CASE ABOUT CUSTOMER LOYALTY IN INSURANCE

1. CUSTOMER LOYALTY IN
INDIAN INSURANCE INDUSTRY
Case study

2. INTRODUCTION
Customer loyalty has emerged as a significant differentiator in
the light of risen competition and increased customers'
expectations across various service industries.
Customers' level of awareness has increased manifold and their
expectations have reached new heights.
Insurers are discovering new ways to build loyalty by offering
their customers an interconnected array of services that
extend beyond insurance.

3. INDIAN INSURANCE INDUSTRY
The insurance industry of India has 57 insurance companies 24 are in the life insurance business, while
33 are non-life insurers. Among the life insurers, Life Insurance Corporation (LIC) is the sole public sector
company.
There are six public sector insurers in the non-life insurance segment. In addition to these, there is a sole
national re-insurer, namely General Insurance Corporation of India (GIC Re).
Other stakeholders in the Indian Insurance market include agents (individual and corporate), brokers,
surveyors and third-party administrators servicing health insurance claims.
The development of insurance in India took place at its own pace and imbibed features from insurance of
other countries as well. The Indian insurance bears huge impact of insurance practices prevailing in
England.industries.
India witnessed the arrival of life insurance business in the year 1818 when Oriental Life Insurance
Company was established in Calcutta. This company failed later in the year 1834.Another company that
ventured into life insurance business in 1829 was Madras Equitable that commenced its operations in the
Madras Presidency. In the year 1870, British Insurance Act was enacted. Three more life insurance
companies, i.e. Bombay Mutual (1971), Oriental (1874) and Empire of India (1897) took off in the
Bombay Residency.

4. INDIAN INSURANCE INDUSTRY
key objectives:- To promote healthy competition in the insurance market.
To ensure greater customer satisfaction through availability of a wide range of options
and lower rates of Premium.
To secure the finan cial soundness of the Indian insurance market.
• The circle had completed with Indian insurance getting reopened for private sector in the
early 1990s.
• Based upon the recommendations of the Malhotra Committee report, Insurance Regulatory
and Development Authority (IRDA) was constituted in April 2000 as an autonomous body
responsible for, regulation and development of Indian insurance industry.

5. INDIAN INSURANCE INDUSTRY
• A well-developed and evolved insurance sector is a boon for economic development as it
provides long- term funds for infrastructure development at the same time strengthening
the risk taking ability of the country.
• Today there are 34 general insurance companies including the ECGC and Agriculture
Insurance Corporation of India and 24 life insurance companies operating in the country.
• According to IRDA (20Il),presently 24 general insurance companies including the ECGC
and Agriculture Insurance Corporation of India and 23 life insurance companies are
operating in the country.
• The official website of IRDA reports that the Indian insurance sector has enormous potential
and is growing with a growth rate of l5-20% and along with the banking sector, it
contributes around 7%o to the country's GDP.

6. INDUSTRY OUTLOOK
1957 1991 1993 1994 1999
General lnsurance
Council devised a
code of conduct to
ensure fair and
ethical business
practices
The process of
liberalising lndlan
economy
commenced.
Malhotra
committee was
constituted to ofier
recommendations
and suggestions
for reforms in
lndian insurance
industry.
De-tarifing of
aviation, liability,
personal,
accidents and
health and marine
cargo products
took place.
IRDA bill passed.
SUCCESS

7. INDUSTRY OUTLOOK
2000 2005 2006 2007 2011
The lnsurance
Regulatory &
Development
Authority (IRDA)
was constituted for
regulation and
registration of
private insurance
companies.
General lnsurance
Corporation along
with its four
subsidiaries,
Marine hull was
de-tarified..
ln order to
facilitate the entry
of new companies,
norms pertaining
to foreign equity
were relaxed.
All general
insurance
products
excluding the auto
third-party liability
segment were
de-tarified.
IRDA issued
guidelines for
lPOs that enabled
the private life
insurance
companies to
approach capital
markets for funds.
SUCCESS

8. CUSTOMER LOYALTY IN INSURANCE
According to World Insurance Report
(2007) by Capegemini, insurance
industry, has become more transparent
due to the increased usage of Internet
which enables customers to have easier
access to product and price-related
information, thereby increasing their
bargaining capacity.
This information transmission has
made customers self-reliant, more price
sensitive and less loyal.

9. Customer loyalty can be a significant
tool in the hands of life insurers aiming
to create differentiation.
Given the fact that, in life insurance
business, customers' loyalty is largely
dependent on company's advisors'
loyalty towards the company.
most of the life insurers offer loyalty
rewards to their agents in order to
ensure their continued allegiance with
the company.
CUSTOMER LOYALTY
IN INSURANCE

10. Specific Customer Loyalty
Practices in Insurance Industry
Bajaj Allianz, a major insurance provider in
India, launched an innovative program called
“Jiyo Fit” for its customers.
The program intended to encourage Bajaj Allianz
customers to adopt healthy life style by
providing them access to a large network of
gyms, spas and health clinics.
The” Jiyo Fit” card also featured access to Bajaj
Allianz network hospitals and association with
Yes Bank and Visa.

11. Specific Customer Loyalty
Practices in Insurance Industry Key Features of the Program
❑ Earn points for every visit to a gym
Reward points for purchasing healthy
foods at high-street retailers.
❑ Earn points on improving health through
regular medical check-ups .
❑ Exclusive benefits and offers at various
partner service providers and retailers

12. THANKYOU!