IDBI Federal Life Insurance


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IDBI Federal Life Insurance

  1. 1. STUDY OF CUSTOMER RETENTION IN IDBI FEDERAL LIFE INSURANCE CORPORATION LIMITED A Project Report submitted in partial fulfillment of the requirements for the award of the degree of Masters of Business Administration by U.SINDHU 11MBA0108 Under the Guidance of Prof. Sudipto Battacharya PhD VIT Business School fostering innovation JULY 2012 1
  2. 2. CERTIFICATE This is to certify that Institutional Training Report submitted by Ms.U.sindhu, Reg. No.11MBA0108 to VIT Business School, VIT University, Vellore in partial fulfillment of therequirements for the degree of Master of Business Administration is a bonafide record of workcarried out by her under my supervision. The contents of this report, in full or in parts have notbeen submitted in any form to any other institute or university for the award of any degree ordiploma Faculty Guide Programme ManagerInternal Examiner External Examiner 2
  3. 3. DeclarationI, Sindhu.U (11MBA0108), a Bonafide student of the VIT Business School, VIT University,Vellore, hereby declare that the Institutional Training Report submitted in partial fulfillment ofthe requirements of the Degree of Master of Business Administration of the VIT University, is myoriginal work..Date:Place: Vellore Sindhu.U 3
  4. 4. ACKNOWLEDGEMENTI express my sincere thanks to the Chancellor, Dr. G. Vishwanathan for providing me withadequate infrastructure and a congenial academic environment.I wish to express my thanks to the Vice Chancellor, Dr. V. Raju, for his patronage.I am grateful to the Programme Manager of VIT Business School, Dr. Bhanu Sree Reddy, forencouraging and providing me with the necessary assistance in accomplishing the project.I am also thankful to my guides, Dr. Sudipto Bhattacharya PhD, VIT Business School andMrs.Shanthi Yagyanath , IDBI Federal Life Insurance Corporation Limited, whose timelyguidance and persistent encouragement helped me in completing the project successfully andmaking it a wonderful learning experience.I convey my sincere thanks to all the teaching and non-teaching staff of the business school fortheir support and co-operation during the project.Finally I thank my parents and colleagues who have helped me in the successful completion ofthe project. (SINDHU.U) 4
  5. 5. CONTENTSS.NO TITLE PAGE NO List of Tables and Charts 2 1 Introduction 4 2 Review of Literature 8 3 Company Profile 17 4 Research Methodology 27 5 Analysis and Interpretation 29 6 Findings 51 7 Recommendation 53 8 Conclusion 55 9 Appendix 57 10 Bibliography 62 5
  6. 6. LIST OF TABLES AND CHARTSS.NO TITLE PAGE NO 1 Decision Criteria for Univariate Analysis 30 2 Age Distribution 31 3 Gender 32 4 Marital Status 33 5 Education Qualification 34 6 Occupation 35 7 Income 36 8 Service Satisfaction 37 9 Concern Solvation 38 10 Benefit Satisfaction 39 11 Courteous Service 40 12 Quick Call 41 6
  7. 7. 13 Knowledge Representative 4214 Highest Benefits 4315 Policy & Procedure Understanding 4416 Easy Payment Mode 4517 Long Relationship 4618 Recommend IDBI 4719 Friends Insisted 4820 Another Policy in IDBI 4921 Overall Mean & Stranded Deviation Value 50 7
  8. 8. 1. INTRODUCTION 8
  9. 9. IMPORTANCE OF THE STUDY Customer satisfaction and customer retention are two of the most important factorsregarding the long term success of a company. These factors are known to be a huge influencingfactor in relation to the economic success of a company. Customer retention is one of the most important factors of profit growth. Its so importantbecause it costs so much to influence customers to buy and so little to induce a repurchase. Theseare the benefits of customer retention: i. New customers cost more than keeping existing ones. Help executives make the most of existing relationships by helping their customers make repeat purchases. Existing customers have made an emotional commitment that required a large investment of time to earn. ii. Company already knows how to do business with existing customer. An executive doesnt have to invest additional resources training to do business with the existing customer. This saves time and allows them to serve existing customers faster. iii. Satisfied customers are already convinced of value. They have already proven they can serve the customer, and have provided proof. Executives dont have to invest the resources necessary to start from scratch again. iv. Strengthening of the unique selling propositionSTATEMENT OF PROBLEM IDBI Federal life insurance co ltd is a joint venture company between three financialcompanies IDBI Bank, federal Bank and European Insurer Ageas. With effective utilization ofdigital marketing tools IDBI federal life insurance are able to reach potential customers. IDBI in-house technology for customer inquiries and query resolution are deeply entrenched in terms ofprocesses and call to action with respective customer. Though such technologies for the customer retention are prevailed there are somedrawbacks in it. Premium collection of the insurance company fell down by 34% during April –December 2011.I wanted to know the relinquishment level of IDBI federal life insurancecorporation limited and the ways that could make the customer retain. 9
  10. 10. OBJECTIVES OF THE PROJECT 1. To identify the present situation of IDBI Federal Life Insurance 2. To identify the ways to retain the customerSCOPE OF THE PROJECT Successful companies are constantly working in the field of customer retention, becausewithout customer retention it isn’t and wasn’t possible to be successful in the long term.Currently many companies are facing an aggressive battle regarding customer retention. Thisstudy will help IDBI to know the relinquishment level and how to retain the customers.PERIOD OF THE STUDY The Period of Study is 6 weeks.COLLECTION OF DATA Two types of data are collected: Primary and secondary dataPrimary data The data are collected by the questionnaire method. The questionnaire consists of anumber of questions interviewed to the customers for their response. Interview: Telephonic InterviewSecondary data Secondary data is the data that have been already collected by and readily available fromother source. The secondary data for this study are already available in the firms enrolledfeedback, journals, books, newspapers and other related report - policy book, MagazineSAMPLE DESIGN The research will be carried out among the customers of IDBI federal life insurance. Andsample will be around 100. 10
  11. 11. LIMITATIONS OF THE STUDY Although there were very few limitations to enlist but every research work carried out hasto face some limitations. i. It is planned to collect 200 responses from the company .Due to some restrictions only 100 responses are collected. ii. The survey conducted was more objective and completely based on the views of the respondent. iii. Survey was conducted among customers of Coimbatore branch only so the result may not be accurate. 11
  12. 12. 2. REVIEW OF LITERATURE 12
  13. 13. INTRODUCTION A literature review discusses published information in a particular subject area, andsometimes information in a particular subject area within a certain time period. A literaturereview can be just a simple summary of the sources, but it usually has an organizationalpattern and combines both summary and synthesis. A summary is a recap of theimportant information of the source, but a synthesis is a re-organization, or a reshuffling, of thatinformation. It might give a new interpretation of old material or combine new with oldinterpretations. Or it might trace the intellectual progression of the field, including major debates.And depending on the situation; the literature view may evaluate the sources and advice thereader on the pertinent or relevant. This chapter began with retention, measuring retention,importance of customer retention, advantage of customer retention, benefits of customerretention.CUSTOMER RETENTION In today’s challenging economy and competitive business world, retaining their customerbase is critical to organization success. If the company doesn’t give their customer some goodreason to stay, organization’s competitors will give the customer a reason to leave. Customerretention and customer satisfaction drive profits. It’s far less expensive to cultivate organizationexisting customer base and sell more service to the customer than it to seek new, single-transaction customers. Most surveys across industries shows that keeping one existing customeris five to seven times more profitable than attracting one new customer. A customer-focusedapproach among its employees is still not present. In this era of intense competition .it is veryimportant for any service company to understand that merely acquiring customer is not sufficientbecause there is a direct link between customer retention over time and profitability & growth.Customer retention to a great extent depends on service quality and customersatisfaction. Complaints are natural part of any service activity as mistakes are an unavoidablefeature of all human endeavor and thus also of service recovery. Service recovery is the processof putting things right after something goes wrong in the service delivery. Customer retention isthe maintenance of continuous trading relationships with customers over the long term.Customer retention is the mirror image of customer defection or chum. 13
  14. 14. High retention is equivalent to low defection. In an industry where there are a multiplepurchases over the years, organization’s entire team should be very focused on retaining thosecustomers: i. Delivering service that’s consistent with your value proposition and brand ii. Cross-selling, up-selling and asking for referrals from existing customers iii. Developing programs to increase customer loyalty and decrease turnover iv. Prioritizing retention as a major focus in your annual marketing plan. v. Knowing the lifetime value for different segments and using that data to improve the marketing. Studies say it costs ten times more to generate a new customer than to maintain anexisting one. If organization has a small number of customers, losing a few could cripplecompany. Even if there are a large number of customers, a small increase in the rate shoulddramatically increase profits. The maintenance of the patronage of people who have purchased a company’s goods orservices once and the gaining of repeat purchases. Customer retention occurs when a customer isloyal to a company, brand, or to a specific product or service, expressing long-term commitmentand refusing to purchase from competitors. Of critical importance to such strategies are the widerconcepts of customer service, customer relations, and relationship marketing. Companies canbuild loyalty and retention through the use of a number of techniques, including databasemarketing, the issue of loyalty cards, redeemable against a variety of goods or service,preferential discounts, free gifts, special promotions, newsletters or magazines, members’ clubsor customized products in limited editions. It has been argued that customer retention is linked toemployee loyalty, since loyal employees build up long-term relationships with customers.Customer retention has always been an important topic for the marketing. For sure, theadvantages of loyal clients are obvious. Often CRM is only implementing new systems for datamining and client segmentation or operational system like a complaint management. But thething is: data mining system or client clubs are not the basis. They are the cherry of the cakecalled client retention. A key principle of relationship marketing is the retention of customersthrough varying means and practices to ensure repeated trade from preexisting customers bysatisfying requirements above those of competing companies through a mutually beneficialrelationship. 14
  15. 15. This techniques is now used as a means of counter balancing new customer andopportunities with current and existing customers as a means of maximizing profit andcounteracting the “leaky bucket theory of business” in which new customer gained in orderdirect marketing oriented businesses were at the expense of or coincided with the loss of oldercustomers. This process of "churning" is less economically viable than retaining all or themajority of customers using both direct and relationship management as lead generationvia new customers requires more investment. Many companies in competing markets will redirect or allocate large amounts of resourcesor attention towards customer retention as in markets with increasing competition it may cost 5times more to attract new customers than it would to retain current customers, as direct or"offensive" marketing requires much more extensive resources to cause defection fromcompetitors. However, it is suggested that because of the extensive classic marketing theoriescenter on means of attracting customer and creating transactions rather than maintaining them,the majority usage of direct marketing used in the past is now gradually being used morealongside relationship marketing as its importance becomes more recognizable. According toBuchanan and Gilles the increased profitability associated with customer retention efforts occursbecause of several factors that occur once a relationship has been established with acustomer. i. The cost of acquisition occurs only at the beginning of the relationship, so the longer the relationship, the lower the amortized cost. ii. Account maintenance costs decline as a percentage of total costs or as a percentage of revenue.iii. Long-term customers tend to be less inclined to switch, and also tend to be fewer prices sensitive. This can result in stable unit sales volume and increase in dollar-sales volume. iv. Long-term customer may initiate free word of mouth promotions and referrals. v. Long-term customers are more likely to purchase ancillary products and high margin supplemental products. vi. Customer that stay with company tend to be satisfied with the relationship and are less likely to switch to competitors, making it difficult for competitors to enter the market or gain market share. 15
  16. 16. IMPORTANCE OF CUSTOMER RETENTION There are a number of reasons for this. To begin with, to acquire a customer a companyincurs promotional costs like advertising, sales promotion etc. It is said that it costs five timesmore to attract a new customer than retaining one. The operating cost decrease when a customerstays. Service being rich in experience and credence qualities, it takes some time for customersto get accustomed to it and once they are used to the service and are satisfied with the serviceprovider, they tend to purchase more over a period of time. As they remain satisfied with aservice provider, they spread a positive word of mouth, which is very effective in case of servicefor attracting new customers. Longer the customer stays with an organization, more theorganization knows about him, which enables it to offer a customized service which makes itdifficult for the customer to defect. This may even provide opportunities to the organization tocharge price premium by offering individualized service which may be difficult for thecompetitors to offer. Considering the importance of retaining customers in service business,Reichheld & Sasser coined a term ‘Zero Defection’. They highlighted that companies can boostprofits by almost 100% by retaining just 5% more of their customers. Further, it is also veryimportant to understand the life time value of a customer. Further, if by a positive word ofmouth, he brings just one more customer to the organization, his value to the organizationdoubles. Therefore, it is important for all the employees in the organization to understand the lifetime value of their customers.ADVANTAGES OF CUSTOMER RETENTIONPOSSIBILITY OF REPEAT BUSINESS This is probably the most obvious advantage of customer retention. Effective servicesthat lead to customer satisfaction will make customer coming back to again, thus giving repeatbusiness. Repeat business is a win-win proposition for the business or service and the customer.The business reduces the cost of customer acquisition, while the customer reduces the cost offinding a reliable vendor and thus also saves on costs associated with switching vendors. 16
  17. 17. REDUCED COSTS FOR CUSTOMER ACQUISITION Acquiring a customer has certain associated costs. These include the costs associatedwith advertising, following up, sales demos, travel and meeting cost etc. having a repeatcustomer means that the customer means that the customer is already aware of your processesand can predict certain quality of output, thus minimizing the cost involved in new customeracquisition. Having a repeat customer also has the potential to open up another channel toadvertise your business – word of mouth. Word of mouth advertising / recommendations areperhaps the most important outcome of having a satisfied customer.FOSTERING GREATER INTERACTION BETWEEN BUSINESSAND CUSTOMER Today’s markets are increasingly moving away from mass produced standard productsand service, towards a more customized market, where products and service are tailored to meetcustomers’ specific requirements. Having a repeat customer is an opportunity for you to build amore focused relationship based on your customers’ specific needs and requirements. Beingensured of having a customer who comes back, you have more confidence to suggestimprovements, provide an insight to better understand their needs and consequently designproducts and services that are relevant. Having a repeat business also provides an opportunity forthe buyer and the seller to co-create products and services.HAVING MORE DELIGHTED CUSTOMERS Effective customer retention strategies allow you to move from the zone ofcustomer satisfaction to customer delight. Studies have shown that customer delight is achievedonly when there is a perfect synergy between the buyer needs and the buyer understands what theseller can deliver exactly what the customer need. If you are able to deliver your customers, youhave better chance of them coming back to you, since they now know why you are different fromthe rest of competition. 17
  18. 18. CUSTOMER RETENTION: STATISTICS i. Acquiring new customer can cost five times more than satisfying and retaining current customers. (Source: ii. 2% increase in customer retention has same effect on profits as cutting costs by 10%. (Source: retention-acquisition/489/) iii. The average company losses 10% of its customer each year.(Source: http:/ iv. 5% reduction in the customer defection rate can increase profits by 25-125%, depending on the industries. (Source: v. The customer profitability rate tends to increase over the life of a retained customer.(Source: http:/ vi. Companies can boost profits anywhere from 25 to 125% by retaining merely5% more existing customers. (Source: 2012)vii. Only one out of 25 dissatisfied customers will express dissatisfaction. (Source: acquisition/489/)viii. Happy customer tells 4 to 5 others of their positive experience. Dissatisfied customers tell 9 to 12 how bad it was. ( Source: statistics-2012) ix. Two-thirds of customers do not feel valued by those serving them. (Source: 18
  19. 19. MEASURING CUSTOMER RETENTION Retention rate is normally calculated as the number of customers who have been lost overa period of time, usually calculated over a quarterly or annual period. The key is to calculate thepercentage versus existing customers, and not underestimate the loss rate by tallying newcustomer acquisitions into the mix. The customer retention rate refers to the number of customerlost over a period of time. It is normally calculated by the percentage of lost customer versusexisting customers over a quarterly or annual period, without tallying new customer acquisitions.While there are obvious benefits to keeping customers loyal and maintaining retention rates, itcan be extremely challenging for management to keep retention rates up. Some companies can measure retention rate using their CRM system, since any of thevendors with solid sales modules should offer this capability. Customer service expert LoriBocklund recommends that companies look for this functionality when evaluating CRMsolutions, even though it is unlikely to be the differentiating factor. Companies like witness,Performix, AIM, and Merced offer these types of tools. To measure this, some companiescombines data from the CRM system and data from other systems, such as your systems, such asyour quality monitoring system, ACD or CTI solution handling contact routing and reporting.There are no hard and fast rules on calculating customer defection and customer retention,according to Lowenstein. It can depend on the industries or the type of business, since companieshave long-term arrangements with customers. However, several consulting and database management companies have succeeded increating them. However, the appropriate interval over which retention rate should be measured isnot always one year. Rather, it depends on the customer repurchase cycle. Car insurance andmagazine subscriptions are bought on an annual basis. Carpet tiles and hi-fis are not. If thenormal hi-fi replacement cycle is four years, then retention rate is more meaningful if it ismeasured over four years instead of twelve months. Additional complexity is added whencompanies a sell a range of products and services, each with different repurchase cycles.Automobile dealers might sell cars, parts, fuel and service to a single customer. These productshave different repurchase cycles which make it very difficult for the dealer to have a whole ofcustomer perspective on retention. Sometimes companies are not clear about whether anindividual customer has defected. This is because of the location of customer related data, whichmight be retained in product silos, channel silos or functional silos. 19
  20. 20. TYPE OF CUSTOMER RETENTION RATERAW CUSTOMER RETENTION RATE This is the number of customer doing business with a firm at the end of a trading period,expressed as percentage of those who were active customer at the beginning of the period.SALES-ADJUSTED RETENTION RATE: This is the value of sales achieved from the retained customers, expressed as a percentageof the sales achieved from all customers who were active at the beginning of the period.PROFIT-ADJUSTED RETENTION RATE: This is the profit earned from the retained customers, expressed as a percentage of theprofit earned from all customers who were active at the beginning of the period. 20
  21. 21. 3. COMPANY PROFILE 21
  22. 22. THE INSURANCE INDUSTRY: The insurance sector has gone through a number of phases and changes. Insurance inIndia used to be tightly regulated and monopolized by state-run insurers. Following the movetowards economic reform in the early 1990s, various plans to revamp the sector finally resultedin the passage of the Insurance Regulatory and Development Authority (IRDA) Act of 1999.Significantly, the insurance business was opened on two fronts. Firstly, domestic private-sectorcompanies were permitted to enter both life and non-life insurance business. Secondly, foreigncompanies were allowed to participate, albeit with a cap on shareholding at 26%. With theintroduction of the 1999 IRDA Act, the insurance sector joined a set of other economic sectorson the growth march. During the 2003 financial year, life insurance premiums increased by an estimated 12.3%in real terms to INR 650 billion (USD 14 billion) while non-life insurance premiums rose 12.2%to INR 178 billion (USD 3.8 billion). Growth in insurance premiums has been averaging at11.3% in real terms over the last decade. There are strong arguments in favor of sustained rapidinsurance business growth in the coming years, including India’s robust economic growthprospects and the nation’s high savings rates.COMPANY PROFILEIDBI FEDERAL LIFE INSURANCE CO. LTD.: IDBI Fortis Life Insurance Co. Ltd., is a joint venture between three financialcompanies–Development and Commercial Bank, IDBI Bank, India’s private sectorBank, Federal Bank and European insurer Ageas (formerly Fortis). IDBI Fortis Life Insurance Co. Ltd. was formed on March 2008. In this venture, IDBIBank owns 48% equity while Federal Bank and Ageas own 26% equity each. The Headquartersis located in Mumbai, India. IDBI Bank Ltd. continues to be, since its inception, India’s premier industrialdevelopment bank. Created in 1956 to support India’s industrial backbone, IDBI Bank has sinceevolved into a powerhouse of industrial and retail finance. 22
  23. 23. Today, it is amongst India’s foremost commercial banks, with a wide range of innovativeproducts and services, serving retail and corporate customers in all corners of the country from720 branches and 1228 ATMs. The Bank offers its customers an extensive range of diversified services including projectfinancing, term lending, working capital facilities, lease finance, venture capital, loansyndication, corporate advisory services and legal and technical advisory services to its corporateclients as well as mortgages and personal loans to its retail clients. As part of its development activities, IDBI Bank has been instrumental in sponsoring thedevelopment of key institutions involved in India’s financial sector – such as the Securities andExchange Board of India (SEBI), National Stock Exchange of India Limited (NSE) and NationalSecurities Depository Ltd. Federal Bank is one of India’s leading private sector banks, with a dominant presence inthe state of Kerala. It has a strong network of 708 branches and 749 ATMs spread across India.The bank provides over four million retail customers with a wide variety of financial products.Federal Bank is one of the first large Indian banks to have an entirely automated andinterconnected branch network. In addition to interconnected branches and ATMs, the Bank has a wide range of serviceslike Internet Banking, Mobile Banking, Tele Banking, and Any Where Banking, debit cards,online bill payment and call center facilities to offer round the clock banking convenience to itscustomers. The Bank has been a pioneer in providing innovative technological solutions to itscustomers and the Bank has won several awards and recommendations. Fortis is an international insurance group composed of AG Insurance, the overall marketleader in life and non-life insurance in Belgium, distributing its insurance products through thenetwork of BNP Paribas Fortis Bank and independent insurance brokers, and Fortis InsuranceInternational with subsidiaries in the UK, France, Hong Kong, Luxembourg (Non-life),Germany, Turkey, Russia and Ukraine, and joint ventures in Luxembourg (Life), Portugal,China, Malaysia, Thailand and India. 23
  24. 24. VISION AND VALUESVISION To be the leading provider of wealth management, protection and retirement solutionsthat meets the needs of our customers and adds value to their lives.MISSION To continually strive to enhance customer experience through innovative productofferings, dedicated relationship management and superior service delivery while striving tointeract with our customers in the most convenient and cost effective manner. To be transparentin the way we deal with our customers and to act with integrity. To invest in and build qualityhuman capital in order to achieve our mission.VALUESTransparency: Crystal Clear communication to our partners and Stakeholders.Value to Customers: A product and service offering in which customers perceive value.Rock Solid and Delivery on Promise: This translates into being financially strong,operationally robust and having clarity in claims.Customer-friendly: Advice and support in working with customers and partners.Profit to Stakeholders: Balance the interests of customers, partners, employees, shareholdersand the community at large.EXCELLENCE "In every aspect of work ranging from the in-house training institute to the detailedPersonal Insurance Plan. IDBI Fortis is focused on achieving the highest standards of quality inevery aspect of their business". 24
  25. 25. HONESTY "Is the heart of the Life Insurance business? IDBI Fortis believes that above all, LifeInsurance is based on trust. Transparency, Dependability and Integrity will form the cornerstonesof the IDBI Fortis experience."KNOWLEDGE "Is what makes experts. IDBI Fortis is focused on the Life Insurance business. Perfectlycombining global expertise with local knowledge, IDBI Fortis is the Indian Life Insurancespecialist."CARING "For the customer IDBI Fortis is redefining the Life Insurance paradigm to focus on theneeds of the customers. The IDBI Fortis service process is responsive, personalized, humane andempathetic."CULTURE Our "in house culture recipe" has some of the finest ingredients going into its making.Some of the more prominent aspects of our culture are stated below: i. Customer comes first ii. Do it right the first time iii. Bias for result oriented action iv. Financial strength and discipline v. Clarity of purpose vi. International quality standards vii. Inclusive Meritocracy viii. learning opportunities ix. Fun at work x. Commitment to published value system 25
  26. 26. TECHNOLOGY To monitor and manage its network equipment across 34 sites, IDBI Fortis uses TulipProactive Managed CE solution. The solution includes device management, proactivetroubleshooting and notification support. With the implementation of the solution, IDBI hasreported improvement of network performance and availability, with a faster, more effectivechange and configuration management.PRODUCTS IDBI Fortis launched its first set of products across India in March 2008, after receivingthe requisite approvals from the Insurance Regulatory and Development Authority (IRDA). IDBIFortis offers services through a nationwide network across the branches of IDBI Bank andFederal Bank in addition to a network of advisors and partners. IDBI Fortis has 35 branchesacross the country.SPONSORSHIPS, AWARDS IDBI Fortis Life Insurance Company was selected as the title sponsor for the India-SriLanka Cricket Series. This was followed by the IDBI Fortis Wealthsurance Twenty20.‘Wealthsurance Made Easy’ (WME), a knowledge aid by IDBI Fortis for its sales force, wonThe Bronze Dragon in the category for ‘Best Dealer/Sales Force activity’ at the PromotionMarketing Awards of Asia (PMAA). 26
  27. 27. ORGANIZATIONAL STRUCTURE SALES ORGANIZATIONAL STRUCTURE G.V NAGESHVAR RAO (MD & CEO) MURLIIYER (country Head sales) North South East West Zonal Head Zonal Head Zonal Head Zonal Head Area Bank Area Bank Area Bank Area Bankagency assurance agency assurance agency assurance agency assurance head head head head head head head head Manager Manager Manager Managerdistribution distribution distribution distribution deputy deputy deputy deputychief senior chief senior chief senior chief senior Corporate Corporate Corporate Corporate head head head head Distributer Distributer Distributer Distributer & trainees & trainees & trainees & trainees & agencies & agencies & agencies & agencies 27
  28. 28. HUMAN RESOURCE ORGANIZATIONAL STRUCTURE G.V NAGESHVAR RAO (MD &CEO) MURLIYER (Country Head Sales) MALLIKA SARASWATH (Human Resource Head) Service Department Pay Roll Recruitment Senior Manager Chief Manager Assistant Manager There are no Zonal Heads in the Human Resource Department the area Human Resourceexecutive only acts as the Human Resource Manager and reports all the activities to the HeadOffice that is in MUMBAI. 28
  29. 29. OPERATIONS ORGANIZATIONAL STRUCTURE G.V NAGESHVAR RAO (MD &CEO) MURLIYER (Country Head Sales)MARKET & UNDERWRITING FINIANCE PRODUCTPROMOTION DEPARTMENT DEPARTMENT DEPARTMENTDEPARTMENT ANIL SHRIVATSAV North Zonal South Zonal Support Manager Support Manager East Zonal West Zonal Support Manager Support Manager The Zonal Managers are supported by Branch Support Executives and the Operations department is present only in the Head Office which is in MUMBAI. 29
  30. 30. PRODUCT PROFILE:WEALTHSURANCE: The Wealthsurance Milestone Plan enables the policyholder to save andbuild wealth to meet their financial goals. This Plan comes with a wide range of 13 investmentoptions and 7 insurance benefits - all packaged with a low charge structure and unmatchedflexibility.HOMESURANCE: IDBI Federal Homesurance Protection Plan provides full insurance coverfor properties even under construction, thus ensuring that the beneficiary gets the full sanctionedamount in case of any unfortunate event. It also has an innovative fixed period cover for thosewho would aim to prepay their loans early.BONDSURANCE: Bondsurance is designed for customers looking for guaranteed returns whichwill not get affected by financial market conditions. It offers guaranteed return on investmentalong with life insurance cover.MICROSURANCE: IDBI Federal Microsurance Plan is a one of its kind insurance plan whichcan be very useful for various Micro Financial Institutions and NGOs, wherein not only themembers but even the member’s family gets an insurance cover.TERMSURANCE: IDBI Federal Termsurance Protection Plan offers the unique IncreasingCover option that automatically increases the cover every year without increasing the premium.INCOMESURANCE: Knowing the customer helped us to combine the Endowment & MoneyBack plans into a single plan. It linked the returns to the G-Sec rates, transparently declared bythe government. Also, the Guaranteed Annual Payout and other benefits upon death are tax-freeunder Sec 10(10D). 30
  32. 32. INTRODUCTION The system of collecting data for research projects is known as research methodology.The data may be collected for either theoretical or practical research for example managementresearch may be strategically conceptualized along with operational planning methods andchange management. Research methodology is to describe how to gather information (method)this can be survey interview, litterateur review etc. And then explain each method what are they,what are the method. Some important factors in research methodology of measure most of yourwork is finished by the time you finish the analysis of data. Formulation of research questionsalong with sampling weather probable or non-probable is followed by measurement that includessurveys and scaling. This is followed by research design, which may be either experimental orquasi-experimental. Methodology includes a philosophically coherent collection of theories,concepts or ideas as they relate to a particular discipline or field of inquiry.METHOD OF DATA PRESENTATION Any research finally leads to a result, which would be analyzed, from the data that havebeen received by the researcher. Data analysis is meant to be the most sensitive part of anyresearch work. On achieving this various methods can be adopted there are three differentmethods using for data analysis such as univariate statistic. The univariate analysis consist of mean, standard deviation, percentage etc. although themean most commonly seen representation of central tendency and the stranded deviation takesinto account each observation’s distance from the mean. The obtained data were presentedthrough table based on the percentage of the respondents and were analysis through spread sheetunder the univariate measures such as mean, standard deviation. 32
  34. 34. METHOD OF DATA EVALUATION After the data analysis, it must be evaluate to get the decision. Here the decision rule willbe applied that is univariate measure calculated to the decision. The liker’s scale is given 1-3 toeach statement in the questionnaires.Based on the value indicated in the questionnaire, the average value for each factor is considered.The mean value lies between 1-3 which follows.1) Agree2) Neutral3) Disagree 1 2 3Further three types of degree of consideration that can be derived regarding differentiationvariables are show in the following table Decision Criteria for Univariate Analysis Range Decision Attribute 1<X=2.5 Low Level Relinquishment 2.5<X=3.5 Moderate Level Relinquishment 3.5<X<=5.0 High Level RelinquishmentPERSONAL INFORMATION The research is to identify the customer retention in IDBI federal insurance Co limited inCoimbatore branch. Retaining the customer is based on the customer satisfaction. Age, sex, civilstatus, education level, occupation, income also decide the satisfaction. 34
  35. 35. AGE DISTRIBUTION Age distribution pattern of the customer in Coimbatore branch it’s represented by thesample 100. Age distribution class was categories in to three classes.63% of customerrepresented the age categories of 18-35 years. 5% of customer represented the age categories of36-50 years. 32% of customer represented the age categories of over 50 years. Age Distribution Frequency Percentage 18-35 Years 63 63% 36-50years 5 5% Over 50 Years 32 32% Total 100 100% Age Distribution 70 60 50 40 30 20 10 0 18 - 35 36 - 50 above 50 35
  36. 36. GENDER In this research the factor of gender represent 76% of sample male & 24% of samplesfemale. Gender Frequency Percentage Male 76 76% Female 24 24% Total 100 100% Gender 80 70 60 50 40 30 20 10 0 Male Female 36
  37. 37. MARITAL STATUS Out of 100 samples, 77% samples were unmarried and 23% of samples were married. Marital status Frequency Percentage Unmarried 77 77% Married 23 23% Total 100 100% Marital status908070605040302010 0 Unmarried Married 37
  38. 38. EDUCATION QUALIFICATION 33% of samples were found in the category of UG degree holder. 58% of samples werefound in the category of PG degree holder. 19% of samples were found in the category of otheror none. Education Qualification Frequency Percentage UG degree holder 33 33% PG degree holder 58 58% Other or none 19 19% Total 100 100% Education Qualification 70 60 50 40 30 20 10 0 UG Degree Holder PG Degree Holder Other or None 38
  39. 39. OCCUPATION 64% of samples were found in the category of professional. 10% of samples were foundin the category of clerical. 26% of samples were found in the category of unskilled workers. Occupation Frequency Percentage Professional 64 64% Teacher 0 0% Clerical 10 10% Unskilled workers 26 26% Total 100 100% Occupation 70 60 50 40 30 20 10 0 Professional Teacher Clerical Unskilled workers 39
  40. 40. INCOME Income was categories in to four classes. 5% customer represents the income Rs 10000-20000.12% customer represents the income Rs 20000-30000. 83% customer represents theincome above Rs 300000. Income range (per month) Frequency Percentage Rs 10000-20000 5 5% Rs 20001-30000 12 12% Above Rs 300000 83 83% Total 100 100% Income 14 12 10 8 6 4 2 0 10000 - 20000 20001 - 30000 Above 30000 40
  41. 41. RESEARCH INFORMATION The data collected from 100 customers who were statement in order to evaluate. Themean and standard deviation are calculated to evaluate the research details. Mean = Σfx / Σf Standard deviation = (Σfx^2 / Σf)-(Σfx / Σf) ^2EVALUATED RESEARCH DATA7. In thinking about the recent experience with IDBI Federal life insurance, rate the satisfactionwith the customer service received by you? Frequency PercentageAgree 78 78%Neutral 0 0%Disagree 22 22% Total 100 100% Service Satisfaction 100 80 60 40 20 0 Agree Neutral Disagree X f fx x^2 fx^2Agree 1 78 78 1 78Neutral 2 0 0 4 0Disagree 3 22 66 9 198 100 144 276Mean = 1.44Standard deviation = 0.69 41
  42. 42. 8. The process for getting your concerns resolved is fast? Frequency PercentageAgree 83 83%Neutral 0 0%Disagree 17 17% Total 100 100% Concern Solvation 90 80 70 60 50 40 30 20 10 0 Agree Neutral Disagree X f fx x^2 fx^2Agree 1 83 83 1 83Neutral 2 0 0 4 0Disagree 3 17 51 9 153 100 134 236Mean = 1.34Standard deviation = 0.56 42
  43. 43. 9. Please think about the features and the benefits of the insurance you took. Are you satisfiedwith the insurance? Frequency PercentageAgree 32 32%Neutral 45 45%Disagree 23 23% Total 100 100% Benefit Satisfaction 50 45 40 35 30 25 20 15 10 5 0 Agree Neutral Disagree X f fx x^2 fx^2Agree 1 32 32 1 32Neutral 2 45 90 4 180Disagree 3 23 69 9 207 100 191 419Mean = 1.91Standard deviation = 0.54 43
  44. 44. 10. a. The customer service representative was very courteous Frequency PercentageAgree 53 53%Neutral 17 17%Disagree 30 30% Total 100 100% Courteous Service 60 50 40 30 20 10 0 Agree Neutral Disagree X f fx x^2 fx^2Agree 1 53 53 1 53Neutral 2 17 34 4 68Disagree 3 30 90 9 270 100 177 391Mean = 1.77Standard deviation = 0.78 44
  45. 45. b. The customer service representative handled your call quickly Frequency PercentageAgree 56 56%Neutral 5 5%Disagree 39 39% Total 100 100% Quick Call 60 50 40 30 20 10 0 Agree Neutral Disagree X f fx x^2 fx^2Agree 1 56 56 1 56Neutral 2 5 10 4 20Disagree 3 39 117 9 315 100 183 391Mean = 1.83Standard deviation = 0.56 45
  46. 46. c. The customer service representative was knowledgeable Frequency PercentageAgree 68 68%Neutral 12 12%Disagree 20 20% Total 100 100% Knowledge Representative 80 70 60 50 40 30 20 10 0 Agree Neutral Disagree X f fx x^2 fx^2Agree 1 68 68 1 68Neutral 2 12 24 4 48Disagree 3 20 60 9 180 100 152 296Mean = 1.52Standard deviation = 0.65 46
  47. 47. 11. The policy plans of IDBI Federal Company provide highest benefits for you? Frequency PercentageAgree 80 80%Neutral 15 15%Disagree 5 5% Total 100 100% Highest Benifits 90 80 70 60 50 40 30 20 10 0 Agree Neutral Disagree X f fx x^2 fx^2Agree 1 80 80 1 80Neutral 2 15 30 4 60Disagree 3 5 15 9 45 100 125 185Mean = 1.25Standard deviation = 0.25 47
  48. 48. 12. The insurance plans policy and procedure of IDBI insurance company are understandableeasily? Frequency PercentageAgree 100 100%Neutral 0 0%Disagree 0 0% Total 100 100% Policy & Procedures Understandability 120 100 80 60 40 20 0 Agree Neutral Disagree X f fx x^2 fx^2Agree 1 100 100 1 100Neutral 2 0 0 4 0Disagree 3 0 0 9 0 100 100 100Mean = 1Standard deviation = 0 48
  49. 49. 13. Is the premium payment mode of IDBI federal insurance is easy? Frequency PercentageAgree 100 100%Neutral 0 0%Disagree 0 0% Total 100 100% Easy Payment Mode 120 100 80 60 40 20 0 Agree Neutral Disagree X f fx x^2 fx^2Agree 1 100 100 1 100Neutral 2 0 0 4 0Disagree 3 0 0 9 0 100 100 100Mean = 1Standard deviation = 0 49
  50. 50. 14. Do you like to have a long term relation with IDBI insurance company? Frequency PercentageAgree 34 34%Neutral 24 24%Disagree 42 42% Total 100 100% Long Relationship 45 40 35 30 25 20 15 10 5 0 Agree Neutral Disagree X f fx x^2 fx^2Agree 1 34 34 1 34Neutral 2 24 48 4 96Disagree 3 42 126 9 378 100 208 508Mean = 2.08Standard deviation = 0.73 50
  51. 51. 15. Do you recommend IDBI Insurance Company to your friends? Frequency PercentageAgree 43 43%Neutral 52 52%Disagree 31 31% Total 100 100% Recommend IDBI 60 50 40 30 20 10 0 Agree Neutral Disagree X f fx x^2 fx^2Agree 1 43 43 1 43Neutral 2 26 52 4 104Disagree 3 31 93 9 279 100 188 426Mean = 1.88Standard deviation = 0.73 51
  52. 52. 16. You insure in IDBI because friends insisted? Frequency PercentageAgree 68 68%Neutral 10 10%Disagree 22 22% Total 100 100% Friends Insisted 80 70 60 50 40 30 20 10 0 Agree Neutral Disagree X f fx x^2 fx^2Agree 1 68 68 1 68Neutral 2 10 20 4 40Disagree 3 22 66 9 198 100 154 306Mean = 1.54Standard deviation = 0.69 52
  53. 53. 17. Would you like to have another insurance policy in IDBI in future? Frequency PercentageAgree 32 32%Neutral 23 23%Disagree 45 45% Total 100 100% Another Policy In IDBI 50 45 40 35 30 25 20 15 10 5 0 Agree Neutal Disagree X f fx x^2 fx^2Agree 1 32 32 1 32Neutral 2 23 46 4 92Disagree 3 45 135 9 405 100 213 529Mean = 2.13Standard deviation = 0.75 53
  54. 54. OVERALL MEANS & STANDARD DEVIATION VALUE Statement Agree Neutral Disagree Mean Std.DevIn thinking about the recent experience 78 0 22 1.44 0.69with IDBI Federal life insurance, ratethe satisfaction with the customerservice received by you?The process for getting your concerns 83 0 17 1.34 0.56resolved is fast?Please think about the features and the 32 45 23 1.91 0.54benefits of the insurance you took. Areyou satisfied with the insuranceThe customer service representative was 53 17 30 1.77 0.78very courteousThe customer service representative 56 5 39 1.83 0.56handled your call quicklyThe customer service representative was 68 12 20 1.52 0.65knowledgeableThe policy plans of IDBI Federal 80 15 5 1.25 0.25company provide highest benefits foryou?The insurance plans policy and 100 0 0 1 0procedure of IDBI insurance companyare understandable easily?Is the premium payment mode of IDBI 100 0 0 1 0federal insurance is easy?Do you like to have a long term relation 34 24 42 2.08 0.75with IDBI insurance company?Do you recommend IDBI Insurance 43 26 31 1.88 0.73company to your friends?You insure in IDBI because friends 68 10 22 1.54 0.69insisted?Would you like to have another insure 32 23 45 2.13 0.75policy in IDBI in future? No of Response Mean Std deviation 100 20.69 6.95 The above table shows that IDBI federal insurance is having a high level of customerrelinquishment. 54
  55. 55. 6. FINDINGS 55
  56. 56. CUSTOMER RELINQUISHMENT IDBI federal insurance is having a high level of customer relinquishment.WAYS TO RETAIN THE CUSTOMER The IDBI federal insurance company in Coimbatore branch has to take some action to havecustomers for long time. i. Free some amount of premium on continuous purchase. ii. Give some gifts which must satisfy the needs of the customers. iii. Establish membership cards and membership programs iv. Frequent buyer programs which permit customers to build up fair play v. Databases that keep track of customer’s purchases, preferences, complements and complaints, which are used to carry out loyalty building services and dialogs. vi. Integrated marketing programs where the advertising, direct communications, customer service, database marketing and sales programs are all orchestrated together and designed to build loyalty. 56
  57. 57. 7. RECOMMENDATION 57
  58. 58. RECOMMENDATIONS The unmarried people are actually not interested to take insurance. They wanted to investtheir money in other fields like buying a house, bike, buildings, and real-estate etc. They are evenready to take risk for more earnings. The married peoples are interested in insurance for the benefit of their partner as well as theirchildren and medical expenses. Generally educated people understand easily so most of graduateclearly understand the benefits of insurance policies. So IDBI Federal Life Insurance Corporation Limited can develop a new policy by targetingthe unmarried people. IDBI have to increase their promotional activities in such a way that even unskilled personsunderstand the importance of their Insurance add value to their customer. 58
  59. 59. 8. CONCLUSION 59
  60. 60. CONCLUSIONS The data were collected from the customer’s response of the IDBI Federal Life InsuranceCorporation Limited Coimbatore branch. Based on the percentage of the customers 100 samplesize was collected. The age, gender, marital statuses, educational qualification, occupation,monthly income, were analyzed as personal information in the questionnaire. According to thecollected personal information, most of the sample customers were young age, single, educated,higher income customers who got insurance. According to the research the IDBI Federal LifeInsurance Corporation Limited Coimbatore have high customer relinquishment because most ofthe customers did not insure out of their own interest. Parents, Friends who are working or doingtheir project or internship in IDBI Federal Life Insurance wanted them to have a policy. This isthe reason why customers move out of IDBI Federal. 60
  61. 61. 9. APPENDIX 61
  62. 62. QUESTIONNAIREGood morning is this Mr./Ms.…………I am Sindhu from IDBI federal one of the leading wealthsurance solution provider in India.Do you have a moment to talk?I work extensively in the area of proving future financial planning solution to people. Myexpertise includes planning for your family’s financial security, your children’s education,marriage or your personal retirement.The reason why I called you today is to get your idea and feedback about IDBI federal can Icontinue?PART A: PERSONAL DETAILS1. Is your agea) 18-36 yearsb) 36-45 yearsc) Over 50 years2. Gendera) Maleb) Female3. Marital statusa) Singleb) Married4. Education qualificationa) UG degree holderb) PG degree holderc) Other or none 62
  63. 63. 5. Occupationa) Professionalb) Teacherc) Clericald) Unskilled workers6. Monthly incomea) Rs 10000-20000b) Rs 20000-30000c) Above Rs 300000PART B: RESEARCH DETAILSEvaluate the statement on the basis of the point given below1. Agree2. Neutral3. Disagree7. In thinking about the recent experience with IDBI Federal life insurance, rate the satisfactionwith the customer service received by you? 1 2 38. The process for getting your concerns resolved is fast? 1 2 39. Please think about the features and the benefits of the insurance you took. Are you satisfiedwith the insurance? 1 2 3 63
  64. 64. 10. Customer service Representative Pertain to the customer service representative you spoke with most recently please indicatewhether you agree or disagree or none to the following statements 1 2 3 The customer service Representative was O O O Very courteous The customer service Representative handled O O O your call quickly The customer service Representative was O O O Knowledgeable11. The policy plans of IDBI Federal Company provide highest benefits for you? 1 2 312. The insurance plans policy and procedure of IDBI insurance company are understandableeasily? 1 2 313. Is the premium payment mode of IDBI federal insurance is easy? 1 2 3 64
  65. 65. 14. Do you like work or held the relationship between you and IDBI insurance company at longtime? 1 2 315. Do you recommend IDBI Insurance Company to your friends? 1 2 316. You insure in IDBI because friends insisted? 1 2 317. Would you like to have another insure policy in IDBI in future? 1 2 3 Thanks a lot for your response Have a nice day 65
  66. 66. 10. BIBLIOGRAPHY 66
  67. 67. Books 1. Research Method for Business Students-Pearson Education-Mark Saunders, Philip Lewis, and Adrian Thorn hill. 2. Questioner design-Ian Brace 3. Developing a Questionnaire (Real World Research) by Bill Gill ham 4. Questionnaire Design by A.N. Oppenheim 5. Analysis of Questionnaire Data with R by Bruno Falissard 6. Kothari C.R. (1990) Research Methodology: Method and Techniques, WishvaParkashan, New Delhi. PP115-117 7. Bodie. Z, Kane. A & Marcus. J: Essentials of Investments PP242-243Websites 1. 2. 3. 4. Student Insurance: 5. Vehicle Insurance 67