of 99
8/14/2019 MetLife Srinagar Sayeem
1/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 1
Table of Contents
Executive Summary.......................................................................................................2
HISTORY OF INSURANCE.........................................................................................5
INSURANCE IN INDIA.............................................................................................10
Insurance......................................................................................................................11
LIFE INSURANCE......................................................................................................13
METLIFE PO L I C I E S ..............................................................................................17
INSURANCE AS INVESTMENT..........................................................................23
Literature Review.........................................................................................................25
Life Insurance Companies Are Consistently Coming up With More New Policies....27
OBJECTIVESOF THE STUDY..................................................................................29
RESEARCH DESIGNAND METHODOLOGY.........................................................31
METLIFE PROFILE....................................................................................................34
MetLife`S ACHIEVEMENTS....................................................................................41
Chart showing Market Share of ULIPS in Kashmir region.........................................44
Growth Ranking 2008..................................................................................................45
Financial Status of MetLife..........................................................................................46
From balance sheet............................................................................................46
BANCASSURANCE...................................................................................................48
Banks as Referral Agent of an insurance company..................................................58
Insurance products distribution by banks as Corporate Agents...............................59
INCORPORATION OF METLIFE AS A JOINT VENTURE WITH J&K BANK...61
Introduction to Reinstatement......................................................................................66
Reinstatement of Policies without CI Rider.............................................................67
Data Analysis and Interpretation..................................................................................71
RESEARCH FINDINGS.............................................................................................86
CONCLUSIONS:.....................................................................................................95
Suggestions...............................................................................................................97
ANNEXURE................................................................................................................99
Glossary..................................................................................................................100
QUESTIONNAIRE................................................................................................104
Bibliography...............................................................................................................107
Bibliography
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
2/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 2
Executive Summary
MetLife India Insurance Co. Pvt . Ltd. Is one of the largest , s trongest
and most respected financial organizations in USA. It was incorporated
i n I nd ia o n A pr il 1 1, 2 00 1 a s a j oi nt v en tu re b et we en M et Li feInternational Holdings Inc. , The Jammu & Kashmir Bank, M. Pallonji
and Co. Pvt . L td . And other pr ivate indust r ies . The miss ion of the
c om pa ny i s t o p ro vi de 5 m il li on c us to me rs i n I nd ia w or ld c la ss
solutions for financial security and in the process add significant value
to its shareholders, associates and society by 2010.
In order to facilitate its mission the need of the company was to analyze the
factors responsible for lapsed Policies, and go for the revival of the same. Keeping in
view the need of the company I took it as my Research Problem and developed the
Questionnaire with the HR Department. To facilitate this process firstly I approached
FAs of various branches of J&K Bank and discussed the matter with them. After
seeing their positive response towards the same problem as discussed above the
details of customers was made and were approached personally with the prior
appointment at a convenient place of the client at a suitable time and day.
The Research was conducted in Srinagar City. As this is a Exploratory
Research different branches of J&K Bank were allotted to me to discuss the cases of
Lapsation with the Insurance Managers/CSO for the smooth conduct of the Survey.
About 50 customers were contacted at various J&K Bank branches and at Head Office
Of MetLife India Insurance .
The main objective of the study is to know the actual
problem of lapses and loopholes in the whole system/process,
The following objectives were set for the present study:
1) To rectify the errors in the system which led PSPs and Monthlys
to appear in the lapsed list.
2) To find the discrepancy in the data for the rest of the modes.
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
3/99
8/14/2019 MetLife Srinagar Sayeem
4/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 4
The main limitation of the research that I feel was Shortage of time. This research
was of vast nature and six weeks time was very little for its complete study. Customer
satisfaction level cannot be fully analyze on the basis of 50 customers only, MetLife
globally perform surveys and this survey will just serve as a part of that in Kashmir
region.
A t l as t I c an s ay t ha t t o a ch ie ve i ts g oa ls o f I ns ur in g 5 M il li on
customers the MetLife can easily achieve it by simply overcoming such
loopholes and there is a lot of opportunit ies for the Company to grow
in the country like India.
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
5/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 5
HISTORY OF INSURANCE
As with so many things in so many facets of our l ives, Insurance too
was born out of a primary need and shaped by socio-economic realities
of th is t ime. The s tory goes back to around 2100 BC, to the ancient
civilization of Babylon and a business practice called "Bottomry". For
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
6/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 6
all practical purposes form of marine insurance, bottomry enabled ship
owners to borrow money against their ships to pay for the tr ip. With
Piracy rampant on high seas, traders and seafarers were reluctant to sail
to other lands for fear of their lives and goods. Bottomry gave them
some semblance of secur i ty . The ar rangement was that i f only thei r
ship re turned did t raders have to repay to loan, a long wi th in teres t ,
which was pegged at an above market rate for the r isk covered. So if
the i r f a i l ed to make i t back , they d id no t have to r epay the loan ,
thereby recovering some or all of the loans.
O R I G I N S
With the marine route being the bedrock of t rade and commerce
in those days, the pract ice of bottomy evolved, and spread. With the
g ro wt h o f t ow ns a nd t ra de i n E ur op e, m ed ie va l g ui ld s ( gr ou ps
organized on the basis of some common objectives, l ike traders) pooled
in money to protect their members from loss by f ire and shipwreck, to
pay ransom if they were captured by Pirates, and to provides burial and
support in sickness and poverty . By the middle of the 14 t h century, as
evidenced by the earl ies t known insurance cont rac t (Genoa, 1347) .
Marine insurance was common among maritime nations of Europe.
Lloyd's of London, the largest marine insurer today, was founded in
1688, in a coffee shop in London. L loyd ' s coffee house became the
preferred place for merchants, ship owners and underwriters to transact
business. Insurance development rapidly with the growth of Bri t ish
co mmer ce i n t he 1 7t h and 18 t h cen turi es and s ta rt ed becoming
organized, a long the way going through a per iod of defaul ters and
closures
The Br i t ish brought insurance to India in 1818, reple te wi th
imperial is t prejudices. The Oriental l i fe insurance company, the f irst
insurance company in the country , insured only European widows,
Br it i sh insurers eventually began insur ing Indian l ives, but for a
p remium tha t was 15-20 percent h igher than tha t payab le by the
Bri ti sh . I t was only in 1870 tha t the d ispa ri ty was cor rected . S ix
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
7/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 7
Indians , peeved by th is second-Class t rea tment, se t up by Bombay
Mutual life assurance society, and started Insuring Indian lives at the
same cost as Bri tish l ives, social discrimination, in fact turned out to
be a ca ta lys t for Indian in i t ia t ive in the insurance sector . In 1909,
activist Ishwar Chandra Vidyasagar founded the Hindu family Annuity
fund- the f ir st i ns tance o f a pension - based inves tment scheme
targeted at Indians.
As had happened in England earl ier , a f lood of new players and
patchy regulations snowballed into a crisis. Several insurers defaulted
on their contractual obligat ions to policy holders, ci t ing investment
losses; some even folded up. The insurance Act 1938 introduced state
controls on insurance, but even this fai led to safeguard policy holder interest.
N A T I O N A L I Z A T I O N
Post- independence, discontent against insurers reached a pi tch.
Business was chaot ic , fore ign insurer were leaving the country and
Indian insurers driven by greed and business considerations werent
earning much credibi li ty . The cry for national iz ing insurance grew
louder. A move that insurers were of course opposed to.
On 19 t h J an ua ry 1 95 6 t he l if e o f i ns ur an ce b us in es s w as
nat iona li zed. In one swoop the gov t. snapped up 245 insurer s and
provident societies. Eight months later the LIC was formed which took
over the bus inesses o f the e rs twhi le p riva te insurer s and s ta rt ed
expanding a t a f renetic pace . Today th is monol ith has 2100 branch
offices, 800,000 agents, and offers a bevy of insurance and investment
products . LIC marked insurance less as a r i sk management too and
more as a saving ins t rument wi th a tax edge. A look a t LICs pol icy
prof i le shows that jus t 18 percent of pol ic ies in force current ly are
p ro tect ion p lans ; insurance cum inves tment p lans account for 60
percent, with the balance being pure investment plans. Still , households
embraced these safe investments avenues, with the sum assured (or the
tota l va lue of cover) increas ing f rom Rs. 1476 crores in 1957 to Rs .459201 crores in 1998-1999.
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
8/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 8
Similar circumstances lead to the nationalization of Non-life (or
general insurance). As in life insurance, pre-nationalization, there were
an inordinately large number of insurers, many of whom were notorious
for f loat ing investment norms and delaying set t lement of claims Non-
li fe i ns ur an ce w as n ati on ali ze d i n 1 97 2. A g en er al i ns ur an ce
corpora tion (GIC) was setup as a holding company ; a tot al o f 107
p ri va te i ns ur er s w er e m er ge d a nd g ro up ed t o f or m G IC s f ou r
subsidiaries.
P R I V A T I S A T I O N
Th er e w er e v ar io us r ea so ns g iv en b y th e g ov er nme nt to
n at io na li ze t he i ns ur an ce s ec to r; t ak e i ns ur an ce t o t he m as se s,
facilitate the flow of long-term funds (which insurance companies, by
v ir tu e o f t he b us in es s t he y a re in , h av e r ea dy ac ce ss t o) i nt o
development o f inf rast ructure in the count ry , and safeguard the
interests of policyholders. Towards this end, state insurers did develop
insurance sector, though most experts believe these monopolies could
have done much, much more.
In the early ninet ies, the government went on a reforms bl inge
a nd s ta rt ed l oo se ni ng c on tr ol s o n I nd ia n i nd us tr y. I n 1 99 3, t he
government appointed the Malhotra committee, headed by the former
RBI governor R .N. Malhotra , to draw up a b luepr int for insurance
s ect or r ef or ms . Th e Pa ne l su bmi tt ed it s re po rt a ye ar l at er ,
recommending pr ivatizat ion, backed by s t if f entry guidelines and
stringent regulations, so as to avoid a repeat of the pre-nationalization
fee-for-all .
The Insurance Regulatory and development Authori ty ( IRDA)
was f or me d to r eg ul ate th e s ect or a nd o ver see t he p ro ce ss o f
privatization. In 2000, the IRDA started giving out licenses, and a year
later the f irst of the private players star ted operations. The wheel had
come full circle.
Under state controls, the insurance sector, both life and non-life
grew steadily. Still , Indians are not adequately insured and lag behind
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
9/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 9
most countr ies. Total insurance penetrat ion ( insurance premiums as
percentage of gross domestic product) is dismal when compared to i ts
economic standing; just 2 percent of the population
has some fo rm of l i f e insurance . Bu t in th i s huge gap l i e s a huge
opportunity, which is why private insurers are queuing up.
In many ways, the r e-en try o f p riva te insurer s has marked a
s ec on d c om in g f or t he s ec to r. I n j us t t hr ee y ea rs t he s ec to r h as
undergone a makeover, o ffer ing the f ru it s o f a f ree marke t; more
choice, bet ter service, quicker set t lement, t ighter regulations, greater
awareness. State insurers have been compelled to get their act together.
And, to think of it , these are still very early days
INSURANCE IN INDIA
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
10/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 10
Insurance
Definition and Meaning
To insure means to make a contract that promises to payer secure payments of a
specified sum of money in case of accident, damage, loss, injury, death or any other
event taking place.
Sayeem Rafiq Regd No. 10807184
1818 The British introduce life insurance to India, with theestablishment of the Oriental Life insurance company inCalcutta.
1850 Non-life insurance debuts, with Triton Insurance Company.
1870Bombay Mutual Life Assurance Society is the first Indian-
owned life insurance business1907
Indian Mercantile Insurance is the first Indian non-life insurer.
1912The Indian Life Assurance Companies Act enacted to regulate
the life insurance business
1938The Insurance Act, which forms the basis for most current
insurance laws, replaces earlier Act.
1956Government Steps up LIC.
1958Life insurance nationalized government takes over 245 Indian
and foreign insurers and provident societies.
1972 Non life insurance nationalized; GIC set up.
1993Malhotra committee headed by former RBI governor R.N.
Malhotra, setup to draw up a blue print for insurance sector
reforms.
1994Malhotra committee recommends reentry of private players,
autonomy to PSU insurers
1997Insurance regulator IRDA (Insurance Regulatory and
Development Authority) setup.
2000 IRDA starts giving licenses to private insurers;ICICI prudential and HDFC standard life first private life
insurers to sell a policy
2001Royal Sundaram alliance first non-life insurer to sell a policy
2002Banks allowed to sell insurance plans; as TPAs enter the
scene, insurers start setting non-life claims in the cashless
mode
8/14/2019 MetLife Srinagar Sayeem
11/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 11
The Dictionary of Business and Finance has defined insurance as a form of
contract or agreement under which one party agrees, in return for a consideration,
to pay an agreed amount of money to another party to make good a loss, damage or
injury to something of value in which the insured has a pecuniary interest as a
result of some uncertain event. It is a device by which the loss likely to be caused
by an uncertain event is spread over a number of a person who is exposed to it and
who proposes to insure themselves against such events.
MEANING OF INSURANCE
From the above definition, it becomes clear that insurance is a voluntary
agreement between two parties , viz. the insurer and the insured the former to
compensate the latter against the loss suffered by him on the happening of an event.
Thus , it is a device theough which the loss is spread over a large number parties.
Insurance is the undertaking (assurance) given by a company , society or the State to
provide safeguard against loss, provision against sikness, death etc. in return for a
regular payments called premia (plural of premium). The person or company which
undertakes to make payment in case of loss etc. is called the insurer and the person to
whom such payments will be made is called the insured. The person who pays the
premiums or premia is called insurant. The meaning of insurance can be well
understood from the following example of fire insurance.
Suppose there are ten houses in a particular locality costing Rs 1,000 each. On
an average each year one house gets completely destroyed by fire. This means the
unfortunate owner whose house catches fire has to suffer a loss of Rs 1000. Instead,
this loss can be spread over all the ten owners by means of insurance. By providing
fire insurance, a sum of Rs 100 ( in the form of premium) can be collected from each
owner and the total amount Rs 1000 so collected can be given to the unfortunate
owner to reconstruct the house. In this way, each year one house can be built. Each
owner will annually pay Rs 100 for ten years. Thus, the loss is spread over all the
owners equally. In real practice, however, it is in proportion to the value of insurance.
Thus, insurance is a device by which the loss likely to be caused by an unforeseen
event is spread over a large people who are exposed to it and who proposed to
insurance themselves against such an event.
From the legal point of view, insurance is based on a contract between twoparties. It is a written agreement to make good some loss, damage or injury .The terms
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
12/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 12
and conditions agreed to are stated in the contract which is known as insurance policy.
In this way, the risk of loss is transferred from the insured to the insurer. Insurance
has nowadays become so popular that practically everything from a pin to a giant
structure can be insured against a possible risk.
Like any other contract, the contract of insurance must also satisfy the
following conditions:
1 There must be an agreement between the two parties, the insurer and the
insured.
2 The agreement called insurance policy must be in writing.
3 The parties to the agreement must give their free consent to all terms ad
conditions of it.
4 The parties must be competent to enter into contract
5 There must be mutual consideration
6 The object of the contract must be lawful.
LIFE INSURANCE
Of all forms of insurance, life insurance or assurance occupies a
prominent p lace in a l l walks , of l i fe . Almost every wage-earner i s
nowadays interes ted in t ak ing l if e insurance . I t has made such a
tremendous progress that it has occupied a leading position in the field
of insurance. This is because the r isk involved is certain. The event is
bound to happen soon or later , e .g. death. Hence sometimes the term
"Assurance" i s used ins tead o f the t erm insurance . A con trac t o f
assurance guarantees the payment of a specif ied sum of money to the
assured on the happening of a specified even. Hence life assurance Life
insurance or assurance is defined as " a contract by which the insurer ,
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
13/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 13
i n conside ra tion o f a cer ta in p remium, e ithe r in a lump sum or by
periodic payments , under takes to pay certa in sum of money to the
assured on his reaching " a part icular age or to those enti t led to i t in
the event of his death". Thus, l i fe insurance is a contract between an
insurance company and the insured whereby the insurer, in
consideration for a premium, undertakes to pay a certain sum of money
on the death of the insured or n expiry of a stipulated period whichever
occurs ear l ier . S ince each one of us , dur ing our l ives are faced wi th
numerous r i sks fa il ing heal th, f inancia l losses, accidents and even
fatalities, our instincts drives us to cover ourselves against those risks.
Though an insurance cover can' t protect you against emotional losses
arising out of these r isks, i f softens the economic crisis that usually
accompanies these losses. Contract of life insurance is mainly based on
two principles, viz. , those of utmost good fai th and insurable interest .
The person who wants to take our l i fe insurance pol icy must possess
insurable interest in the l i fe he wishes to get assured.
T here fore , a per son can t ake out a l if e insurance pol icy for
h imse lf o r h is w ife, husband , son, daugh te r, paren ts o r any o ther
relat ive in whose l i fe he or she has insurable interest . Life assurance
contact is not a contract of indemnity. It is a contract for payment of a
specif ic amount because actual loss of human l ife cannot be measured
in terms of money.
Life insurance differs from other types of insurance in several respects.
First of all , i t is no protection to the life of insured person. It is only a
cover under compulsory saving is provided. I t is a kind of channel to
mobil ize small savings into investment. Thus, i t promotes savings and
inves tment . I t i s in the fo rm of a f inanc ia l a id o f the fami ly o f an
insured person in the event of his premature death. In case, he survives
th roughout the t e rm of the po l i cy , he i s pa id a lump sum which i s
nothing but h is own savings kept wi th the insurance company in the
form of premiums deposited. Secondly, in life insurance, the amount of
pol icy i s cer ta in ly payable by the insurer sooner la ter except in the
circumstances of controversial death of the assured. Thirdly, the term
of a l i fe insurance contract is sufficiently long such as 20 years or 25
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
14/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 14
years in case of endowment policies. In case of whole l i fe policies i t
may be still longer.
Settlement of the life insurance claims
When a pol icy becomes due for payment in the event o f the
policyholders death, the following procedure has to be followed by his
nominee to claim the amount of the policy.
Proof of Death: This is the f irst s tep in the procedure of get t ing the
amount claim. The proof of death has to be furnished to the insurance
company i f the pol icy has become due owing to the dea th o f theassured. A cert i ficate g iven by doctor who has t rea ted the assured
before his death is a sat isfactory proof of his death or the cert if icate
issued by the Municipal i ty can also be a sat isfactory proof of death.
The necessary documentary evidence of death must be submitted to the
insurance company.
Proof of age: The assured i s requi red to produce a sa ti s fac tory
proof of his age to the insurance company at the t ime of taking out a
p ol ic y. T hi s e vi de nc e o f a ge m ay n ot b e g iv en t o t he i ns ur an ce
company a t the t ime o f set tl ement, i f t he age was admit ted by the
insurance company earlier. In case, no such proof was submitted at the
time of issue of policy, the claimant of the policy amount has to submit
i t , s ince without such a proof claim cannot be set t led by the insurance
company.
Proof of title: The person who lodges a claim with the insurance
company have to establish own legal t i t le to the amount of the policy.
E stab li sh ing l egal t it le to the amount o f the pol icy i s necessa ry
especially when no nominee is named in the policy.
If the insurance company is sat isf ied with al l the documentary proofs
submi tt ed, the amount c la im i s set tl ed by i t. In case, the re i s any
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
15/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 15
dispute regarding the set t lement of claim, the matter is referred to the
court for arbitration purpose.
THE REAL CONCEPT OF INSURANCE
A f inancia l p lanner once sa id th is about l i fe insurance buying
habi ts of Indians , they don t buy insurance , and i t s sold to them.
Unfortunately, but true. Individual awareness and understanding of life
insurance products is extremely low, and many among the insured dont
even know whether the l i fe insurance policy they own meets thei r
insurance needs, and in large context, their personal finance needs, . In
most cases, chances are, they could be doing better.
The f i rs t and the most important s tep towards doing better
involves being financially being financially literate, and having, at the
least, an elementary understanding of l i fe insurance is al l about . This
means being aware of the various types of insurance products on offer
in the market , as wel l as having the abi l i ty to unders tand ones l i fe
insurance needs and find appropriate fits.
Life insurance is chiefly a r isk management tool , meant to offer
financial protection to your dependants in the unfortunate event of your
death. If you are adequately insured, your life insurance should enable
your dependants ( Spouse, Children, parents) to maintain their current
l i fe s ty le and pursue thei r l i fe goals t i l l such t ime as they are in a
posi tion to set up an al ternat ive income stream by themselves. Thats
the basic purpose of life insurance.
But in India, as in most other developing markets, l ife insurance
has come to r epresent more than jus t r isk cover . T he bes t sel ling
insurance products in the market double as inves tment options and
offer a t tract ive tax breaks. In fact , i t s because of th is two- in-one
p ro fi le t ha t t he y a pp ea l t o t he a ve ra ge i nd iv id ua ls w ho s ee ks
convenience in personal finance matters.
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
16/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 16
METLIFE POLICIES
B as ed o n t he ir o bj ec ti ve , b as is p la ns o ff er ed t o i ns ur er s c an b e
classif ied under three broad categories: pure insurance products ( term
plans), pure investment products (pension plans) and investment-cum-
insurance products (endowment , money-back, Inves tment-cum-
insuran ce products (endowment, money-back, whole-life and unit- linked
insurance plans). Increasingly, insurers are launching hybrid variants ofthese plain vanilla plans.
T E R M P L A N S
Term plans are the purest form of insurance. These are no-fr il ls
policies that cover only the risk of your death. In the event of your death
during the policy term, your nominee receives the cover amount. In
insurance parlance holders, mutual funds to unit holders, automobile
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
17/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 17
clubs to members, and so on. Factor in such freebies while computing
your life cover.
E N D O W M E N T P L A N S
While term plans cover just the r isk of death, endowment plans
also offer return on the premiums paid by you. So, if you die during the
policy term, your nominee gets the sum assured plus some returns; if you
survive the policy term, you still gets back the sum assured and returns.
As much a s this mo ney if you live "Philoso phy is an enticing
proposition, it comes at a price; high premiums, which drag down the
returns from endowment plans, to barely 4-6 percent a year.
In an endowment plan, you pay premiums for pre-defined tenure
and sum assured. The premium will depend on your age, the sum assured,
the plant tenure and the nature of returns. A portion of premium paid by
you is invested by the insurer on your behalf. Another port ion goes
towards. Meeting the insurer administrative expenses, this lowers the
effective yield on your investment in endowment plans.
WHOLE-LIFE PLAN :
The three categories of insurance plans mentioned above provide you
l if e cover on ly fo r a de fin i t e pe r iod , up to a ce r t a in age (g ener a l ly ,
7 0 y e a r s ) W h o l e - l i f e p l a n s , o n , t h e o t h e r h a n d , a n d ( ge ne ra ll y, 70
years) Whole- l i fe p lans , on, the o ther hand, and provides you cover
through your lifetime-the only class of insurance policies to do so.
Typical ly, whole-l ife plans are structured such the policyholder
has the option to pay premiums up to a certain age (referred to as the
matur i ty age , the insurer provides you the opt ion to e i ther cont inue
through your l i fet ime (for which no further premiums wil l have to be
paid) or encash the maturity benefits (sum assured plus bonuses). Some
insurers do give the opt ion to encash the bonus dur ing term i t se l f ,
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
18/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 18
which can serve as a useful income stream during your later years, i f
you so desire.
But do you real ly need l i fe cover through your t ime? Typical ly ,
your l if e insurance needs s ta rt t aper o ff a ft er the age o f 50. Your
children are earning and probably in need of life cover themselves.
You yourself would have accumulated, or are well on your way
to accumulating, a sizeable nest-egg to see you through your retirement
years. Only if you have f inancial dependants or have an income steam
to protect during your post-retirement year does it make sense to buy a
whole-life policy.
UNIT- LINKED INSURANCE PLANS
In insurance-cum-investment plans of the kind l is ted above, you have
l it tl e s ay i n w he re y ou r m on ey b e i nv es te d. Y ou r i ns ur er t oo i s
governed by investment restr ict ions; i t can invest just 10 per cent of
the premium paid by you in equities; the greater chunk of 90 per cent
has to be inves ted in debt paper . Whi le such res t r ic t ionsare intended
to ensure safety o f your inves tment, t hey a lso l ead to r ig id ity in
inves tment and rein in your r eturns , to s ingle d ig it s. Uni t- linked
insurance plans get around such rest r ic t ions, by giving you greater
control over where your premium is invested.
Think of them as insurance plans that double as mutual funds .
The annual premium you pay on unit l inked plans is l inked to the sum
assured and the pol icy t enure. In the i llus tr at ion g iven below for
example , fo r a sum assured o f Rs . 1 l akh on a 20- yea r p lan , the
premium payable is Rs 6,000 a year. In the first year, typically, around
20 per cent of the premium is deducted by the insurer towards your risk
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
19/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 19
cover and to meet i ts own administrat ive expenses ( this f igure drops
gradually through the plan term, tapering off at around 5 percent). The
balance 80 per cent in the f irst year (more in the subsequent years) is
invested in an investment plan of your choice, and your are al located
uni t , based on the prevai l ing net asse t va lue (NAV) of the p lan you
have opted for. Just like in a mutual fund.
The investment plans on offer cover the r isk reward spectrum.
You can choose f rom income p lans (high on deb t, l ow on equ ity) ,
growth plans (high on equity, low on debt) and balanced plans (roughly
equal distribution between debt and equity).
Insurers, based on the historical performance of their plans and
thei r re turn expecta t ions, tend to project a range of re turns for each
plan. Take note tha t these are jus t guess t imates- what end up wi th
could be higher or lower, depending on your plan's performance.
You can swi tch f rom one p lan to ano ther f r ee o f cos t once a yea r (a
nominal amount is charged for addit ional switches) . So, i f you think
s tocks are going cheap, you can move to the growth plan; or , i f you
think stocks are overvalued, you can move your money to the income
plan. Thus, unlike endowment plans, you can control your investmentin unit-linked insurance plans.
Uni t -l inked plans a lso enable you to periodical ly moni tor the
performance of your inves tment . Insurers declare the NAV of the
various p lans periodical ly-general ly, once in three months. Exit ing
these plans i s a lso eas ier and i t doesn ' t invi te prohibi t ive penal t ies .
Af ter a lock in per iod (genera l ly , one year) , you can wi thdraw your
units anytime, in part or in ful l , at the then-prevail ing NAV; your l i fe
cover wi l l be reduced accordingly , You can a lso make incrementa l
inves tments any t ime, and add a corresponding amount to your l i fe
cover.
By their very nature, unit- l inked insurance plans are meant for
individuals who understand investing and the stock market but prefer to
l eave i t t o the exper ts to do act ive money management ; they a re
prepared to forfeit assurance on returns for a chance to take home more
than what a conventional endowment plan would offer.
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
20/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 20
Th e c as e to p re fe r u ni t- lin ke d p la ns o ve r co nv en tio na l
endowment plans is compell ing. Insurance plans are long-term plans,
with tenures stretching to 10, 15, 20 years-durat ions that give a good
chance to reap the t rue re turns potent ia l of equi t ies . In endowment
plans, though your money stays locked for similar lengths of periods.
At least 90 percent of it is invested in low yielding debt instruments, as
a r esu lt o f which re tu rns from them are pede s t r i an . In o t he r wo rds ,
e n do w me n t p l an s d o n ' t m a xi m iz e returns, especially for
knowledgeable investors. Unit-linked plans offer that possibility
PENSION PLANS
Pension p lans d if fe r f rom the f ive types o f insurance p lans
mentioned above in a fundamental way: not all of them offer life cover.So, why are we talking about them here? Because pension plans feature
among the bevy of products of fered by insurers and are p i tched as
ret ir ement p lann ing schemes , s imilar to o ther inves tment- based
insurance plans.
Pension p lans a re inves tment opt ions tha t l et you set up an
income stream in your post-ret irement years by routing your savings
through an insurer, who invests it on your behalf for a fee. The precise
re turns you wi l l ge t depend on severa l fac tors : your age when you
b eg in i nv es ti ng , t he c on tr ib ut io ns y ou m ak e, y ou r i nv es tm en t
preferences based on your risk profile, the age at which your want the
money to star t coming back to you, and the number of years for which
you want the returns.
Immediate or deferred? The payback f rom pension plans genera l ly
takes the form of an annui ty you are paid a cer ta in sum every year .
There are two types of annuities, depending on when the insurer begins
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
21/99
8/14/2019 MetLife Srinagar Sayeem
22/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 22
No such indicative assurances are given under unit-linked pension
plans. Your contr ibutions are directed to an investment plan of your
choice. For each investment you make, you wil l be given some units ,
b as ed o n t he s ch em e' s t he n- p re va il in g N AV . A s i n u ni t- li nk ed
insurance plans , you can choose f rom a varie ty of scheme prof i les
(typically, income, growth and balanced) and make a free switch once a
y ea r ( a n om in al c ha rg e i s l ev ie d f or a dd it io na l s wi tc he s) . E ac h
c on tr ib ut io n m ad e b y y ou w il l e nt it le y ou t o a dd it io na l u ni ts .
Depending on the per fo rmance o f your scheme, the value o f your
inves tment w il l appreciate o r depreciate. Pension p lans fac il it at e
discipl ined, long-term invest ing-one of the pi l lars of wealth creat ion.
E ach yea r, you set a side a cer ta in , p re -spec if ied sum towards you
reti rement k i tty. This money says inves ted for long periods of t ime,
reaping the benef it s of compounding. Premature wi thdrawals invi te
prohibitive penalties- typically; you lose 7 percent of the current value
of your inves tment i f you wi thdraw wi thin a year , 3 .5 to 5 percent
within 3 yea rs and 3 .5 percent a ft er three yea rs . On reach ing the
vesting age, you can withdraw your money. Alternatively, you can use
it (in part or in full) to buy a participative annuity, from your existing
insurer or from another insurer. The variable option gives you a play on
e qu it ie s, a nd t he re fo re h as t he p ot en ti al ( bu t n o a ss ur an ce ) t o
outperform the f ixed- return option. I t ' s a r isk- return trade-off , and
you have to find your fit .
Some insurers , on some of the i r p lans , g ive you the opt ion to
bundle l i fe insurance along with these pension plans. You can ch oo s e
t h e a m o u n t o f l i f e c o v e r y o u w a n t , b a s e d o n w h i ch a premium
will be deducted from your contribution, which will make a differenceto your maturity amount: It will show up as marginally lower annuities
in participative plans and lower sum invested in unit-linked plans
INSURANCE AS INVESTMENT
Endowment plans are the best sel l ing l i fe insurance product in
the country. This single fact says a lot about how most Indians who get
themselves covered l ike their insurance products to be: insurance cum
investment plans. Individuals have been known to banks on endowment
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
23/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 23
plans to get their lives insured, save on tax, build a retirement corpus,
and fund thei r chi ldrens educat ion and among other th ings . But are
th ey ma ximi zi ng t hei r r et ur ns , o r c an th ey d o b et te r, wi th ou t
compromising on the l i fe insurance benefi ts? In other words, do l i fe
insurance plans make good investments?
The answers to these quest ions are not straight forward, given
the number of factors that influence returns on your investments. These
include the impossibility of predicting interest rates and tax rates over
twenty years or more-tenures typically of insurance contracts .Yet, with
some realistic assumptions, it is possible to assess if endowment plans
make good investments.
THE RETURN EQUATION
Illustration : The case of a healthy 30- year old male who wants life
cover of Rs 5 lakh for 20 years. He has two options before him. The
first is to buy an endowment plan which gives him life cover of Rs 5
lakh by way of a term plan ( the cheapest life cover), and invest the
premium differential in investments of his choice.
We have considered Insurance plans f rom LIC, the countrys
largest Life Insurer . The endowment plans is Endowment Assurance
Plan, in which he will have to pay an annual premium of Rs 23,978. the
term plan is Jeevan Anmol, in which a cover of Rs 5 lakh can be had
for a premium of Rs 1 ,528 a year . The di f ferent ia l of Rs 22,450 is
invested in various instruments. In order to give an idea of the return
possibilities, we looked at three instruments that span the risk- rewardsspectrum: PPF( r isk-free, moderated returns) , debt funds ( moderate
risks, moderate returns) and equity funds ( high r isk , high return( . In
an endowment plan they declare an annual bonus of Rs 50 per Rs 1,000
sum assured a real ist ic assumption through the term yields Rs 10
lakh ( tax free) the end of the term, which translated into a return of
6.6 per cent a year. Thats significantly less than what in other options
wo ul d y ie ld , e ve n i f t he p re mi um d if fe re nt ia l w as i nv es te d i n a
comparable r isk-free instrument, l ike the 8 per cent PPF; the returns
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
24/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 24
would increase further if the premium differential was able to earn the
historical returns debt funds and equity funds has been known to give
over such long periods.
THE ROAD AHEAD
Returns from endowment plans have fallen sharply; between 1999
and 2005, bonus rates have dropped from 9 percent of sum assured to 4
percent and these could drop even further
FALLING RETURNS
There are guidelines on where life insurer can invest the money they
collect by way of premiums from you on endowment plans. Around 90
per cent of it is to be invested in safe debt instruments, leaving just 10
percent for the high yielding asset class that is equities. It follows that
profits of insurers will closely track returns from debt paper.
Literature Review
1. M. ShriNivas Osmani a University Hyderabad , 2008
This s tudy was a modest a t tempt to analyze the causes for lapsation
after privatizat ion on the basis of the experiences of the functionaries
l ike branch managers , development officers , Agency managers and
insurance agents (CSOs) who are the core marketing staff for MetLife
India Ins. Co. Pvt. L td. Af ter pr ivatizat ion s igni ficant progress has
taken place in Indian insurance sector especia l ly in l i fe insurance
business. However still lot of potential for life insurance consumption
i s ava il ab le in Ind ia as the Ind ia 's L ife Insurance penet ra tion and
densi ty is low when compared to Asian average or world average. In
s pi te o f r ap id p ro gr es s t he s ec to r i s s uf fe ri ng w it h h ig h r at e o f
lapsation of policies . This study reveals that forced sel l ing of policies
without caring for matching of MetLife products with requirements of
the policy holders plays a vital role in lapsation of policies in the f irst
year of policy life. This is happening due to the fact that beneficiaries
are unaware about the insurance products and their comparative merits
and limitations. In addition the services after sale of policies are not as
per the requi rements of the pol icy holders . Hence there i s a need to
organize special t rain ing camps to agents and awareness camps to
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
25/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 25
beneficiaries periodical ly . Attention has to be paid on not to yield for
forced selling, target oriented last movement selling without caring for
matching of insurance products with that of the requirements of policy
holder.
2. Misbah Showkat, Student of K.U., J&K, 2008
In her study Misbah has clarif ied that For the purpose of identifying
prime causes for lapsation, the perceptions of the core functionaries in
the marke ting network o f MetLi fe a re a scer ta ined by canvass ing
questionnaire. They include Branch managers, Area Managers, Sales
Managers, Development Officers and Agents. For the purpose stratified
random sampling is applied in select ing sample of Branch managers
(BMs), Development Officers (Dos) and Banca Agents. The study is
confined to the city of Srinagar. The findings include awareness levels
of the customer (about personal risks, insurance and insurance product
knowledge) , product mismatch ( lack of need based se ll ing/ forced
sel l ing/ wrong sel l ing), incompetent services (by agent and MetLife) ,
financial problems of customers (due to insufficient income, inflation,
lack of f inancia l p lanning) , C om pe ti ti on ( wi th o th er f in an ci al
institutions and other investments with higher returns).
3. Irfan Ali Zargar, student of Kashmir Univer sity, J&K, 2007
In his study Irfan Ali has l is ted that purchase of insurance more than
affordabil i ty , purchase of wrong type policies, purchase of expensive
policies etc are some of the causes for lapsat ion. He has included the
Srinagar ci ty as epicenter , s ince Srinagar is the best s i te of Kashmir
val ley for successful bus iness . P resent ly he i s the Area manager of
Sales Department; this is the result of his s incere efforts towards themiss ion of organization. The conclus ion and recommendat ions were
very helpful to the management . He has re ins ta ted a lmost 100 (one
hundred) lapsed policies.
4. IRDA journal Aug., 2008:
T he f oc us o f t hi s i ss ue o f j ou rn al i s o n LA PS AT IO N OF LI FE
INSURANCE BUSINESS. It starts with an article discussing inter alia
t he vulne rabi li ti es tha t insurer s a re exposed to account o f ear lyl ap sa ti on . I n t he n ex t a rt ic le , a t ea m o f l if e i ns ur an ce d om ai n
Sayeem Rafiq Regd No. 10807184
http://www.britannica.com/EBchecked/topic/207178/financial-planninghttp://www.britannica.com/EBchecked/topic/207178/financial-planning8/14/2019 MetLife Srinagar Sayeem
26/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 26
consultants project persistency of business as the f if th p, which is
as important as the other four ps of Marketing. Another article draws
light about the important role that the distributor [Agency personnel or
CSO] p lays in ensur ing tha t l if e insurance con trac ts dont d ie an
immature death. One signif icant adverse feature of high lapsat ion in
l ife insurance is the f inancial cr isis that i t br ings about , both for the
insurer as well as the insured. This journal also focuses on the remedial
measures adopted by l i fe insurers. Although in an insurance contract ,
the insurer promises to pay the assured sum on the happening of the
event, sometimes the claims are not paid on account of various reasons,
this gives birth to the problem of REPUDATION OF CLAIMS.
5. Life Insurance Companies Are Consistently Coming up
With More New Policies
Now days there are so many ways where we can save our earnings and invest for the
future. Investing in life insurance policy is one of the foremost way of doing that.
MetLife has got so many products from which we can benefit ourselves. They are the
whole term life insurance policy, the mortgage policy, the health insurance policy, theuniversal life insurance policy and many more. All the products offered by MetLife
are very good, we can benefit ourselves from them if we in invest according to our
requirements. MetLife offers various products for various life stages, it has got wealth
accumulation plans, retirement, child care plans. So we should invest according to our
need. Before investing in life insurance we should consult various persons like
friends, family members etc. especially we should consult the customers of that very
company in which we want to invest. We should inquire various important things
from which reinstatement is one. We should always take decisions keeping in view
both the aspects ie; could be, could not be. If somehow your policy gets lapsed then
reinstatement is the obvious tool to change its states. Hence reinstatement is a
compulsory thing which we should take care of. From the track record it is confirm
that MetLife is using this tool with good technique.
6. PREMIUMS AND REINSTATEMENT
Renewal premiums are those paid after the initial premium. MetLife offers its
customers so many frequency with which renewal premiums will be paid. Renewal
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
27/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 27
payment options given by MetLife are monthly, quarterly, semi-annually and
annually. A policy at MetLife will lapse if the renewal premium has not been paid and
the grace period has expired. Grace period at MetLife is a specified period of time,
usually 30 or 31 days after the due date, during which the premium may be paid
without penalty and coverage remains in force. If a renewal premium is not paid by
the end of the grace period, the policy lapses, which means coverage ends and the
company is no longer bound by the insurance contract. Metlife may waive its right to
have premiums paid on the due date.
If your policy lapses because you did not pay the premium by the end of the grace
period, you may be able to reinstate your policy at MetLife with some special ease
than other companies. It is because the reinstatement guidelines followed at MetLife
are quite different from others, they are more customer focused. Policies atmay bereinstated after termination. Payment of past due premiums is required. MetLife
require an application and evidence you are insurable under their underwriting rules
then in effect. Reinstatement takes effect on the date Metlife approve the application
of reinstatement. If MetLife do not decline reinstatement in writing within 45 days,
the policy will be reinstated on the 45th day after date of the conditional receipt will
give you in exchange for your payment of all premiums due.
7. Keep your Life Insurance Policy Current
There are two basic types of life insurance, and premium payments are processed
differently for each of them. Failure to pay your premiums will have a different effect
on your policy depending on the type of product purchased. There are many reasons
why policy at MetLife lapses. The two most common reason a customer let's a Life
Insurance Policy lapse is because they forgot to renew it or they don't think they can
afford the premium. Allowing a Life Insurance Policy to lapse is a very bad thing.
Don`t think you can simply call MetLife and reinstate your policy some time after it
lapses similar to a cable, cell phone or electricity bill but the fact is you can't. If you
allow your policy to lapse it is very likely you will need to apply for a new policy.
This can be very costly as you may have had a term life insurancepolicy locked in 10
years ago when you were young and healthy. There is no doubt your premium will
now go up even with the same death benefit but how much the premium goes up
depends on how well your health is. Don't forget to renew it! MetLife have made it
very easy to ensure you never forget to renew it. So before you invest in MetLife
Sayeem Rafiq Regd No. 10807184
http://www.compuquotes.com/term-life-insurance-articles.htmlhttp://www.compuquotes.com/term-life-insurance-articles.html8/14/2019 MetLife Srinagar Sayeem
28/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 28
make sure that you are satisfied with the reinstatement procedure so that in will not
prove costly to you
OBJECTIVESOF THE STUDY
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
29/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 29
Objectives of the Study :
The main objective of the study is to know the actual
problem of lapses and loopholes in the whole system/process,
The following objectives were set for the present study:
1) To rectify the errors in the system which led PSPs and Monthlys
to appear in the lapsed list.
2) To find the discrepancy in the data for the rest of the modes.
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
30/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 30
3) To know the factors responsible for the lapsed policies.
4) To go for the revival of the policies.
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
31/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 31
RESEARCH DESIGNAND METHODOLOGY
RESEARCH DESIGN
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
32/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 32
A conclusive Research was adopted to conduct the study in two stages. Firstly, to
know the factors responsible for the lapsed policies, discrepancies in the data of SA,
A and Q and to rectify the errors in PSPs and monthlys. Secondly, to go for the
revival of the policies.
In order to realize the objective of the study, primary data was collected through
SCHEDULE besides the use of Secondary data.
Sampling Plan
The population of interest was the policy holders of Kashmir valley whose policies
has gone lapsed. Three branches of J&K bank were selected for the sample. All the55customers were contacted whose policies fall in lapsed list. The customers were
approached at their respective residences, business establishments or at the concerned
bank branches. Some of the customers were contacted telephonically.
Sample size
Monthly = 10 respondents
Quarterly = 7 respondents
Semi-annually = 15 respondents
Annually = 23 respondents
DATA COLLECTION
Data Source:
Primary as well as secondary were usedPrimary data has been collected f rom the survey conducted through
sys temati c gathe ring o f data f rom s truc tu red sample o f cus tomers
through questioner
Secondary data comprised mainly of management books and
various websites.
T he repor t mainly consi st s o f p rimary data gathe red through the
schedule of questions asked to the respondents directly.
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
33/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 33
Research instrument
In order to faci l ita te respondents express ion a semi s t ructured non
d isgui sed type o f schedule o f quest ions was used con ta in ing the
re levant ques t ions as per the reason of thei r non cont inuing of the
policies. The same was done with the FAs of the J&K bank.
INTERVIEWING PROCESS
T he survey was conducted through interviews w ith the FAs and
customers were asked the reason of lapsed policies and the interviewer
n ot ed d ow n t he r es po ns es . T hi s e ns ur ed h ig h r es po ns e r at e a nd
eliminated wrong irrelevant responses.
Pilot survey
The schedule was pre tested for errors and ease of understanding. The errors thus
determined were eliminated. The understanding issues were also eliminated to the
extent they could be without any effect on the intended purpose of the query.
This brought some changes in the schedule regarding phrasing, order, and
number of Queries that were made on time.
Statistical tools
Microsoft Excel was used for tabulation of data, percentages are drawn
for general iz ing the s tudy and g raphs a re used for hav ing bet te r
pictorial representation.
.
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
34/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 34
METLIFE PROFILE
The spirit of MetLifes commitment..
V I S I O N
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
35/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 35
Build f inancial freedom for al l through leadership in providing
profess ional f inancia l advice and build ing long term re la t ionships
through innovative protect ion, accumulat ion and ret irement products,
robust underwri ting processes and creat ing a world-c lass customer
service experience for our customers.
O U R M I S S I O N
By 2010, p rovide 5 mil lion cus tomers in Ind ia wor ld -c lass
solutions for financial security and in the process add significant value
to our shareholders, associates and society.
O U R C O R E V A L U E S
1 We lead through innovat ion to offer wor ld class and compet i tive
products to our customers.
2 We build long term re lat ionships with our cus tomers by creating
a world class service experience through operational excellence
and the innovative use of technology.
3 We c rea te a cus tomer centered and resul t focused d ivi sion tha t
inspi res and has the buy in of a l l our associa tes and has thei r
buy-in.
4 We are committed to creat ing a high performance organizat ion by
creating an environment that allows each one of our associates to
perform at their peak. As a result we wil l also be recognized as
an employer of choice.
5 We a re commit ted to pa r tner ing w i th our in terna l and ex te rnal
customers for mutual success.
6 We work with integri ty , fairness and f inancial prudence in al l our
deal ings keeping the interest of our shareholders, customers and
employees paramount.
.Partnering for excellence
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
36/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 36
MetLife proudly inherits its parent company's over- 136 year-old
r e p u t a t i o n o f h e l p i n g b u i l d f i n a n c i a l f r e e d o m f o r e v e r y o n e .
Ra nk ed 3 8 o n th e F ort un e 5 00 l is t ( Ap ri l 2 00 4) Me tLif e
insurances (MetLife) is one of the largest, strongest and most respected
financial organizat ions. MetLife through i ts ' aff i l iates is the number
one l i fe insurer in the U.S with approx. @2.5 tr i ll ion of l i fe insurance
in force (as of Dec. 2002) and has been delivering reliable, high quality
service to its customers since 1868.
MetLife is a leader in group benefits that serve 88 of the top onehundred FORTUNE 500 companies, and providing benef it s to 37
million employees and family members through its sponsors in the U.S.
T he MetL i fe companies a re a l so r anked #1 in g roup l i f e and #1 in
commercial dental in the U.S. Headquartered in New York. MetLife
through i ts aff i liates, subsidiaries and representative offices, operates
in 15 countr ies throughout the America, Europe and Asia. MetLife ' s
inst i tut ional cl ients have approx. 35 mil l ion employees and members.
MetLife has assets under management worth $255 billion.
(FORTUNE 500 is a registered trademark of FOURTUNE
Magazine, a division of Time, Inc)
MetLife insurance Company private Limited was incorporated in
India on April 11, 2001 as a joint venture between MetLife
international Holdings Inc. , The Jammu and Kashmir Bank, M. Pallonjiand Co. Pr ivate L imi ted and other pr ivate inves tors. MetLife has-
developed and distributes a range of life insurance in India.
MetLife is headquartered in Bangalore with officers and presence
in major Indian ci t ies, and an additional 1000 outreach points through
its channel partners.
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
37/99
8/14/2019 MetLife Srinagar Sayeem
38/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 38
major differentiator among competi tors. In addit ions, with the launch
of the new MetLife te levis ion commercia ls , which i s a f i r s t for our
I nd ia o pe ra ti on , t hi s w il l a dd g re at ly t o M et Li fe 's g lo ba l b ra nd
r ec og ni ti on . Th e c omb in ati on o f t his b ra nd a nd t he c on ti nu ed
outstanding efforts will provide the fuel to drive MetLife further up the
road of success.
MetLife delivers value and world-c lass service to customers
through i ts f inancial advisors and corporate sales representatives. The
miss ion of MetLife Insurance i s to build f inancia l f reedom for a l l.
What is financial freedom? It is all about securing one's future. It about
approaching lifes major milestones without any worries. True financial
f reedom ar ises f rom ident ify ing your f inancia l capabil i ties , se tt ingreal i st ic goals based on your dreams and aspi rat ions and achieving
them through a comprehensive plan. Most importantly , while you set
out to draw up financial plans for your life- you need to understand that
i t i sn ' t a one- t ime plan. The planning that goes in to a t ta in ing your
f inancia l f reedom should be dynamic , s ince l i fe i t se l f i s dynamic .
What's good for you today might not be next year.
Du ri ng th e c ou rs e o f yo ur l ife yo u n ee d to a ch ie ve yo ur
aspirat ions ( l i fe owning of house) , meet certain f inancial obligat ions
( li fe educa ting your chi ld ren o r-ge tt ing them mar ri ed), r ide over
unforeseen contingencies and plan a financially independent retirement
phase. The Met Advice Financial Planning could be the f irst s tep in
your p lanning exerc ise . I t a t tempts to g ive you on overview of the
various investment options available in the market today.
P R O D U C T S O F M E T L I F E
1. MET 100
2. MET SUKH
3 . MET M ORTA GAGE P RO TECTOR S ING LE PA Y
4 . M ET P LA TI NUM ( PA RT IC IP ATI VE E ND OW NM EN T)
5 . MET 10 0 GO LD (PA RTI CI PA TI VE WHO LE LI FE)
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
39/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 39
6 . M ET 1 00 PL AT IN UM (P AR TI CI PA TI VE WH OL E L IF E)
7 . M ET G OL D ( NO N P AR TI CI PA TI VE E ND OW NM EN T)
8. MET BHAVISHYA
9 . M ET SU VI DH A ( NO N P AR TI CI PA TI VE RE GU LA RP AY )
10. MET SUVIDHA (NON PART ICIPAT IVE LIMITE D PAY)
11. MET SUVIDHA (NON PARTICIPATIVE SINGLE PAY)
12. MET SUVIDHA (NON PARTICIPATIVE SINGLE PAY)
13. MET SUVIDHA (PART ICIPAT IVE LIMITE D PAY)
14. MET SUVIDHA (PART ICIPAT IVE LIMITE D PAY)
15. MET SUVIDHA (PART ICIPAT IVE S INGL E PAY)
16. MET PENSION (PARTICI PATIVE SINGLE PAY)
17. MET PE NSION (PART ICIPAT IVE REGUL AR PAY)
18. MET PE NSION (PART ICIPAT IVE L IMIT ED PAY)
19. MET SURAKSHA (NON PART ICIPAT IVE RE GULARPAY)
20. MET SURAKSHA (NON PART ICIPAT IVE LIMITE DPAY)
21. MET SURAKSHA (NON PARTICIPATIVE S INGL EPAY)
2 2. M ET SU RAKS HA LI MI TED TO A GE 6 0 ( NO N PA RTI CI PA TI VE
REGULAR. PAY)
2 3. M ET SU RAKS HA LI MI TED TO A GE 6 0 ( NO N PA RTI CI PA TI VE
LIMITED PAY)
2 4. M ET SU RAKS HA LI MI TED TO A GE 6 0 ( NO N PA RTI CI PA TI VE
SINGLE PAY)
25. MET SMART PLUS-RP
26. MET SMART PREMIER- RP
27. MET SMART PLUS SINGLE
2 8. MET S MAR T PREM IER SI NG LE
29. MET ADVANTAGE PLUS-
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
40/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 40
MetLife`S ACHIEVEMENTS
MetLife enjoyed a golden performance on May 15, 2009 (New York) - At the
15th Annual FCS Annual Portfolio Awards, the Financial Communications
Society (FCS): four awards, all Gold trophies, plus the Best-in-Show
Multicultural award for its "South Asian Brand Television Campaign," created
by IW Group. The award was sponsored by Forbes. MetLife also won Gold in
the new ROI category, which recognized the success of marketing campaigns
for their stated return on investment.
MetLifes corporate vision to build financial freedom for everyone guides
the companys response to peoples growing need for first-rate financial
products and services through various life stages and economic cycles.MetLifes trusted brand, capital strength, and existing relationships with
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
41/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 41
millions of individual and institutional customers around the globe uniquely
position MetLife among its competitors.
The "everyone" in MetLifes vision took on added meaning in 2000 as the
company welcomed an important new constituency: shareholders. MetLife
transformed itself from mutual to stock ownership in April of that year
through a demutualization and initial public offering that was completed in
just 18 months after Board authorization.
The year 2001 was a true test of the qualities that define MetLife. The
companys core values, brought to life in what MetLife does every day, were
no more evident than in MetLifes response to the tragic events that shook our
nation on September 11. MetLife responded quickly. The company served its
customers, communities and employees during this difficult time. At the same
time, MetLife invested $1 billion in a broad array of publicly-traded common
stocks.
In 2001, MetLife was the first insurance company to establish a financial
holding company with a nationally chartered bank. Leveraging its unparalleled
distribution channels, MetLife entered the retail-banking arena with the launch
of MetLife Bank, making it an easy and convenient way for MetLifes
customers to realize their financial goals.
MetLife announced in 2002 that it would be continuing its long-standing
relationship with Snoopy and the rest of the PEANUTS characters. The
company signed a new contract that would allow the characters to appear in
MetLifes domestic and international advertising for the next 10 years.
The sale of State Street Research & Management Company to BlackRock, Inc.
was announced in 2004. In line with MetLifes strategy to focus on core
business growth, the sale benefited many of the companys Individual and
Institutional Business clients who held investments through State StreetResearch, as it became part of one of the largest publicly traded investment
management firms in the U.S.
The companys stated long-term goal is to become the recognized leader
throughout the world for relationship building, connectedness and caring in
financial services in the "giant league" with over 100 million people as
MetLife customers by the year 2010.
MetLife took a major step toward realizing this goal in 2005, when it acquired
Travelers Life & Annuity and substantially all of Citigroups international
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
42/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 42
insurance businesses for $12 billion. Completed on July 1, 2005, the Travelers
acquisition made MetLife the largest individual life insurer in North America
based on sales, the second largest provider of retail annuities and the largest
provider of institutional annuities.
Working Mothermagazine honoured MetLife in 2005 by naming the company
one of the "100 Best Companies for Working Mothers," for the seventh
consecutive year. In 2005, the company was named to Diversity Inc.s list of
the Top 50 Companies for Diversity. In early 2006, MetLife was also named
to the National Association for Female Executives annual list of Top 30
Companies for Executive Women.
In 2006, MetLife appointed C. Robert (Rob) Henrikson chairman of the board
of directors, president and chief executive officer of MetLife, Inc. Henrikson
was appointed CEO on March 1, 2006 and chairman of the board on April 25,
2006.
Henrikson has been the architect of an aggressive growth strategy that
included double-digit organic growth, the divestiture of non-core businesses,
and an M&A strategy which resulted in market leadership in all of MetLifes
core product lines. Before it was commonly talked about, Henrikson
recognized the opportunities presented by the changing demographics in a
global marketplace and set the company on a course for continued success by
developing innovative products and services and strengthening the companys
distribution power in the U.S. and 16 markets in Asia Pacific, Latin America
and Europe.
Today, a time when consumers are feeling a greater financial burden than ever
before, MetLife is helping millions of customers create their own personal
safety net. At no time in the companys history has MetLife been as well
positioned to capitalize on its history, its reputation for security and stability,and its innovative products and services as it is today.
In the future, MetLife will continue to grow its business with focus, innovation
and profitability. This will be accomplished by drawing on the reservoir of
history that has produced an enduring set of corporate values based on more
than 138 years of integrity, social responsibility, strong leadership and
financial strength.
Some other achievements
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
43/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 43
Largest life insurer in the US with approximately $3.4 trillion of life insurance in
force1
Serves 70 million customers and experiences the existence of over 140 years in
the industry
Ranked 39 on the FORTUNE 500 listing
Ranked 6th In Fortune Magazine 2009 List of Americas Most Admired
Companies
Named by Forbes magazine as The Best Managed Insurance Company in
America (2008)
3rd Runner up in customer loyalty survey Conducted by Business Standard & AC
Nielson in 2008
Chart showing Market Share of ULIPS in Kashmir
region
Inference and analysis:
The Graph shows that 31.39 Cr is the market share of Kashmir region
regarding ULIPS(Uni t L inked Insurance Polic ies) , 27 Cr i s that of
ICICI prudential and 22.5 Cr that of Bajaj Allianz.
Inference:
It implies that major portion of ULIPS market is that of MetLife
India Insurance Ltd. But there is a tough complet ion among the three
1Metlife inc. through its affliates
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
44/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 44
that is Bajaj All ianz, ICICI Prudential and MetLife. So, MetLife have
an edge over others and sho uld continue the same in the market.
Growth Ranking 2008
Sayeem Rafiq Regd No. 10807184
0 %
1 %
2 1
2 1
3 7
3 7
3 9
5 1
5 7
7 3
8 2
8 8
9 1
1 0 3
N A
N A
N A
N A
N A
N A
- 2 0 % 0 % 2 0 % 4 0 % 6 0 % 8 0 % 1 0 0 % 1 2 0 %
B h a r a t i A x a L i f e
F u t u r e G e n e r a l i
ID B I F o r t is L i f e
C a n a r a H S B C O B C
A e g o n R e l ig a r e
D L F P r a m e r ic a
A v i v a
B a j a j A l lia n z
IC I C I P r u d e n t ia l
IN G V y s y a
S h r i r a m L if e
H D F C S t a n d a r d
T a t a A IG
M a x N e w Y o r k
S a h a r a
O m K o t a k
B i r la S u n lif e
M e t L i f e
R e lia n c e L i f e
S B I L i f e
8/14/2019 MetLife Srinagar Sayeem
45/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 45
Financial Status of MetLife
{See annexure for fin. report}
From balance sheet
The f igure of total assets has increased f rom $356,808.0
(2004) to $559,149.0(2007) during past four years but i t
showed drastic decline in the financial year 2008,
[$501,678.0]. This might be the resul t of huge economic
meltdown which effected all over the world. There is increase
in cash amount but the long term investments have declined
due to high risk in the slowing down economic scenario. Alsothe good will of company has increased to satisfactory level.
S imilar ly the l iabi li ties f igure has increased f rom 2004
($333,984.0) to 2007 ($523,970.0) but dec lined in 2008
financial year up to $477,944.0. The h ighest figure
($408,961.0) is of policy liabilities i.e. the amount which the
company owes to i ts policy holders in case of their c laim/accident. The amount of long term debt has shown an
increasing trend from past five years ($7,412.0 to $13,425.0).
There i s a huge amount of retained earnings ($6,608.o to
$22,403.0) which depicts that the company is not distributing
its all net profit after tax in its shareholders. So the figure of
total liability & shareholders equity is $501,678.0 in financial
year 2008.
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
46/99
8/14/2019 MetLife Srinagar Sayeem
47/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 47
BANCASSURANCE
B A N C A S S U R A N C E
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
48/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 48
B an c a ss ur an ce i n i ts s im pl es t f or m i s t he d is tr ib ut io n o f
insurance products through a bank's distribution channels. In concrete
terms banc assurance, which is also known as Allfinanz - describes a
p ac ka ge o f f in an ci al s er vi ce s t ha t c an f ul fi ll b ot h b an ki ng a nd
insurance needs at the same time.
I t takes various forms in various countr ies depending upon the
demography and economic and legis la t ive c l imate of that country .
Demographic profile of the country decides the kind of products banc
assurance shall be deal ing in with, economic si tuat ion wil l determine
the trend in terms of turnover, market share, etc. , whereas legislat ive
cl imate wil l decide the periphery within which the bane assurance has
to operate.
The motives behind banc assurance also vary. For banks i t is a
means of product diversification and a source of additional fee income.
Insurance companies see banc assurance as a tool for increasing their
market penet ra t ion and premium turnover . The customer sees banc
assurance as a bonanza in terms of reduced price, high quality product
and delivery at doorsteps. Actually, everybody is a winner here.
Benefits to bank
Using bank as a distribution channel benefi ts both the insurance
company and the bank. Benefits of using bank as a distribution channel
are:
1) Banks provide a readymade infrastructure and, th erefore,
reduces the time and cost in establishing distribution network
by the insurance company Bank can supplement fee income
without utilizing large amounts of capital.
3 ) L everage i ts st reng th in di st ribu tion of bank ing. -p roduc ts .
4) Customer retention by offering convenient window for
banking and insurance products.
Benefits to the insurance companies
Benefits that would accrue to the insurance companies:
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
49/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 49
1 Banks h ave t he p otential t o a void e xpensive a gency s ystem
and fac il it at e p rospec ting o f small er t erm l if e insurance
policies which are not covered by the existing agency system.
2 Banks' customer focused information system in the banks
facilities automating the process of prospecting customers for
specific products.
3 Banks p rovide a n e ffective c hannel f or d irect marketing by
periodic mailing and also online access.
4 Access to readymade customer base for selling insurance
products.
5 Avoiding wasteful expenditure on data procurement, data
warehousing and data mining.
Critical success factor
Bank Assurance has been successful for selling insurance products due
to:
Easy accessibility
Customer trust on bank
Frequent interaction with the customer
Quick service
Improved sales
Reduced cost of
High conversion rates of the customer
Convergence of Banking and Insurance IndustriesKey Issues for Banks in India
As banks in India increas ingly show active in teres t in enter ing the
insurance sec to r, several manager ia l i ssues, r egular concerns and
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
50/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 50
operational challenges are beginning to surface. Her we seek to review
the factors driving the phenomenon and then to consider some of the
technical challenges that converge poses to senior bank managers. In
part icular , i t advocates the need for a coherent ar ticula tion of the
convergence proposal by every bank involved, and the implications the
ini t ia t ive holds for the core banking business . The s tudy c loses by
consider ing some of the long- term impl ica tions in the in it iat ive for
public sector banks, which dominate the Indian f inancial system. The
objective of the paper is to raise the awareness of banking and finance
profess ionals about the g lobal phenomenon of convergence in the
financial sector and certain unique issues in the Indian context due to
ownersh ip and o ther a spec ts tha t under line the need for a careful
trading of the path.
The pressure to move towards convergence
There are three factors driving banks in India to look at entry into the
insurance sector:
1) The attraction of fee income in the face of declining interest
spread
2) The scope to divert the staff rendered surplus due to massive
computerization
3) The motivation to enlarge the product range to bank customers.
It is relevant to note that the factors that have pushed banks abroad into financial
convergence by way of Banassurance are not entirely the same as in India. In
continental Europe, well established Banasurance programmes contributes 20 to 30 %
of the retail banking profits. The main driving force in their case has been to establish
synergy with insurance to secure an additional and more stable stream of income.
Banks have sought to leverage their extensive customer base and sell a range of
financial services to increase customer retention. Another motive for banks overseas
has been to reduce the risk based capital requirement for the same level of revenue.
In a study published by the Economist Intelligence Unit in 1996 titledCreating tomorrows leading retail bank, one of the conclusions was that as
Sayeem Rafiq Regd No. 10807184
8/14/2019 MetLife Srinagar Sayeem
51/99
M e t L i f e I n d i a I n s u r a n c e C o m p a n y L t d P a g e | 51
retail banking became intensely competitive from electronic commerce, banks needed
to quickly take up customer- centric business model, and Banc assurance emerged an
important activity to aid banks based on their segmentation knowledge, develop
pricing strategies and channel offerings for every single customer that are customized
to the fullest possible extent.
Declining interest spread
Banks in India at the present stage are not driven by such a customer segmentation
approach before embarking on a new sector such as Insurance. At the same time, the
three factors mentioned above are becoming important. While Indian banks have
recorded an increase in net interest income spread) in the recent past, this is largely
due to containment of interest expenditure in a softer interest regime witnessed at
present. The ratio of spread earning foreign banks, as yields on assets have declined
more than proportionately vis--vis the cost of liabilities.
The net interest margin of the banks in India (as a percentage of total assets)
was 2.85 % in 2001, which came down to 2.57 % in 2002. I