CHAPTER 1:

INTRODUCTION:

1.1 INTRODUCTION

1.1. 1) INTRODUCTION OF CRM

1.1. 2) INTRODUCTION OF INSURANCE

1.1. 3) INTRODUCTION OF CRM IN INSURANCE

1.2 SIGNIFICANCE OF CRM IN LIFE INSURANCE SECTOR

1.3 BACKGROUND OF CRM IN LIFE INSURANCE SECTOR

1.4 LIMITATION

1.5 OBJECTIVE OF STUDY

1.6 RESEARCH METHODOLOGY

1.6.1) PRIMARY DATA

1.6.2) SECONDARY DATA

1

CHAPTER 1:

INTRODUCTION:

1.1.1) INTRODUCTION OF CUSTOMER RELATIONSHIP

MANAGEMENT (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.

2

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 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.

3

1.1.2) INTRODUCTION OF LIFE INSURANCE :

Whenever the word insurance comes to here we things of protection.

The protection against life the most precious thing & the 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 some thing which gives protection against

the loss & to fulfill the loss upto 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

4

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.

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 of 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

5

the 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

6

the acceptance of the risk would render the insurance contract null

and void.

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.

7

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.

1.1.3) INTRODUCTION OF CRM IN INSURANCE

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

8

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.

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

9

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

10

properly it could affect the company’s bottom line, as the company

might lose the customers it does not want to lose.

1.2 SIGNIFICANCE OF CRM IN LIFE INSURANCE SECTOR

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

exiting 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.

11

1.3 BACKGROUND OF CRM IN LIFE INSURANCE SECTOR

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.

1.4 LIMITATION

Other services of insurance company have not been covered.

Project has been restricted to Mumbai in order to avoid

complications.

Only focuses on customer-centric approach.

1.5 OBJECTIVE

To study there strategy of tackling there competitors.

To kwon the perceive future of CRM in insurance.

To identify how to retain the customers.

To identify the problems faced by the organizations to maintain

CRM.

12

1.6 RESEARCH METHODOLOGY

Primary data has been collected by personal visits to insurance

companies & its branches, Telephonic interview from Consultants,

agents, advisors & with the help of Questionnaires filled by them.

Secondary data has been collected from various sources such as

books, news papers, & etc.

13

CHAPTER 2:

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.

14

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

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 Life Assurance, Royal Insurance, Liverpool and London Globe

Insurance and the Indian offices were up for hard competition from

the foreign companies.

15

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. In

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

16

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.

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

17

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.

18

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

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

19

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.

Some of the important milestones in the life insurance business in India are:

1818 Oriental Life Insurance Company, the first life insurance

company on Indian soil started functioning.

1870 Bombay Mutual Life Assurance Society, the first Indian

life insurance company started its business.

1912 The Indian Life Assurance Companies Act enacted as the

first statute to regulate the life insurance business.

20

1938 Earlier legislation consolidated and amended to by the

Insurance Act with the objective of protecting the interests

of the insuring public.

1956 245 Indian and foreign insurers and provident societies are

taken over by the central government and nationalized.

LIC formed by an Act of Parliament, viz. LIC Act, 1956,

with a capital contribution of Rs. 5 crore from the

Government of India.

21

CHAPTER 3:

CRM IN INSURANCE – 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

22

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 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

23

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

24

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.

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

companies products much better than the organization itself. The

basic existence of the organization lies on the hands of its customers.

25

It can be easily conclude that for success, it is necessary to implement

CRM in the right manner.

26

CHAPTER 4:

CRM IN INSURANCE - IMPORTANCE:

4.1 SEGMENTATION

4.2 LONG TERM ASSOCIATION WITH THE CUSTOMER

4.3 NEED – BASED SELLING

4.4 PROPER TRAINING INPUTS FOR THE DISTRIBUTOR

4.5 CLAIMS MANAGEMENT

27

CHAPTER 4:

CRM IN INSURANCE - IMPORTANCE:

With the competitors hotting up in the post liberalized insurance

market, one factor that is contributing to the over all 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. This

two activity 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

28

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.

4.1 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

29

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.

4.2 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

30

towards providing good service throughout the contract period. How

often does this happen really?

4.3 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 her

may not end in delivering positive results & this would act as a

dampener.

31

4.4 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 forward to the advisor providing

continued service to the policyholder during the entire period of the

contract.

32

4.5 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

33

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 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

34

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 the 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 is lacking in a

demotivated 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.

35

CHAPTER 5:

CUSTOMER SERVICES – CHALLENGES AHEAD:

5.1 NEED FOR EXPLICIT POLICY CONDITIONS

5.2 AGENT’S PRIORITIES

5.3 RETENTION OF BUSINESS

5.4 NEED FOR HEALTHY COMPITITION

36

CHAPTER 5:

CUSTOMER SERVICES – CHALLENGES AHEAD:

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

37

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.

5.1 NEED FOR EXPLICIT 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

38

through the clauses or the policy conditions & to this extent alone, it

is the great achievement.

5.2 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.

39

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 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.

5.3 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

40

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

obvious reasons. The role of riders comes into play exactly in such

41

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 baker? 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.

42

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 there 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 the policy put together. Besides, there is also an

upper age limit until when the accident cover is provided

(usually 70 years).

43

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

44

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

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

45

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,

46

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.

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.

47

5.4 NEED FOR HEALTHY COMPITITION

It is a universal fact that there is resistance to change. This holds well

in the insurance domain as well. The policyholder, on his part, is

resistance to changes occurring in the domain, post- liberalization, or

he has been so attuned to the working of insurance companies that he

is not able to appreciate anything novel in this regard. The incumbent

insurance companies suffer from a similar limitation & are finding it

very hard to come to grips with a competitive scenario. In the process,

the customer has to pay the price. Being incumbent, if the public

sector behemoths take the lead in spreading a healthy competition, it

would be better for the industry as well as for the customer in the long

run. The competition that one gets to see presently is leaving a lot to

be desired.

While some new product & riders have been introduced into the

market, information with regard to them is not being disclosed

completely thereby putting customer in the quandary. In some cases,

it sound as if one companies is announcing the onset of the new

product just as the competition for another, rather than a genuine

customer interest. If this is the trend, are we not product-centric &

defeating the very basic tenet? Insurance companies should try to see

48

beyond mere alternative to products & aim at coming out with

customize solutions for the policyholder.

The best thing that has happened in the post-liberalization scenario is

the introduction of brokers into the system. These brokers, being

better literate & also being neutral to a particular company can be

good crusaders for the policyholders. However, the institution has not

taken of to the expected level & the market is yet to experience

positive results. One hopes that the real benefit of the institution of

broker is present, for all to see, in the near future.

49

CHAPTER 6:

METHODOLOGY OF CRM IN INSURANCE:

The utility of the applications is vast & extend across the value chain.

There are applications that the customer-facing, adding more value &

satisfaction to the customer. Such application enhance customer’s

intelligence & empower them to perform a host of activities at there

own convenience over the internet.

The Customer Relationship Management (CRM) solutions pack such

applications. The utility extended by such solutions are plentiful, a

few of which are detailed below.

Needs Analysis:-

Enable prospective customers to identify the product that match there

risk profile the help of an interactive needs analysis process. The

customer’s answers a series of logically presented questions, based on

the options selected for these questions, the most suitable product(s)

that match the customers requirements are presented to the customer.

For example, while guiding the prospective customer toward a

suitable product, the application will present questions related to the

age, professional status & marginal status. Based on the answer

provided by the customer the product line will be narrowed down &

only those products that suit the prospective customer’s profile will

50

be presented. The prospective customer can then select the product

based on the features & optioned provided by the product.

Online Selling:-

Enable prospective customers to submit the proposal forms online. In

this process, applications will enable the following:

╬ Captures of the details from the proposal forms.

╬ Match proposal details to existing data to check if the

customer already exists in the system, if exist, link customers

details.

╬ Enable lead management by triggering alerts to the marketing

& distribution channels of the prospective customer.

╬ Trigger alerts to the actuarial personnel to determine the

premium quotation for the policy proposal.

╬ E-mail the prospective customer of the premium quotations.

Online Payments:-

Enables customers to make online premium payment. Application

will enable such online payment of the premium in a secured manner

& register such information in to the internal systems; generates the

customize policy certificate which give the customer unique

51

identification code, the policy details, start the expiry dates of the

policy & other terms & conditions.

Claim intimation & Settlements:-

Enables faster & easier mechanism for reporting losses. Application

capture necessary information from the forms & documents submitted

& trigger alerts to the customer for additional information required,

trigger claim handling process & alerts the loss assessors, process

claims settlement on obtaining the assessment details & finally

intimate the customer of the claims settlements details.

Online Customers Servicing:-

Provide authenticated access to confirmed customers enabling them

to interact online with the insurer. Application can be triggered to get

information on regarding the policy, premium to be paid, bonus

issued & claim settlements status, make basic endorsement like

changes to customer profile or policy etc.

Loan Processing:-

Customer can make online requests for loan against existing policies.

Applications will enable processing of loan requests; provide status of

loan sanction, the loan repayment schedules, online repayment,

trigger reminders for outstanding installments etc.

52

Knowledge Management:-

Customers can be updated about the significant developments that

will enable them to review there risk profile, the need for modify

existing policies or to go for additional insurance.

53

CHAPTER 7:

FUTURE OF CRM / What is CRMnext?

CRMnext is a comprehensive, easy-to-use, hosted customer

relationship management (CRM) solution.

With CRMnext you can easily evolve and implement customer

facing strategies, using industry best practices, without any

upfront cost. It enables you to manage and seamlessly share

information, across departments by centralizing all customer data.

The powerful reporting and analytical capabilities delivers

54

actionable business intelligence that can significantly improve

company's bottom line revenues..

Key Benefits:

Ensures fast and hassle free roll-out.

Develop more profitable marketing campaigns.

Improve pipeline visibility and sales effectiveness.

Deliver consistent world class customer service.

Enforce processes with a single-click.

Ensure better, more informed decision-making

The CRMnext Foundation:

CRMnext is more than a CRM. We're successful because we

(its)married a comprehensive CRM with an advanced business

process management suite. The result, with CRMnext you can not

55

only manage data (like other CRM's) but also the process behind

the data.

Big companies (foreign insurance industry) leverage the

CRMnext foundation, to standardize and enforce uniform

processes across geographical locations. Each business unit can

further redefine process to accommodate requirements of local

businesses. Smaller companies take advantage of the enforcement

engine to implement built-in global best practices and grow right.

The Business Strategy Perspective on CRM

We now consider the Business Strategy Perspective on CRM. Here,

we propose a model, which is a hybrid, and typical of many of the

models and diagrams of CRM that you will find on The Internet and

in popular books on the topic of eMarketing/eCommerce. The model

has three key phases and three contextual factors:

56

Three key phases:

1. Customer Acquisition.

2. Customer Retention.

3. Customer Extension.

Three contextual factors:

4. Marketing Orientation.

5. Value Creation.

6. Innovative IT.

1. Customer Acquisition - This is the process of attracting our

customer for the first their first purchase. We have acquired our

customer.

Growth - Through market orientation, innovative IT and value

57

creation we aim to increase the number of customers that

purchase from us for the first time.

2. Customer Retention - Our customer returns to us and buys for

a second time. We keep them as a customer. This is most likely

to be the purchase of a similar product or service, or the next

level of product or service.

Growth - Through market orientation, innovative IT and value

creation we aim to increase the number of customers that

purchase from us regularly.

3. Customer Extension - Our customers are regularly returning

to purchase from us. We introduce products and services to our

loyal customers that may not wholly relate to their original

purchase. These are additional, supplementary purchases. Of

course once our loyal customers have purchased them, our goal

is to retain them as customers for the extended products or

services.

Growth - Through market orientation, innovative IT and value

creation we aim to increase the number of customers that

purchase additional or supplementary products and services.

4. Marketing Orientation - means that the wholes organisation

is focused upon the needs of customers. Customer needs are

58

addressed by the Three Levels of a Product whereby the

organisations not only supplies the actual, tangible product, but

also the core product and its benefit, and also the augmented

product such as a warranty and customer service. Marketing

orientation will focus upon the needs of consumers for all three

levels of a product. (N.B. 'market' orientation and 'marketing'

orientation are not the same).

5. Value Creation - centres on the generation of shareholder

value based upon the satisfaction of customer needs (as with

marketing orientation) and the delivery of a sustainable

competitive advantage.

6. Innovative IT - is exactly that - Information Technology must

be up-to-date. It should be efficient, speedy and focus upon the

needs of customers. Whilst IT and/or software are not the entire

story for CRM, it is vital to its success. CRM software collects

data on consumers and their transactions. Huge databases store

data on individuals and groups of individuals. In some ways,

CRM means that an organisation is dealing with a segment of

one person, since every consumer displays different purchasing

59

habits and preferences. Organisations will track individuals,

and try to market products and services to them based upon

similar buyer behaviour seen in other individuals (e.g. When

Amazon tells you that customers that viewed/bought the same

product as you, also bought another product).

CRM is a term that is often referred to in marketing. However,

there is no complete agreement upon a single definition. This is

because CRM can be considered from a number of Perspectives

In summary, the three perspectives are:

Information Technology (IT) perspective.

The Customer Life Cycle (CLC) perspective

Business Strategy perspective

DISCLAIMER

Our model is a hybrid of many other commonly cited models from a

number of sources. If you are undertaking higher-level academic

work you need to clarify with your tutor, the nature of his or her

preferred model on the topic.

What is CRM?

It is based around a few premises on customers:

60

New customers are expensive to capture (estimates put the cost

at as much as ten times the cost of a retained customer) and

take time to deliver value.

Lost customers tell many others about their experiences and

rarely come back.

Retained customers are better value and in time move from

being clients to becoming advocates working on your behalf.

Your major efforts should be spent on excellent customers or

groups of customers - i.e. those that are likely to yield good

returns.

61

Much research has been carried out into customer profitability and the

conclusions are consistent (see chart above). The longer a customer is

with you the better the profitability and the chart clearly shows that

after the second year you start to make money from cross-sales,

repeat orders, referrals etc. Clearly the higher the turnover (and

therefore the shorter the time they stay with you) the less likely you

are to make profits. In life insurance this is critical as the embedded

value of a customer takes even longer to become established and is

why actuaries spend much time trying to improve the lapse rate

(persistency). CRM therefore is about managing your customer base

to ensure that they stay with you and therefore yield a better profit. It

is also about getting rid of those customers that take up a

disproportionate amount of time for the profit that they yield.

62

CHAPTER 8:

PRIMARY DATA ANALYSIS:

The most easy and popular way of collecting data is with the help of

Questionnaire and taking interview.

Questionnaire means a list of question which is drawn in systematic

way for the purpose of collection data. The questionnaire is the

outline, of what information is required in the project content by

which the data can be drawn efficiently. The discussion with

professionals or experts, give very valuable idea about how the

questionnaire should be framed and as to the phrasing of the

questions.

Interview that take personally is not so easy. Thus, interviewer

should have that much skill which makes him/her to give a proper

63

answer of the questions. The person whom you are interviewing is

having a limited time to answering to your questions & having many

other work to do, and attending there clients.

I have done the project by sampling method.

For gaining a knowledge regarding my project & completion of it

efficiently, I had an interview with few insurance companies &

agents, managers.

Q1. Does the CRM provide benefits or opportunities to Customers?

Answer –

Provide Benefits or

Opportunities

NO. of approachement (%)

Yes 10

No 0

Don’t know 0

From the above table it has been easy to understand that CRM

activity provide benefits or opportunities to Customers & it has been

clearly shown in above table that 100% CRM people says that it

64

really helps to customers to get benefits & opportunities from life

insurance.

It has been shown in more welled manner in the following diagram:

Yes No Don’tknow

NO. of approachem

ent

Provide Benefits or Opportunities

CRM provide benefits or opportunities to Customers

NO. of approachement

From the above diagram it has been come to know that the 100%

CRM people says that it gives benefits or opportunities to Customers

as new policy is being invented as the period is passing.

Q2. Does it help to increase the saving of customers via. Life

Insurance?

Answer –

Increase saving of customers NO. of approachement(%)

Yes 8

No 1

Don’t know 1

65

From the above table it has been easy to understand that through

CRM help to increase the saving of customers via. Life insurance.

And it has been proved form the above table that 80% people says

yes, only10% says no & 10% says they don’t know. It has been more

clearly explain through graph as under:

From the above graph it has been come to know that most of the

people i.e. 80% that CRM help to increase the saving of customers

via. Life Insurance only the 10% of people says no & 10% people say

they don’t know.

Q3. Does it have a positive image in front of customers?

Answer –

Positive Image NO. of approachement (%)

Helps to increase the saving of customers via. Life insurance

Yes80%

No10%

Don’t know10%

Yes No Don’t know

66

Yes 10

No 0

Don’t know 0

From the above table it is become easy to recognize that CRM has

positive image in front of customer as it provides all related

information’s to the customers as 100% CRM people says that.

It has been clearly explain in the form of graph which is as under:

It has been clearly shown in the above graph that CRM has positive

image in front of customers i.e. also 100% as it is said by CRM

people. As it gives benefits or opportunities to Customers.

Have a positive image in front of customers NO. of approachement

0

2

4

6

8

10

12

Yes No Don’tknow

Positive Image

ap

pro

ach

eme

nt

NO. of approachement

67

Q4. Does CRM helps out to sell the policy to existing customers?

Helps to sell the policy NO. of approachement (%)

Yes 8

No 2

Don’t know 0

From the above table it has been easily come to know that CRM helps

them to sell the policy to existing customers as good relation has been

generate between them. These results to sell out more policy to them.

And it has also said by the CRM people .i.e. 80% CRM people, 20%

people says that it does not work in efficient manner.

And it has been shown in more effective manner by the way of

diagram as under:

CRM helps out to sell the policy to existing customers

80%

20% 0%

Yes

No

Don’t know

68

From the above diagram it has been clearly come to know that the

CRM activity helps to CRM people to sell out the policy to the

existing customer. And most of the people i.e. 80% people says yes &

20% people says no.

Q5. What problems faced by your organization to maintain CRM?

Answer – The CRM people are facing the major problem is to

maintain such huge data of there customers (old & new). As the

information technology is not has been updated & reached to all the

offices or branches all over the country. Secondly, the records of the

premium paid or remain, is one of the big problem as customers

relationship management people as it also requires IT support because

this much record is to be maintain in the files i.e. in hard copy, is not

so easy even for search it takes lot of time of both the parties.

Q6. What is the reaction of the customers when your agent

approaches them?

Answer –

Reaction of customers NO. of approachement (%)

Will our money be return 0

69

Is there any guarantee of your

insurance company

2

We don’t want policy 3

At present we don’t have

money

5

As from the above table we can easily come to know that what are the

reaction of the customers when an agents approaches them to sell

policy the answer of most of the people i.e. 50% says that they won’t

have money, were 30% people say they don’t want policy & rest 20%

people ask Is there any guarantee of your insurance company? It has

been clearly shown in following diagram:

70

From the above graph it has been come to know that what are the

reactions of customers/prospects when agents approaches them the

50% population says that they don’t have money to take policy were

as 20% people asking about the guarantee of the insurance company

& 30% people says that they don’t want policy.

Q7. How do you tackle your competitors?

Answer –

Strategy used to tackle the

competitors

NO. of approachement (%)

By investing heavy on 0

Reaction of customers when an agent approaches them.

0%20%

30%

50%

Will our money beReturn

Is there anyGuarantee of yourInsurance Company

We don’t wantPolicy

At present weDon’t have money

71

advertisements

By offer better service to

customers

6

By providing extra benefits to

customers

4

From the above table it has been easy to understand that what strategy

the CRM department used for tackling there competitors most of

them i.e. 60% people says that they offer better service to there

customers, were 40% says that by providing extra benefits to the

customers to retain in the market & increase the business. It has been

more clearly explain in diagram which is as under:

Strategy used to tackel to competitors

0%

60%

40%

By investing heavy on advertisements

By offer better service to customers

By providing extra benefits to customers

72

From the above diagram it has been clearly shown that the CRM

people or department is using the strategy to survive in the market is

said by 60% that they provide better service to customers % rest 40%

people says that they providing extra benefits to customers to get

policy & retain in the competitive market.

Q8. How do you perceive future of CRM in insurance?

Answer –

Perceive future of CRM NO. of approachement (%)

May increase 6

May remain same 2

May decrease 2

From the above table we can easily come to know that what the CRM

people says about perceive future of CRM in insurance the 60%

people says it will be increase were as 20% people says that it may

remain same & rest 20% people says that it may decrease. Because in

future they may not be only manage data (like other CRM's) but also

the process behind the data. It has been clearly shown in the

following graph:

73

From the above graph it has been seen that the future of CRM may

increase as 60% of CRM people says that, were as 20% CRM people

says that it may remain same & remaining 20% people says that it

may decrease, but prediction is not the final answer as future of any

thing is unpredictable no one knows about future what happens when.

CHAPTER 9:

FINDINGS AND CONCLUSION:

It has been conclude that from the all question that most of the CRM

people says that it is providing opportunities & benefits to the

customers as it launches the new policies in every 3-6 months or in a

Perceive future of CRM in life insurance

60%20%

20%May increaseMay remain sameMay decrease

74

year, by keeping the attention on the needs & wants & there

requirement. As the CRM is a tool or activity which help to the

company tom survive in today’s competitive market.

Even the CRM activity is advantage for the customer as it help to sell

the policies to the customers which help the customer to make saving

through taking life insurance policy for his/her or for there family as

it gives financial protection to the policyholder or nominee & as there

is 100% guarantee of getting money back.

Well its awareness in the customer is not yet known 100% then also

whoever know about these facilities through there agent or respective

managers has a positive image about CRM in life insurance sector.

It is one of the activity that CRM to sells out the policies to the

existing customers as the good relation is been maintain by the

agent/manager with there existing customer but it has not being 100%

successful because there are the customer who does not required more

policy it has been success up to 80%.

The CRM managers /agents are facing some problem to maintain

relation with there existing customers as there is not possible to

maintain large amount of data /record or information related to there

old customers and new customers and even of premium statements, as

most of the CRM people says that they are lacking behind because the

75

Information Technology not has been developed yet to all over the

offices or to the agent.

As the human being all the people has some or the other reaction

when an insurance agent approaches them to get the policies from

them. There are certain doubt in the mind of the customer as they

were asking about there money will get them back or not, question is

about the stability of the company which is asked by 20% peoples or

the most fruitfully reason is that they don’t have money these reason

is given by 50% peoples & they don’t want policy as they already

have there life insurance is said by 30% of peoples.

As today’s competitive scenario the survival of the company is

depend on CRM as it a Mantra to get success in the market as it plays

a vital role in the company like life insurance as there business is

mostly rely on it. They have to face the competition to be in the

market & generate profit from it they tackle there competitors in the

following way:

By making heavy in advertisement.

By offering better service to there customers.

By providing extra benefits to customers.

As most of the CRM people says i.e. 60% that they usually giving

better service to there customers & remaining 40% says that they

76

providing extra benefits to the customers such as diaries, gift on

occasions, etc & no CRM managers/agents says that they are

spending more on the advertisement to attract the customers or

getting more number of policies.

The CRM people perceive the future of CRM in life insurance as it

may increase as said by the 60% of the CRM people were some are

i.e. 20% saying that it may remain same & rest 20% says that it may

decrease.

CHAPTER 10:

SUGGESTIONS & RECOMMENDATIONS:

This project is conducted for getting the knowledge (theoretical &

practical) as well as for the future aspects of the CRM services in

77

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

longer 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

78

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.

BIBLOGRAPHY

BOOKS

CRM IN INSURANCE – AN INTRODUCTION

- V .V GOPAL, PUBLISHED BY: THE ICFAI UNIVERSITY

79

PRESS

INSURANCE CHRONICLE

(LIFE & HEALTH INSURANCE)

PUBLISHED BY: THE ICFAI University Press

EDITION OF APRIL - 2005.

INSURANCE CHRONICLE

(RATEMAKING IN INSURANCE)

PUBLISHED BY: THE ICFAI University Press

EDITION OF DECEMBER - 2005.

WEBSITES

www.googlesearch.com

www.insurance.com

ANNEXURE -I

QUESTIONNAIRE ON CRM IN LIFE INSURANCE

Q1. Does the CRM provide benefits or opportunities to Customers?

Answer - a) Yes - b) No - c) Don’t know –

80

Q2. Does it help to increase the saving of customers via. Life

Insurance?

Answer - a) Yes - b) No - c) Don’t know –

Q3. Does it have a positive image in front of customers?

Answer - a) Yes - b) No - c) Don’t know –

Q4. Does CRM helps out to sell the policy to existing customers?

Answer - a) Yes - b) No - c) Don’t know –

Q5. What problems faced by your organization to maintain CRM?

Answer –

Q6. What is the reaction of the customers when your agent

approaches them?

Answer - They are:-

a) Will our money be returned?

b) Is there any guarantee of your insurance company?

81

c) We don’t want policy.

Q7. How do you tackle your competitors?

Answer - They are:-

a) By investing heavy on advertisements.

b) By offer better service to customers.

c) By providing extra benefits to customers.

Q8. How do you perceive future of CRM in insurance?

Answer - They are:-

a) May increase.

b) May remain same.

c) May decrease.

82