the persistency in life insurance industry at MeyLife Srinagar By Ahmad Mustafa

MetLife India Insurance Co. Pvt. Ltd.

Factors Responsible For Lapsed Policies

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LOVELY PROFESSIONAL UNIVERSITY

DEPARTMENT OF MANAGEMENT

Report on Summer Training

“The Persistency In Life Insurance Industry

With Special Thrust On Lapses And Loopholes”

Submitted to


And

Lovely Professional University (LPU)

In partial fulfillment of the Requirements for the award of Degree of

Master of Business Administration (MBA)

Submitted by:

Name: Ahmad Mustafa

Reg. No. 10811688

DEPARTMENT OF MANAGEMENT (2009)



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ACKNOWLEDGEMENT

I would like to express my sincere grati tude to Mr. Irfan Ali Zargar

(Area Sales Manager) for providing me wonderful opportunity to do a project

in an esteemed organization.

I am also highly indebted to Mr. Ifthikar Bashir (Operations Manager)

and Mr. Shabir Ahmad (Sales Manager Banca) of MetLife for providing me

proper direction, for sparing the valuable time and rendering all possible

guidance, when ever needed.

Special thanks are owed; in particular to every member of MetLife

(Sgr. Kashmir) those constitute Ms.Gousia, Ms. Misbah, Mr. Kulwant, and

Ms. Gazala.

Lastly I express my thanks to my family members particularly my

ABBA and AMMI for extending their whole hearted cooperation and support

and without whose help this project would have been incomplete. All the

entries are done on market survey bases and the suggestions and

recommendations are the result of hard work over the entire one and a half

months period.

AHMAD MUSTAFA



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Contents Executive Summary ................................................................................................................................. 4

Chapter 1. ................................................................................................................................................ 6

Introduction ............................................................................................................................................ 6

History of Insurance ............................................................................................................................ 7

History of insurance sector in India .................................................................................................. 11

Literature Review .............................................................................................................................. 14

Chapter 2. .............................................................................................................................................. 16

Introduction To MetLife India Insurance Pvt. Co. Ltd. ...................................................................... 16

Benefits of MIVRA ............................................................................................................................. 21

PRODUCTS OF MetLife ................................................................................................................. 22

BANC ASSURANCE ....................................................................................................................... 23

Financial Status of MetLife ................................................................................................................ 28

Chapter 3. .............................................................................................................................................. 30

OBJECTIVES AND RESEARCH METHODOLOGY ...................................................................................... 30

Objectives Of Study ........................................................................................................................... 31

Research Methodology ..................................................................................................................... 31

Chapter 4. ............................................................................................................................................. 34

Data presentation and analysis ......................................................................................................... 34

Chapter 5- ............................................................................................................................................. 53

Summary ........................................................................................................................................... 54

Conclusion ......................................................................................................................................... 55

Recommendations ....................................................................................................................... 56

Annexure ............................................................................................................................................... 57

GLOSSARY ........................................................................................................................................ 58

Bibliography .......................................................................................................................................... 64



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Executive Summary

MetLife India Insurance Co. Pvt. Ltd. Is one of the largest, strongest and

most respected financial organizations in USA. It was incorporated in India

on April 11, 2001 as a joint venture between MetLife International Holdings

Inc. , The Jammu & Kashmir Bank, M. Pallonji and Co. Pvt. Ltd. And other

private industries. The mission of the company is to provide 5 million

customers in India world class solutions for f inancial security and in the

process add significant value to its shareholders, associates and society by

2010.

Since while probing that whether the management is in dilemma or not, I

came to know that issue of lapsation of policies was striking the minds of

management. I took that issue as my problem and designed my research

questions. Since the time period for my summer training was allowing me to

go for an Exploratory Research, so did me. The s tudy was conducted in

Kashmir valley as the MetLife office is at Srinagar Kashmir. Since my

project was more based on survey rather than simply interviewing the

MetLife customers, so I was given the task of visiting different branches of

J&K Bank at Srinagar City and discussing the lapsed cases with the

concerned Insurance Managers and CSO’s (Channel Sales Officer). Getting

the case details from the bank and then discussing with the Operations

section of MetLife. My study also reflects the relationship of CSO’s with

operations department. My target was to reinstate the lapsed policies. Last ly

50 MetLife customers were contacted at Head Office and there feedback

towards company was recorded, analyzed and interpreted as well.



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The major findings of the study are:

� MetLife has been successful in building confidence and hope for

better future in the customers.

� MetLife ought to provide proper guidance regarding policy

matters to its customers as well as its CSO’s.

� Better services in terms of timely delivery of renewal notices,

premium receipts should be provided.

� MetLife’s major causes for lapses of policies were Bank

Employees, Delay in operations process and CSO’s as well as its

customers up to certain extent.

� Need for online system was recognized by most of the

customers.

� Operations department was not cooperative at all towards its

CSO’s

� Bank employees ought to make accountable and responsible.

� The due date of premium ought to be maintained on 30 t h of

/every/ month.

MetLife is exerting every effort to gain market share but due to huge no. of

lapsed cases the retention part is still lacking. It is very much driven towards

the acquisition of new customers as compare to retain the existing ones.

Delivering quality product should be the f irst preference of an organization

towards i ts customers as quality service is the basic element of today’s era

which frames the f irm’s quantitative advantage. Improvement in quality in

terms of simplif ied procedures, personal follow up of customers, product

effectiveness, its flexibility and simplici ty should be provided. Relationship

marketing should be preferred as retention of customers is MUST.

Expectations of customers should be satisfied to the maximum level so that

both the parties achieve their end. Thus I can say that by overcoming such

loopholes there is very much space for MetLife to grow to its fullest.



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Chapter 1.

Introduction



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History of Insurance

Everyone knows what l ife insurance or property insurance is and usually

knows something about how it works but not everyone knows the history and

reasons for and behind insurance in general. In the most basic sense,

insurance is the compensating of a person or business for a loss. There are

many types of insurance to cover any situation including, auto insurance,

health insurance, dental insurance, home insurance, personal insurance and

even pet insurance. A type of Property Insurance first became popular about

3000 BC in China. Chinese merchants, as well as their investors, wanted to

ensure that they would see a profit from their goods that they shipped

overseas. In the event that a ship was lost at sea or pirated, an insuring

partner would reimburse the owners of the ship and goods. To pay for the

loss the merchant would be sold into slavery to the insurer until the debt was

repaid. This was a mutually beneficial arrangement since a merchant could

not afford to pay for the lost goods or even to buy a ship unless someone

invested. The merchant could become very rich and even own a fleet of ships

if he was successful. Of course property insurance wasn't just available in

China. In Babylon merchants and investors devised a system of contracts in

which the supplier of money for a trade venture agreed to cancel the loan if

the trader was robbed of his goods. The trader who borrowed the money paid

an extra amount for this protection in addition to the usual interest. As for

the lender, collecting these premiums from many traders made it possible for

him to absorb the losses of the few. This arrangement proved to be more

appealing and sensible than the earlier one. Later this series of contracts was

extended to include provisions for a family's home and even covered murder,

the start of life insurance.

Of course news of a good idea spread fast. Soon the Phoenicians and to the

Greeks, Hindus and Romans also had similar concepts in place. Each culture

had its own interest ing twist on the laws. For example the Roman's had a

"jettison" law which stated that if a ship's crew had to lighten the ship by

throwing things overboard then the loss would be spl it between the merchant

and the insurer. In fact, this law still exists today as part of our own laws for



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protection against losses at sea and the very word " insurance" is derived from

the Latin word for "security."

Other forms of insurance terminology are also derived from ancient practices

of Mediterranean commerce. The origin of the word "underwriter ," for

example, is Italian, from an old system of signing contracts on marine

insurance. Those businessmen who had agreed to share in the profit or loss

on a certain venture signed their names underneath the contract, writing at

the same time the amount of risk assumed by each. It is possible that "policy"

is also of Italian origin - derived from "promise" - although other sources

have been claimed for this word. Things changed dramatically in the 17th

century. In 1666 the Great Fire of London finally and forcibly demonstrated

the need for f ire insurance . The primit ive f ire-fighting methods of the day

were virtually helpless against the hungry flames that roared unchecked

through narrow streets reducing timbered dwellings to ashes. The Great Fire

of London burned for four days and nights. It razed 436 acres, devouring

13,200 houses, 89 churches (including Saint Paul 's Cathedral), the Custom

House, the Royal Exchange and dozens of other public buildings. Only six

people perished in the f lames, but hundreds died from shock and exposure.

Insurance protection as we know it today can be traced to the aftermath of

that tragedy and a man call Nicholas Barbon. Profoundly shaken by the Great

Fire, Barbon promptly opened an office "to insure buildings." This venture

was apparently successful, because in 1680 he founded a partnership and

established England's first f ire insurance company , The Fire Office, to insure

brick and frame houses. The f irst mutual f ire insurance company was

established in 1696 with the cumbersome name of "Contributor ship for

Insuring Houses, Chambers, or Rooms from Loss by Fire by Amicable

Contributions" . This company was highly successful, eventually being

absorbed by the Commercial Union Assurance Company, Ltd. , of London in

1905. In 1704 the Lombard House inaugurated f ire insurance for household

and business goods, and in 1762 the first mutual life insurance company was

formed, The Equitable of London. The earliest authenticated insurance

contract (i .e. That which displays the characteristics of insurance in the sense



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of a transfer of risk of loss due to a fortuitous uncertain event in lieu of

payment of consideration / premium), is a marine insurance contract on a ship

“The Santa Clara” dated 1347 in Genoa. The policy is in the Italian language

and appears in the form a maritime loan to avoid the canon (church)

prohibition against usury.

The earliest insurance contracts did not appear in the form of a modern

insurance contract, but rather was drafted in the form of e ither a fictional

sale or loan, until the insurance contract proper was recognized and accepted.

The earliest insurers were merchants underwriting risks for fellow merchants,

on a part t ime basis. Until the 1800-1900’s premiums were not determined by

statistics kept etc. as in the modern sense, but was often arrived at as a result

of haggling. The contract of insurance was not created as a result of judicial

or legislative innovation, but by the merchants themselves as a result of

commercial expediency and need (Necessi ty being the mother of invention).

It is evident from the implementation of the earliest legis lative measures

enacted that there was a distinct divergence between the legal position and

what occurred in practice. Very few reported cases exist, or legal principles

were established by the judiciary on the Continent, unti l Lord Mansfield C.J.

took office in the Highest Court in England. During his tenure in office a

large number of cases and principles were established by the eminent judge,

many of which today exist unaltered (examples of which would be that

insurances contracts are contracts of good faith, the duty of disclosure, the

effect of misrepresentation and non-disclosure on the insurance contract, the

effect of fraud on the insurance contract, warranties, etc, to name a few).

Due to the fact that insurers were in fact fellow merchants who underwrote

risks on a part t ime basis, with no accurate data or statistics or experience to

determine premiums, such “insurers” were clearly in an unequal or weaker

bargaining posit ion than the insured’s a t the time. For this reason a large

number of decisions handed down, and principles enunciated were to a large

extent for the protection of the insurer. However despite the establishment of

corporate insurers and the advancements made in the determination of risk,

statistics, data sharing and collection, experience, and expertise in



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underwriting risks, many of the early principles have not been adapted to suit

modern times or take into account insurer’s greater bargaining power. This is

particularly evident in the instance of the duty of disclosure where Lord

Mansfield CJ in the seminal case of Carter V Boehm explained the duty of

disclosure on the part of the Insured as being a duty to disclose facts which

were within the own peculiar knowledge of the Insured, and which could not

have been reasonably discovered by the insurer by reasonable inquiry or facts

which were common knowledge to both the parties to the insurance contract.

Those policy wordings have to a large extent, remained unaltered and follow

the example of the Lloyds policy wordings which had been created more than

200 years ago. This is particularly evident in the f ield of marine insurance.

Personal lines insurance policy wordings however have been greatly

improved and simplified in recent times.

Despite insurance being a “contract”, the general principles in contract law

are not applied, or followed in the insurance context. This is particularly

evident when one has regard to the principles relating to misrepresentation,

non-disclosure, breach of contract, and the remedies available to the part ies.

The clearest example of this would be that the remedies available to a party

in the law of contract would extend to damages, whereas in the case of the

insurance contract the parties would not have the remedy of damages

available to them.

Very often one f inds that sight is lost of the above when dealing with the

insurance contract, and more often than not, a large number of parties who

are exposed/ involved in dealings/interpreting the insurance contract do not

take account of the remarkable background of this contract.



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History of insurance sector in India

The Indian Life Insurance Sector has been witnessing considerable prosperity

in many fronts after its opening to private sector in 1999. Foreign

investments of Rs.8.7 billion have poured into the Indian market and 21

private companies have been granted licenses. India has a favorable market,

which is growing fast. There are currently 14 life including LIC and 14 non-

life insurers companies. The compound growth rate of new business of

individual life insurance premium income rose to 18 percent during 200-05 as

compared to average of 14.5 percent during pre privatization period from

1957-1999. The business in force of individual life insurance premium has

grown at a compound annual growth rate of 22.6 as compared to 14.2 percent

before privatization. During the same period number of policies issued also

has grown to 10.07 percent from 6 percent. Management expenditure to

premium has come down to 17.3 percent in 2004 from 23.24 percent in

1991.At the present compound growth rate, i t is estimated that premium from

individuals may go up to Rs.357000 crores by 2020 from Rs.47303 crores in

2006. During the same period the group insurance premium may rose up to

Rs.160000 Crores from 100000 Crores. Insurance Regulatory and

Development Authority (IRDA) has cleared 386 new insurance products

between 2001 and 2005. The contribution of life fund at market price has

gone up from 10.58 percent of GDP in 2002-03 to 13.8 percent in 2004-

05.The Life insurance penetration was doubled from 1.41 in 1999 to

2.67.However it stands lowest when compared to world average of 4.53,

Asian average of 5.18, South African average of 14.38 and North American

average of 4.12. Similarly though the density of Life Insurance went up from

11.7 to 15.7 during the same period, it stood lowest when compared to world

average of 291.5,Asian average , North American average of 1617.2, South

African average of 545.5 . Thus there is a lot of potential for insurance

consumption in India when compared the world average. Among many other

factors which are coming in the way of consumption of life insurance policies

discontinuation of policies (here after called as lapsation) in the f irst year of

their sale is considered as virus for the growth of the sector. Perhaps the

most disturbing feature of Indian life insurance business is the high



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proportion of lapses. If we take into consideration all lapses including paid-

ups and surrenders as wastages, the proportion will be substantially higher.

The insurance sector in India has come a full circle from being an open

competitive market to nationalization and back to a liberalized market again.

Tracing the developments in the Indian insurance sector reveals the 360-

degree turn witnessed over a period of almost 190 years. The business of life

insurance in India in its existing form started in India in the year 1818 with

the establishment of the Oriental Life Insurance Company in Calcutta.

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

� 1912 - The Indian Life Assurance Companies Act enacted as the f irst

statute to regulate the life insurance business.

� 1928 - The Indian Insurance Companies Act enacted to enable the

government to collect statistical information about both life and non-

life insurance businesses.

� 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 societ ies 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.

� The General insurance business in India, on the other hand, can trace

its roots to the Triton Insurance Company Ltd. , the first general

insurance company established in the year 1850 in Calcutta by the

British.



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

� 1907 - The Indian Mercantile Insurance Ltd. set up, the firs t company

to transact all classes of general insurance business.

� 1957 - General Insurance Council, a wing of the Insurance Association

of India, frames a code of conduct for ensuring fair conduct and sound

business practices.

� 1968 - The Insurance Act amended to regulate investments and set

minimum solvency margins and the Tariff Advisory Committee set up.

� 1972 - The General Insurance Business (Nationalization) Act, 1972

nationalized the general insurance business in India with effect from

1st January 1973.

� 107 insurers amalgamated and grouped into four companies viz. the

National Insurance Company Ltd. , the New India Assurance Company

Ltd. , the Oriental Insurance Company Ltd. and the United India

Insurance Company Ltd. GIC incorporated as a company.



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Literature Review 1. M. ShriNivas Osmania University Hyderabad, 2008

This study was a modest attempt to analyze the causes for lapsation after

privatization on the basis of the experiences of the functionaries like branch

managers, development officers, Agency managers and insurance agents

(CSO’s) who are the core marketing staff for MetLife India Ins. Co. Pvt. Ltd.

After privatization significant progress has taken place in Indian insurance

sector especially in l ife insurance business. However still lot of potential for

life insurance consumption is available in India as the India 's Life Insurance

penetration and density is low when compared to Asian average or world

average. In spite of rapid progress the sector is suffering with high rate of

lapsation of policies . This study reveals that forced selling 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 requirements of

the policy holders. Hence there is a need to organize special training camps

to agents and awareness camps to beneficiaries periodically. Attention has to

be paid on not to yield for forced sel ling, 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 clarified that For the purpose of identifying prime

causes for lapsation, the perceptions of the core functionaries in the

marketing network of MetLife are ascertained by canvassing questionnaire.

They include Branch managers, Area Managers, Sales Managers,

Development Officers and Agents. For the purpose stratif ied random

sampling is applied in selecting sample of Branch managers (BMs),

Development Officers (Dos) and Banca Agents. The study is confined to the

city of Srinagar. The f indings include awareness levels of the customer

(about personal risks, insurance and insurance product knowledge), product



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mismatch (lack of need based selling/ forced selling/ wrong selling),

incompetent services (by agent and MetLife), financial problems of

customers (due to insufficient income, inflation, lack of financial planning),

Competition (with other f inancial insti tutions and other investments with

higher returns).

3. Irfan Ali Zargar, student of Kashmir University, J&K, 2007

In his study Irfan Ali has listed that purchase of insurance more than

affordability, purchase of wrong type policies, purchase of expensive policies

etc are some of the causes for lapsation. He has included the Srinagar city as

epicenter, since Srinagar is the best si te of Kashmir val ley for successful

business. Presently he is the Area manager of Sales Department; this is the

result of his sincere efforts towards the mission of organization. The

conclusion and recommendations were very helpful to the management. He

has reinstated almost 100 (one hundred) lapsed policies.

4. IRDA journal Aug., 2008:

The focus of this issue of journal is on “LAPSATION OF LIFE INSURANCE

BUSINESS”. It starts with an article discussing inter alia the vulnerabilities

that insurers are exposed to account of early lapsation. In the next article, a

team of life insurance domain consultants project ‘persistency’ of business

as the fif th ‘p’, which is as important as the other four ‘p’s of Marketing.

Another art icle draws light about the important role that the distributor

[Agency personnel or CSO] plays in ensuring that life insurance contracts

don’t die an immature death. One significant adverse feature of high

lapsation in life insurance is the financial crisis that it brings about, both for

the insurer as well as the insured. This journal also focuses on the remedial

measures adopted by life 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”.



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Chapter 2.

Introduction to MetLife India Insurance Pvt. Co. Ltd.



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The spirit of MetLife’s commitment………..

V I S I O N

Build financial freedom for all through leadership in providing professional

f inancial advice and building long term relationships through innovative

protection, accumulation and retirement products, robust underwriting

processes and creating a world-class customer service experience for our

customers.

O U R M I S S I O N

By 2010, provide 5 million customers in India world-class solutions for

f inancial 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

� We lead through innovation to offer world class and competitive

products to our customers.

� We build long term relationships with our customers by creating a

world class service experience through operational excellence and the

innovative use of technology.

� We create a customer centered and result focused division that inspires

and has the buy in of all our associates and has their buy-in.

� We are committed to creating a high performance organization by

creating an environment that allows each one of our associates to

perform at their peak. As a result we will also be recognized as an

employer of choice. We are committed to partnering with our internal

and external customers for mutual success.

� We work with integrity, fairness and financial prudence in all our

dealings keeping the interest of our shareholders, customers and

employees paramount. ………….Partnering for excellence



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MetLife proudly inherits its parent company's over- 136 year-o l d 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 .

Ranked 43 on the Fortune 500 list (Dec. 31, 2007). MetLife insurances

(MetLife) is one of the largest, strongest and most respected financial

organizations. MetLife through its ' affiliates is the number one life insurer in

the U.S with approx. @3.4trillion of life insurance in force (as of Dec. 2007)

and has been delivering reliable, high quality service to its customers since

1868.

MetLife is a leader in group benefits that serve over 90 of the top 100

FORTUNE 500® companies, and providing benefits to 70 million employees

and family members through its sponsors in the U.S. The MetLife companies

are also ranked #1 in group life and #1 in commercial dental in the U.S.

Headquartered in New York. MetLife through its aff iliates, subsidiaries and

representative offices, operates in 15 countries throughout the America,

Europe and Asia. MetLife 's institutional clients have approx. 39,800

employees in the USA, and more than 55,300 employees worldwide. MetLife

has assets under management worth $521.3 billion (third quarter 2008).

(FORTUNE 500® is a registered trademark of FOURTUNE®

Magazine, a division of Time, Inc)



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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. Pallonji and Co. Private Limited and

other private investors. MetLife has-developed and distributes a range of life

insurance in India.

MetLife is headquartered in Bangalore with officers and presence in major

Indian cities, and an additional 1000 outreach points through its channel

partners. Through our highly professional agency system, we are dedicated to

helping Indian consumers plan for their f inancial security through customized

solutions. MetLife is driven by the principles of uncompromising integrity

and the highest level of professionalism. Its mission is to work with utmost

integri ty, fairness and financial prudence in all i ts dealings.

MetLife benefits from its parent company's global presence in the f ield of

insurance, track record of establishing successful insurance operations in

emerging markets and the unique strengths of its other Indian promoters.

Drawing from these experiences, MetLife will be able to address the needs of

the Indian customer.

MetLife aspires to build on MetLife history of meeting policy holder and

contract obligations and the, ability to withstand the impact of adverse

economic factors. The MetLife brand, known for empowering people to feel

protected, guided and hopeful about their lives, will do the same for its

Indian customers. In the past two years, MetLife has made significant

contributions to the growth of MetLife international. Since selling its firs t

policy in January 2002, MetLife has experienced strong growth from its

agency force, which increased 45% during 2003 alone. The company

presently has more than 240, 00 policies in place and has recently entered the

institutional market with a group life product. While group insurance in India

is not currently a large market, the segment is forecasted to grow rapidly in

the next two-to-three years. By focusing on this untapped market, MetLife

can meet the needs of large corporations, helping them establish benefit

programs that help them attract and retain top talent. However, i t is pertinent



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to mention here that India 's Banc assurance and Corporate Agency has also

played a significant role in contributing to this success. The goal is for

MetLife to contribute significantly to the MetLife mission of reaching 100

million customers by 2010. To help reach that goal, MetLife plan on

launching innovative products in the near future, this wil l act as a major

differentiator among competitors. In additions, with the launch of the new

MetLife television commercials, which is a first for our India operation, this

will add greatly to MetLife 's global brand recognition. The combination of

this brand and the continued outs tanding efforts will provide the fuel to drive

MetLife further up the road of success.

MetLife delivers value and world-class service to customers through its

f inancial advisors and corporate sales representatives. The mission of

MetLife Insurance is to build financial freedom for all . What is financial

freedom? It is all about securing one's future. It is about approaching life’s

major milestones without any worries. True financial freedom arises from

identifying your financial capabilities, setting realistic goals based on your

dreams and aspirations and achieving them through a comprehensive plan.

Most importantly, while you set out to draw up financial plans for your life-

you need to unders tand that it isn' t a one-time plan. The planning that goes

into attaining your f inancial freedom should be dynamic, since life itself is

dynamic. What's good for you today might not be next year. During the

course of your life you need to achieve your aspirations (life owning of

house), meet certain f inancial obligations (life educating your children or-

getting them married), ride over unforeseen contingencies and plan a

f inancially independent retirement phase. The Met Advice Financial Planning

could be the first step in your planning exercise. It attempts to give you on

overview of the various investment options available in the market today.

� In India MetLife has presence in 192 branch offices and 440 agency

units as of December 2008.

� Also i ts presence is in over 680 locations with access to 1892

branches of banc assurance partners.



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� AFYP of 1153.6 crore for period January 2008 to Dec. 2008[a growth

of 80% over 2007].

� It has sold 2, 94,400 individual policies during Jan. 2008 to Dec. 2008

[a growth of 155% of the policies last year] .

� A Banc Assurance and business partnership {BABP} has done a

business of Rs 641.2 Crores for the period of Jan. 2008 to Dec. 2008.

[ it is 195% of the business done for last year same period].

Since MetLife was founded in 2001with its headquarters in Bangalore India

but its operations started in f inancial year 2001-02. Mr. Rajesh Relan is

Managing Director of MetLife and the no. of Employees is 7688 (up to 6 t h

March 2009). The total no. of advisors was 56,072 and the 5 members of

Bancassurance Tie-ups are J&K BANK , AXIS BANK, DHANALAKSHMI

BANK, KARNATAKA BANK AND BARCLAYS. There are almost twenty

products of life policies of MetLife in the market.

Recent happenings: July 09, 2008

MetLife Ties-up with Siemens Enterprise Communications to launch MIVRA-

'MetLife Integrated Voice Response Application’ an Advanced Telephony

System that combines the cutting edge attributes of technology with the

human resources. With this, MetLife will have a 24/7 perspective on the

customer requirements.

Benefits of MIVRA

Check the renewal premium due along with the due date

� Request for a premium paid certificate through e-mail or courier

� Request an account statement (For unit l inked policy owners)

� Fix up appointments for medical examinations

� Check application status online



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PRODUCTS OF MetLife

� Met Growth, ULIP [Non Par]: A unit l inked plan to grow wealth for

your retirement years.

� Met Suraksha [Non Par]: a pure risk cover plan at low cost.

� Met 100 [Par & Non Par]

� Met Suvidha [Par & Non Par]: flexible endowment plan that combine

savings and security.

� Met sukh [Non Par]: Guaranteed Money-Back

� Met Bhavishya [Non Par]: Guaranteed Money-Back plan to secure

child’s future.

� Met Riders [Non Par]

� Met Easy, ULIPS [Non Par]: A simple tick and take unit l inked plan.

� Met Smart Gold ULIP [Non Par]: A unit linked endowment plan for

accelerated wealth creation and protection.

� Met advantage plus ULIP [Non Par]: A unit l inked pension plan to

meet your retirement needs.

� Met Smart Plus & Met Smart Premier ULIP [Non Par]: Whole life

unit l inked life insurance plan.

� Met Mortgage Protector: Reducing term plan to protect loans.

� Met Sukh: Guaranteed money back plan.



23

AHMAD’s

BANC ASSURANCE



24

AHMAD’s

Banc assurance in its simplest form is the distribution of insurance

products through a bank's distribution channels. In concrete terms banc

assurance, which is also known as Allfinanz - describes a package of

f inancial services that can fulf ill both banking and insurance needs at the

same time. It takes various forms in various countries depending upon the

demography and economic and legislative climate of that country.

Demographic profile of the country decides the kind of products banc

assurance shall be dealing in with, economic situation will determine the

trend in terms of turnover, market share, etc. , whereas legislative climate

will 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 diversif ication and a source of additional fee income. Insurance

companies see banc assurance as a tool for increasing their market

penetration 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 benefits both the insurance company and

the bank. Benefits of using bank as a distribution channel are:

1) Banks provide a readymade infrastructure and, therefore, reduces

the time and cost in establishing distribution network by the

insurance company.

2) Bank can supplement fee income without utilizing large amounts of

capital.

3) Leverage its strength in distribution of banking.-products.

4) Customer retention by offering convenient window for banking and

insurance products.



25

AHMAD’s

Benefits to the insurance companies

Benefits that would accrue to the insurance companies:

1 Banks have the potential to avoid expensive agency system and

facilitate prospecting of smaller term life 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 provide an effective channel for direct 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 sel l ing insurance products due to:

� Easy accessibi l ity

� Customer trust on bank

� Frequent interact ion with the customer

� Quick service

� Improved sales

� High conversion rates of the customer

AHMAD’s

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(Unit Linked Insurance Policies

prudential and 22.5 Cr that of

Inference :

It implies that major portion of ULIPS market is that of MetLife India

Insurance Ltd. But there is a tough completion among the three that is Bajaj

Allianz, ICICI Prudential and MetLife. So, MetLife have an edge over others

and should continue the same in the market.

MetLife

40%

Market Share Of Major Players





Unit Linked Insurance Policies), 27 Cr is that of ICICI

prudential and 22.5 Cr that of Bajaj Allianz.




ould continue the same in the market.

Bajaj Allianz

27%

ICICI Prud

33%

Market Share Of Major Players



26



), 27 Cr is that of ICICI






27

AHMAD’s

Why choose MetLife?

It takes great pride in the f inancial solutions that it offers. But that’s not all.

The customer requirements and comfort are always at its priori ty. That is why

its interactions are distinguished by its expertise, compassion and sensitivity.

The MetLife companies are one of the world’s largest and most respected

f inancial services organizations. For over 140 years, i t has been helping

people build f inancial freedom. For some, this means protection for their

families. For others, i t means wealth optimization or preservation. Combined

with i ts innovation, it makes the MetLife companies truly formidable players

in the Life Insurance industry.

Why life insurance?

Just think!!!! Your son’s education, your daughter’s marriage, your

home loan, your retirement planning is your

responsibility.

But if you are not there then!!!!!!!

Your son’s education, your daughter’s marriage, your

home loan, your retirement planning is your responsibility.

So l ife insurance!!!! An umbrella to cover all your need.



28

AHMAD’s

Financial Status of MetLife

{See annexure for fin. report}

From balance sheet

The figure of total assets has increased from $356,808.0 (2004) to

$559,149.0(2007) during past four years but it showed drastic

decline in the financial year 2008, [$501,678.0]. This might be the

result 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. Also the good will of company has increased to

satisfactory level.

Similarly the liabilities figure has increased from 2004 ($333,984.0)

to 2007 ($523,970.0) but declined in 2008 financial year up to

$477,944.0. The highest figure ($408,961.0) is of policy liabilities

i.e. the amount which the company owes to its policy holders in

case of their claim/ accident. The amount of long term debt has

shown an increasing trend from past five years ($7,412.0 to

$13,425.0). There is 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.



29

AHMAD’s

From income statement

Total revenue figure shows increasing trend i.e. $38,701 to $50,989

where the total premium earned increases from $25,067 to $31,295.

Gross profit shows small inclination from 2004 to 2007 but slows

down in 2008 ($24,189 to $23,155). The company is doing

increased expenses year after year, in 2005 it was $7,553 but in

2008 it was $7,907.0.

Net income after tax figure shows incline from 2004 ($2,572.0) to

2007 ($4,102.0), but in 2008 the net income after tax amount is US

$3,510. The EPS has increased in last 4 years but in 2008 it remains

low at 4.72.

From past ten years income statement predicts similar increase in coming

financial year but there might the effect of economic slowdown. Figure moves

from EBIT $1,175 to US $5,762 [In millions] (up to 2007), and in 2008

it declines to US $5,090 [In millions] Also ES (earning per share)

varies from 0.83 to 5.2 (4.54 in 2008).

From past 10 years balance sheet similar trend is viewed i.e.

Current Assets varies from $225,232.0 (in millions) to $501,678, up

to 2008. Also current liabilities vary from $211,542 to $477,944. In

addition long term debt increases from $2,514.0 to $13,425.0.

All above figures are forecasting better future of MetLife but C.A.

should be utilized properly and lowering the liabilities. It is better

to retain earnings than long term debt by discussing the same issue

with share holders.



30

AHMAD’s

Chapter 3.

OBJECTIVES AND RESEARCH METHODOLOGY



31

AHMAD’s

Objectives of Study

The objectives of my research included the following important functions:

i. To know the factors responsible for the lapsed policies

ii. To provide feedback of customer to MetLife

iii. To explain the benef its of policy to the policy holder and

motivate him to pay the pending premium.

iv. Ultimately reinstate the lapsed policies.

Research Methodology

Research design:- i t constitutes the blueprint for the collection,

measurement, and analysis of data. It helps the researcher in the allocation of

limited resources by posing crucial choices in methodology.

In this research some selected branches of J&K Bank were visited and the

cases of lapsed policies were taken one by one and worked over for their

REINTATEMENT. Also a customer survey was undertaken to know the factors

responsible for lapsation of policies and working of MetLife.

Since there was lack of clear idea about factors causing lapsation of policies,

thus an exploratory research design was adopted to conduct the study in order

to know the above mentioned objectives. The data collection method was

Random sampling.



32

AHMAD’s

Sampling plan

Population of Sample

The population of interest were the policy holders of Kashmir Valley (Active

as well as lapsed) Total of 50 MetLife customers were contacted. The

customers were approached personally with the prior appointment at a

convenient place of the client at a suitable time and day/ some of them were

contacted when they visited the Head Office Srinagar, J&K.

Sample size

Monthly 20% of 50 = 10 respondents

Quarterly 10% of 50 = 5 respondents

Semi-annually 10% of 50 = 5 respondents

Annually 60% of 50 = 30 respondents

Data Collection

Data Source

Primary as well as secondary were used

Primary data has been collected from the survey conducted through

systematic gathering of data from structured sample of customers through

questionnaire. Secondary data comprised mainly of management books like

Business Research Methods, IRDA journals and various websites.

The report mainly consists of primary data gathered through the schedule of

questions asked to the respondents directly.



33

AHMAD’s

Research instrument

A structured interviewer administered questionnaire was used containing the

relevant questions seeking information from the existing policy holders of

MetLife (lapsed cases particularly).

Statistical tools

Microsoft Excel is used for tabulation of data, charts are drawn in M.S.Word

in continuation of Excel, percentages are drawn for generalizing the study

and graphs are used for having better pictorial representation.

Limitations of technique

The first and most crucial hurdle in this study was shortage of time, being

one and a half months duration. Secondly no vast researches were done over

the problems faced by MetLife at Kashmir valley; this forced us to start from

zero. Since the research was exploratory based and no hypothesis testing was

worked out. Also no tests like Z-test, T-test etc were applied. Some other

points related to our research were:

Although every effort was undertaken to conduct the study as rigorously as

possible, there are certain limitations of the project as follows: -

Time limit is not sufficient enough to collect all the data to complete

the project report.

The sample size was limited to 50 respondents.

Some confidential information was not allowed to be analyzed by the

management which might have more relevance from the study angle.

The study was limited to Srinagar city.

Some of the respondents didn’t take research seriously and didn’t

give enough time

While fill ing the questionnaire.

Due to continuous strikes in valley I faced lot of problems in data

collecting.



34

AHMAD’s

Chapter 4.

Data presentation and analysis

AHMAD’s


24% respondents came to know about MetLife through Friends

18% respondents came to know about MetLife through T.V. Advertisement

38% respondents came to know about MetLife through J & K Bank,

0% respondents came to know about MetLife through Hoardings/bill boards

20% respondents came to know MetLife through other means.

Most of the customers were introduced to MetLife through J&K Bank and

lesser number of customers got aware of it through

advertisement. Though most of its marketing is done by

needs to use other marketing tools to capture more and more market. Since

the presence of MetLife has been made more visible through Co branding

wherein both names appear (

J&K Bank

38%

Hoardings/Bill

Boards

0%

Q 1. Which among following influenced you

to join MetLife?



24% respondents came to know about MetLife through Friends



respondents came to know about MetLife through Hoardings/bill boards

20% respondents came to know MetLife through other means.


lesser number of customers got aware of it through hoardin

advertisement. Though most of its marketing is done by J&K bank



wherein both names appear (J&K bank and MetLife).

Friends

24%

T.V.

Advertisement

18%J&K Bank

Other

20%

Q 1. Which among following influenced you

to join MetLife?



35



respondents came to know about MetLife through Hoardings/bill boards


hoardings and

J&K bank but it





36

AHMAD’s


14% respondents chose MetLife because of its Tax Benef its

12% respondents chose MetLife because its var iety in polic ies

18% respondents chose MetLife because of its High returns

48% respondents chose MetLife because it is af f i l iated with J&K Bank

8% respondents chose MetLife because i t ’s better r isk coverage.

The Goodwill that J&K Bank has created in Kashmir valley is the major

factor that influences customers mostly to go for MetLife policy. Other

reason being its high returns on policies, variety it provides and tax rebates.

tax benefit

14%

varieties of policies

12%

high returns

18%

affiliation with

J&K Bank

48%

Better risk coverage

8%

Q.2. You choose MetLife because of its:

AHMAD’s


36% respondents strongly agree that their investment is secure

38% respondents agree that their investment is secure

18% respondents mentioned Can’

4% respondents d isagree

4% respondents strongly Disagree that their investment is secure

More than 50 percent customers agree that their investment is secure and

only few customers are not sure about their investments. So MetLife needs to

build confidence in their customers. By

returns and the f inancial position o

who mentioned their disagreement towards the above question.

Can't Say

18%

Disagree

4%

Q 3. MetLife makes your investment secure



% respondents strongly agree that their investment is secure

% respondents agree that their investment is secure

% respondents mentioned Can’t Say.

that their investment is secure

Disagree that their investment is secure



build confidence in their customers. By publicizing the annual growth

and the financial position of company, it will overcome the customers

who mentioned their disagreement towards the above question.

Strongly Agree

36%

Agree

38%

Disagree Strongly Disagree

4%

Q 3. MetLife makes your investment secure



37

Disagree that their investment is secure



the annual growth

f company, it will overcome the customers



38

AHMAD’s


8% respondents Strongly agree that MetLife staff is f r iendly

26% respondents Agree that MetLife staff is f r iendly

58% respondents mentioned Can’t Say

4% respondents Disagree that MetLife staff is f r iendly

4% respondents Strongly Disagree that MetLife staff is f r iendly

Most of the respondents agree that the staff of MetLife is helpful and

provides proper guidance regarding policy matters. Few respondents did not

experience any such behavior; this response comes as most of the respondents

were those whose policy has lapsed from last one year [approx.].

Strongly Agree

8%

Agree

26%

Can't Say

58%

Disagree

4%

Strongly Disagree

4%

Q 4. Is MetLife Staff friendy to you?



39

AHMAD’s


36%respondents pay their premium through cash

28% respondents pay their premium through their bank account

18% respondents pay their premium through cheque

18% respondents pay through mixed/ other means.

Most of the customers pay their premium by cash, yet some of them pay their

premium through their bank accounts. They find it easy as the amount

automatically gets deducted from their respective accounts. Since this method

is the easy one, I found that all customers have applied for SIM facility at

their respective branches. Cheques are also given by some customers and few

of the customers pay in mixed manner i .e. sometimes cash, sometimes cheque

etc.

cash

36%

automatically

deducted

28%

by cheque

18%

other mode

18%Other

36%

Q.5. You pay your premium via:

AHMAD’s


38% respondents mention that they

notice in time.

8% respondents mention

notice in time.

20% respondents mention that they

in time

34% respondents mention that they never receive Renewal premium notice

in time.

Though most of the customers re

time but there are customers who receive Renewal notice but not in time. So

MetLife needs to improve their services and should send such notice in time

because this becomes the cause for Policy lapsation.

became prey of lapsation due to absence of reminder about their premium

due date and most of them were monthly paying premium customers. Now

they were advised to apply for facility of SIM i.e. automatic way of

deducting the premium amount from the

seldomly

never

34%

Q. 6. you get renewal premium notice in time



% respondents mention that they regularly receive Renewal premium

% respondents mention that they usually receive their Renewal premium

% respondents mention that they seldom receive Renewal premium notice

% respondents mention that they never receive Renewal premium notice

Though most of the customers receive their Renewal premium Notice in



because this becomes the cause for Policy lapsation. 34% responden




deducting the premium amount from the bank account.

regularly

38%

usually

8%seldomly

20%




40

receive Renewal premium

that they usually receive their Renewal premium

receive Renewal premium notice

% respondents mention that they never receive Renewal premium notice

ceive their Renewal premium Notice in



34% respondents were





AHMAD’s


8% respondents say that they receive reminder always

20% respondents say that they receive

52% respondents say that they receive

20% respondents say that they never receive rem

As about 70% respondents never receive any reminder regarding their

premium payment. There was found a delay in sending the reminder to

customers, usually the mode of telecommunication is used to remind the

customers their due date. But the problem

dated. A need to update the contact numbers is the issue to be kept at highest

priority.

sometimes

Q.7. You recieve reminder when you don't

pay your premium on due date:



8% respondents say that they receive reminder always

20% respondents say that they receive reminder usually

52% respondents say that they receive reminder sometimes

20% respondents say that they never receive reminder




customers their due date. But the problem is that the contact numbers are out


always

8% usually

20%

sometimes

52%

never

20%

Q.7. You recieve reminder when you don't

pay your premium on due date:



41




is that the contact numbers are out




42

AHMAD’s


56% respondents Always receive their Premium receipts.

12% respondents usually receive their premium receipts

29% respondents sometimes receive their premium receipts

3% respondents never receive their premium receipts

Most of the customers receive the receipt after paying their premium. But

there are some who sometime receive or don’t receive at all . This again

focuses on the service .MetLife should try their best to improve their services

and should give proper receipts while accepting premium from customers.

Premium receipt is an important document for customer as well for MetLife.

If there had been on-line system then this issue might not have been so

important, so on-line system is recommended in Kashmir Valley particularly.

56%

12%

29%

3%

32%

Q. 8. After the payement of premium, Do you

receive its reciept?

always

usually

sometimes

never

AHMAD’s


42%respondents contact their CSO or insurance Managers in case they don’t

receive their premium receipts.

19% respondents call MetLife in case they don’t receive usually receive their

premium receipts

36% respondents contact MetLife head office in case they don’t Head office

sometimes receive their premium receipts

3% mentioned “other specif

Most of the customers contact their CSO or Insurance manager in case they

don’t receive their premium receipts. Few of them either call MetLife office

or contact them personally.

such problem i.e. they have always received their Premium Receipts and

there are some who don’t bother about their receipts because of many reasons

like busy schedules. But as this Premium receipt is an important document

both for insurer and insured so customers should k

and contact MetLife people in case they don’t

contact Head

Office

36%

Q. 9. In case you don't receive the



%respondents contact their CSO or insurance Managers in case they don’t

premium receipts.

% respondents call MetLife in case they don’t receive usually receive their

% respondents contact MetLife head office in case they don’t Head office

sometimes receive their premium receipts

% mentioned “other specify’ when asked.



or contact them personally. There are many customers who have never faced

. they have always received their Premium Receipts and

are some who don’t bother about their receipts because of many reasons


both for insurer and insured so customers should keep a track of all receipts

and contact MetLife people in case they don’t issue it.

contact CSO

42%

call MetLife

19%

contact Head

Office

36%

other

3%

Q. 9. In case you don't receive the

reciept, You do :



43

%respondents contact their CSO or insurance Managers in case they don’t

% respondents call MetLife in case they don’t receive usually receive their

% respondents contact MetLife head office in case they don’t Head office



are many customers who have never faced

. they have always received their Premium Receipts and

are some who don’t bother about their receipts because of many reasons


eep a track of all receipts

AHMAD’s


46% respondents say that their policy has been lapsed once.

30% respondents say that their policy has been lapsed twice.

20% respondents say that their policy has been lapsed many times.

4% respondents say that their policy has never lapsed.

Though most of the customers policy has never been lapsed

are many whose policy has been lapsed either

lapsation creates a problem for both the cus

well. Customers need to re

premium amount without interest rate as today is the special scheme for

lapsed policy holders. And MetLife staff needs to do all cumbersome

calculations involved in reinstating the lapsed cases

them details regarding their policy, if demanded/needed.

twice

30%

many times

20%

Q.10. Your policy has lapsed,



% respondents say that their policy has been lapsed once.

% respondents say that their policy has been lapsed twice.

their policy has been lapsed many times.

% respondents say that their policy has never lapsed.

Though most of the customers policy has never been lapsed once

cy has been lapsed either twice or many times. This

tes a problem for both the customers and MetLife people

Customers need to re-activate their policy, in such case, by paying the

without interest rate as today is the special scheme for

And MetLife staff needs to do all cumbersome

reinstating the lapsed cases for customers and give

details regarding their policy, if demanded/needed.

once

46%

many times

20%

never

4%

Q.10. Your policy has lapsed,



44

once but there

twice or many times. This

and MetLife people as

by paying the

without interest rate as today is the special scheme for

And MetLife staff needs to do all cumbersome

for customers and give

AHMAD’s


36% customers mentioned “


of their policy lapsation



There were varied reasons for Policy lapsation.

that the cause of their policy lapsation was that they paid the premium late

which had its own reasons like having some financial problem, or the

customer being out of station, or busy schedules. Many cu

that though they paid in time but it was reconciled late the reason being

CSO’s ignorance. , system error, server problem causing

MetLife staff and resulting in late reconciliations of premium which finally

results in Policy lapsation.

{other option} entered there premium amount in wrong policy number,

without any notice to the real owner.

provided with trained and responsible CSO’s which will minim

lapsation case.

22%

30%

Q.11. The policy got lapsed because,

paid premium late Got reminder late



mentioned “I paid premium late” as the reason of lapsation

% customers mentioned “I got Renewal premium notice late” as

% customers mentioned “I paid on time but it was reconciled late”

% customers mentioned “Other specify”

ns for Policy lapsation. Majority of people admitted



customer being out of station, or busy schedules. Many customers mentioned


CSO’s ignorance. , system error, server problem causing workloads

MetLife staff and resulting in late reconciliations of premium which f inally

apsation. Also other gave the blame that bank employees


without any notice to the real owner. Thus an improved system should be

provided with trained and responsible CSO’s which will minim

26%

22%22%

Q.11. The policy got lapsed because,

Got reminder late paid on time but reconciled late other



45

the reason of lapsation

as the reason

time but it was reconciled late”

of people admitted



stomers mentioned


workloads in

MetLife staff and resulting in late reconciliations of premium which f inally

Also other gave the blame that bank employees


Thus an improved system should be

provided with trained and responsible CSO’s which will minimize the

other



46

AHMAD’s


80% respondent mentioned that they received the receipt/ t icket No. raised.

20% respondent said that they did not received the receipt due to lack of

time/ busy schedule.

It is obvious that after the cumbersome work of reinstating the lapsed policy,

all the customers will demand any receipt No. from the concerned authority,

whether it is the customer itself or the CSO. A few cases are here who have

not received the receipt no. due to exhaustion from the process. Management

should try to put all the customers at motivated level so that the goodwill of

company would be sustained.

80%

20%

Q. 12. Did you received any reciept regarding

policy reinstatement

Yes No

AHMAD’s


35 respondents recommend

2 respondents recommend pay

4 respondents recommend payment of

10 respondents recommend

Majority of the respondents f ind

feasible than other modes of premium Payment

through annual mode and many others pay quarterly, half yearly or yearly.

The choice of mode depends on many factors like Regularity of income,

occupation. some find it easy to pay small amount every month while for

others it ’s more feasible to pay in one whole yearly installment. And also for

some it’s feasible to pay half yearly and quarterly

Monthly

Quartely

half Yearly

Yearly/Annually

2

4

10

Q. 13. Do you recommend any favorable

mode of paying premium,



recommend payment of premium as monthly.

payment of premium as Quarterly.

respondents recommend payment of premium as Half yearly

recommend payment of premium as yearly

Majority of the respondents f ind monthly mode of premium payment more

feasible than other modes of premium Payment despite they are paying

and many others pay quarterly, half yearly or yearly.


ome find it easy to pay small amount every month while for


some it’s feasible to pay half yearly and quarterly

35

Q. 13. Do you recommend any favorable

mode of paying premium,



47

mode of premium payment more

despite they are paying

and many others pay quarterly, half yearly or yearly.


ome find it easy to pay small amount every month while for


AHMAD’s


54% respondents mentioned’ YES’

24%respondents mentioned ‘NO’

22% respondents mentioned ‘CAN’T SAY’.

Most of the respondents agreed that there should be an online system through

which customers can keep a track of their policy and could easily check their

Policy details and other necessary info

There were few who were indifferent

being that they had no knowledge about such systems

busy schedules where they couldn’t f ind to check all such details online.

And there were very less number of respondents who were not in favors of

such systems Major reason for this being that they were less educated and

had no knowledge about computers.

Thus As 54% customers find

should develop such a system which will help customer to check their details

anywhere at any time and get all necessary information regarding their

policies and also regarding MetLife.

24%

22%

Q.14 Do you wish online



% respondents mentioned’ YES’

ondents mentioned ‘NO’

% respondents mentioned ‘CAN’T SAY’.



Policy details and other necessary information concerning their policies.

There were few who were indifferent. Two main reasons were found

no knowledge about such systems. And other being their


d there were very less number of respondents who were not in favors of


had no knowledge about computers.

% customers f ind the need of such online system,

develop such a system which will help customer to check their details

and get all necessary information regarding their

policies and also regarding MetLife.

54%

22%

Q.14 Do you wish online-system to check the

policy status?



48



rmation concerning their policies.

Two main reasons were found, one

. And other being their


d there were very less number of respondents who were not in favors of


so MetLife

develop such a system which will help customer to check their details

and get all necessary information regarding their

system to check the

Yes

No

Can't Say

AHMAD’s


90% respondents say that they

10% respondents say that they are never

products.

Majority of the respondents say that they are informed by MetLife regarding

their new products. To maintain this facility they ought to

information notices to customers and also

information to customers who visit them or who are in touch with the

will create a feeling among customers that they are being cared and will keep

customers satisf ied which will finally

organization.

010

Yes

No

Q. 15.Does MetLife Inform you about its new



that they are informed by MetLife about new products.

nts say that they are never informed by MetLife


To maintain this facility they ought to

information notices to customers and also their CSO’s should provide such

information to customers who visit them or who are in touch with the


ed which wil l f inally result in the increase in sales/ goal of

2030

4050


Products?



49

about new products.

about new


send such

’s should provide such

information to customers who visit them or who are in touch with them. This


result in the increase in sales/ goal of




50

AHMAD’s


28 respondents said that they would like to recommend MetLife to others

18 respondents said that they would not like to recommend MetLife to others

4 respondents mentioned ‘CANT SAY’.

This question is directly related to the customer satisfaction. Though many

customers were sat isfied to the extent that they wanted to recommend

MetLife to other People they know. But there were also many other customers

who either did not want to recommend it to others or were not sure whether

they will recommend or not. Such a response from customers side

questions/doubts the satisfaction level in customers by MetLife .The main

reason for this being bitter experience of customers with MetLife

Thus MetLife should try its best to satisfy its customers and make customer

their first priority. MetLife should also appoint well t rained CSO”s that’ll

develop confidence in their customers. MetLife should also focus on proper

selling of policies. The customer should not feel that he/she has been

cheated. Thus wrong selling should be avoided. Proper and correct

information should be provided to customers regarding policy.

28

18

4

0

5

10

15

20

25

30

Yes No Some times

Q. 16. Now, Would U like to rcommend

MetLife to others?

AHMAD’s


20% respondents recommend online

24% respondents recommend responsible staff

22% respondents recommend better time Mgt

6% respondents recommend better techniques of customer satisfaction

14% respondents recommend increment in motivational approach

14% respondents recommend not to focus on high targets but t ry to retain the

existing policy holders, since this tech. is low in cost basis and takes the

goodwill of f irm up to the sky.

From this open question, as no option was given to them, was a new

experience to me? I got confronted with the inner opinion of respondents

towards the MetLife.

Thus I can infer from the above result, that if fortune favours MetLife wil l

me the market leader in Kashmir valley in no time, unti l i t focuses on

customer attraction.

22%

6%

14%

14%

Q. No. 17. Any Suggestion?



20% respondents recommend online system

24% respondents recommend responsible staff

ondents recommend better time Mgt. In process of operations


14% respondents recommend increment in motivational approach



goodwill of firm up to the sky.


I got confronted with the inner opinion of respondents

Thus I can infer from the above result, that if fortune favours MetLife will

me the market leader in Kashmir valley in no time, unti l i t focuses on

20%

24%

Q. No. 17. Any Suggestion?

ONLINE SYSTEM NEEDED

RESPONSIBLE/ ACCOUNTABLE

STAFF

TIME MGT. IN PROCESSING

PREMIUM RENEWAL

WORK ON CUSTOMER

SATISFACTION TECH.

INCREASE MOTIVATIONAL

POWER/GOOD WILL OF COMPANY

DON'T FOCUS ON HIGH

TARGET, PROVIDE BEST QUALIT



51

. In process of operations dept.





I got confronted with the inner opinion of respondents

Thus I can infer from the above result, that if fortune favours MetLife wil l

me the market leader in Kashmir valley in no time, until i t focuses on

ONLINE SYSTEM NEEDED

RESPONSIBLE/ ACCOUNTABLE

TIME MGT. IN PROCESSING

PREMIUM RENEWAL

WORK ON CUSTOMER

SATISFACTION TECH.

INCREASE MOTIVATIONAL

POWER/GOOD WILL OF COMPANY

DON'T FOCUS ON HIGH

TARGET, PROVIDE BEST QUALIT



52

AHMAD’s

Special term applicable to all policy holders

If payment of premiums is discontinued:

a) Discontinuance within three years of commencement – If all the

premiums have not been paid for at least three consecutive years from

inception, the insurance cover shall cease immediately. Insurers may give an

opportunity for revival within the period allowed; if the policy is not revived

within that period, surrender value shall be paid at the end of third policy

anniversary or at the end of the period allowed for revival, whichever is

later.

b) Discontinuance after three years of commencement -- At the end

of the period allowed for revival, the contract shall be terminated by paying

the surrender value. The insurer may offer to continue the insurance cover, if

so opted for by the policy holder, levying appropriate charges until the fund

value is not less than one ful l year’s premium. When the fund value reaches

an amount equivalent to one full year’s premium, the contract shall be

terminated by paying the fund value.

AHMAD’s

Chapter



Chapter 5-



53



54

AHMAD’s

Summary

The project work stared with a fruitful discussion with the management of

MetLife at Srinagar, J&K. then a problem was assigned to me that is to work

on the lapsed policies. I with another trainee [Mr. sayeem] worked all

together towards our assigned task and by the grace of Almighty ALLAH we

did our best to accomplish the task. Part icularly J&K branch SKIMS SOURA

and karanagar Sgr. were analyzed. The response from the concerned

Insurance Manager and CSO [Channel sales Officer] was satisfactory. Cases

were taken on regular basis and necessary action was taken to reinstate/ make

them active policies. Almost 10 policies were reinstated and 20 other were

near to be made active. The concerned policy holders were visited personally

and the case was informed them and they too participated at most. Operations

department of MetLife Sgr. Was profoundly ready to help at every step. All

these steps and our sincere efforts were appraised by management as well.

Lastly the company gave me best regards and blessings to succeed in future

period and assure me that you wil l get placement in a reputed corporate due

to my smart work plus hard work also.



55

AHMAD’s

Conclusion

MetLife is exerting every efforts to gain market share but the retention part

is still lacking it is very much driven towards the acquisition of customers as

compare to retaining the existing ones. Customers are dissatisfied by the

nature (quality and value) of service they are getting.

Customers usually complain about the various errors that are being created by

the organization by not providing the policy documents and renewal receipts

on time.

Delivering quality product should be the f irst preference of an organization

towards its customers as quality service is the basic element which frames

f irms quantitative advantage.

Improvement in quality in terms of simplified procedures, personal follow up

of customers, products effectiveness, i ts flexibility and simplicity.

Relationship marketing should be preferred as retention of customers is must.

Expectations of customers should be satisfied to the maximum level so that

both the parties achieve their end.

As observed there is lack of staff , MetLife should recruit personal to lessen

the burden and perform various activit ies effectively.

Thus we can say that by overcoming the loopholes there is very much space

for MetLife to grow to the fullest.



56

AHMAD’s

Recommendations

� Though most of the Marketing is done by J&K Bank but MetLife

should not solely depend on it and should adopt other marketing tools

to capture more and more market.

� Wrong selling should be avoided.

� MetLife should equally concentrate in the retention of existing

customers as well as capturing new ones, as retention of customers

requires low cost.

� MetLife should provide user friendly online system which will help

customers to check their policy details anywhere and at any time and

get all necessary information about their policies and also about

MetLife.

� MetLife should update their customers about their new products and

their CSO’s should also provide such information to customers.

� MetLife should have a proper training Mechanism to train and

Develop CSO.

� MetLife should send periodic Policy details to customers so that they

have a track on their policy.

� MetLife should update its customer information database like

customer address, phone number etc.

� MetLife should try to minimize its policy requirements so that policy

taking becomes easy and less time consuming.

� MetLife should try to personalize its services to some extend like

giving reminders through phone calls, sms’s and emails.



57

AHMAD’s

Annexure



58

AHMAD’s

GLOSSARY

TERMS USED IN INSURANCE & LIFE INSURANCE

INSURER/ASSURER; The insurance company with whom an art icle is

insured is known as insurer. Also known as underwriter, the insurer issues

insurance policies. In life insurance the insurance company is called

ASSURER.

INSURED/ASSURED; The person who obtains insurance policies from an

insurance company is called insured or assured. Every insured party must

possess insurable interest in the subject-matter insured.

PROPOSAL; It ’s the application made by the assured to secure insurance

policy from the insurer. Proposal has to be made on a prescribed form

supplied by the insurance company.

POLICY; Insurance policy is a contract between insurer and insured. It

contains all terms and conditions of the contract as agreed by both parties.

Its a stamped and sealed document issued by the insurance company.

PREMIUM : It is the amount of installments payable by the insured to the

insurance company in consideration for the company’s assurance to

indemnify him against a specific loss.

CLAIM ; It is a demand made by the insured on the insurance company to

compensate him against the loss or damage suffered by him in the event of

materializing of the risk for which insurance cover was obtained.

SURRENDER VALUE ; This is the value which an insurance company

assesses and is prepared to Pay to the assured who desires to surrender his

policy by giving up his rights the policy. Sometimes the policy holder f inds

it impossible to continue pay premiums due to his poor economic conditions

or some other unavoidable circumstances. A policy can be surrendered only

after paying premiums for at least three years



59

AHMAD’s

PAID UP VALUE ; A policy holder who wishes to discontinue his policy and

stops payments of further premiums may get the policy converted into a paid

up value. In such case , the policy holder is entitled to receive the paid up

value of the policy. The amount is payable only on maturity or death of the

policy holder whichever is earlier.

ASSIGNMENT OF POLICY; Assignment of policy means transfer of

property in the policy to the third party It is possible to assign a policy

without assigning the rights to it . Assignment of policy is governed by the

following rules;

(a) Assignment must be made in writing.

(b) The notice of assignment must be given to the insurer. It is essential

to observe these rules to make these assignee’s tit le effective against

insurance company otherwise If the company makes any payment to

the assignor ,without the assignee’s knowledge , the company would

stand protective. The assignment of the policy carries with it the right

to all profits , Bonus etc.

NOMINATION OF POLICY; When a policy holder specifies the name of

the person in the policy with a view to enabling him to get the amount of the

policy in case of his death, its called nomination. The person who is so

entitled to get the amount of the policy is called Nominee. If the policy

matures within the li fe time of assured, the amount is payable to the assured

himself or his nominee as per his own desire .



60

AHMAD’s

QUESTIONNAIRE

Pol icy Holder: ……………………….. Income: ……………………..

Pol icy No: …………………………….. Type of pol icy: ……………..

Mode of Pol icy: ……………………….

1. Who among the fol lowing inf luenced you to join MetLife:-

� Friends/Family

� T.V. Advert isements

� J&K bank

� Hoardings/Bi l l Boards

� Others Specify ………………………………………..

2. You chose MetLife because of i ts:-

� Tax benef it

� Variety of policies

� High returns on your investments

� Aff i l iat ion with J&K Bank

� Better Risk Coverage

3. MetLife makes your investment secure:

� Strongly agree

� Agree

� Can’t say

� Disagree

� Strongly Disagree



61

AHMAD’s

4. Is MetLife staff f r iendly to you:-

� Strongly agree

� Agree

� Can’t say

� Disagree

� Strongly Disagree

5. You pay your premium via:

� Cash

� I t automatical ly gets deducted f rom your account (SIM)

� Cheque

� Others specify ……………………………………………. 6. You get renewal premium notice in t ime:-

� Regularly

� Usually

� Seldom

� Never

7. You receive reminders when you don’t pay your premium on due date:

� Always

� Usually

� Sometimes

� Never

8. Af ter you pay your premium you receive the receipt of your premium

� Always

� Usually

� Sometimes

� Never



62

AHMAD’s

9. In case you don’t receive your premium receipt, you

� Contact your CSO

� Call MetLife tol l f ree no.

� Contact Head off ice

� Others Specify …………………………………………

10. Your pol icy has lapsed

� Once

� Twice

� Many t imes

� Never

11. The pol icy got lapsed because

� I paid premium late

� I got renewal premium reminder not ice late

� I paid on t ime but it was reconci led late.

� Others(Specify)

12. Did you receive any t icket no. or receipt regarding your pol icy

reinstatement?

� Yes

� No

13. Do you recommend any favorable mode of paying premium?

� Monthly

� Quarter ly

� Half year ly

� Yearly



63

AHMAD’s

14. Would you l ike to pay your premium and check your pol icy status on-

l ine?

� Yes

� No

� Can’t Say

15. Does MetLife inform you about i ts new products?

� Yes

� No

16. Would you l ike to recommend MetLife to others?

� Yes

� No

� Can’t Say

17. Any suggestions:

__________________________________________________________

__________________________________________________________.

Note: This quest ionnaire is designed to get ins ights regarding the factors

responsib le for lapsed pol icies of exist ing pol icy Holders of MetLife India

Insurance Co. Pvt. Ltd. This information wil l be kept in security by Ahmad

Mustafa, Student of LPU PUNJAB Reg. No. 10811688.



64

AHMAD’s

Bibliography

• http://www.metl ife .co.in/

• http://www.allbankingsolut ions.com/insuresub3.htm

• http://www.indianmba.com/Occas ional_Papers/OP85/op85.html

• http://ww.smashits.com/video/snoop/12802/indian-insurance-sector-at-

boom.html

• http://business.mapsofindia .com/india- insurance/market.html

• http://www.business-standard.com/india/news/market-sharepsu-players -

in-mf-industry-fal ls/362390/

• http://prasathr.sulekha.com/blog/post/2006/09/insurance-industry- in-

india.htm

• http://www.financia lexpress.com/news/met life-wont-take-tarp-

money/446796/

• http://www.business-standard.com/india/news/met life -strengthens-its-

customer-service-plat form/328282/

• D.R. Cooper P.S. Schindler, Business Research Methods-9 t h edit ion,

Tata McGraw-Hill companies, 2008

• IRDA journal Aug. 2008, vol.-VI, no.8, “lapsation in life

insurance , the No-Win”.

• Ms. Misbah (2008), project work on “customer satisfaction at

MetLife Insurance, Srinagar city”

• Mr. Irfan Ali Zargar (2007) project work on “lapsation of

policies with MetLife’s loopholes”

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the persistency in life insurance industry at MeyLife Srinagar By Ahmad Mustafa

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