing product awareness and
promoting consumer education and information. The strong growth potential of the
country has also made international players to look at the Indian insurance
market. Moreover, saturation of insurance markets in many developed economies

Page 17 of 107
has made the Indian market more attractive for international insurance players,
according to "Booming Insurance Market in India (2008-2011)”.

CUSTOMER RELATIONSHIP MANAGEMENT IN INSURANCE

Changes in customer expectations can be identified throughout the world. Customer

relationship management (CRM) strategies have become increasingly important
worldwide due to these changes in expectations from customers as well as
changes in the nature of markets. Changes have been noted across the world, but
opportunities present themselves in South Africa and other developing countries for
CRM strategies. Customer Relationship Management (CRM) is managerial philosophy
that seeks to build long term relationships with customers.CRM can be defined as
“the development and maintenance of mutually beneficial long-term relationships
with strategically significant customers” .Under certain circumstances it may
result in the termination of relationships. It can also be noted that the
relationship is developed with strategically significant customers, and hence it is
necessary for the organization to determine the nature of the significance.
Traditionally this would be done by determining the value of the customer to the
organization, but other criteria that can be used include whether a customer
serves as a benchmark for other customers or whether the customer inspires
change in the supplier.

The implementation of CRM is regarded as desirable by organizations due to the

benefits that accrue from these strategies among their customers, such as greater
loyalty and resulting profits. The focus of a CRM strategy is the acquisition,
retention and overall customer profitability of the specific group of customers.
• Acquisition of customers: This refers to the need of organization to find new
customers for their products. This means they are required to develop strategies to
attract potential customers to purchase the product. The cost of attracting a new
customer is estimated to be five times the cost of keeping a current customer happy.
• Retention of customers: Organizations also need to focus on existing customers
in order to ensure that they continue purchasing and continue supporting the product.

Page 18 of 107
Organizations can increase their profitability by between 20% and 125% if they
boost their customer retention rate by 5 percent.
• Profitability: Customer profitability reflects the financial performance of
customers with respect to all the costs associated with a transaction.
Profitability in the case of CRM is determined in the light of the lifetime value
of the customer to the organization, taking account the income and expenses
associated with each customer and their respective transactions over time.
In attempting to understand the implementation of CRM programs, it must be borne
in mind that economies differ in terms of their level of development. Two
economic criteria can be used in this economic analysis - population size and per
capita income have been incorporated into the calculation of per capita GNP and per
capital GDP. This analysis makes it possible to categorize economies as being
Developed, Developing and Less-Developed.

Developed economies are characterized by political stability, highly-educated and

literate populations, high levels of innovation and entrepreneurship as well as
high levels of both industrial and information technology.

Less-developed economies (such as Bulgaria, Bangladesh and Ethiopia) have

political instability (sometimes political anarchy), Government inefficiency, low
standards of living and low levels of economic wealth.

An emerging market (or developing economy) is defined as markets that are in the
process of evolving to becoming developed (i.e. higher income).
Talking particularly about insurance sector like IDBI Federal Life Insurance Co.
Ltd., different customers has different needs therefore it is necessary to
differentiate and segmenting the customers according to their needs and
requirements. Like some customers are interested in Wealth insurance while some
are interested in income Insurance and some are in Retiresurance. Therefore it is the
duty of the marketers to understand the needs of the customers and segment the
customers accordingly. The customers should be targeted after properly having the

Page 19 of 107
full information of the financial circumstances of the customers and offer the package
accordingly.

WAYS OF CUSTOMER RELATIONSHIP MANAGEMENT

1. Going direct to the customer: The biggest current shift in the insurance market
means big changes for customer experience. Because of heightened competition
from many of the newer, more Internet-driven insurance providers, several of the
older, well established insurance companies are investing significant resources to
move more towards a direct - to-consumer business model and away from their
traditional model, which has relied heavily on third-party brokers or captive or
independent insurance agents in the field. This will help to maintain the customer
relationship as they have greater control of the company brand and more access to
customer data.

2. Becoming more customer centric: In order to master providing a consistent

– and consistently positive – customer experience, insurance companies must rebuild
their organizations and their contact centers around the customer. They need to
become customer-centric rather than policy-centric.

3. Effectiveness and Efficiency in the Contact Center: Operational issues in the

contact center plague many large organizations and insurers are no different.
Some of these issues include:

CSR churn - Insurance providers already experience a very high CSR churn
rate in their call centers relative to other industries. This results in significant
expense to the company in terms of training and recruitment and can
negatively impact customer experience. One of the top reasons CSRs leave
their jobs is because of the difficult systems and technology they need to
learn.
Provincial thinking – Insurance providers as a whole are rather infamous
for their “we can build it in IT” culture. This tends to cripple insurance IT
resources, and the customer service operation continually falls down the IT
priority list.

Page 20 of 107
 Desktop complexity - insurance companies have more than 20 applications
and tools on the desktop. That means that CSRs, who are supposed to
provide qualit y and timely service to customers on each call, end up
navigating through dozens of non - integrated applications. These business
applications were all implemented to satisfy the needs of other
departments: the financial department needs a billing system, the
marketing department needs a CRM system, , and the claims department
needs a claims system. And the poor CSR taking the customer’s call
needs to access the data in ALL of those systems, resulting in the CSR‟s
desktop becoming complete chaos, with dozens of open applications and
tools, each of which contains important – but siloed – information. This is
why it can take several months just to get new insurance CSRs up to speed,
let alone fully productive, and it is a major contributor to the very high churn
rate which insurance contact centers experience.

4. Honest about the policy – CSRs are required to be honest about the
policy. As the customers are very conscious these days, they want
clarifications of each and every question before taking any insurance
policy.

5. Avoid false Selling – As insurance is a business of developing trust with the

customers therefore CSRs are required to avoid the false selling to their
customer as it will ruin the relationship when the customer gets to know the
truth.

Page 21 of 107
HISTORY OF TOPIC

IDBI Federal: Introduction

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 Fortis Insurance International, a multinational insurance giant
based out of Europe. In this venture, IDBI owns 48% equity while Federal Bank and
Fortis own 26% equity each. At IDBI Federal, we endeavor to deliver products that
provide value and convenience to the customer. Through a continuous process of
innovation in product and service delivery we intend to deliver world -class wealth
management, protection and retirement solutions to Indian customers. Having started
in March 2008, in just five months of inception we became one of the fastest
growing new insurance companies to garner Rs 100 Cr in premiums. The company
offers its services through a vast nationwide network across the branches of IDBI
Bank and Federal Bank in addition to a sizeable network of advisors and partners. In
only its first year of operations, as on March 31st 2009, the company collected more
than 328 Cr in premiums – highest first year collection in the history of Indian life
insurance industry, through over 87000 policies and over Rs 2825 Cr in Sum
Assured.

Sponsors of IDBI Federal Life Insurance Co Ltd:

IDBI Bank Ltd. Continues to be, since its inception, India’s premier industrial
development bank. Created in 1956 to support India’s industrial backbone, IDBI Bank
has since evolved into a power house of industrial and retail finance. Today, it is
amongst India’s foremost commercial banks, with a wide range of innovative
products and services, serving retail and corporate customers in all corners of the
country from over 700 branches and more than 1180 ATMs. The Bank offers its
customers an extensive range of diversified services including project financing, term
lending, working capital facilities, lease finance, venture capital, loan syndication,
corporate advisory services and legal and technical advisory services to its corporate

Page 22 of 107
clients as well as mortgages and personal loans to its retail clients. As part of its
development activities, IDBI Bank has been instrumental in sponsoring the
development of key institutions involved in India’s financial sector – such as the
Securities and Exchange Board of India (SEBI), National Stock Exchange of
India Limited (NSE) and National Securities Depository Ltd.

HISTORY OF LIC: Introduction

Whenever the word insurance comes we hear the things of protection. The protection
against life the most precious thing, property, assets, etc. The question arise why
insurance is required it may be life or general whatever the answer is there is a fear of
loss came into the picture, so there should be something which gives protection against
the loss & to fulfill the loss up to certain extent. That’s why the insurance is needed
because in today’s scenario there is no guarantee of anything, now let us focuses on life
insurance which is topic of project with related to CRM (customer relationship manager).
CRM & life insurance both are essential for each other because they both are like wheels
of a vehicle (bike) one cannot run efficiently & effectively without each other. To make
survive the life insurance industry in the market there is a need of CRM (customer
relationship manager). To create CRM there is a need of proper subject (life insurance).
So let know something about life insurance. Know about life insurance? Life insurance in
India made its debut well over 100 years ago. In our country, which is one of the most
populated in the world, the prominence of insurance is not as widely understood, as it
ought to be. What follows is an attempt to acquaint readers with some of the concepts of
life insurance, with special reference to LIC. It should, however, be clearly understood
that the following content is by no means an exhaustive description of the terms and
conditions of an LIC policy or its benefits or privileges. For more details, please contact
our branch or divisional office. Any LIC Agent will be glad to help you choose the life
insurance plan to meet your needs and render policy servicing.

Page 23 of 107
WHAT IS LIFE INSURANCE?
Life insurance is a contract that pledges payment of an amount to the person assured (or
his nominee) on the happening o f the event insured against.
The contract is valid for payment of the insured amount during
• The date of maturity, or
• Specified dates at periodic intervals, or
• Unfortunate death, if it occurs earlier
Among other things, the contract also provides for the payment of premium periodically
to the Corporation by the policyholder. Life insurance is universally acknowledged to be
an institution, which eliminates 'risk', substituting certainty for uncertainty and comes to
timely aid of the family in the unfortunate event of death of the breadwinner.
By and large, life insurance is civilization’s partial solution to the problems caused by
death. Life insurance, in short, is concerned with two hazards that stand across the life-
path of every person:
1. That of dying prematurely is leaving a dependent family to fend for itself.
2. That of living till old age without visible means of support.

Life Insurance vs. other savings

Contract of Insurance:
A contract of insurance is a contract of utmost good faith technically known as uberrima
fides. The doctrine of disclosing all material facts is embodied in this important principle,
which applies to all forms of insurance.
At the time of taking a policy, policyholder should ensure that all questions in the
proposal form are correctly answered. Any misrepresentation, non-disclosure or fraud in
any document leading to the acceptance of the risk would render the insurance contract
null and void.

Page 24 of 107
Protection:
Savings through life insurance guarantee full protection against risk of death of the saver.
Also, in case of demise, life insurance assures payment of the entire amount assured (with
bonuses wherever applicable) whereas in other savings schemes, only the amount saved
(with interest) is payable.

Aid to Thrift:
Life insurance encourages 'thrift'. It allows long-term savings since payments can be
made effortlessly because of the 'easy installment' facility built into the scheme.
(Premium payment for insurance is monthly, quarterly, half yearly or yearly). For
example: The Salary Saving Scheme popularly known as SSS provides a convenient
method of paying premium each month by deduction from one's salary.
In this case the employer directly pays the deducted premium to LIC. The Salary Saving
Scheme is ideal for any institution or establishment subject to specified terms and
conditions.

Liquidity:
In case of insurance, it is easy to acquire loans on the sole security of any policy that has
acquired loan value. Besides, a life insurance policy is also generally accepted as
security, even for a commercial loan.

Tax Relief:
Life Insurance is the best way to enjoy tax deductions on income tax and wealth tax. This
is available for amounts paid by way of premium for life insurance subject to income tax
rates in force. Assesses can also avail of provisions in the law for tax relief. In such cases
the assured in effect pays a lower premium for insurance than otherwise.

Page 25 of 107
CUSTOMER RELATIONSHIP MANAGEMENT

Fortis is an international insurance group composed of AG Insurance, the overall

market leader in life and non-life insurance in Belgium, distributing its insurance
products through the network of BNP Paribas Fortis Bank and independent
insurance brokers, and Fortis Insurance International with subsidiaries in the
UK, France, Hong Kong, Luxembourg (Non -life), Germany, Turkey, Russia
and Ukraine, and joint ventures in Luxembourg (Life), Portugal, China, Malaysia,
Thailand and India.
Federal Bank is one of India’s leading private sector banks, with a dominant
presence in the state of Kerala. It has a strong network of over 660 branches and 690
ATMs spread across India. The bank provides over four million retail customers
with a wide variety of financial pro ducts. Federal Bank is one of the first large
Indian banks to have an entirely automated and interconnected branch network.
In addition to interconnected branches and ATMs, the Bank has a wide range of
services like Internet Banking, Mobile Banking, Tele Banking, Any Where
Banking, debit cards, online bill payment and call centre facilities to offer
round the clock banking convenience to its customers.
Insurance companies can learn, from customer’s responses, to improve there business.
Insurers can reach the customers expectation by understanding there needs & behavior
of the customers, which will also help them to improve their profits. To take full
advantage of the CRM program, it should be properly implemented with lot of support
from the organization. A customer-centric has to be embedded in the organization
culture. CRM bring about a positive change in the company’s process people &
technology over the period of time, & results in extending the companies customer
relationship.
A CRM program accumulates knowledge about the customer’s wants, & accordingly
improves the product & services. This results in increased customer loyalty, acquisition
& thereby revenues. The program also helps in improving efficiency across the
organization, which helps in cost of reduction. Moreover, customized solutions are
provided to the customers as & when required.

Page 26 of 107
CRM implementation brings about convergence between people & process, thereby
increasing the business of the agent & the employer group. It also plays a key role in
identifying the right mix of tools & information for optimal profitability.
In order to effectively implement any CRM program, some factors have to be
considered. First of all, the customer segments have to be defined to keep a better track
of the customers. Next comes the selling of policy. Cross-selling is another accepts seen
in most of the insurer these days. Selling additional policies to the existing policies
holders is one of the aspects happening in insurance companies.
Are the company’s objectives, vision and key performance measures defined for better
control over operation is there a scope to shift the companies focus on product centric
approach to customer centric approach to insure that the model is sustainable to generate
customer satisfaction.
CRM can help or hurt the risk management process depending on how well it is
managed. According to industry analysts, CRM and supply chain application are 81%
more profitable for the companies who utilized them, rather than the company that don’t.
According to a study, the failure rate of CRM projects will increase from 55% to 70% in
2004.research also reveals that after the installation of CRM, the call centre reporting
has improved by 88%. CRM is not merely an implementing technology solution or
customer service, but it should be able to learn about the customer’s needs, behaviors,
and preferences in order to identify the market segments. CRM programs might also fail,
if the companies don’t include corporate culture and organization in planning and
companies should also never underestimate the importance of people.
Many managers don’t understand that the customer’s wants, rewards and recognition are
based on efficiency rather than effectiveness. CRM is more than a customer service as it
involves finding the best customers and directing the resources that will be deployed.
Many organizations look at CRM as a requirement and if it is not operated properly it
could affect the company’s bottom line, as the company might lose the customers it does
not want to lose.

Page 27 of 107
PRODUCTS AND SERVICES OF IDBI FEDERAL

INCOMSURANCE:

Incomesurance not only gives you unmatched transparency and flexibility but there
are lots of other features which are inbuilt in the product like convenient premium
payment options, Tax benefits and double advantage of Endowment and Money Back
plan. Incomesurance combines Endowment and Money Back benefits into one
plan. You can get periodic payments as in Money Back or get a lump sum at
maturity as in Endowment. You can make it into an Endowment plan or Money Back
plan, as you wish.

WEALTHSURANCE:

The Wealthsurance Foundation Plan enables you to save and build wealth to meet your
financial goals. However, unlike other investment alternatives, it also enables you to
achieve your wealth goals even in the event of unexpected death, accidents,
disablement or serious illness. The Wealthsurance Foundation Plan can ensure that
your plans for wealth creation are achieved by protecting that plan with insurance
benefits.

With Wealthsurance plan, you can:

Save into the Plan as much money as you want whether at one time, at re gular
intervals or as per your convenience.

Build your wealth by choosing the investments your savings go into and change
them from time to time as you wish.

Get adequate life insurance cover with a unique built -in terminal illness benefit, so
that the financial security of your loved ones is assured and your plans are always
realized.

RETIRESURANCE:

Page 28 of 107
The IDBI Federal Retiresurance Pension Plan is a Unit Linked Insurance Plan that
helps you accumulate your funds for your retirement. The plan is tailor -made for
the ever changing investment environment, with built-in flexibilities to manage
your investment mix. On retirement, you can use the maturity proceeds to buy an
annuity so that you have a monthly paycheck for life, even after you stop earning your
regular income.

HOMESURANCE:
The Homesurance Protection Plan is a reducing term plan, which provides
insurance cover equal to the outstanding balance of your home loan. In the
unfortunate event of death of the home loan borrower, the insurance cover enables
repayment of the home loan liability.
Protection against loan liability:
A home loan is usually a large liability and if the breadwinner who would repay the
loan were not to be there, it could become a serious burden to the family. The
Homesurance Protection Plan protects against this liability.

BONDSURANCE:
Bondsurance is a single premium plan which allows you to make a one-time
investment and get a guaranteed amount on maturity. You can choose a maturity
period of 5 or 10 years for your investment. At the end of the chosen period, you
will receive a guaranteed maturity amount.
Besides the guaranteed maturity amount, Bondsurance also provides a life insurance
cover. In case of death before the maturity date, a Death Benefit which is also
guaranteed will be paid.
Thus you can get life insurance cover, while earning an assured return on your
investment.

Page 29 of 107
SIGNIFCANCE OF CRM IN LIFE INSURANCE

Customer Relationship Management i.e. CRM it acting as very vital role in life insurance
sector as it is beneficial for both the parties i.e. Organization which implement it & the
Customers of that particular company because it focuses on maintenance of relationship
with existing customers & try to getting more business from them as well as generating
new clients for the industry by giving better services. It is like a MANTRA for the
insurance company in today’s scenario where the competition is increasing day by day, as
its help the organization to face the new challenges in upgrading & growing market were
all the people are aware the need/importance of insurance but taking it from the company
were it get better/best services & policy’s which fulfills there need & wants as per there
thoughts. CRM is required for fulfilling these things only, & if CRM program is being
successful it turn the organization as the horse of long race & generate the profitable
business.

The need for research felt here to know in detail, the practical & theoretical aspects of
CRM in life insurance. CRM is on today’s insurance market is emerging as a popular
contact. My aim in selection of this topic is to know more about the future scope of
CRM‘s importance in life insurance sector in India & to know about its effect on
organization & its image in customer mind.

Page 30 of 107
HISTORY OF CRM IN LIFE INSURANCE
CRM in life insurance sector plays a very important role; it is an activity/program by
which the survival of an industry is being easy in competitive market. As its main
functions is to maintain relationship with the existing (old) customers & new customers.
The CRM is working as an important tool for the insurance industry in today’s
world/scenario as it is not an easy task to maintain the relationship with customers for
long period of time but with the help of CRM it is being possible. CRM help the
companies to face the New Challenges arises in the market which create problem for
increasing the business such as, competitions, especially after the LPG (Liberalization,
Privatization, & Globalization) concept has been implemented in India. In such tuff
competition the CRM plays a vital role to an industry to getting the business form the
common people & existing customers. The CRM has born just after the Life Insurance
Companies is exist in the globe & from that time it is playing very important role to
increase the business if life insurance sector. In India, insurance has a deep-rooted
history. It finds mention in the writings of Manu (Manusmrithi), Yagnavalkya
(Dharmasastra) and Kautilya (Arthasastra). The writings talk in terms of pooling of 14
resources that could be re-distributed in times of calamities such as fire, floods,
epidemics and famine. This was probably a pre-cursor to modern day insurance. Ancient
Indian history has preserved the earliest traces of insurance in the form of marine trade
loans and carriers’ contracts. Insurance in India has evolved over time heavily drawing
from other countries, England in particular.

1818 saw the advent of life insurance business in India with the establishment of the
Oriental Life Insurance Company in Calcutta. This Company however failed in 1834. In
1829, the Madras Equitable had begun transacting life insurance business in the Madras
Presidency. 1870 saw the enactment of the British Insurance Act and in the last three
decades of the nineteenth century, the Bombay Mutual (1871), Oriental (1874) and
Empire of India (1897) were started in the Bombay Residency. This era, however, was
dominated by foreign insurance offices which did good business in India, namely Albert

Page 31 of 107
Life Assurance, Royal Insurance, Liverpool and London Globe Insurance and the Indian
offices were up for hard competition from the foreign companies.

In 1914, the Government of India started publishing returns of Insurance Companies in

India. The Indian Life Assurance Companies Act, 1912 was the first statutory measure to
regulate life business. 1928, the Indian Insurance Companies Act was enacted to enable
the Government to collect statistical information about both life and non- life business
transacted in India by Indian and foreign insurers including provident insurance societies.
In 1938, with a view to protecting the interest of the Insurance public, the earlier
legislation was consolidated and amended by the Insurance Act, 1938 with
comprehensive provisions for effective control over the activities of insurers.
The Insurance Amendment Act of 1950 abolished Principal Agencies. However, there
were a large number of insurance companies and the level of competition was high.
There were also allegations of unfair trade practices. The Government of India, therefore,
decided to nationalize insurance business.

An Ordinance was issued on 19th January, 1956 nationalizing the Life Insurance sector
and Life Insurance Corporation came into existence in the same year. The LIC absorbed
154 Indian, 16 non-Indian insurers as also 75 provident societies—245 Indian and foreign
insurers in all. The LIC had monopoly till the late 90s when the Insurance sector was
reopened to the private sector.

The story of insurance is probably as old as the story of mankind. The same instinct that
prompts modern businessmen today to secure themselves against loss and disaster existed
in primitive men also. They too sought to avert the evil consequences of fire and flood
and loss of life and were willing to make some sort of sacrifice in order to achieve
security. Though the concept of insurance is largely a development of the recent past,
particularly after the industrial era – past few centuries – yet its beginnings date back
almost 6000 years.

Page 32 of 107
Life Insurance in its modern form came to India from England in the year 1818. Oriental
Life Insurance Company started by Europeans in Calcutta was the first life insurance
company on Indian Soil. All the insurance companies established during that period were
brought up with the purpose of looking after the needs of European community and
Indian natives were not being insured by these companies. However, later with the efforts
of eminent people like Babu Muttylal Seal, the foreign life insurance companies started
insuring Indian lives. But Indian lives were being treated as sub- standard lives and heavy
extra premiums were being charged on them. Bombay Mutual Life Assurance Society
heralded the birth of first Indian life insurance company in the year 1870, and covered
Indian lives at normal rates. Starting as Indian enterprise with highly patriotic motives,
insurance companies came into existence to carry the message of insurance and social
security through insurance to various sectors of society. Much later on the 19th of
January, 1956, that life insurance in India was nationalized. About 154 Indian insurance
companies, 16 non-Indian companies and 75 provident were operating in India at the time
of nationalization. Nationalization was accomplished in two stages; initially the
management of the companies was taken over by means of an Ordinance, and later, the
ownership too by means of a comprehensive bill.

The Parliament of India passed the Life Insurance Corporation Act on the 19th of June
1956, and the Life Insurance Corporation of India was created on 1st September, 1956,
with the objective of spreading life insurance much more widely and in particular to the
rural areas with a view to reach all insurable persons in the country, providing them
adequate financial cover at a reasonable cost.
LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its
corporate office in the year 1956. Since life insurance contracts are long term contracts
and during the currency of the policy it requires a variety of services need was felt in the
later years to expand the operations and place a branch office at each district headquarter.
Re-organization of LIC took place and large numbers of new branch offices were opened.
As a result of re- organization servicing functions were transferred to the branches, and

Page 33 of 107
branches were made accounting units. It worked wonders with the performance of the
corporation. It may be seen that from about 200.00 crores of New Business in 1957 the
corporation crossed 1000.00 crores only in the year 1969-70, and it took another 10 years
for LIC to cross 2000.00 crore mark of new business. But with re- organization
happening in the early eighties, by 1985-86 LIC had already crossed 7000.00 crore Sum
Assured on new policies.

Today LIC functions with 2048 fully computerized branch offices, 100 divisional offices,
7 zonal offices and the corporate office.

LIC continues to be the dominant life insurer even in the liberalized scenario of Indian
insurance and is moving fast on a new growth trajectory surpassing its own past records.
LIC has issued over one crore policies during the current year. It has crossed the
milestone of issuing 1,01,32,955 new policies by 15th Oct, 2005, posting a healthy
growth rate of 16.67% over the corresponding period of the previous year.

From then to now, LIC has crossed many milestones and has set unprecedented
performance records in various aspects of life insurance business. The same motives
which inspired our forefathers to bring insurance into existence in this country inspire us
at LIC to take this message of protection to light the lamps of security in as many homes
as possible and to help the people in providing security to their families.

BREIF PROFILE OF STUDY AREA

The study area that has been selected is the Mumbai Region which starts from Colaba
to Jogeshwari from different Housing societies and institutions. The correspondents
majorly belong to the Mumbai region and they have been living here for many
decades.

Page 34 of 107
DIFFERENT CONCEPTS

The biggest management challenge in the new millennium of liberalization and

globalization for a business is to serve and maintain good relationship with the king – the
customer. In the past producers took their customers for granted, because at that time the
customers were not demanding nor had alternative source of supply or suppliers. But
today there is a radical transformation. The changing business environment is
characterized by economic liberalization, increasing competition, high consumer choice,
demanding customer, more emphasis on quality and value of purchase etc.

All these changes have made today’s producer shift from traditional marketing to modern
marketing. Modern marketing calls for more than developing a product, pricing it,
promoting it and making it accessible to target customer. It demands building trust, a
binding force and value added relationship with the customers.

The process of developing a cooperative and collaborative relationship between the buyer
and seller is called customer relationship management shortly called CRM. According to
Ashoka dutt head of Citi Bank “the idea of CRM is to know the individual customer
intimately, so that the company has a customized product ready for him even before he
asks for it.”

AIMS FOR CRM

The CRM is a new technique in marketing where the marketer tries to develop long term
relationship with the customers to develop them as life time customers. CRM aims to
make the customer climb up the ladder of loyalty.

The company first tries to determine the likely prospects i.e. the people who have a
strong potential interest in the product and ability to pay for it. The company hopes to
convert many of its qualified prospect into first time customers and then to convert those
first time customers into repeat customers. Then the company tries to convert these repeat
customers into clients – they are those people who buy only from the company in the

Page 35 of 107
relevant product categories. The next challenge for the company is to convert these client
into advocates. Advocates are those clients who praise the company and encourage others
to buy from it.

The ultimate challenge is to convert these advocates into partners where the customers
and the clients work actively together to discover ways of getting mutual benefit.

Thus in CRM the key performance figure is not just current market share but share of life
time value by converting customers into partners.

In CRM the company tries to identify that small percentage (20%) of key account holders
who’s contribution to the company revenues is high (80%). So from this point of view,
CRM is also known as KEY ACCOUNT MANAGEMENT.

EIGHT WAYS TO KEEP CUSTOMERS FOR LIFE

1. Every part of the company’s marketing effort should be geared towards building
lifetime relationships.
2. People want to do business with friendly people. To have effective relations a friendly
attitude must permeate in the organization.
3. Information technology developments should be positively used to serve the
customers.
4. The company should always be flexible to bend its rules and procedures in the client’s
favor.
5. The company should communicate with its customers even when it is not trying to sell
something.
6. The company can communicate and develop stronger customer bonding by providing
financial and social benefits.
7. The company should try to know all its customers including their lifestyles, hobbies,
likes and dislikes etc.
8. The company should make it a point to deliver more than what is promised.

Page 36 of 107
CRM IN INSURANCE – A NEW MANTRA:
With the increasing in the number of insurance players in the market & consumers
becoming more & more aware of different product, insures have realized the
importance of CRM (Customer Relationship Management). CRM has been practice
for decades now, the grocery shopkeeper near our home, the paanwala, etc.; all of
them have been practicing it. In today’s competitive era, where customer is the king,
it is a must for the insurers to not only make new clients but also maintain the existing
customer and encourage repeat purchase. It is estimated that the cost of attracting a
new customer is five times more than that incurred to make an existing customer
happy. Life Insurance Corporation (LIC) of India has been the sole player in the
market before the appearance of private players. It exploited its monopoly powers are
didn’t care much about either attracting new customers or retaining the existing ones.
If anyone needed an insurance policy they had to purchase from LIC. It was mostly a
tax- saving schemes which encourage the purchase of insurance policy. Customers
were not educated regarding insurance matter & a source of knowledge to them was
only the insurance agent & he was the person who suggests the policy to the customer
instead of the customer making his own choice. The customers could not even choose
some other policy from some other insurer because it was Hobson’s choice, i.e., LIC.
But when private players entered in the market, the competition forced LIC & the
other new entrants to become customer centric.

Customer service is getting more & more as most of the time buying an insurance
policy is a one – time purchase & customers are unaware of the variation available in
the market. In the insurance sector, there is an agent-client relationship & satisfied
client can be the biggest brand ambassador for the company (word of mouth
advertisement). It is in the interest of the company to build up good relationship with
the client. The insurance agents of the company play an important role in building
this relationship because they are the people who interact with prospective & existing
clients. Therefore, every organization should build a foundation of relationship
marketing because it acts as a new mantra to all organizations & its help to the agents

Page 37 of 107
 to talk about the company’s product & convince the customer. The best effort is to go
for CRM in an integrated approach. To be more friendly & the customer-centric,
organization need to be implement a CRM strategy which helps them to interacts with
there customers in a more informed manner because CRM helps the manager, the
agent & the other officials (present or past employees) to understand the status of
present client. So, CRM should be implemented in such a way tat it does not become
a hurdle for the organization but is its assets, which facilitated the smooth flow of
information & better care of the customer. CRM has been estimated to be of use of all
organizations, be it of service sector or any other sector still, the experience in the
implementation part has not be successful. In most of the cases, it has been practically
observed that CRM implementation in an unstructured manner has led it to become a
hurdle for the organization instead of becoming valuable assets & an integrated part
of the company.

. LIC, the biggest player in the insurance sector has also gone for implementing CRM
in its organization to ‘facilitated better care of the customer’. Now the customer can
deposit there premium in any computerize branch all over India. But it has not be
implemented at bottom level i.e. agents & managers who are the person interacting
directly with the clients. It is the task of the top-level & middle level manager to train
their agents to practice relationship management & build relationship with their
clients.
1. The agents should be trained to analysis their environment (society, friends, peer
groups, etc.) & build good relationship with their environment because a good
marketer first forms relationship & then sells his goods.
2. An agent should make a profit of the prospective targets (or potential clients).
3. He should be trained to interact with them.
4. He should trained to build the customer database classify them into potential
existing customer into dissatisfied, satisfied highly satisfied customers.
5. The agents should be trained to get the feedback of the customer because
insurance selling is a confidence building measure were relationship is build
between the agent, which lasts for a long duration.

Page 38 of 107
To survive & have an upper hand over the competitors, in today’s scenario insurance
companies need to implement CRM in there organization not only technically (computer,
network, database system, CRM software trained personnel) but also as part of the
culture. Relationship marketing is a key to success in the present era & only those
organizations can succeed who and been able to build a base of their loyal customers,
because a loyal customer advocates the company’s products much better than the
organization itself. The basic existence of the organization lies on the hands of its
customers. It can be easily conclude that for success, it is necessary to implement CRM
in the right manner.

CHALLENGES IN CRM
Customer service is the buzzword of the corporate world & a firm will be better known
by the quality of service it provides rather than its market share or profits-earning
capacity. While providing good & efficient service is a perquisite for any entity, it posses
several problems as far as service organizations are concerned. On account of an invisible
& intangible ‘product’, it makes the assessment of the services provided, that much more
complicated & difficult. This holds true for an insurance organization & in fact, the
problem is of very significance, especially in a life insurance product, where the contract
runs for very long term, sometimes for a few decades. Hence, it is very essential for
insurance companies to sustain the quality of service to retain the loyalty of the client. All
business entities claim to provide the best of customer’s service, but how much of it is
being translated into reality of the question of doubt. In order to be sure that they really
delivering the best service, business houses should first know clearly what the customers
expects & then ensures that the service is delivered. Several fail in this regard & in spite
of heavy expenditure they incur preparation of this customer’s services package, the real
service is not delivered, leading to a disillusioned customers. Hence, it is very essential to
know at the outset, what the customer expects rather then investing the sum of money in
attainting what the company feels is the real customer services.

Page 39 of 107
Need for Policy conditions
In an insurance contract, there are several clauses which maybe beyond the
comprehension of a policyholder as a part of an innate nature of an insurance contract.
While a part of it be totally ruled out, insures should make these clauses as explicit as
they can be. This would pave the way for a reasonable settlement of the claim, if & when
it arises. In the absence of such a clarity & openness, it is bound to be lead to a situation
wherein the two parties the insured & insured, would fail to come to a consensus, leading
to a third party viz., the legal mechanism. The courts may take ambiguity of the clauses
to work against the insurers & to this extent, the customer is well protected. But why
should not avoid the whole episode by putting simple & comprehensible clauses. In
India, the problem is more complicated to the extent that no policy holder has the practice
of reading the clauses. In this regard the new players deserve to be complimented for the
introduction of the free look-in period. Whatever be the ‘free’ part of it the policyholder
is being made to go through the clauses or the policy conditions & to this extent alone, it
is the great achievement.

Agent’s Priorities
Another problem that confronts the industry (both insurer as well as insured’s) is the
lopsided priority of the distributor, either the agent of the broker, in canvassing the
product to the prospect. There is certain tilt toward his own interests in the form of higher
commission & his target to be achieved rather than the proponents need profile. This
could lead to a sense of dissatisfaction of the policyholder & could possibly lead to an
abortive end to the contract. One possible solution to this problem could be having in
place better system remuneration to the agent, which would compel him to look at long
term prospect rather than short term interest like an immediate high rate of commission.
It would also be in the interest of the industry to have more ‘educated’ distributor who
can explain the nuances of the proposed contract to the prospect & do the job of the
primary underwriter, which he is purported to be. This would eventually lead to lesser
heartburn& a higher retention ratio for the insurer. Further, an agent is the link between
the insurer & insured. For whatever service policyholder requires during the team of the
contract, he looks up to the agent to be his representative. In the absence of the agent

Page 40 of 107
playing this middlemen’s role positively the policyholder may be deprived of the service
that he expects. This is one more reasons for a better regulated compensation system for
the agent, in order to sustain his interest in the continuation of the contract.

Retention of Business
Taking about the retention ratios, one is compelled to know about the insurer’s obsession
about the higher retention ratio. One gets to hear that a particular company is
progressively improving its customer retention ratio. It is merely to satisfy the company’s
ego that these ratios are considered from time to time, are we objectively looking at the
improvement of retaining the client? Let us considered a few point to this regard. As
discussed above, the large skew in the agents commission rate could be a factor for
several contact being with the half way through, if not initial year itself. By having more
regulated commission payment system, perhaps, the agent would be, more interest in the
continuation of that policy thereby leading to a possible improvement in the retention
ratio. Further, when a contract is achieved by the payment of the huge rebate, the policy
holder may not have sufficient motivation to continue the policy & could drop out at the
slightest possible excuse.
It is strong case for ruling against rebate payment in insurance, if it can be helped. There
may be some other factor compelling a policy holder to discontinue his life insurance like
inability to sustain the premium payment, other commitment etc. the insurance company
has to consider all these factors in absolute detail, in order that genuine retention ratio
improved in the long run.
The insurers should adopt a customer-centric approach rather than being product-centric.
This would ensure that the customer would not shift loyalties as he develops a feeling
that he is being taken care of. This would a ballooning effect on the business as it would
ensure that the satisfied client would spread the good word around. In this way, the
customer base can be widened to a great extend. It is not for nothing that one says a
satisfied customer is the greatest brand ambassador.
On e positive development which would work towards the accomplishment of the
objective is the introduction of the riders in the life insurance policies. While the needs of
the customer are multifaceted, there cannot be a matching number of basic products for

Page 41 of 107
obvious reasons. The role of riders comes into play exactly in such situations. What
exactly are these riders & how do they add to the flexibility of options for a customer?
Ever ordered a pizza from the neighborhood before? If you did, you must be aware that
the baker would ask is ‘What is the topping of your choice?’ Only after you make your
choice can the order be finalized, which goes to indicate that the toppings are the only
differentiating factor, while the pizza base remain the same. The riders in a life insurance
policy are exactly like the topping of pizza & can be ordered as per one’s needs. Just as
the cost of the pizza changes by the topping(s) that one prefers, the cost of the policy (or
the total premium) also changes with the rider that the policyholder orders for himself/
herself. Above all, a policyholder can ordered several riders for himself/ herself (once
again like the multiple toppings of a pizza) & pay for them separately.

The convenience of having riders in a policy is that one does not need to obtain a separate
policy for each of the needs. By taking just one policy, several needs can be fulfilled by
going for several riders. In this aspect, there is a great deal of flexibility for the customer.
The overriding factor, however, is that these riders have to be paid for and in a few cases
can be quite expensive.

In the Indian insurance market, however, these riders were not significant hitherto, before
the opening up of this industry. One could here of some riders like accident benefit,
disability benefit, etc., nothing more. The emergence of newcomers on the horizon has
suddenly shot up the importance of the riders & several new companies are offering the
riders with their base policies. These riders actually are a value addition to the policies. A
look at some of the riders would enable a better understanding if the role of the riders.
The Accidental Death rider has been the oldest & the most among the several
riders universally. It has been in extensive use in the Indian insurance industry as
well. Under this rider, the beneficiary gets an additional amount (beside the some
additional policy, usually an equal additional amount) if the policyholder were to
die in an accident. The premium for this rider is also very reasonable & makes it
doubly attractive. The term ‘accident’ for this clause covers a wide range of
events. However there is a maximum limit put on the amount of coverage in all

Page 42 of 107
 the policy put together. Besides, there is also an upper age limit until when the
accident cover is provided (usually 70 years).
Premium Waiver Benefit rider, where under the payment of future premiums by
the policyholder is totally waived if the policyholder were to be afflicted with one
of the covered crippling eventualities & be disable to live a normal life. Normally,
it goes with tandem with the disability benefit rider. There is a condition on the
extend of disability & it is covered above certain percentage of disability. The
other conditions the policy continues as if the premiums are being remitted
regularly & the policy is in full force.
Guaranteed Insurability rider, under which the further renewal of the policy when
the present terms ends, is guaranteed without proving further insurability.
Normally, a person would have to prove himself / herself insurable for a fresh
policy of the renewal. Besides, if a policy were to obtain a policy for a very long
term, surrender of the policy in case of need would not be profitable. This rider
gives the flexibility of choosing shorter terms with guaranteed insurability at the
end, if the policyholder so prefers.
Critical Illness rider, under which the policyholder can combine the advantage of
health insurance without having to obtain a separate health insurance policy. The
coverage is against a list of disease mention under the policy which is restricted as
per the age & a personal / family profile of the policyholder
Family income benefit rider, which is a very good value addition to the policy, as
it’s ensure the regular stream of income for the family, if the sole breadwinner of
the family dies during active, working period. The rider along with the base
policy takes care of both the cash needs as well as income need of the family. The
policyholder should be prudent in choosing the term for which the family income
should be payable, as it decides the rate.

These are some of the riders that insurer offers. Not all these riders are offered by all
the insurers everywhere (nor each of them is required by every policyholder), but
there are at least some which are available for the policyholder. As mentioned earlier,
these riders are available at an additional cost, over & above the base premium. Life

Page 43 of 107
insurance is an assurance; whereby there is solemn promise to make payment, either
on maturity or on earlier death. The riders which are attached to the life insurance
policies, however, defeat this property as they only cover certain eventualities that
occur during the contracts period. Besides all said and done life insurance is still
treated as an investment by several sections of the society, especially in India & in
this regard the premium spent or rider may not provide any payment in return. This
point must be clearly made to be understood by the insured, so that it does not lead to
any sort of misgivings at the time of claim settlement.

The entry of foreign, private players into the insurance industry in India marked the
onset of several riders. While the trend in the earlier era was to have bundled product,
the new players are emphasizing the importance of the riders. Most of the new
players have only a few base products to offer & there contention is, by mixing
different combinations of riders, several policies can be designed. They are
leveraging on these on the utilities of these riders to come up with customized
solutions, rather than rigid bundled products. While it sound very customer-friendly
& dynamic, it is very essential that the public awareness in insurance is at a high
level, which unfortunately not the case in India. The introduction of the brokers as a
distribution channel, coupled with a board understanding of the various riders may
provide a solution in the long run.

While the new players are very enthusiastic about the usefulness of the riders for the
policyholders, the erstwhile monolith, Life Insurance Corporation of India has its
reservation about them. Their contention is that the riders cannot provide any
surrenders value, should a policy be stopped during the contract period, due to some
impending & unavoidable reasons. This argument could hold some water in a market
like India where insurance is still seen as an investment tool by a large section of
people

Page 44 of 107
Considering the exclusive risk-coverage feature of the riders, IRDA has initially
prescribed an upper limit on the premium paid towards the coverage of riders if the
life insurance policy. This limit was set at 30 percent of the premium to be paid on the
base policy. There was a furore in the industry over the cap of the premium toward
riders. The new players’ contention was, when the riders are meant to provide
customized solutions, what is the sanctity in having the cap on the premium? There
was been a serious debate on the raising of this cap, if not totally doing away with it.
There are been immense pressure from the industry in this area to do away with the
cap totally. The regulator would, no doubt, take a judicious decision before restoring
to this elimination of the upper limit, considering the brokerage activity as a
distribution channel, the way insurance is being understood by the common man &
also the way the insurance industry develops over a period of times.

Page 45 of 107
 RESEARCH METHODOLOGY

HYPOTHESIS:
The customer relationship of IDBI Federal Life Insurance is satisfactory.
The customer relationship of LIC of India is satisfactory.

OBJECTIVES OF THE RESEARCH:

In this dynamic Insurance Sector scenario, this study is an attempt to understand the
different models and strategies adopted by the different Insurance Companies in order to
build and maintain a strong relationship with their customer base along with their
retention and also to derive the inferences for the future. The study is intended to present
a holistic picture of the customer retention of Insurance companies in India. The main
objectives of this Project are:-
1. To study the CRM techniques and model of the Insurance sector in India.
2. To find out the different types of strategies and methods of Relationship Marketing
to develop long-term relationships with the Customers of IDBI Federal Life
Insurance Co.
3. To find out the different types of strategies and methods of Relationship Marketing
to develop long-term relationships with the Customers of L.I.C. OF INDIA.
4. To study the strategy of tackling their competitors.
5. To understand the CRM strategies that utilizes the entire organization to identify
individual customers’ needs and develop relationships that stretch over several
transactions.
6. To find out the type of loopholes in the Customer Relationship strategies.
7. To find out the factors which influence customer relations of IDBI Federal Life
Insurance Co. & L.I.C. of India and their expectations from the company?
8. To understand the future growth of Customer Relationship management in the
Insurance Sector.

Page 46 of 107
 AIM & SCOPE OF THE PROJECT:

This study aims to know the consumer mind set and perception towards
various insurance policies. The analysis is based on the empirical data collected
from Mumbai. The study also aims to discuss in detail the various strategies
adopted by different companies providing intangible services to know how they
are maintain long term relationship with their customers and implement that
strategy in IDBI Federal Life insurance co. Ltd. Customer Relationship in Insurance
sector is one the most important aspects of their business as due to increased
competition from the other contemporaries, they have to customize their Products to
attract more and more Customers and retain them by maintaining personal relations .
One of the basic Aims of CRM are:

1. All round increase in economic activity due to long term relationship with customers.
2. To maintain Relationship of IDBI Federal Life Insurance Co. Ltd. with the
customers.
3. To know about the strategy adopted by different companies which provide
intangible services and implementing that strategy in IDBI Federal.
4. Features which the people consider the most while taking any insurance
policy and work on to strengthen that feature.
5. Segmenting the customers on the basis of their expectations.

LIMITATIONS:
The Limitations of this Project are:
1. Area covered by the Project is Mumbai Region.
2. The time period taken for the project is last 5 years, from 2011-2016.
3. All the information regarding the CRM of IDBI Federal Life Insurance &L.I.C of India
is Secondary Data collected from its websites and online journals.

Page 47 of 107
SAMPLE DATA

Research methodology consists of Primary and Secondary Data.

PRIMARY DATA: It consists of original Information collected for Specific Purpose. The
Primary Date for this Project was collected by:
1. Survey
2. Face to Face Interactions.
SECONDARY DATA : It consists of Information that already exists somewhere and has
been collected for some specific purpose in the study. The Secondary data for this Project
has been collected from various sources like:

1. Books
2. Website
3. Newspapers and Magazines.

A structured questionnaire was developed covering all the important aspects of CRM in
the Insurance sector. The whole methodology has been systematic and was done in
accordance to the process as detailed below:

SAMPLE SIZE
A random sample of 100-200 were administered with the questionnaire and the
responses were collected.

Page 48 of 107
RESEARCH AREA
The research was carried out at Mumbai Region and all data pertains to the IDBI Federal
Life Insurance Co. & L.I.C. of India
CONSUMER SURVEY: The survey of the consumers was done keeping in mind the
following points:
1. Top of mind awareness of the relationship with consumers in the Insurance sector.
2. To study the comparative influence of various mediums of CRM models in
creating a long lasting bond with the customers.
3. To find the immediate competitors in the minds of the consumers in regards to
their relations with other Insurance Companies.

TABULATION OF DATA

To ensure that the sample selected for the study is a true representative of the universe,
following criteria is adopted for selection of the service organizations in General and Life
insurance.
1. Organizations who have implemented a CRM program.
2. Organizations who are market leaders in the state of Maharashtra.
3. Organizations who have established their name or have a long standing in the market.
4. Both Public and Private sector (wherever applicable) are represented in the sample.

Name of the Type No. of No. of regions Total

Company correspondents

IDBI Federal General 100 1 100

L.I.C. Life 100 1 100

Fig: Selection of sample for Survey.

Page 49 of 107
REASON FOR SELECTION OF TOPIC
With the competitors heating up in the post liberalized insurance market, one factor that
is contributing to the overall performance of an insurance player is the customer
relationship management (CRM) that the company including in. each of the insurers is
parading its own leverages in the field & highlighting the importance that they attached to
customer service in their organizations. To what extend the promises are being delivered
is the million dollar question.

One thing which is common to most of the companies is that they are all relatively new in
the field & not been tested seriously. This is particularly true in the case of life insurance
companies who have long term relationships with their clients. It should be attempt of the
players to not only retain the existing customers but also widen the customer base by
enrolling fresh customers from time to time. These two activities are inter–depended in
the way: if the customer service in the organization is really good, the customer is
unlikely to look elsewhere. On the contrary, he would act as a great brand ambassador for
the company, which would eventually pave the way for enrolling the customers. In the
case of long term contracts, it is possible that a policyholder has a host of services to be
attended to during the entire period of contract.

One aspect that is related to such a long term contract is that the perishability of service
may not be significant. While it may be broadly believed to be so, it would not apply as
an ‘across the board’ characteristic. There may be some service which may have to be
attended with all the urgency. For e.g.:- if a policyholder being serviced under the Salary
Saving Scheme (SSS) of a life insurer is transferred to one place to another, an undue
delay is transferring his file to the desired destination may result in all the premiums
being kept in the pipeline or the suspense account. It is possible that the policyholder
would realize this only at the time of claim settlement by which time is either too late or
too complicated to rectify the damage.

Page 50 of 107
SEGMENTATION:
One area where the insurers are looking at creating an ideal CRM platform is the
segmentation of customers. This would, however, presuppose that the players have
enough products to cater to different segments of the customers. In the life insurance
contract, however the players can access the flexibility that is attached to the use of
various riders. Even without having a large product base, by designing several riders,
several customized solutions can be offered. It would be better for the players to have a
long range planning in this regard & the specific segments that they would like to venture
in. this would enable the players to adopt the right CRM solutions, which would be
expected to last for a reasonably long time. One thing that they should bear in mind is
that the CRM solutions do not come on the platter – they have to be paid for dearly &
another pertinent point is, obsolescence that is associated with the solution should be
tackled properly. Not an easy combination to contend with by any standards, indeed. It
would be a better option to make the solutions as wholesome as possible. Besides, the
players should also keep in mind the likely changes that are going to occur as regards
regulations, the role of the global economic environment etc.

LONG TERM ASSOCIATION WITH THE CUSTOMER:

Customer service in insurance organizations is beset with some strange constraints, which
may not be very relevant in the other areas of service organizations. Especially in life
insurance, one thing is strikingly different in the long term nature of the contract. In some
cases, it can go up to a entire life time of the client, if he or she looking at the backing up
the risk coverage during the active working period with a reasonable & decent pension
package. This type of relationship has to be necessarily built by a rock–solid commitment
towards providing good service throughout the contract period. How often does this
happen really?

Page 51 of 107
NEED – BASED SELLING:
The problem is much more complicated in the case of a nascent market like the Indian
one. The role of the insurer in this aspect begins at the proposal stage – its agent or the
advisor is expected to the primary underwriter. He/she should be capable of identifying
the need of the client & then be in a position to suggest a product that would best suit his
or her needs. This would ensure that the business would be retained for a long term. If the
distributor is himself or herself not ware of the nuances of the product that is being
recommended, it result in a disillusioned policyholder in due course. This would
eventually lead to poor retention ratios of business. This, in fact, is the bane of the Indian
insurance market & is what is responsible for high lapsation ratio of several insurance
companies, private players included. Insurance companies should contribute their own
service by providing the back-up support for the distribution personnel. This would hold
well in the case of renewal of short-term contracts. In the absence of this, all the efforts
put in by him or she may not end in delivering positive results & this would act as a
dampener.

PROPER TRAINING INPUTS FOR THE DISTRIBUTOR:

What would obviate the above problem is the existence of a thoroughly trained
distribution force. We have several pre-requisites for being an insurance agent or advisor.
But if the high incidence of default is observed despite all the preconditions attached to
the training of the advisor what would it indicate? It would perhaps indicate that the right
inputs of the training have not been imparted. While the institutes certify this advisor
have apparently fulfilled all the necessary formalities, ‘the real’ education or the training
of the personnel has not been accomplished. It is good to observed that the regulator is
seriously pursing this aspect of advisor training in all its seriousness. Apart from the
initial training that is mandatory, insurance companies should also look at imparting
refresher courses for these personnel in order to ensure proper updation of their skills. By
doing this, the insured can be assured of an agency force that is capable of not only
identifying the needs of the prospect & then sell the product, but they can also look

Page 52 of 107
forward to the advisor providing continued service to the policyholder during the entire
period of the contract.
CLAIMS MANAGEMENT:
On very vital part of customer relationship management in insurance business is the way
that it looks at claims settlement. For the policyholder it is the early settlement of claims
that is what matters as an essential service here again, the matter much more significant
in the life arena, because the policyholder looks forward to a quick settlement after
fulfilling his role of premium payment for a very long time. Insurer should play a very
proactive role in the area of maturity claims by initiating the process ahead of the due
dates. This would ensure that the policyholder would get the ultimate payment on the day
that is due is over. In the settlement of death claims, insurer should empathize with the
policyholder’s beneficiary ensure that claims are settled a6t the earliest as possible time
without unduly troubling the claimants. Even in case there are some requirements to be
fulfilled, the insurer should help the customer in their processing. If the service rendered
at the time of claim settlement is quick & efficient, it is bound to improve the image of
the insurer & it would pave the way of more fresh business.

While most of these issues are common to all areas of insurance business, there are some
classes which call for a special mention of the issues associated with them. E.g. Health
insurance. It is to foregone conclusion that none of the policyholders is in the habit of
reading & understanding all the policy conditions. The free look period that is associated
with the life insurance contracts should be extended to all classes of insurance so that
policyholder at least has the motivation to go through all the policy clauses & conditions.
This would enable the policyholder to understand the contracts in its detailed thereby
avoiding any possible heartburn at a large stage. A special mention has to be made about
the ‘mutually cancelable’ clause of the contract. The insurer should not be undue
advantage of this clause by canceling the contract where the likelihood of claims being
made is high. Even were the repudiation of a claim is inevitable, the insurer should
explain the reasons for such an eventuality giving details of the relevant clauses & the
reasons for the repudiation. This would create an image in the mind of the policyholder
that the insurers really care. In the absence of this & in the case of blunt rejection of

Page 53 of 107
claims, the policyholder is bound to lose faith in the concept of insurance. This would be
detrimental not only to the business interest of the insurer but also to the overall
insurance industry.

Above all, the insurance players are looking at creating the CRM solutions though the
rapid advancements being accomplished in information technology. As mentioned
earlier, here the emphasis should be on customizing the needs rather going for
humongous investment in technology. Retrieval from a poor decision would itself be
replete with grave completion as well as loss of investments. One thing should be born in
mind, however, is that ultimately is it the person that is delivering the service that is more
important than the means. If the eagerness to help the customer results in a de-motivated
employee, what would the technical advancement achieve? This aspect should be
considered seriously by the players while acquiring CRM solutions. It would be much
wiser to go in for a package which can be implemented easily rather than investing
heavily in a fanciful platform & then try to adapt the human resources to it. These are
some priorities that insurer have to consider while taking this vital decisions.

Page 54 of 107
 LITERATURE REVIEW

Alok mittal, et al., (2013) presented an article on “An exploratory study of CRM
orientation among employees”. The paper aimed at exploring the aspects of the CRM
orientation among employees of both the public and the private sector Insurance
companies. The findings of the research highlighted that there is need for improvement
on some of the components of the CRM such as customer communication, customer
orientation, customer care and handling of complaints in both public and private sector
Insurance companies. The aged employees in the public and private Insurance institutions
need to improve their CRM skills in order to complete with their younger counterparts.

Tapan, (2014) in his article “creating customer lifetime-value through effective CRM in
financial services industry”, has stressed the importance of the CRM in financial services
industry. 166 Customer data management gives clues about the probability of customer
demand and technology helps in tracking the characteristics and categorization of
customers depending on their past behavior. He concluded that with increased
competition and customers moving very fast from firm to firm another, it is essential to
have an integrated CRM strategy across the whole organization for generating higher
customers’ life-time value.

D Ghosh Roy (2012) in his article titled “Relationship Marketing: Branch Level
Perspective” has pointed out that the three levels of relationship marketing, i.e. Retention,
Relationship and Bonding when practiced, helps a branch manager the utmost benefit
from the existing customers in his branch. The article brings forth the fact that the higher
the level in which relationship marketing is practiced, the greater the opportunity to
create loyal customers and the most profitable of all customers. Further the author
highlights at level one relationship marketing the emphasis is on financial incentives, and

Page 55 of 107
it is the most easily imitated by competitors. At level two it adds the personal dimension
to the relationship between the branch banker and his clients, and this is not so easily
copied by the competitors. And at level three it adds structural solutions to customers'
banking-related problems and will have the competitive edge. The author is of the
opinion that those branch bankers who provide all the three types of bonds the financial,
social and structural and who generally deliver a high level of service will create more
and more loyal customers

Vinod Dumblekar (2015) in his research paper “Building Customer Relationships

through Call Centers in Banking and Financial Services” is of the opinion that CRM is a
philosophy that directs the organization to build its processes around its customers needs.
The Call Center is a CRM-embedded automation that builds long term, strategic
relationships with its customers. It assures high volume performance for organisations,
and fast, consistent services for their customers. Banks and other financial services
providers can benefit more than other industries because they deal in information and
funds that are electronically transacted. The Call Center is a strategic investment, and
therefore must be driven by top management. However, process changes, technology
integration and absorption and regular cultural training are vital for success of the
investment.

Anjana Grewal (2014), in her research paper titled “Winning Strategies and Processes for
Effective CRM in Insurance and Financial Services” has presented a case study on
relationship management practices developed in leading foreign Insurance institutions in
India in the early nineties. It is a practical paper providing insights on what makes it
happen. A model has been developed thereafter. The model outlines ten stages for
effective customer relationship practices in financial services. These stages span across
defining the customer relationship, understanding transaction behavior and business
volumes for different customers, developing a customer profitability model, creating the
organisation structure to support relationship management practices, developing training
programmes, relationship pricing and continuously evaluating the role of relationship
managers

Page 56 of 107
 DATA ANALYSIS, INTERPRETATION & PRESENTATION

IDBI FEDERAL

IDBI FEDERAL offers a different variety of schemes and a good range of ULIPs.
There are a lot of ULIPs under the flagship banner Wealthsurance, Bondsurance,
Homesurance and Retiresurance. I have done the comparative analysis of money
back scheme which is called incomesurance and ULIPs under Wealthsurance.

Analysis of ULIPs has been done under the flagship banner wealthsurance and
the companies undertaken for the study are:

LIC INDIA
ICICI Prudential

Comparative analysis of money back schemes of IDBI Federal which is called

Incomesurance has been done taking the following companies under consideration:

LIC India
SBI Life Insurance Co.
ICICI Prudential
Met Life

Page 57 of 107
Following is the analysis of the data collected through the questionnaire and the
classification of the data into tables:

ANALYSIS OF B2B QUESTIONNAIRE:

TABLE-I: The given below Bar graph shows the response of 100 customers.

Main Reason for choosing the Co.

60

50

40

30 Main Reason for choosing the

Co.
20

10

0
Credibility Product Service Image Others

INTERPRETATION:

The sample includes the responses of the employees of the companies who have given
the main reason for their customers to choose their respective companies and 50% of
them considered their services as the main reason for the customers to choose their
company.

Page 58 of 107
TABLE-II: The given below Bar Chart shows the “Preferred Interval of
Communication”.

Preferred Interval of Communication

50
45
40
35
30
25 Preferred Interval of
20 Communication
15
10
5
0
Annually Half-Yearly Quarterly Monthly Weekly

INTERPRETATION:

The strategy also includes how often they contact their customers in order to develop
the relationship with their customers. Around 70% of the companies prefer to contact
their customers on monthly and weekly basis to get their feedback and work for the
improvisation.

Page 59 of 107
TABLE-III: The given Bar shows the “The Preferred Medium of Communication”.

Preferred Medium Of Communication

80

70

60

50

40 Preferred Medium Of
Communication
30

20

10

0
Face to Face Telephone E-mails

ITERPRETATION:

Also when asked about the preferred medium of communication with their customers,
around 70% of the company prefer telephone as the main medium for the
communication with their customers. Next preference will be given to face to face
talking with the customers.

Page 60 of 107
TABLE IV: This bar Chart shows the “Frequency of Solving Customer Complaints”.

Frequency of resolving Customer Complaint

80

70

60

50

40
Frequency of resolving
30 Customer Complaint
20

10

0
1-3 days 3-6 days 6-9 days more than 10
days

INTERPRETATION:

When asked about the time taken by them to resolve customer complaints, around
70 % of them take 1 to 3 days to resolve the customer complaints.

Page 61 of 107
TABLE V: The following bar Chart depicts the “Methodology Adopted”.

Methodology Adopted
60

50

40

30
Methodology Adopted

20

10

0
Differentiation Customer Brand Image Others
Centric

INTERPRETATION:

When asked about the methodology adopted by different companies in order to

differentiate themselves from their competitors, 55% of the companies adopted
customer centric approach and give priority to their services in order to maintain
customer relationship with the customers.

Page 62 of 107
TABLE VI: This bar Graph shows the “Efforts to establish loyal customers.”

Efforts to establish loyal Customers

80

70

60

50

40
Efforts to establish loyal
30 Customers
20

10

0
Providing good Taking Timely Providing Gifts Others
Services Feedback

INTERPRETATION:

Also when asked about the strategy they adopted in order to establish the loyal customers
and retain the existing one, around 65% said about providing good services and 20% of
them prefer timely feedback to the customers.

Page 63 of 107
TABLE VII: TABLE VI: This bar Graph shows the “Efforts to establish loyal
customers.”

Customization of products
70

60

50

40

30 Customization of products

20

10

0
YES NO

INTERPRETATION:
The present graph shows us that 40 % of the time the company customizes the product
only for the customers while 60 % of the time it doesn’t customize the product or service.
This indicates the level of customization which the company adjusts to.

Page 64 of 107
TABLE VIII: This bar Graph shows the “Concept of Internal Service in the company.”

60

50

40

30
Concept of Internal Service

20

10

0
YES NO

INTERPRETATION:

The above graph shows that IDBI Federal Insurance has 55% of its internal services up to
date while 45% of the internal services aren’t conceptualized yet.

Page 65 of 107
TABLE IX: This bar Graph shows the “role of computers in serving the customers.”

Role of computers
45
40
35
30
25
20 Role of computers
15
10
5
0
Plays a big role Not much role to play No role to play

INTERPRETATION:

According to the survey done, in IDBI Federal life insurance, 40% of the work done in
the whole customer relationship management is done with the help of customers while
the other 60% of the work is done manually.

Page 66 of 107
TABLE X: This bar Graph shows the “centralized database for customer information.”

centralized database for customer

information
90
80
70
60
50
40 centralized database for
customer information
30
20
10
0
YES NO SUCH DATABASE

INTERPRETATION:

It seems that 80% of the customer information in IDBI is centralized while 20% is yet to
be centralized. This indicates the level of centralization and decentralization in the private
sector companies.

Page 67 of 107
TABLE XI: This bar Graph shows the “staff access to customer database.”

80

70

60

50

40
access to customer database
30

20

10

0
YES NO

INTERPRATATION:

The above graph states the fact that 70% of the office staff has direct access to the
centralized data base of the office while 30% of lower staff has no direct access.

Page 68 of 107
TABLE XII: This bar Graph shows the “improvement in customer response rate to the
marketing activities.”

improvement in customer response

80

70

60

50

40 improvement in customer
response
30

20

10

0
YES NO

INTERPRETATION:

The above graph shows us that there has been 75% improvement in the customer
response rate due to the various customer relationship techniques implemented by the
company which establishes a direct proportionality to the CRM tools to improvement.

Page 69 of 107
TABLE XIII: This bar Graph shows the “conduction of customer satisfaction surveys.”

100

90

80

70

60

50
Customer satisfaction survey
40

30

20

10

0
YES NO

INTERPRETATION:
The above survey shows that 90 % of the times the company conducts regular consumer
satisfaction surveys through various techniques which provide them an idea about the
levels of customer satisfaction.

Page 70 of 107
TABLE XIV: This bar Graph shows the “improvement in customer retention and
loyalty.”

Improvement in customer retention and

loyalty
70

60

50

40
Improvement in customer
30
retenion and loyalty
20

10

0
YES NO

INTERPRETATION:
The above table denotes the improvement in the customer retention due to the CRM
techniques followed by the company. 60% of the customers are retained and are pretty
much loyal to the company.

Page 71 of 107
ANALYSIS OF B2C QUESTIONNAIRE:

This questionnaire was mainly formulated to target the common man to see his
perception and awareness of various investment options available. The sample of
respondents was carefully selected covering people in all age groups and with
different background s and occupations. The analyses of these questionnaires give us
an insight about the mindset of people regarding various investments. I have also used
factor analysis in SPSS to extract the prominent factors influencing the investment
decisions of the customers. Customer preferences as to where they would like to
invest have been studied. Also we come to know about the preferences given by
customers towards various top life insurance companies and their reasons for it. Here
we see that most of the customers invest regularly from quite some time but
since the last few months their investments have come down due to recession and
market slowdown. Following is the analysis of the primary data collected through
questionnaires. The sample included respondents from all the age groups out of which
people in the age group 30-40 constituted around 60%.

TABLE XV: The following Graph shows the “Age Group of the Respondents”.

Age Group Of the Respondents

70

60

50

40

30 Age Group Of the Respondents

20

10

0
20-30 30-40 40-50 50-60

Page 72 of 107
TABLE XVI: This bar chart shows the “Occupation of the Respondents”.

Occupation
60

50

40

30
Occupation

20

10

0
Govt. Service Business Private Company Self-employes

INTERPRETATION:

The sample of respondents was heterogeneous with people of various occupations

right from government service to ones who were self employed. Out of these people
50% of the respondents are working in the private companies.

Page 73 of 107
TABLE XVII: When asked from the respondents that whether they own an insurance
policy or not, 80% of the respondents own an insurance policy.

Owning An Insurance Policy

90

80

70

60

50

40 Owning An Insurance Policy

30

20

10

0
YES NO

TABLE XVIII: When asked about the reasons for taking the insurance policy, 60 %
of the people will consider risk coverage before taking the insurance policies. This is
due to the following reasons:

1. It will provide returns in the case of unexpected death to deal with debts,
mortgage payments and day-to-day living expenses. It offers protection to the
family you leave behind and serves as a cash resource.
2. It secures your estate on death by providing tax free cash which can be
utilized to pa y estate and other death duties.
3. Some policies have riders such as critical illness for the children or spouse.
There are particular rules considering eligibility for riders which you will
have to clearly understand.

Page 74 of 107
4. In case of bankruptcy, the cash value together with the death benefits is
exempt from your creditors.
5. It is considered as having a financial asset and this will improve your credit
rating when you need medical insurance or a home loan or business loan.
6. It has double benefits as it protects and you can also your money back during
strategic points in your life.
7. It can contribute towards sustaining a family’s standard of living when one
contributing partner dies unexpectedly.

Reasons for Taking policies

80

70

60

50

40
Reasons for Taking policies
30

20

10

0
Risk Coverage Pension Tax benefit

Page 75 of 107
 Table XIX: This Bar chart shows us the preferred the “Investment Instrument”

Preferred Investment Instrument

40

35

30

25

20
Preferred Investment
15 Instrument
10

0
bank Mutual funds Insurance Post-office Shares
Deposits

INTERPRETATION:

Also the customers‟ preferences for different forms of savings have been carefully
studied. The Comparison of investment in insurance has been done with other
forms of investment instruments and analyzed carefully. The main savings
instruments generally preferred by customers are bank deposits, mutual funds,
insurance and shares and debentures. Around 35% of the respondents feel Mutual
funds and bank deposits are better investment instruments than insurance but 29%
are willing to invest in insurance industry.

Page 76 of 107
TABLE XX: The following Chart shows the “Preferred Company To Invest”.

Following is the rating (from 1-5, 1-bad, 5-best) given by respondents to the five
selected life insurance companies. Here we can clearly see that LIC has the best
rating. The reasons given by the respondents were that LIC was a public sector
company which is well established and has got loads of experience.

INTERPRETATION:

Around 63% of the respondents owned an insurance policy in LIC which clearly
shows that LIC still continues to be the market leader in as it has been since the last
50 years or so in spite of the presence of various powerful private players which
are still finding hard to capture a major market share. Around 13% of respondents
chose ICICI Prudential

Page 77 of 107
LIC OF INDIA

Insurance companies can learn, from customer’s responses, to improve there business.
Insurers can reach the customers expectation by understanding there needs & behavior of
the customers, which will also help them to improve their profits. To take full advantage
of the CRM program, it should be properly implemented with lot of support from the
organization. A customer-centric has to be embedded in the organization culture. CRM
bring about a positive change in the company’s process people & technology over the
period of time, & results in extending the company’s customer relationship. A CRM
program accumulates knowledge about the customer’s wants, & accordingly improves
the product & services. This results in increased customer loyalty, acquisition & thereby
revenues. The program also helps in improving efficiency across the organization, which
helps in cost of reduction. Moreover, customized solutions are provided to the customers
as & when required. CRM implementation brings about convergence between people &
process, thereby increasing the business of the agent & the employer group. It also plays
a key role in identifying the right mix of tools & information for optimal profitability. In
order to effectively implement any CRM program, some factors have to be considered.
First of all, the customer segments have to be defined to keep a better track of the
customers. Next comes the selling of policy. Cross-selling is another accepts seen in most
of the insurer these days. Selling additional policies to the existing policies holders is one
of the aspects happening in insurance companies. Are the company’s objectives, vision
and key performance measures defined for better control over operation is there a scope
to shift the company’s focus on product centric approach to customer centric approach to
insure that the model is sustainable to generate customer satisfaction. CRM can help or
hurt the risk management process depending on how well it is managed. According to
industry analysts, CRM and supply chain application are 81% more profitable for the
companies who utilized them, rather than the company that don’t. According to a study,
the failure rate of CRM projects will increase from 55% to 70% in 2004.

Page 78 of 107
Following is the analysis of the data collected through the questionnaire and the
classification of the data into tables:

ANALYSIS OF B2B QUESTIONAIRRE:

TABLE-I: The given below Bar graph shows the response of 100 customers.

Main Reason for choosing the Co.

60

50

40

30 Main Reason for choosing the

Co.
20

10

0
Credibility Product Service Image Others

INTERPRETATION:

The sample includes the responses of the employees of the companies who have given
the main reason for their customers to choose their respective companies and 50% of
them considered their services as the main reason for the customers to choose their
company.

Page 79 of 107
TABLE-II: The given below Bar Chart shows the “Preferred Interval of Communication”.

Preferred Interval of Communication

50
45
40
35
30
25 Preferred Interval of
20 Communication
15
10
5
0
Annually Half-Yearly Quarterly Monthly Weekly

INTERPRETATION:

The strategy also includes how often they contact their customers in order to develop
the relationship with their customers. Around 70% of the companies prefer to contact
their customers on monthly and weekly basis to get their feedback and work for the
improvisation.

Page 80 of 107
TABLE-III: The given Bar shows the “The Preferred Medium of Communication”.

Preferred Medium Of Communication

90

80

70

60

50
Preferred Medium Of
40
Communication
30

20

10

0
Face to Face Telephone E-mails

ITERPRETATION:

Also when asked about the preferred medium of communication with their customers,
around 80% of the company prefer telephone as the main medium for the
communication with their customers. Next preference will be given to face to face
talking with the customers.

Page 81 of 107
TABLE IV: This bar Chart shows the “Frequency of Solving Customer Complaints”.

Frequency of resolving Customer Complaint

80

70

60

50

40
Frequency of resolving
30 Customer Complaint
20

10

0
1-3 days 3-6 days 6-9 days more than 10
days

INTERPRETATION:

When asked about the time taken by them to resolve customer complaints, around
70 % of them take 1 to 3 days to resolve the customer complaints, while 16% take
around 3-6 days and 24% take around 6-9 days.

Page 82 of 107
TABLE V: The following bar Chart depicts the “Methodology Adopted”.

Methodology Adopted
60

50

40

30
Methodology Adopted

20

10

0
Differentiation Customer Brand Image Others
Centric

INTERPRETATION:

When asked about the methodology adopted by different companies in order to

differentiate themselves from their competitors, 55% of the companies adopted
customer centric approach and give priority to their services in order to maintain
customer relationship with the customers. L.I.C. rides on 46% of its brand image.

Page 83 of 107
TABLE VI: This bar Graph shows the “Efforts to establish loyal customers.”

Efforts to establish loyal Customers

80

70

60

50

40
Efforts to establish loyal
30 Customers
20

10

0
Providing good Taking Timely Providing Gifts Others
Services Feedback

INTERPRETATION:

Also when asked about the strategy they adopted in order to establish the loyal customers
and retain the existing one, around 69% said about providing good services and 24% of
them prefer timely feedback to the customers.

Page 84 of 107
TABLE VII: TABLE VI: This bar Graph shows the “Efforts to establish loyal
customers.”

Customization of products
80

70

60

50

40
Customization of products
30

20

10

0
YES NO

INTERPRETATION:
The present graph shows us that 30 % of the time the company customizes the product
only for the customers while 70 % of the time it doesn’t customize the product or service.
This indicates the level of customization which the company adjusts to.

Page 85 of 107
TABLE VIII: This bar Graph shows the “Concept of Internal Service in the company.”

90

80

70

60

50

40 Concept of Internal Service

30

20

10

0
YES NO

INTERPRETATION:

The above graph shows that L.I.C. has 80% of its internal services up to date while 20%
of the internal services aren’t conceptualized yet.

Page 86 of 107
TABLE IX: This bar Graph shows the “role of computers in serving the customers.”

Role of computers
70

60

50

40

30 Role of computers

20

10

0
Plays a big role Not much role to play No role to play

INTERPRETATION:

According to the survey done, in IDBI Federal life insurance, 60% of the work done in
the whole customer relationship management is done with the help of customers while
the other 40% of the work is done manually.

Page 87 of 107
TABLE X: This bar Graph shows the “centralized database for customer information.”

centralized database for customer

information
80
70
60
50
40 centralized database for
30 customer information

20
10
0
YES NO SUCH DATABASE

INTERPRETATION:

It seems that 80% of the customer information in L.I.C. is centralized while 20% is yet to
be centralized. This indicates the level of centralization and decentralization in the private
sector companies.

Page 88 of 107
TABLE XI: This bar Graph shows the “staff access to customer database.”

80

70

60

50

40
access to customer database
30

20

10

0
YES NO

INTERPRATATION:

The above graph states the fact that 70% of the office staff has direct access to the
centralized data base of the office while 30% of lower staff has no direct access.

Page 89 of 107
TABLE XII: This bar Graph shows the “improvement in customer response rate to the
marketing activities.”

improvement in customer response

80

70

60

50

40 improvement in customer
response
30

20

10

0
YES NO

INTERPRETATION:

The above graph shows us that there has been 75% improvement in the customer
response rate due to the various customer relationship techniques implemented by the
company which establishes a direct proportionality to the CRM tools to improvement.

Page 90 of 107
TABLE XIII: This bar Graph shows the “conduction of customer satisfaction surveys.”

100

90

80

70

60

50
Customer satisfaction survey
40

30

20

10

0
YES NO

INTERPRETATION:
The above survey shows that 90 % of the times the company conducts regular consumer
satisfaction surveys through various techniques which provide them an idea about the
levels of customer satisfaction.

Page 91 of 107
TABLE XIV: This bar Graph shows the “improvement in customer retention and
loyalty.”

Improvement in customer retention and

loyalty
80
70
60
50
40 Improvement in customer
30 retenion and loyalty

20
10
0
YES NO

INTERPRETATION:
The above table denotes the improvement in the customer retention due to the CRM
techniques followed by the company 70% of the customers are retained and are pretty
much loyal to the company.

Page 92 of 107
ANALYSIS OF B2C QUESTIONNAIRE:

This questionnaire was mainly formulated to target the common man to see his
perception and awareness of various investment options available. The sample of
respondents w a s carefully selected covering people in all age groups and with
different background s and occupations. The analyses of these questionnaires give us
an insight about the mindset of people regarding various investments. I have also used
factor analysis in SPSS to extract the prominent factors influencing the investment
decisions of the customers. Customer preferences as to where they would like to
invest have been studied. Also we come to know about the preferences given by
customers towards various top life insurance companies and their reasons for it. Here
we see that most of the customers invest regularly from quite some time but
since the last few months their investments have come down due to recession and
market slowdown. Following is the analysis of the primary data collected through
questionnaires. The sample included respondents from all the age groups out of which
people in the age group 30-40 constituted around 60%.

TABLE XV: The following Graph shows the “Age Group of the Respondents”.

Age Group Of the Respondents

70

60

50

40

30 Age Group Of the Respondents

20

10

0
20-30 30-40 40-50 50-60

Page 93 of 107
TABLE XVI: This bar chart shows the “Occupation of the Respondents”.

Occupation
60

50

40

30
Occupation

20

10

0
Govt. Service Business Private Company Self-employes

INTERPRETATION:

The sample of respondents was heterogeneous with people of various occupations

right from government service to ones who were self employed. Out of these people
50% of the respondents are working in the private companies.

Page 94 of 107
TABLE XVII: When asked from the respondents that whether they own an insurance
policy or not, 80% of the respondents own an insurance policy.

Owning An Insurance Policy

80

70

60

50

40
Owning An Insurance Policy
30

20

10

0
YES NO

TABLE XVIII: When asked about the reasons for taking the insurance policy, 60 %
of the people will consider risk coverage before taking the insurance policies. This is
due to the following reasons:

1. It will provide returns in the case of unexpected death to deal with debts,
mortgage payments and day-to-day living expenses. It offers protection to the
family you leave behind and serves as a cash resource.
2. It secures your estate on death by providing tax free cash which can be
utilized to pa y estate and other death duties.
3. Some policies have riders such as critical illness for the children or spouse.
There are particular rules considering eligibility for riders which you will
have to clearly understand.

Page 95 of 107
4. In case of bankruptcy, the cash value together with the death benefits is exempt
from your creditors.
5. It is considered as having a financial asset and this will improve your credit
rating when you need medical insurance or a home loan or business loan.
6. It has double benefits as it protects and you can also your money back during
strategic points in your life.
7. It can contribute towards sustaining a family’s standard of living when one
contributing partner dies unexpectedly.

Reasons for Taking policies

80

70

60

50

40
Reasons for Taking policies
30

20

10

0
Risk Coverage Pension Tax benefit

Page 96 of 107
 Table XIX: This Bar chart shows us the preferred the “Investment Instrument”

Preferred Investment Instrument

40

35

30

25

20
Preferred Investment
15 Instrument
10

0
bank Mutual funds Insurance Post-office Shares
Deposits

INTERPRETATION:

Also the customers‟ preferences for different forms of savings have been carefully
studied. The Comparison of investment in insurance has been done with other
forms of investment instruments and analyzed carefully. The main savings
instruments generally preferred by customers are bank deposits, mutual funds,
insurance and shares and debentures. Around 35% of the respondents feel Mutual
funds and bank deposits are better investment instruments than insurance but 29%
are willing to invest in insurance industry.

Page 97 of 107
 CONCLUSION AND SUGGESTIONS
Following are main extracted prominent factors that influence the consumer and that
help in building relationship with the customer are:

1. Customer services
2. High returns associated with insurance policy.
3. Minimum Risk involved
4. Customization of services
5. Product differentiation
6. Tax benefit from the insurance policy.
7. Flexible investment options
When rating the above extracted factors based on the importance given by the
respondents, customer service is the most prominent feature associated with the
insurance policy in order to maintain the customer relationship as 43% of the
respondents preferred of getting good service from the insurance company they are
dealing with.

Percentage Of Respondents
5% Flexible Investment
12 11% Options
High returns

43 Customization Of Products
17%

Product Differentiation
7%
5% Risk Involved

Fig: Comparison of Extracted Factors.

Hence, the key factor extracted from the above pie chart that is most responsible for
maintaining good customer relationship is CUSTOMER SERVICE.

Page 98 of 107
CONCLUSION:

1. LIC, ICICI Prudential and HDFC offer various ULIPs under the same banner
i.e. wealthsurance as compared to IDBI Federal. Hence they give more
flexibility to the customer which helps to optimize the relationship with the
customer.
2. The major competitive forces which are necessary to build the
strong customer relationships are:
Better Quality
Low cost
Reliability –Delivering on Promises
Responsiveness- Willing to Help
Brand Image
3. People are more willing to invest in Life insurance products as compare to
Non-Life insurance products.
4. In the insurance sector LIC is the number one company prefer by the people as
its market is very high as compare to other insurance companies.
5. Better customization of the product helps to strengthen the relationship
with the customer
6. Most of the insurance companies consider Customer Service as the main
reason for the customers to choose their company.
7. Most of the insurance companies prefer monthly and weekly basis to
communicate with their customers.
8. Telephone is the most preferred mode of communication by the services
companies.
9. Product differentiation and customer centric approach is the most preferred
approach by the companies.
10. Most of the respondents look for long term investment with the preferred
company.
11. Customer Service is the prime reason given by the respondents behind
taking any insurance policy.

Page 99 of 107
 12. Bank deposits, mutual funds and insurance are considered to be the most
preferred investment instrument by the respondents.
13. Most of the respondents feel that high risk is involved in ULIPs.

SUGGESTIONS:

1. The company should constantly come out with innovative products as the
competition is very tough with around 22 companies fighting hard for the
market share. Some new innovative ideas have been suggested below:
An insurance plan for the unborn babies. The premium payment term
could be for 6 months and it could start once the fetus is 3 months old
inside the mother’s womb. There could be various benefits under this plan
for the customers like in case of a premature or a complicated birth the
company would bear the expenses till the baby is healthy again through
the insurance policy. Also there could be death benefits in case of the
death of the baby inside the womb or at the time of delivery. This plan
could really be successful as in India there are lot of premature child
deaths and if the company comes out with a plan like this very tactfully
with some implied conditions it would be the first Indian company to offer
insurance to unborn babies.
An insurance plan for mentally retarded and physically handicapped
people. This might be hard to digest but if at all plans like these are
possible and really come out then a good amount of Indian population
would really be interested.
The company could also come out with a plan for both the husband
and wife where automatically the wife gets insured along with her
husband when her husband purchases the policy. This could also be the
other way round. This could be called the combo family plan. In simple
words it means buy one policy and get another free. No other company
has done something like this till now.

Page 100 of 107

2. IDBI Fortis should focus on its customer services as more and more
people are inclined to this feature of the insurance policy which helps to
acquire more customers and retain the existing one.
3. As the company is a new company it has to really work hard to get itself
promoted.
The company could start sponsoring major events and conduct talk shows
and seminars to get noticed. It could also take the help of NGOs. There are
many people in India who still do not know about the concept of insurance.
The company could take this as an opportunity by trying to create awareness.
4. IDBI Fortis should increase the number of plans under its products to
give more flexibility to the customers so that they get better options and
take their decisions as per their needs and requirements.
5. L.I.C. should bring effective communication and efficiency in its contact
center in order to avoid any chaos and problem at the customer end in order to
develop strong relationship with them.
6. IDBI Federal should adopt face to face interaction with its customers as the
customer’s expectations are fluctuating day by day so to overcome that it
is required to understand the need and behavior of the customer in a better
way which can be done by face to face interaction with him.
7. L.I.C. should contact its customers on the monthly basis in order to make
continuous interaction with them and taking regular feedback to improvise
their operations.
8. L.I.C. should make some innovative strategy to build loyal customers and
retain the existing one so that they can make long term relationship
with the company.
9. IDBI Federal should launch the open source software as it is seen that there
‟s lack of awareness about the company in the market
10. L.I.C. should target the consultancy companies for its promotion.
11. L.I.C. needs to understand the consumer buying behavior and formulate its
policy accordingly.

Page 101 of 107

This project is conducted for getting the knowledge (theoretical & practical) as well
as for the future aspects of the CRM services in insurance sector in India. As it is a
very vast area which includes more number of services related to it. It is very
competitive activity for insurance which directly provides a various type of services
under one roof. As it includes various types of services it has its advantage as well
as disadvantage. Same, as coin has two sides, this service is valuable to the
customers, clients, dual/ individual, etc...

But on the other hand it has its limitations which show that people are not aware of
it such as (clients, group/individuals, etc…). So to make it helpful to its providers &
services buyers or policy holders, the awareness of it is necessary because some or
the other are taking the policy for long or short period of time. It plays a very
important role in the development of a country especially in industrial sectors. So,
CRM service providers(department) should be careful always about the services
while provided to their customers & try to make its awareness to all the customers,
not only to maximization the profit, but because there is a rising of competition in
this sector.

To the insurer, make its awareness to yours staff members/agents of all branches by
the way of training programs, seminars, workshops, etc. because many of them
don’t know that how the CRM actually is to be conduct may be there some of
branches are providing this services, in real term all the agents, advisors, etc. are
providing this service in effective manner but they don’t know the importance of it,
at industry level so the awareness of this is necessary, only the managers or big post
personality know about the CRM & its services as well its activities in better way.

Page 102 of 107

 BIBLIOGRAPHY

This project has been made with the references taken from the following
portals:
Newspapers
Magazines Published
Annual Reports
Online Journals:
http://www.google.co.in/
www.idbifederal.com
www.metlife.co.in
https://www.licindia.in/
www.eagonreligare.com
http://www.scribd.com
www.irda.org

Page 103 of 107

 ANNEXURE

The following questions were asked:

B2B Questionnaire:

1) What do you think is the main reason for customers to choose your company?
a) Service
b) Product
c) Reliability
d) Image
e) Others

2) How often you contact your customer?

a) Weekly
b) Monthly
c) Annually
d) Quarterly
e) Half-Yearly

3) What is the Preferred Medium of Communication with your Customers?

a) Face to Face
b) E-mails
c) Telephones

4) How long do you take to resolve Customer Complaints?

a) 1-3 days
b) 3-6 days

Page 104 of 107

 c) 6-9 days
d) more than 10 days

5) What are the methodologies adopted by different Companies to differentiate from

competitors?
a) Customer Centric Approach
b) Brand Image
c) Differentiation
d) Others

6) What are the Strategies adopted by the company to establish Loyal Customers?
a) Providing Good Services
b) Taking timely Feedback
c) Providing gifts
d) Others

7) Do you customize your product or services according to the customer?

a) Yes
b) No

8) Do you have a concept of “internal service”?

a) Yes.
b) No.

9) How much is the role of computers in serving the customers?

a) Plays a big role
b) Not much role to play
c) No role to play

10) Do you have centralized database for customer information?

a) Yes
b) No such database

Page 105 of 107

11) Does the staff have access to the customer database?
a) Yes
b) No

12) Is there any improvement in customer response rate to the marketing activities?
a) Yes
b) No

13) Do you conduct customer satisfaction surveys?

a) Yes
b) No

14) Is there any improvement in customer retention and loyalty?

a) Yes
b) No

B2C Questionnaire:

15) The Age Group of Respondents?

a) 20-30 years
b) 30-40 years
c) 40-50 years
d) 50-60 years

16) What is the Occupation of the Respondents?

a) Government Service
b) Business
c) Private Company
d) Self- Employed

Page 106 of 107

17) Do you own an Insurance Policy?
a) Yes
b) No

18) What are the reasons to take the policies?

a) Risk Coverage
b) Pension
c) Tax benefits

19) What are the preferred Investment Instruments?

a) Bank Deposits
b) Mutual Funds
c) Insurance
d) Post- Office
e) Shares

20) What are the Preferred Companies in which would you like to invest?
a) Bajaj Alliance
b) HDFC Standard Life
c) ICICI Prudential
d) IDBI Federal
e) LIC
f) TATA-AIG

Page 107 of 107