AN ANALYSIS OF CRM IN INSURANCE

A PROJECT SUBMITTED TO
DR. HOMI BHABHA STATE UNIVERSITY FOR PARTIAL COMPLETION OF THE
DEGREE OF
MASTERS IN COMMERCE [BANKING & FINANCE]
UNDER THE FACULTY OF COMMERCE

BY
AKSHATA RAMESH GAIKWAD
ROLL NO- 74

UNDER THE GUIDANCE OF

DR. SMITA KUNTAY

SYDENHAM COLLEGE OF COMMERCE AND ECONOMICS

‘B’ ROAD CHURCHGATE MUMBAI 4000020

DECEMBER-2022
 INDEX
Sr.no Particulars Page no.

1. Introduction 1-28

1.1 Introduction to CRM

1.2 Introduction of Insurance

1.3 CRM in Insurance

1.4 IDBI Federal

1.5 LIC

2. Review of Literature 29-32

3. Research methodology 33-34

3.1 Primary objective

3.2 Secondary objective

3.3 Sample

3.4 Sample size

3.5 Limitation of study

3.6 Demographic Profile

4. Data analysis & Interpretation 35-52

5. Findings 53

6. Suggestions & Recommendation 54-55

7. Conclusion 56-58

8. Bibliography 59

9. Annexures 60
 9. Case Study 63-71

GOVERNMENT OF MAHARASHTRA

Sydenham College
Of Commerce And Economics, Mumbai

(Re-accredited ‘A’ grade by NAAC (3.42 CGPA)

(A Constituent College of Dr. Homi Bhabha State Cluster University)

CERTIFICATE

This is to certify that Ms. Akshata Gaikwad has worked and duly completed her/his Project Work for the

degree of Masters in Commerce (Banking and Finance) under the faculty of Commerce in the subject of

Banking & Finance her/his project is entitled, “New CRM In Insurance” under my supervision. I further

certify that the entire work has been done by the learner under my guidance and that no part of it has been

submitted previously for any Degree or Diploma of any University.

It is her/his own work and facts reported by her/his personal findings and investigations.

Name and signature of

Seal of the Guiding teacher
College

Date of submission: 31st March 2021

 GOVERNMENT OF MAHARASHTRA

Sydenham College
Of Commerce And Economics, Mumbai

(Re-accredited ‘A’ grade by NAAC (3.42 CGPA)

(A Constituent College of Dr. Homi Bhabha State Cluster University)

DECLARATION BY LEARNER

I the undersigned Miss Akshata Gaikwad here by, declare that the work embodied in this project work
titled “New CRM In Insurance” forms my own contribution to the research work carried out under the
guidance of Dr. Smita Kuntey is a result of my own research work and has not been previously submitted
to any other University for any other Degree/Diploma.

Wherever reference has been made to previous works of others, it has been clearly indicated as such and
included in the bibliography.

I, here by further declare that all information of this document has been obtained and presented in
accordance with academic rules and ethical conduct.

Akshata Gaikwad

Certified by
Dr. Smita Kuntey
 GOVERNMENT OF MAHARASHTRA

Sydenham College
Of Commerce and Economics, Mumbai

(Re-accredited ‘A’ grade by NAAC (3.42 CGPA)

(A Constituent College of Dr. Homi Bhabha State Cluster University)

ACKNOWLEDGEMENT

To list who all have helped me is difficult because they are so numerous and the depth is so enormous.

I would like to acknowledge the following as being idealistic channels and fresh dimensions in the
completion of this project.

I take this opportunity to thank the Dr.Homi Bhabha State University for giving me chance to do this
project.

I would like to thank my Principal Dr.M.V. Kagalkar for providing the necessary faculties required for
completion of this project.

I take this opportunity to thank our Coordinator Dr. K.S Jain, for his moral support and guidance.

I would also like to express my sincere gratitude towards my project guide Dr. Smita Kuntey whose
guidance and care made the project successful.

I would like to thank my College Library, for having provided various references books and magazines
related to my project.

Lastly, I would like to thank each and every person who directly or indirectly helped me in the
completion of the project especially my parents and peers who supported me throughout my project.
 New CRM In Insurance Sector

Chapter No. 1: Introduction

In this chapter selection and relevance of the problem, historical background of the problem, brief profile
of the study area, definition of related aspects, concepts, characteristics, Difference concept pertaining to
the problem etc. can be incorporated by the learner.

Chapter No. 2: Literature Review

This chapter will provide information about studies done on the respective issue. This would specify how
the study undertaken is relevant and contribute for value addition in information/knowledge/application
of the study area is ultimately helps the learner to undertake further study on same issue

Chapter No.3: Research Methodology

This chapter will include objectives, hypothesis, scope of the study, limitation of the study, significance
of the study, selection of the problem, sample size, data collection, tabulation of data, technique and tools
to be used, etc. can be incorporated by the learner.

Chapter No. 4: Data analysis Interpretation & Presentation

This chapter is the core part of the study. The analyses pertaining to collect the data will be done by the
learner. The application of the selected course or techniques will be use to arrive at findings. In this, table
of information, presentation of graph etc. can be provided with the interpretation by the learner.

Chapter No. 5: Conclusion & Suggestion

In this chapter of project work, findings of work will be covered and suggestion will be enlisted to
validate the objective and hypotheses.

 Bibliography
 Appendix
 Case Study
 EXECUTIVE SUMMARY

Customer relationship management is an old concept. It's all about how you treat your customer after the
sale. Businesses that handle well succeed referrals and repeat sales are the lifeblood of business. They are
also a direct result of effective customer relationship management. Financial Services industry is part of
an economy & successful operation of the industry sets impetus for other industries and development of
an economy. This article focuses related to customer relationship building especially for retail investors
from life insurance sector and its management in general, based on the principles of Relationship
management in service organizations. Identifying the managerial practices and measures for relationship
building for effective and efficient business is the epitome of this article. Right from basic concept of
CRM, its strategy & technique formulation to evaluation of CRM, various aspects of customer
relationship management are covered in this article. This report examines and provides a detailed analysis
of Customer Relationship Management (CRM) with respect to itsS implementation in the Insurance
sector. The study investigates market trends, levels of its current practice, levels of successes and failures
and the factors associated with the implementation of the same. In order to gain proper understanding of
the subject matter research, two different case studies are discussed in detail. At the end, the study
presents a proposed model of successful implementation of CRM along with a set of recommendations
following the conclusion. The paper then discusses different case studies with respect to the
implementation of CRM in the Insurance industry. Thus, analyzing the issues practically involved and
raised in the implementation of the management system aimed at creating customer value, and also
putting forward the experiences of two different companies in the same industry. Therefore, looking into
the challenges created for the management, causes/factors associated with and resulting in the
success/failure of CRM as a means of creating customer value, and overall experience of the companies
attempting to implement CRM. The discussion therefore leads to a roadmap for successful
implementation of CRM with a recommendation of “Ten Key Steps” for successful implementation of
CRM in an organization. Lastly, in the light of the analysis presented and case studies discussed, an
independent conclusion under the subject matter research is formed along with a set of
recommendations/suggestions.
 INTRODUCTION

CUSTOMER RELATIONSHIP MANAGEMENT

INTRODUCTION TO CRM:

People make buying decisions. People have loyalties. Relationship only can be developed between
people. Your Customer Relationship Management program must be structured around this well-known
fact. CRM is about people. CRM is an approach to organizing your company’s interaction with customer
that starts with customer- centered point of view. It’s an entire discipline, not a single activity. Customer
relationship management (CRM) is no longer a buzzword, but a necessity for business in the knowledge
age we live in.
Customer relationship management (CRM) solutions provide customer-oriented services for planning,
developing, maintaining, and expanding customer relationships, with special attention paid to the new
possibilities offered by the Internet, mobile devices, and multi- channel interaction. Sophisticated
analytical techniques are then applied to this customer information to better understand and predict
customer behavior. CRM can then be used to strategically implement acquired customer knowledge in
every area of the company, from the highest management level to all employees who come into direct
contact with customers.
CRM thus enables an organization to address its customer’s preferences and priorities much
more effectively and efficiently. CRM is a tool that can help organizations to profitably
meet the lifetime needs of customers better than their competitors. This definition of CRM covers many
but not all activities of the company. CRM is limited to activities that take place in the customer- facing
functions, including marketing, sales, customer services, & product support.

MEANING

Customer Relationship Management (CRM) is to create a competitive advantage by being the best at
understanding, communicating, delivering, and developing existing customer relationships, in addition to
creating and keeping new customers. It has emerged as one of the largest management buzzwords.
Popularized by the business press and marketed by the aggressive CRM vendors as a panacea for all the
ills facing the firms and managers, it means different things to different people. Some call database
marketing as CRM.

There are many others who refer to technology solutions as CRM. Merchants and traders have been
practicing customer relationship for centuries. Their business was built on trust. They could customize the

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products and all aspects of delivery and payment to suit the requirements of their customers. They paid
personal attention to their customers, knew details regarding their customers tastes and preferences, and
had a personal rapport with most of them. In many cases, the interaction transcended the commercial
transaction and involved social interactions. Even today, this kind of a relationship exists between
customers and retailers, craftsmen, artisans – essentially in markets that are traditional, small and
classified as pre-industries markets. These relationship-oriented practices have changed due to industrial
revolution. Intermediaries like distributors, wholesalers and retailers took on the responsibilities of
warehousing, transportation, distribution and sale to final customers. This resulted in greater efficiencies
and lower costs to manufacturers but brought in many layers between them and the customers. The
resulting gap reduced direct contacts and had a negative impact on their relationships.

Definition

CRM stands for “Customer Relationship Management” and refers to all strategies, techniques, tools, and
technologies used by enterprises for developing, retaining and acquiring customers. Jackson applied the
individual account concept in industrial market to suggest markets CRM to mean, marketing oriented
toward strong, lasting relationship with individual accounts.

McKenna offered a more strategic view by putting the customer first and shifting the role of marketing
from manipulating the customer (telling & selling) to genuine customer involvement (communicating &
sharing the knowledge).

Berry, in a broader term stressed that attracting new customers should be viewed only as intermediate step
in the marketing process. Developing closer relationships with this customer and turning them into loyal
is an equally important aspect of marketing. Thus, he defined relationship marketing as attracting,
maintaining, and, enhancing customer relationships.

Determinants of CRM
Trust
The willingness to rely on the ability, integrity, and motivation of one company to serve the needs of the
other company as agreed upon implicitly and explicitly.

Value
The ability of a selling organization to satisfy the needs of the customer at a comparatively lower cost or
higher benefit than that offered by competitors and measured in monetary, temporal, functional and
psychological terms.

In addition to trust and value, salespeople must:

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Understand customer needs and problems; Meet their commitments; Provide superior after sales support;
Make sure that the customer is always told the truth (must be honest); and have a passionate interest in
establishing and retaining a long-term relationship (e.g., have long-term perspective), See Diagram 1.2 for
more details. Stages in the development of a Customer Relationship: (Shown by Diagram1.1)
• The Pre-relationship Stage: The event that triggers a buyer to seek a new business partner.
• The Early Stage: Experience is accumulated between the buyer and seller although a great degree of
uncertainty and distance exists.
• The Development Stage: Increased levels of transactions lead to a higher degree of commitment and the
distance is reduced to a social exchange.
• The Long-term Stage: Characterized by the companies' mutual importance to each other.
• The Final Stage: The interaction between the companies becomes institutionalized.

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Managing Customer Relationships
The global salesperson must be involved in the following activities in order to initiate, develop and
enhance the process that is aimed at building trust and commitment with the customer.

• Initiating the relationship

Engage in strategic prospecting and qualifying; Gather and study pre-call information; Identify buying
influences; Plan the initial sales call; Demonstrate an understanding of the customer's needs; Identify
opportunities to build a relationship; and illustrate the value of a relationship with the customer

• Developing the relationship

Select an appropriate offering; Customize the relationship; Link the solutions with the customer's needs;
Discuss customer concerns; Summarize the solution to confirm benefits; and Secure commitment.

• Enhancing the relationship

Assess customer satisfaction; Take action to ensure satisfaction; Maintain open, two-way communication;
and Work to add value and enhance mutual opportunities

Importance /Need of CRM:

Globalization is a boom in electronic world to help the field of CRM to contact customers directly. A firm
can easily interact with its customers at low cost. CRM is one to one, communication from the firm and
its customers. Firms must shift from the old paradigm of mass production to the new paradigm of mass
customization to meet the exact demands of the customer. The last 15 years have witnessed an explosion
of growth of opportunities for service sector organizations. Today, more and more service sector
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companies have a chance to walk on the competitive edge and prove their abilities on par if not better
than other players in the field. The present trend is in for of good customer relationship management. The
successes of a service sector organizations today, depends on its ability to serve the customer for ‘ever’
and also making a number of service Customer Relationship Management in Insurance Sector available to
the customers hence there is a need to study the impact of CRM on business prospectus. In this
background, CRM becomes imperative.

A satisfied customer in 10 years will bring 100 more customers to the company. It costs 7 times more to
attract a new customer than to serve an old one. 20% of the company’s loyal customers account for 80%
of its revenues. (Pareto’s principle). The chances of selling to an existing customer are 1 in 2; the chances
of selling to a new customer are 1 in 16. Customers tell eight friends about a satisfying experience and 20
friends for a negative experience. It is easier to influence existing customers to buy 10% more than
increase the customer base by 10%. Eighty per cent of successful new product and service ideas come
from existing customers. Repeat customers cost one-fifth less than new customers and can substantially
increase profits.

Ways to keep customers

1. Every part of the company’s marketing effort should be geared towards building lifetime relationships.

2. People want to do business with friendly people. To have effective relations a friendly attitude must

permeate in the organization.

3. Information technology developments should be positively used to serve the customers.

4. The company should always be flexible to bend its rules and procedures in the client’s favor.

5. The company should communicate with its customers even when it is not trying to sell something.

6. The company can communicate and develop stronger customer bonding by providing financial and

social benefits.

7. The company should try to know all its customers including their lifestyles, hobbies, likes and dislikes
etc.

8. The company should make it a point to deliver more than what is promised.

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Advantages of CRM

CRM is the process of acquiring, retaining and growing profitable customers. It requires a clear focus

on the service attributes that represent value to the customer that create loyalty. Customer relationship
management has several advantages:

1. Company can easily find the needs of the customers.

2. It can easily to target specific customers by focusing on their needs.

3. I makes easier to track the effectiveness of a given campaign.

4. It gives knowledge about the customer who is loyal to the product.

5. Direct contact with the customers, creates the potential customers’ existence.

6. Marketing of a product is based on customer-oriented not price oriented.

7. As per the customers’ wish, a product is manufactured and marketed.

8. It prevents overspending on low-value clients or under-spending on high value ones.

9. It speeds up the time to develop and market a product.

10. CRM reduces advertisement costs.

11. Product quality to be increased.

12. Volume of sale is to be raised.

13. It improves the use of the customer channel, thus making the most of each contact with a customer.

Benefits of CRM

a) Customers are Profitable over a period of time: Studies by the US-based Bain and Company have
shown that a customer becomes more profitable with time because the initial acquisition cost exceeds
gross margin while the retention costs are much lower. When an organization retains the customer, it gets
a larger share of the customers wallet at a higher profit-one percent increase in sale to existing customer
increase profits by 17 per cent while the same amount of sale to new customer increased profit by only 3
per cent. This huge different is explained by the fact that for most companies the cost of acquiring the
customer is very high. Similarly, studies have shown that the probability of selling a product to a prospect
is 15 per cent while it is 50 per cent to an existing customer. Thus, the time, the effort and the costs of
selling are much lower for an existing customer.

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b) Marketing Benefits: CRM will gradually reduce organization ‘s dependence on periodic surveys to
gather data. Collection of data related to buying a and consumption behavior will be an ongoing process.
In many cases, the transaction data is automatically collected sometimes real time as in the e-commerce
transaction. This rich repository of customer information and knowledge updated through regular
interactions and actual customer transactions and purchase behavior will help marketers to develop and
market customer centric products successfully.

c) Service Benefits: Research findings conducted across industries as a part of a Technical Assistance
Research Project (TARP) indicate that:

- 95 per cent of the customers do not bother to complain, the just take their business elsewhere.

- Most loyal customers take time to complain. This enables the product / service provider to improve and
ensure that such mistakes do not recur.

- A typical dissatisfied customer will tell an average of 14 others about a bad experience while she will
tell only six about a satisfying experience with an organization.

- 70 per cent of customers who complain will do business with a company again if it quickly takes care of
a service problem.

Types Of CRM

Collaborative CRM

Applying collaborative interfaces (such as e-mail, conferencing, chat, real time) to facilitate interaction
between customers and organizations, as well as between organizational entities dealing with customer
information (customer to sales representatives, sales to marketing, agent to provider).

Operational CRM

Automating horizontal Integrated business processes involving front-office customer touch point sales,
marketing and customer service-via multiple, interconnected delivery channels and integration between
front-office and back-office.

Analytical CRM

Analyzing data created on the operational side of the CRM equation for the purpose of business
performance management. Analytical CRM is tied to data warehouse architecture; it is most of evident in
analytical applications that leverage data marts.

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Introduction: An Insurance

Insurance is a means of protection from financial loss. It is a form of risk management, primarily used to
hedge against the risk of a contingent or uncertain loss.

An entity which provides insurance is known as an insurer, insurance company, insurance carrier or an
underwriter. A person or entity who buys insurance is known as an insured or as a policyholder. The
insurance transaction involves the insured assuming a guaranteed and known relatively small loss in the
form of payment to the insurer in exchange for the insurer's promise to compensate the insured in the
event of a covered loss. The loss may or may not be financial, but it must be reducible to financial terms,
and usually involves something in which the insured has an insurable interest established by ownership,
possession, or pre-existing relationship.

The insured receives a contract, called the insurance policy, which details the conditions and
circumstances under which the insurer will compensate the insured. The amount of money charged by the
insurer to the policyholder for the coverage set forth in the insurance policy is called the premium. If the
insured experiences a loss which is potentially covered by the insurance policy, the insured submits a
claim to the insurer for processing by a claims adjuster. The insurer may hedge its own risk by taking out
reinsurance, whereby another insurance company agrees to carry some of the risks, especially if the
primary insurer deems the risk too large for it to carry.

HISTORY OF INSURANCE IN INDIA

Insurance has a long history in India. Life Insurance in its current form was introduced in 1818 when
Oriental Life Insurance Company began its operations in India. General Insurance was however a
comparatively late entrant in 1850 when Triton Insurance company set up its base in Kolkata.

History of Insurance can be bifurcated into 3 eras:

1. Pre-Nationalization

2. Nationalization and

3. Post Nationalization.

Life Insurance was the first to be nationalized in 1956. Consolidating the operations of various insurance
companies formed Life Insurance Corporation of India. General Insurance followed suit and was
nationalized in 1973.General Insurance Corporation of India was set up as the controlling body with New
India, United India, National and Oriental as its subsidiaries. The process of opening up the insurance
sector was initiated against the background of Economic Reform process, which commenced from 1991.

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For this purpose, Malhotra Committee was formed during this year who submitted them report in 1994
and Insurance Regulatory Development Act (IRDA) was Page 10 of 80 passed in 1999. Resultantly
Indian Insurance was opened for private companies and Private Insurance Company effectively started
operations from 2001. The Insurance sector has gone through a number of phases by allowing private
companies to solicit insurance and also allowing foreign direct investment.

India allowed private companies in insurance sector in 2000, setting a limit on FDI to 26%, which was
increased to 49% in 2014. Since the privatization in 2001, the largest life-insurance company in India Life
Insurance Corporation of India has seen its market share slowly slipping to private giants like HDFC Life
Insurance, Exide Life Insurance, ICICI Prudential Life Insurance and SBI Life Insurance Company.

Principles of Insurance

Indemnity – the insurance company indemnifies or compensates, the insured in the case of certain losses
only up to the insured's interest.

Benefit insurance – as it is stated in the study books of The Chartered Insurance Institute, the insurance
company does not have the right of recovery from the party who caused the injury and is to compensate
the Insured regardless of the fact that Insured had already sued the negligent party for the damages (for
example, personal accident insurance)

Insurable interest – the insured typically must directly suffer from the loss. Insurable interest must exist
whether property insurance or insurance on a person is involved. The concept requires that the insured
have a "stake" in the loss or damage to the life or property insured. What that "stake" is will be
determined by the kind of insurance involved and the nature of the property ownership or relationship
between the persons. The requirement of an insurable interest is what distinguishes insurance from
gambling.

Utmost good faith – (Uberrima fides) the insured and the insurer are bound by a good faith bond of
honesty and fairness. Material facts must be disclosed.

Contribution – insurers which have similar obligations to the insured contribute in the indemnification,
according to some method.

Subrogation – the insurance company acquires legal rights to pursue recoveries on behalf of the insured;
for example, the insurer may sue those liable for the insured's loss. The Insurers can waive their
subrogation rights by using the special clauses.

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Causa Proxima, or proximate cause – the cause of loss (the peril) must be covered under the insuring
agreement of the policy, and the dominant cause must not be excluded

Mitigation – In case of any loss or casualty, the asset owner must attempt to keep loss to a minimum, as
if the asset was not insured.

Types of Insurance

1) Auto insurance
2) Gap insurance
3) Health insurance
4) Income protection insurance
5) Casualty insurance
6) Life insurance
7) Burial insurance
8) Property
9) Liability
10) Credit
11) Other types
12) Insurance financing vehicles
13) Closed community and governmental self-insurance

CUSTOMER RELATIONSHIP MANAGEMENT IN INSURANCE

As uncertainty looms and risks prevail, the demand for insurance services continues to increase which
alerts insurance companies. This is the perfect time to stand out from the competition. Insurance
companies must be able to step up and offer win-win packages that will not only benefit them but their
clients as well.

The surge in demand stresses the need for companies to be able to systematically gather prospective
clients and introduce them to a plan that will guarantee customer satisfaction and customer retention. This
is where the CRM software comes in. CRM in insurance companies allows users to organize a surge in
leads (potential customers) and each lead in the sales funnel will eventually turn into a paying customer.

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CRMs have been proven to shorten a company’s sales cycle and increase the effectiveness of marketing
campaigns. They primarily focus on gathering data and information from customers themselves and use
them to equip the sales team with the knowledge needed to effectively address their clients’ interests.

Managing customer information is extremely necessary for the insurance sector as each customer can
have different needs and may avail of different services. Data such as the deadline for payments,
beneficiaries, benefits availed, and other concerns relating to their procured insurance services may be
difficult to track over time.

With the overload of information, insurance companies and agencies may find it difficult to increase their
customers by looking for more leads and prospects, which may lead to stagnation of growth. This
overload may also result in a decrease in performance, poor customer service, and a bad company
reputation.

This is why CRM in insurance sector is extremely necessary. In this article, you will find out the
advantages of using CRM, its role in the industry these days, and its importance in contributing to growth
in the company.

Role of CRM in the insurance sector

A CRM system in the insurance industry can give a company an edge over the others. It is crucial in
improving customer retention and boosting sales. It also ensures that all the data and information
regarding a customer are at the insurance company’s disposal so they can have a personalized interaction
with potential and existing customers. 

The tools and features of a typical CRM include options to make phone calls to potential and potential
customers using a centralized platform, scheduled email functions, lead scoring, and features to manage
customers’ contact information. These are features that will help insurance companies develop better
customer relationships for it to grow.

CRM tools also have features like marketing automation which helps insurance companies cut costs as it
reduces the need to hire more employees for tasks like communicating with clients and checking for their
responses. CRMs also help in managing marketing campaigns, which are needed at a time where demand
increases. The software can also help users ensure that their campaigns are working as intended.

Applications and Modules of CRM in insurance sector

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 RICHNESS OF
CUSTOMER
DATA

INTEGRATE
ANALYSIS OF
VIEW OF
CUSTOMER
CUSTOMER
DATA
INFORMATION

FEEDBACK
CONVINIENCE
MECHANISM
OF INTERACTING
FROM
OF INSURER
CUSTOMER

CONSISTENCY
INTELIGENCE AT
OF
OPERATIONAL
COMMUNICATIO
TOUCH POINT
N

• Cross and up selling capability to provide market opportunities within an existing customer database

• Predictive capability to determine customer behavior.

• Information regarding customer retention or attrition helps to determine the likelihood of policy

lapses and helps identify customers worth targeting for retention campaigns.

• Customer segmentation that leverages data to create accurate categories for use in marketing

strategies.

• Market automation that combines analytics with campaign management functionality to help drive a

more effective and efficient marketing campaign.

Importance/ Need of CRM in Insurance Industry

CRM Helps Understand Customers in a Better Way:

When it comes to insurance customers, they belong to different backgrounds. Thus, determining their
demographic and psychographic characteristics is immensely crucial. Additionally, risk assessment of
customers must also be done objectively tools that are designed for insurance companies do this. These

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tools enable insurance agents to put a number to the risk quotient for every customer. Moreover,
premiums can be set based on the information obtained from CRM.

Excellent Customer Service:

To strive in this fierce competition, insurance companies always look for ways in which they can
differentiate themselves from their competitors. And one key to achieving this is to deliver superior
customer service. This encourages repeat purchase from existing customers, reduce customer churn,
increase lifetime value, and acquire new customers. CRM in the insurance sector enables its customers to
utilize self-service features. They can even set reminders for renewing policies or choose to make an
insurance agent call them when they need to renew policies.

Personalize Marketing & Sales Campaigns:

Today’s customers crave personalization. Moreover, research shows that personalization helps in creating
a sense of urgency among the customers. Insurance companies without CRM lack insights required for
crafting personalized sales and marketing campaigns. When an insurance company is armed with CRM, it
can determine the attributes of customers, which helps in developing targeted sales and marketing
campaigns. This urges customers to buy policies.

Reinforce Customer Loyalty:

CRM helps insurance companies offer excellent customer service; thus, increasing customer loyalty. As it
facilitates insurance agents to set reminders and notifications for renewing policing and sending tips,
respectively, customers tend to get fascinated with the services of the company. Besides, CRM automates
dedicated customer service.

Create Customer Profiles in No Time with CRM:

CRM in the insurance sector can bring in a lot of benefits. Right from automating redundant tasks to
delivering personalized services, CRM eases an insurance company’s functions to a great extent.

A CRM can build a customer profile based on every interaction the insurance agents have with him/her.
Right from the time a customer clicks on the CTA button of an online advertisement to the point he/she
started buying policies and renewing them, CRM will keep track of all.

Consistent Brand Experience

When it comes to providing a reliable and consistent brand experience, CRM has a critical role to play.
One of the ways it achieves this is through customer support or initial contact with the agents.

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When sales representatives or customer service agents deliver the same experience each time a customer
contacts, it becomes a part of brand experience for them. Consistent brand experience increases the
credibility of the company, and this is essential for insurance companies. Eventually, they succeed in
winning more customers.

Gain Valuable Customer Insights

As CRM accumulates and stores complete customer data, insurance companies can create detailed reports
and obtain useful insights. These insights not only help in customizing sales/marketing campaigns and
providing better customer service but also help in making sales forecasts. Insights derived from CRM can
help in analyzing customer behavior and design contingency plans based on that. Moreover, comparing
these insights with other tools like ERP software can enable insurance companies to dig deeper and
forecast sales. This signifies the role of CRM in the insurance industry.

Upsell and Cross-Sell Insurance Products

With CRM, insurance companies can fetch insights and determine customer behavior. Thus, they can
quickly identify customers’ pain points and needs. Based on these, insurance agents can see where their
insurance products fit the best. Accordingly, they can choose to upsell or cross-sell insurance products.
Insurance companies not using CRM often fail in recognizing customer needs and thus cannot utilize the
benefits of cross-selling insurance products.

CRM Boosts Insurance Agent’s Efficiency

Insurance agents are often on the move. Therefore, they always find the need to access customer data
from anywhere and at any time. A CRM tool empowers them to do so right from their smartphones. Thus,
onboarding new customers, creating profiles, providing customer service, and more become easier.
Insurance agents can free themselves from paperwork with a CRM installed on their device. Hence, it
results in increased efficiency.

Factors responsible for the Failure of CRM in Insurance

Management strongly believe that CRM is the only source to solve all their problems relates to marketing.
It is after the initiatives begin to unfold and become tangible that the management realizes the gaps in
their expectations same of the cases for failure are,

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1. Business use CRM as a technology, not as a marketing practice. Due to automation of obsolete
processes and, people believing that technology alone can change results without having to what they
really do or what they really believe.

2. Most of the CRM failures based on the company policies and wrong interpretation of the analysis of
CRM.

3. Remaking a company to be genuinely customer-centric is new and uncharted territory and as with
anything new, there is always resistance to change. Change often forces people to regress to what they
know and protect what they have always been comfortable with.

4. If a company wants to apply CRM technique, then it should rely on its analysis. There is a failure in
understanding what CRM is all about. Some regard it’s all about technology and they fail to align
technology with strategy. Some think it’s all about targeting customers and customer groups for special
offers. They see it as a simple matter of capturing names and addresses and linking this to customer
transactions to cross-sell and up-sell.

5. Poor planning of a company’s interaction with customers and increases the chances of addressing
wrong issues.

6. Poor understanding of CRM, can’t fulfil its goal.

7. Many companies don’t educate its staff to execute CRM techniques and can’t educate its customers
how to use CRM. There is lack of CRM skills. Many companies are creating sophisticated customer
research methodology techniques without realizing that such sophisticated tools required sophisticated
users and the users need training.

8. In most cases, CRM requires huge budget allotment.

9. Lack of internal, enterprise-wide data integration has made it exceedingly difficult to develop a

comprehensive view of customers.

WAYS OF CUSTOMER RELATIONSHIP MANAGEMENT IN INSURANCE

1. Going direct to the customer: The biggest current shift in the insurance market means big changes for
customer experience. Because of heightened competition from many of the newer, more Internet-driven
insurance providers, several of the older, well established insurance companies are investing significant
resources to move more towards a direct -to-consumer business model and away from their traditional

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model, which has relied heavily on third-party brokers or captive or independent insurance agents in the
field. This will help to maintain the customer relationship as they have greater control of the company
brand and more access to customer data.

2. Becoming more customer centric: In order to master providing a consistent – and consistently
positive – customer experience, insurance companies must rebuild them organizations and their contact
centers around the customer. They need to become customer-centric rather than policy-centric.

3. Effectiveness and Efficiency in the Contact Center: Operational issues in the contact center plague
many large organizations and insurers are no different. Some of these issues include:

CSR churn - Insurance providers already experience a very high CSR churn rate in their call centers
relative to other industries. This results in significant expense to the company in terms of training and
recruitment and can negatively impact customer experience. One of the top reasons CSRs leave their jobs
is because of the difficult systems and technology they need to learn.

Provincial thinking – Insurance providers as a whole are rather infamous for their “we can build it in IT”
culture. This tends to cripple insurance IT resources, and the customer service operation continually falls
down the IT priority list. Desktop complexity -insurance companies have more than 20 applications and
tools on the desktop. These business applications were all implemented to satisfy the needs of other
departments: the financial department needs a billing system, the marketing department needs a CRM
system, and the claims department needs a claims system

4. Honest about the policy – CSRs are required to be honest about the policy. As the customers are very
conscious these days, they want clarifications of each and every question before taking any insurance
policy.

5. Avoid false Selling – As insurance is a business of developing trust with the customers therefore,
CSRs are required to avoid the false selling to their customer as it will ruin the relationship when the
customer gets to know the truth.

IDBI: FEDRAL

Introduction:

IDBI Federal Life Insurance Co Ltd. is a three-way joint-venture of IDBI Bank, an Indian development
and commercial bank; Federal Bank, one of India’s leading [peacock term] private sector banks and
Ageas, a multinational insurance giant based out of Europe.

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IDBI Federal distributes its products through a multi-channel network consisting of Insurance agents,
Bancassurance partners (IDBI Bank, Federal Bank) Direct channel, and Insurance Brokers.

History of IDBI Federal:

In the year 2006, IDBI Bank, Federal Bank and Belgian-Dutch insurance major Fortis Insurance
International NV signed a MoU to start a life insurance company in India. The company received its
license from Insurance Regulatory and Development Authority of India (IRDAI) in December 2007.

IDBI Fortis Life Insurance Co. Ltd. officially began its operations in March 2008. In August 2008, the
company collected the premium of over Rs.100 crore within a record time of five months, thus becoming
the fastest growing new life insurance company in the private sector.

India-Sri Lanka ODI series that took place in October 2009, found a title sponsor in insurance major IDBI
Fortis. The company’s AUM crossed the Rs. 1,000 crore mark for the first time in March 2010.

In August 2010, the company was rechristened as IDBI Federal Life Insurance Company. In 2012-13, it
declared its maiden profits in record 5 years, thus was one of the fastest to do so in the industry. It yet
again clocked Rs. 80 crore profits for the financial year 2013-14 and has maintained its profitable
trajectory from thereon.

IDBI Federal Promotion:

1. Protecting consumer’s interest, promoting excellence in customer service, support and

complaint resolution;
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2. Promoting consumer protection activities, consumer rights awareness.

3. Providing effective consumer grievance redressal mechanism.

4. Literacy/Awareness programs and activities

5. Skill & Capacity building, promotion of “Vocational skill” livelihood enhancement projects in

the area of economics, finance & commerce

6. Research activities on subject related to economic, health, social research etc.

7. Promotion of awareness of healthcare including preventive health care, for the benefit of

community at large.

8. Promotion of nationally recognized sports

9. Relief, Rehabilitation and Assisting people affected form natural calamities.

IDBI CSR (customer social responsibility)

Corporate Social Responsibility lies at the heart of all our activities since us establishment fifty years ago.
It has been our guiding force long before it became a mandate. IDBI, in association with National
Association for the Blind, established the NAB-IDBI Polytechnic for the Blind at Amber Nath,
Maharashtra in the year 1981.

True to its image of a socially responsive organization, IDBI constructed houses and access roads in
Shirsal Tanda village in Latur, Maharashtra that was affected by a devastating earthquake in 1993. IDBI
displayed the same level of responsiveness in times of natural calamities by providing immediate disaster
relief in earthquake-hit areas of Gujarat (2001), tsunami-hit southern Indian states (2004), flash floods-hit
state of Uttarakhand (2013) and the cyclone-hit Odisha (2013).

PRODUCTS AND SERVICES OF IDBI FEDERAL

INCOMSURANCE:

Incomesurance not only gives you unmatched transparency and flexibility but there are lots of other
features which are inbuilt in the product like convenient premium payment options, Tax benefits and

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double advantage of Endowment and Money Back plan. In comesurance combines Endowment and
Money Back benefits into one plan. You can get periodic payments as in Money Back or get a lump sum
at maturity as in Endowment. You can make it into an Endowment plan or Money Back plan, as you
wish.

WEALTHSURANCE:

The Wealthsurance Foundation Plan enables you to save and build wealth to meet your financial goals.
However, unlike other investment alternatives, it also enables you to achieve your wealth goals even in
the event of unexpected death, accidents, disablement or serious illness. The Wealthsurance Foundation
Plan can ensure that your plans for wealth creation is achieved by protecting that plan with insurance
benefits. With Wealthsource plan, you can: Save into the Plan as much money as you want whether at one
time, at re gular intervals or as per your convenience. Build your wealth by choosing the investments your
savings go into and change them from time to time as you wish. Get adequate life insurance cover with a
unique built -in terminal illness benefit, so that the financial security of your loved ones is assured, and
your plans are always realized.

RETIRESURANCE:

The IDBI Federal Retiresurance Pension Plan is a Unit Linked Insurance Plan that helps you accumulate
your funds for your retirement. The plan is tailor -made for the ever-changing investment environment,
with built-in flexibilities to manage your investment mix. On retirement, you can use the maturity
proceeds to buy an annuity so that you have a monthly paycheck for life, even after you stop earning your
regular income.

HOMESURANCE:

The Homesurance Protection Plan is a reducing term plan, which provides insurance cover equal to the
outstanding balance of your home loan. In the unfortunate event of death of the home loan borrower, the
insurance cover enables repayment of the home loan liability.

Protection against loan liability:

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A home loan is usually a large liability and if the breadwinner who would repay the loan we’re not to be
there, it could become a serious burden to the family. The Homesurance Protection Plan protects against
this liability.

BONDSURANCE:

Bondsurance is a single premium plan which allows you to make a one-time investment and get a
guaranteed amount on maturity. You can choose a maturity period of 5 or 10 years for your investment.
At the end of the chosen period, you will receive a guaranteed maturity amount.

Besides the guaranteed maturity amount, Bondsurance also provides a life insurance cover. In case of
death before the maturity date, a Death Benefit which is also guaranteed will be paid. Thus, you can get
life insurance cover, while earning an assured return on your investment

IDBI Bank Ltd.

Continues to be, since its inception, India’s premier industrial development bank. Created in 1956 to
support India’s industrial backbone, IDBI Bank has since evolved into a power house of industrial and
retail finance. Today, it is amongst India’s foremost commercial banks, with a wide range of innovative
products and services, serving retail and corporate customers in all corners of the country from over 700
branches and more than 1180 ATMs.

The Bank offers its customers an extensive range of diversified services including project financing, term
lending, working capital facilities, lease finance, venture capital, loan syndication, corporate advisory
services and legal and technical advisory services to its corporate clients as well as mortgages and
personal loans to its retail clients. As part of its development activities, IDBI Bank has been instrumental
in sponsoring the development of key institutions involved in India’s financial sector – such as the
Securities and Exchange Board of India (SEBI), National Stock Exchange of India Limited (NSE) and
National Securities Depository Ltd.

LIC

Introduction:

Life Insurance Corporation of India (abbreviated as LIC) is an Indian state-owned insurance and
investment corporation.

The Life insurance Corporation of India was established on September 1, 1956, when the Parliament of
India passed the Life Insurance of India Act that nationalized the insurance industry in India. Over 245
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insurance companies and provident societies were merged to create the state-owned Life Insurance
Corporation of India.

As of 2019, Life Insurance Corporation of India had total life fund of ₹28.3 trillion. The total value of
sold policies in the year 2018-19 is ₹21.4 million. Life Insurance Corporation of India settled 26 million
claims in 2018–19. It has 290 million policy holders.

History of LIC:

Founding organizations

The Oriental Life Insurance Company, the first company in India offering life insurance coverage, was
established in Kolkata in 1818. Its primary target market was the Europeans based in India, and it charged
Indians heftier premiums. Surendra Nath Tagore had founded Hindustan Insurance Society, which later
became Life Insurance Corporation.

The Bombay Mutual Life Assurance Society, formed in 1870, was the first native insurance provider.
Other insurance companies established in the pre-independence era included

Postal Life Insurance (PLI) was introduced on 1 February 1884

Bharat Insurance Company (1896)

United India (1906)

National Indian (1906)

National Insurance (1906)

Co-operative Assurance (1906)

Hindustan Co-operatives (1907)

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Indian Mercantile

General Assurance

Swadeshi Life (later Bombay Life)

Sahyadri Insurance (Merged into LIC, 1986)

The first 150 years were marked mostly by turbulent economic conditions. It witnessed India's First War
of Independence, adverse effects of the World War I and World War II on the economy of India, and in
between them the period of worldwide economic crises triggered by the Great depression. The first half of
the 20th century saw a heightened struggle for India's independence. The aggregate effect of these events
led to a high rate of and liquidation of life insurance companies in India. This had adversely affected the
faith of the general in the utility of obtaining life cover.

Nationalization in 1956

LIC Zonal Office, at Connaught Place, New Delhi, designed by Charles Correa, 1991.

LIC Building at Chennai, was the tallest building in India when it was inaugurated in 1959

In 1955, parliamentarian Feroze Gandhi raised the matter of insurance fraud by owners of private
insurance agencies. In the ensuing investigations, one of India's wealthiest businessmen, Ramakrishna
Dalmia, owner of the Times of India newspaper, was sent to prison for two years.

The Parliament of India passed the Life Insurance of India Act on 19 June 1956 creating the Life
Insurance Corporation of India, which started operating in September of that year. It consolidated the
business of 245 private life insurers and other entities offering life insurance services; this consisted of
154 life insurance companies, 16 foreign companies and 75 provident companies. The nationalization of
the life insurance business in India was a result of the Industrial Policy Resolution of 1956, which had
created a policy framework for extending state control over at least 17 sectors of the economy, including
life insurance.

IPO

Finance Minister Nirmala Sitharaman announced a proposal to conduct an initial public offering for LIC
in the 2021 Union Budget.[6] The IPO is expected to be held in FY22. The Government of India will
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remain the majority shareholder after the public listing. Ten percent of shares are proposed to be allotted
to existing LIC policyholders.

CRM In LIC:

Whenever the word insurance comes, we hear the things of protection. The protection against life the
most precious thing, property, assets, etc. The question arises why insurance is required it may be life or
general whatever the answer is there is a fear of loss came into the picture, so there should be something
which gives protection against the loss & to fulfill the loss up to certain extent. That’s why the insurance
is needed because in today’s scenario there is no guarantee of anything, now let us focuses on life
insurance which is topic of project with related to CRM (customer relationship manager).

CRM & life insurance both are essential for each other because they both are like wheels of a vehicle
(bike) one cannot run efficiently & effectively without each other. To make survive the life insurance
industry in the market there is a need of CRM (customer relationship manager). To create CRM there is a
need of proper subject (life insurance). So, let know something about life insurance. Know about life
insurance? Life insurance in India made its debut well over 100 years ago. In our country, which is one of
the most populated in the world, the prominence of insurance is not as widely understood, as it ought to
be. What follows is an attempt to acquaint readers with some of the concepts of life insurance, with
special reference to LIC. It should, however, be clearly understood that the following content is by no
means an exhaustive description of the terms and conditions of an LIC policy or its benefits or privileges.
For more details, please contact our branch or divisional office. Any LIC Agent will be glad to help you
choose the life insurance plan to meet your needs and render policy servicing.

WHAT IS LIFE INSURANCE?

Life insurance is a contract that pledges payment of an amount to the person assured (or his nominee) on
the happening of the event insured against.

The contract is valid for payment of the insured amount during

• The date of maturity, or

• Specified dates at periodic intervals, or

• Unfortunate death, if it occurs earlier

Among other things, the contract also provides for the payment of premium periodically to the
Corporation by the policyholder. Life insurance is universally acknowledged to be an institution, which

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eliminates 'risk', substituting certainty for uncertainty and comes to timely aid of the family in the
unfortunate event of death of the breadwinner. Page 21 of 80

By and large, life insurance is civilization’s partial solution to the problems caused by death. Life
insurance, in short, is concerned with two hazards that stand across the lifepath of every person:

1. That of dying prematurely is leaving a dependent family to fend for itself.

2. That of living till old age without visible means of support.

Life Insurance vs. other savings

Contract of Insurance:

A contract of insurance is a contract of utmost good faith technically known as uberrima fides. The
doctrine of disclosing all material facts is embodied in this important principle, which applies to all forms
of insurance.

At the time of taking a policy, policyholder should ensure that all questions in the proposal form is
correctly answered. Any misrepresentation, non-disclosure or fraud in any document leading to the
acceptance of the risk would render the insurance contract null and void.

Protection:

Savings through life insurance guarantee full protection against risk of death of the saver. Also, in case of
demise, life insurance assures payment of the entire amount assured (with bonuses wherever applicable)
whereas in other savings schemes, only the amount saved (with interest) is payable.

Aid to Thrift:

Life insurance encourages 'thrift'. It allows long-term savings since payments can be made effortlessly
because of the 'easy installment' facility built into the scheme. (Premium payment for insurance is
monthly, quarterly, half yearly or yearly). For example: The Salary Saving Scheme popularly known as
SSS provides a convenient method of paying premium each month by deduction from one's salary.

In this case the employer directly pays the deducted premium to LIC. The Salary Saving Scheme is ideal
for any institution or establishment subject to specified terms and conditions.

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Liquidity:

In case of insurance, it is easy to acquire loans on the sole security of any policy that has acquired loan
value. Besides, a life insurance policy is also generally accepted as security, even for a commercial loan.

Tax Relief:

Life Insurance is the best way to enjoy tax deductions on income tax and wealth tax. This is available for
amounts paid by way of premium for life insurance subject to income tax rates in force. Assesses can also
avail of provisions in the law for tax relief. In such cases the assured in effect pays a lower premium for
insurance than otherwise.

SIGNIFICATION OF CRM IN LIFE INSURANCE

Customer Relationship Management i.e., CRM it acting as very vital role in life insurance sector as it is
beneficial for both the parties i.e., Organization which implement it & the Customers of that particular
company because it focuses on maintenance of relationship

with existing customers & try to get more business from them as well as generating new clients for the
industry by giving better services. It is like a MANTRA for the insurance company in today’s scenario
where the competition is increasing day by day, as its help the organization to face the new challenges in
upgrading & growing market were all the people are aware the need/importance of insurance but taking it
from the company were it get better/best services & policy’s which fulfills there need & wants as per their
thoughts. CRM is required for fulfilling these things only, & if CRM program is being successful it

turns the organization as the horse of long race & generate the profitable business.

The need for research felt here to know in detail, the practical & theoretical aspects of CRM in life
insurance. CRM is on today’s insurance market is emerging as a popular contact. My aim in selection of
this topic is to know more about the future scope of CRM ‘s importance in life insurance sector in India &
to know about its effect on organization& its image in customer mind

HISTORY OF CRM IN LIFE INSURANCE

CRM in life insurance sector plays a very important role; it is an activity/program by which the survival
of an industry is being easy in competitive market. As its main functions are to maintain relationship with
the existing (old) customers & new customers. The CRM is working as an important tool for the
insurance industry in today’s world/scenario as it is not an easy task to maintain the relationship with
customers for long period of time but with the help of CRM it is being possible.

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CRM help the companies to face the New Challenges arises in the market which create problem for
increasing the business such as, competitions, especially after the LPG (Liberalization, Privatization, &
Globalization) concept has been implemented in India. In such tuff competition the CRM plays a vital
role to an industry to getting the business form the common people & existing customers.

The CRM has born just after the Life Insurance Companies is existing in the globe & from that time it is
playing very important role to increase the business if life insurance sector. In India, insurance has a deep-
rooted history. It finds mention in the writings of Manu (Manusmrithi), Yagnavalkya (Dharmasastra) and
Kautilya (Arthasastra). The writings talk in terms of pooling of 14 resources that could be re-distributed
in times of calamities such as fire, floods, epidemics and famine. This was probably a pre-cursor to
modern day insurance. Ancient Indian history has preserved the earliest traces of insurance in the form of
marine trade loans and carriers’ contracts. Insurance in India has evolved over time heavily drawing from
other countries, England in particular. 1818 saw the advent of life insurance business in India with the
establishment of the Oriental Life Insurance Company in Calcutta. This Company however failed in
1834. In 1829, the Madras Equitable had begun transacting life insurance business in the Madras
Presidency. 1870 saw the enactment of the British Insurance Act and in the last three decades of the
nineteenth century, the Bombay Mutual (1871), Oriental (1874) and Empire of India (1897) were started
in the Bombay Residency. This era, however, was dominated by foreign insurance offices which did good
business in India, namely Albert Life Assurance, Royal Insurance, Liverpool and London Globe
Insurance and the Indian offices were up for hard competition from the foreign companies.

In 1914, the Government of India started publishing returns of Insurance Companies in India. The Indian
Life Assurance Companies Act, 1912 was the first statutory measure to regulate life business. 1928, the
Indian Insurance Companies Act was enacted to enable the Government to collect statistical information
about both life and non- life business transacted in India by Indian and foreign insurers including
provident insurance societies. In 1938, with a view to protecting the interest of the Insurance public, the
earlier legislation was consolidated and amended by the Insurance Act, 1938 with comprehensive
provisions for effective control over the activities of insurers. The Insurance Amendment Act of 1950
Abolished Principal Agencies. However, there were a large number of insurance companies and the level
of competition was high. There were also allegations of unfair trade practices. The Government of India,
therefore, decided to nationalize insurance business.

CRM IN INSURANCE – A NEW MANTRA:

With the increasing in the number of insurance players in the market & consumers becoming more &
more aware of different product, insures have realized the importance of CRM (Customer Relationship

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Management). CRM has been practicing for decades now, the grocery shopkeeper near our home, the
paanwala, etc.; all of them have been practicing it. In today’s competitive era, where customer is the king,
it is a must for the insurers to not only make new clients but also maintain the existing customer and
encourage repeat purchase. It is estimated that the cost of attracting a new customer is five times more
than that incurred to make an existing customer happy.

Life Insurance Corporation (LIC) of India has been the sole player in the market before the appearance of
private players. It exploited its monopoly powers are didn’t care much about either attracting new
customers or retaining the existing ones. If anyone needed an insurance policy, they had to purchase from
LIC. It was mostly a tax- saving schemes which encourage the purchase of insurance policy. Customers
were not educated regarding insurance matter & a source of knowledge to them was only the insurance
agent & he was the person who suggests the policy to the customer instead of the customer making his
own choice. The customers could not even choose some other policy from some other insurer because it
was Hobson’s choice, i.e., LIC. But when private players entered in the market, the competition forced
LIC & the other new entrants to become customer centric.

Customer service is getting more & more as most of the time buying an insurance policy is a one – time
purchase & customers are unaware of the variation available in the market. In the insurance sector, there
is an agent-client relationship & satisfied client can be the biggest brand ambassador for the company
(word of mouth advertisement). It is in the interest of the company to build up good relationship with the
client. The insurance agents of the company play an important role in building this relationship because
they are the people who interact with prospective & existing clients. Now the customer can deposit there
premium in any computerize branch all over India. But it has not be implemented at bottom level i.e.,
agents & managers who are the person interacting directly with the clients. It is the task of the top-level &
middle level manager to train their agents to practice relationship management & build relationship with
their clients. 1. The agents should be trained to analysis their environment (society, friends, peer groups,
etc.) & build good relationship with their environment because a good marketer first forms relationship &
then sells his goods.

2. An agent should make a profit of the prospective targets (or potential clients).

3. He should be trained to interact with them.

4. He should train to build the customer database classify them into potential existing customer into
dissatisfied, satisfied highly satisfied customers.

5. The agents should be trained to get the feedback of the customer because insurance selling is a
confidence building measure where relationship is built between the agent, which lasts for a long
duration. To survive & have an upper hand over the competitors, in today’s scenario insurance companies

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need to implement CRM in there organization not only technically (computer, network, database system,
CRM software trained personnel) but also as part of the culture. Relationship marketing is a key to
success in the present era & only those Page 35 of 80organizations can succeed who and been able to
build a base of their loyal customers, because a loyal customer advocates the company’s products much
better than the organization itself. The basic existence of the organization lies on the hands of its
customers. It can be easily concluded that for success, it is necessary to implement CRM in the right
manner.

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 REVIEW OF LITERATURE
Worldwide, especially developed countries are characterized by a stable insurance market with low
growth potential and a high degree of competitiveness, the focus in these areas being on creating and
managing a portfolio of profitable customers and maintaining it (Biswamohan and Bidhubhusan,
2012). The adopted strategies take into account improving after-sales services (particularly in the field
of damage management and complaint resolution) and to develop attractive and complex product
packages that closely match the customer requirements. In this regard an important role belongs to the
implementation of the customer relationship management concept in the insurance industry.

Compared to this situation, in the Central and Eastern European countries, which have their insurance
market in a developing stage, strategies are mainly focused on attracting more customers (due to the
important insurable potential) by developing insurance products as accessible as possible and less on
completely meeting the need for insurance.
The presence of internationally famous brands in the Central and Eastern European insurance market
(Vienna Insurance Group, Allianz, Axa, Groupama, Uniqa) is due to the large potential of these markets
that can be easily exploited. Consequently, within the top companies’ competition is very tight, each of
them trying to adapt and enforce their own standards and values that have ensured their success
internationally. Also, the deregulation and liberalization process meant to establish a single European
financial market had some important implications for the insurance industry. Due to increased
competition, European insurance companies had to adapt their costs and operate efficiently to survive
in this new environment. (Kasman and Turgutlu, 2011)

In this very complex context, it becomes necessary to develop in Romania also, some strategies geared to
maintaining and preserving the client portfolio, based on the principles of customer relationship
management (CRM). Currently, on the insurance market in Romania, companies face better informed
customers and more concerned with the quality/price ratio of the offered insurance products and after
sales services (particularly in managing damage).

The auto insurance segment is particularly characterized by a high degree mobility of customers, that
change their insurer seeking for a better price for the auto liability insurance (RCA), due to the increased
tariffs in CASCO insurance products (because of an increased amount of compensation resulting from
increased prices charged by service companies and increased spare parts prices) or as a result of
dissatisfaction felt when solving the damage claim (late or partial compensation of the damage).
A satisfied customer stays true to the company, purchases other insurance products as well, sends off
favourable messages for the company's image and its products, pays less attention to competing brands

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and to their advertising and it is less sensitive to price, implying a lower cost of service than new
customers because transactions are already a matter of routine (Montserrat, Scheike and Nielsen, 2012).
Due to the extended 1140 Ciprian Matiş and Liviu Ilieş / Procedia Economics and Finance 15 (2014)
1138 – 1145 requirements gathering way in the insurance market in Romania, it is necessary to develop
European standard after-sales service. The quality of services offered in the field of insurance is closely
linked to the way databases existing in the insurance companies are managed.

In circumstances where we have a performing computer system recording and managing insurance
policies, we can develop specific applications, that are necessary in the internal analysis of each
department taking into consideration its activity and can be used to analyse the volume of the gross
written premiums, the amount of compensations paid, the continuity and age of insurance - per
customer, per business line (auto, property, liability, etc.) per branch / inspector, per collaborator etc.
The utilities of applications developed for the customer portfolio underlie the development of the
customer care activities. Among these we mention: • Customer notification services on payment deadlines
and renewal of insurance policies;
• Providing facilities or bonuses according to the customer’s contract length and damage rate;
• Services to inform customers about new products, promotional offers etc.
A particularly important benefit for the company, resulting from these specific applications, is the
possibility of identifying profitable customers considered according into business lines, in order to make
them loyal on the long run. Identifying and retaining customers that register a damage rate below 70% in
the Casco insurance segment, is an important prerequisite for making this segment profitable. This is
particularly important given the fact that, in the Romanian Casco auto insurance market, the ratio
between the gross paid indemnities (as compensations) and the gross written premiums is 99%, compared
to the average of 71% registered by the European Union’s market

Articles

1. Lawrence W. Borgen (2001) in his published article titled “Focus on Customers “focuses on the
problem of insurers in terms of their inability to translate their promises regarding customer satisfaction
into realities. The study reveals that a majority of insurers are not aware of what their customers really
want, and those who are aware are unable to deliver the goods due to several organizational constraints.
The structure of the organization and the way it does business can be cited as organizational constraints.
The article suggests that insurance providers need to abandon their functional structures and reorganize
into a ‘customer-centric' structure and shift their focus on to the customers.

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2. S Pawan Kumar and Saurabh Swarup (2001) in their white paper titled “Business Intelligence and
Insurance: Application of business intelligence tools like data warehousing, OLAP, and data mining in
insurance” describe the crucial role Business Intelligence (BI)tools like data warehousing, OLAP, and
data mining play in the insurance industry. provide crucial information to the corporate clients, which can
bond the insurer's relations with the clients. The article addresses several issues related to BI and CRM.
Insurance value chain, CRM process, Channel management are a few of them. It suggests that to
effectively interact with customers and design the right products, the CRM strategy adopted by the
insurers should utilize the potential of technology to the maximum extent.

3. Sally Praskey (2001) in the research article titled "Can Customer Relationship Management (CRM) Put
the Focus Directly on the Policyholder?" highlights the benefits of adopting CRM strategies such as
acquiring new customers and at the same time retaining the older ones. CRM facilitates capturing,
consolidating, integrating and analyzing customer data. Implementing CRM strategies can offset the lack
of coordination among the various departments and people in the insurance industry. The article explains
that unlike retail industry wherein there is a continuous interaction between the customer and the retailer,
the number of contacts between the insurer and the insured are just one or two annually. This poses a
major challenge for the insurer in terms of creating a positive perception at the first meeting itself.

4. Simon Drimer (2001) in his published research article titled "Insurers Need to Try Harder with Existing
Customer Base" has advocated the shift in the focus from the product to the customer. The author has
identified revenues and costs as the drivers for customer profitability. The article elaborates on the
relationship duration, which is found to be unintentionally discouraged in the insurance sector. The longer
relationship allows the insurance company to break even on the insurance policy. It also sets up a virtuous
circle, which leads to customer loyalty, cheaper per customer servicing and lower marketing costs.

5. Tapan, (2014) in his article “creating customer lifetime-value through effective CRM in financial
services industry”, has stressed the importance of the CRM in financial services industry. 166 Customer
data management gives clues about the probability of customer demand and technology help in tracking
the characteristics and categorization of customers depending on their past behavior. He concluded that
with increased competition and customers moving very fast from firm to firm another, it is essential to
have an integrated CRM strategy across the whole organization for generating higher customers’ life-time
value.

6. Anjana Grewal (2014), in her research paper titled “Winning Strategies and Processes for Effective
CRM in Insurance and Financial Services” has presented a case study on relationship management

31 | P a g e
practices developed in leading foreign Insurance institutions in India in the early nineties. It is a practical
paper providing insights on what makes it happen. A model has been developed thereafter. The model
outlines ten stages for effective customer relationship practices in financial services. These stages span
across defining the customer relationship, understanding transaction behavior and business volumes for
different customers, developing a customer profitability model, creating the organization structure to
support relationship management practices, developing training programs, relationship pricing and
continuously evaluating the role of relationship managers).

7. Singh H. and Loll M (December 2011), states that life insurance is one of the fastest growing and
emerging markets in India. Insurance diffusion in rural area – the insurance industry has an acceptation
grant in socio-economic development. Objective of the present study is to appraise the opportunities for
insurers in the rural market and what would be new action to tap the highly underinsured rural area.

RESEARCH METHODOLOGY

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Primary Objective:

Topic Name: -

The customer relationship of IDBI Federal Life Insurance is satisfactory.

The customer relationship of LIC of India is satisfactory.

Secondary Objective:

1. To know the scope for Insurance in market.

2. To identify and analyze the factors which influence the service quality of Insurance company.

3. To study the customers perception on factors influencing customer relationship management.

4. To know the use of technology and human resources to understand the needs and behavior of present
and potential customers.

5. To study the Customer Relation Management techniques and model of the Insurance sector in India.

6. To find out the different types of strategies and methods of Relationship Marketing to develop long-
term relationships with the Customers of IDBI Federal Life Insurance Co and LIC of India.

7. To study the strategy of tackling their competitors.

8. To analyze the perception of customer on CRM as a tool of banking sector in retention of customers.

9. To know how they are maintaining relationship with its customers.

10. To find out satisfactory level of policyholders with CRM in Insurance Industry.

11. To study the consumer behavior and investment pattern towards life insurance / general insurance.

12. To provide the suggestions & recommendations to the company.

13.To know the policyholder perception and expectations with CRM in life insurance in India.

14.To acquire, retain and establish mutually rewarding, one to one relationship with customers.

15. To know the CRM is an organizational strategy to develop mutually profitable lifelong relationship
with their customer.

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Sample

There are 88 number of Respondents are there in my project report.

The data is collected from Mumbai and Parel area.

Sample size:

Simple Random sampling

Limitation of study:

1. Time restriction was a major factor while collecting the data.

2. Some of the people were not co-operative while doing my survey.
3. The sample size is also limited to only 88 samples, which is small for a country like India.
4. The data is collected through questionaries, there might be a chance of biased information being
provided by the respondent.
5. Area covered by the Project is Mumbai Region.
6. All the information regarding the CRM of IDBI Federal Life Insurance &L.I.C of India is
Secondary Data collected from its websites and online journals.

Demographic Profile:

1. There are 88 number of respondents in which 59 female, 29 males.

2. Maximum number of respondents is between age group of 20-30 years and minimum number of
respondents is between age group of 50 year – above.
3. Maximum number of respondents of occupation is 37 student and minimum number of
respondents of occupation is 11 government services.

DATA ANALYSIS, INTERPRETATION & PRESENTATION

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1. Gender:

1. Male
2. Female
3. Other

Table:

Options No. of respondents Percentage

Female 59 67%

Male 29 33%

Other _ _

Diagram:

Interpretati
on:

In the above table the majority of respondents are Female-59 respondent and Male- 29 respondent. The
above diagram shows that there is Female 67%, Male 33%, and other is 0%. Hence the majority of
respondents are female rather than male.

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2.The Age group of respondents.

1. 20-30 year
2. 30-40 year
3. 40-50 year
4. 50- above

Table:

Options No. of respondents Percentage

20-30 year 75 83.3%

30-40 year 11 12.4%

40-50 year 2 2.2%

50- above 1 1.1%

Diagram:

Interpretation:

In the above table we seen that in age group of 20-30 year is 75 respondents, in age group of 30-40 year is
11 respondents, in age group of 30-40 year is 2 respondent & in 50- above is 1 respondent.

In the above diagram shows that age group of 20-30 years is 83.3%, 30- 40 years is 12.4%, 40-50 years is
2.2% and 50- above is 1.1%. Hence the respondent in age group of 20 -30 is more than other age groups.

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3.What is Occupation of Respondent?

1. Government service
2. Self-Employee
3. Student
4. Private companies

Table:

Options No. of respondents Percentage

Government service 10 12.4%

Self-employee 12 13.5%

Student 37 41.6%

Private companies 29 32.6%

 Diagram:

Interpretation:

In the above table seen that the occupation of respondent as in government service is 10 respondent, 12
respondents are self -employed,37 respondents are students, & in private companies 29 respondent. In the
above diagram, the sample of the Respondents has been taken from all kind of working class where in
Self-employed is 13.5% and Private companies where maximum at 32.6% and 41.6% are students and the
Government Employees at 12.4%.
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4.What do you think is the main reason to choose particular Insurance company?

1. Service
2. Reliability
3. Image
4. Accessibility

Table:

Options No. of respondents Percentage

Service 36 40.4%

Reliability 21 23.6%

Image 09 10.1%

Accessibility 22 25.8%

Diagram:

Interpretation:

In the above table we seen that the respondent has different reasons to choose insurance company as in
terms to provide Service is 36 respondents, in Reliability 21 respondent, in terms of image 9 respondent is
there and in accessibility 22 respondent.

The above diagram shows us what are the various reason to choose before choosing a particular insurance
company with service around 40.4%, with Reliability 23.6%, 10.1% respondent followed by Image, with

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Accessibility 25.8% and other. Reliability basically means how reliable the company is in various factors
including returns, trust and image as well.

5.Which will be your preferable company to buy Insurance?

1. LIC
2. IDBI Federal
3. ICICI Prudential
4. SBI Life Insurance

Table:

Options No. of respondents Percentage

LIC 46 52.3%

IDBI Federal 11 12.5%

ICICI prudential 14 15.9%

SBI Life insurance 17 19.3%

Diagram:

Interpretation:

In the above table 46 respondent preferred company for buy insurance is LIC, in IDBI Federal 11
respondent, in ICICI Prudential 14 respondent is there, in SBI Life insurance 17. The above Graph shows
selection life insurance companies. Here we can clearly see that LIC has the best rating. Around 56% of

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the respondents owned an insurance policy in LIC which clearly shows that LIC, around 12.5%
respondent choose IDBI Federal, around 15.9%% of respondents chose ICICI Prudential, and the last
19.3% respondent choose SBI Life insurance to buy insurance.

6.What is the reason to take insurance policy?

1. Risk management
2. Tax saving
3. Pension
4. Savings

Table:

Options No. of respondents Percentage

Risk Management 12 14.4%

Tax saving 18 21.1%

Pension 18 20%

Savings 40 44.4%

Diagram:

Interpretation:

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In the above table we seen that there are various reasons to take insurance, 12 respondents have chosen
an insurance for risk management, 18 respondents take insurance for tax savings,18 respondent take
insurance for pension, and 40 respondents choose an insurance for savings.

The above diagram, when asked about the reasons for taking the insurance policy, 14.4% of the people
will consider risk coverage before taking the insurance policies , Savings motives 44.4% people, where
21.1 % people followed by tax saving and 20% people followed by pension.

7.What medium they use to contact you?

1. Telephone
2. Letters
3. Face to face
4. Emails

Table:

Options No. of respondents Percentage

Telephone 34 37%

Letters 09 12%

Face to face 24 27.2%

Emails 21 23.9%

Diagram:

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Interpretation:

In the above table 34 respondent said that insurance company use telephone to contact with customer,
09 respondent said they use Letters to contact, 24 respondents said that they use Face to face interaction
with customer and 21 respondents said they use Emails for contact. Companies prefer to contact their
customer through Telephones since it be the cheapest mode to communicate which stands 37%, as 12%

followed by letters, face-to-face is 27.2% and. Since Online communication has increases companies
communicate through email has 23.9%

8.Does the service provider / insurance company disclose correct and fair Terms and conditions while
selling the Insurance?

1. Yes
2. No

Table:

Options No. of respondents Percentage

Yes 68 77.5%

No 20 22.5%

Diagram:

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Interpretation:

In the above table 68 respondent says ‘yes’ for insurance company disclose correct and fair term and
condition while selling insurance, and 20% respondent said ‘No’.

In the above diagram 77.5% people said yes as they disclose correct and fair terms and conditions while
selling insurance and 22.5% people say no as they not disclose all correct terms and condition.

9.How is the Documentation process while taking of an insurance?

1. Lengthy/ Time consuming

2. Quick

Table:

Options No. of respondents Percentage

Lengthy/ Time consuming 42 48.3%

Quick 46 51.7%

Diagram:

Interpretation:

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The above table show the documentation process while taking an insurance is lengthy/Time consuming is
said by 42 respondent, and 46% respondent said the documentation process is quick.

The above diagram shows 48.3% people said it is lengthy process, and 51.7% people said it is quick
process.

10.Which policy option you generally prefer while paying Life Insurance Premium?

1. Term life insurance

2. Whole life insurance
3. Endowment life insurance policy
4. Money back policy

Table:

Options No. of respondents Percentage

Term life insurance 34 39.3%

Whole life insurance 18 20.2%

Endowment life insurance 15 16.9%

policy
Money back policy 21 23.6%

Diagram:

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Interpretation:

In the above table 34 respondent prefer term life insurance for paying premium, 18 respondents
prefer whole life plan,15 respondent prefer endowment life insurance policy, and 21 respondents
prefer money back policy. In the above diagram 39.3% people prefer term life plan,20.2% people
prefer whole life insurance,16.9% people prefer endowment life insurance plan, and 23.6% prefer
money back policy.

11.How generally the CRM representative cooperate with you to provide service?

1. Prompt service
2. Delay service

Table:

Options No. of respondents Percentage

Prompt service 65 73%

Delay service 23 27%

Diagram:

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Interpretation:

In the above table we seen that 65 respondent says CRM representative cooperate to provide prompt
service, 23 respondents said they provide delay service in insurance policy, for resolving complaints.

In the above diagram 73% of people said they cooperate to provide Prompt service, and 27% people said
they cooperate to provide delay service.

12.How long do they take to resolve the complaints?

1. 1-3 days
2. 3-6 days
3. 7-10 days
4. 10 days - above

Table:

Options No. of respondents Percentage

1-3 days 19 20.9%

3-6 days 20 24.2%

7-10 days 18 19.8%

10 days – above 31 35.2%

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Diagram:

Interpretation:

The above table shows 19 respondents says that the insurance company take around 1-3 days to resolve
complaints, 20 respondent says they take 3-6 days, 18 respondent says they will take 7-10 days, and 31
respondent says 10 days and above to resolve complaint.

Resolving customer complains is very Important since it ensures customer loyalty and spread word of
mouth among new customers. Companies try to Resolve customer complains as soon as possible average
20.9% respondent says it takes around 1-3 days, 24.2% people say it takes 3-6 days,19.8% says it takes 7-
10 days and 35.2% people say it takes 10 days and above.

13.How often companies contact you after purchase of policy?

1. Monthly
2. Quarterly
3. Semi-Annually
4. Annually

Table:

Options No. of respondents Percentage

Monthly 37 42%

Quarterly 20 22.7%

Semi-Annually 18 20.5%

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 Annually 13 14.8%

Diagram:

Interpretation:

In the above table 37 respondent says the company contact monthly after purchase of policy, 20
respondent says they take quarter to contact after purchase of policy,18 respondent says they take
semiannual, and 13 respondent says they take a year to contact after taken policy.

Most of the companies prefer to contact their customer Quarterly which is around 22.7%. Around 42%
respondent said their Insurance Company contact them Monthly, respondent said they contact Semi-
Annually 20.5% and annually be least that is 14.8%.

14.What is the strategies adopted by the companies to established loyal customers?

1. Provide gifts
2. Additional bonus
3. Regular feedback
4. Provide quality service

Table:

Options No. of respondents Percentage

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 Provide gifts 14 15.4%

Additional bonus 15 17.6%

Regular feedback 22 26.4%

Provide quality service 37 40.7%

Diagram:

Interpretation:

In the above table we seen that the 14 respondent says the insurance company provide gifts , 15
respondent says the insurance company gives additional bonus, 22 respondent says insurance company
gives regular feedback and 37 respondent says they will provide quality service.

For any Company to be a market leader it is very important that it has loyal customer which who would
advice new customer about particular company products.

So what efforts companies takes to have loyal customer can be seen through above diagram. Proving gifts
is 15.4 % people says , 17.6% people says they will give additional bonus,regular feedbacks by insurance
company 26.4%, providing quality service by the insurance company is 40.7% people said to established
loyal customer.

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15. After taking an insurance how is After Sales Service of insurance company?

1. Prompt
2. Satisfactory
3. Dissatisfactory

Table:

Options No. of respondents Percentage

Prompt 29 33%

Satisfactory 32 36.4%

Dissatisfactory 27 30.7%

Diagram:

50 | P a g e
Interpretation:

The above table shows 29 respondent said the insurance company gives Prompt service as they take quick
action , 32 respondent said the insurance company gives Satisfactory service , 27 respondent said they
gives Dissatisfactory service as they will take more days to resolve compaints and many more as
respondents were response .

The diagram shows that 33% people are said they will give prompt service , 36.4% people said they were
satisfied with there service and 30.7% said they were dissatisfied with there after sales service.

16. Do your insurance company conduct feedback?

1. Yes
2. No

Table:

Options No. of respondents Percentage

Yes 69 78.4%

No 19 21.6%

Diagram:

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Interpretation:

In the above table we seen that 69 respondent said the insurance company conduct feedback, 19
respondent said they not conduct any feedaback related insuance policy.

Among the 88 respondent 78.4% respondent said their Insurance Companies on regular basis feedbacks
and 21.6% respondent said Feedbacks are not taken regularly.

FINDINGS

 According to my survey , An insurance policy and Customer Relationship Mangement in

insurance sector is known by everyone .
 I found that most of the respondent are female (student, housewives, working).
 The majority of respondents belongs to age group of 20-30 year , 30-40year.
 People are more willing to invest in Life insurance products as compare to Non Life insurance
product.
 Most of the insurance companies consider Customer Service as the main reason for the customers
to choose their company.

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  In the insurance sector LIC is the number one company prefer by the people as its market is very
high as compare to other insurance companies.
 Most of the respondents look for long term investment with the preferred company.
 Most of the insurance companies prefer monthly and Quarterly basis to communicate with their
customers.
 Customer Service is the prime reason given by the respondents behind taking any insurance
policy.
 Telephone is the most preferred mode of communication by the services companies.
 Also ,73% people said the CRM representative provide propmt service.

SUGGESTIONS & RECOMMENDATION

To achieve successful CRM, a company should understand what is and why it is beneficial to customers
in order to retain them for long time. Customers give priority only to satisfy their needs. The success rate
of the CRM depends on the quality of CRM. Many infrastructural changes are required for industry
deployments to be successful. These changes include updating administration systems, consolidating back
offices, integrating front-end channels with back-end systems, moving customer information to front-end
channels and dealing with data issues. The future of CRM is very hopeful in insurance sector.

 As the company is a new company it has to really work hard to get itself promoted.

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  The company could start sponsoring major events and conduct talk shows and seminars to get
noticed. It could also take the help of NGOs. There are many people in India who still do not
know about the concept of insurance. The company could take this as an opportunity by trying to
create awareness
 IDBI Fortis should focus on its customer services as more and more people are inclined to this
feature of the insurance policy which helps to acquire more customers and retain the existing one
 L.I.C. should bring effective communication and efficiency in its contact center in order to avoid
any chaos and problem at the customer end in order to develop strong relationship with them.
 IDBI Federal should adopt face to face interaction with its customers as the customer’s
expectations are fluctuating day by day so to overcome that it is required to understand the need
and behavior of the customer in a better way which can be done by face-to-face interaction with
him.
 L.I.C. should contact its customers on the monthly basis in order to make continuous interaction
with them and taking regular feedback to improvise their operations
 L.I.C. should make some innovative strategy to build loyal customers and retain the existing one
so that they can make long term relationship with the company.
 IDBI Federal should launch the open-source software as it is seen that there is lack of awareness
about the company in the market
 L.I.C. should target the consultancy companies for its promotion.
 L.I.C. needs to understand the consumer buying behavior and formulate its policy accordingly.

This project is conducted for getting the knowledge (theoretical & practical) as well as for the future
aspects of the CRM services in insurance sector in India. As it is a very vast area which includes a greater
number of services related to it. It is very competitive activity for insurance which directly provides a
various type of services under one roof. As it includes various types of services it has its advantage as
well as disadvantage. Same, as coin has two sides, this service is valuable to the customers, clients, dual/
individual, etc...

But on the other hand, it has its limitations which show that people are not aware of it such as (clients,
group/individuals, etc.…). So, to make it helpful to its providers & services buyers or policy holders, the
awareness of it is necessary because some or the other are taking the policy for long or short period of
time. It plays a very important role in the development of a country especially in industrial sectors. So,

54 | P a g e
CRM service providers(department) should be careful always about the services while provided to their
customers & try to make its awareness to all the customers, not only to maximization the profit, but
because there is a rising of competition in this sector.

To the insurer, make its awareness to yours staff members/agents of all branches by the way of training
programs, seminars, workshops, etc. because many of them don’t know that how the CRM actually is to
be conduct may be there some of branches are providing this services, in real term all the agents, advisors,
etc. are providing this service in effective manner but they don’t know the importance of it, at industry
level so the awareness of this is necessary, only the managers or big post personality know about the
CRM & its services as well its activities in better way.

CONCLUSION

CRM is a powerful tool, but it remains just a technology that cannot yield results by itself and it needs
someone to know how to use it. Managers often used the CRM system to gather information about their
customers and to be able to adapt their offer to the needs and desire of each client. Unfortunately
adjusting the offer for a market segment which is too narrow can be extremely expensive and if the
organization fails to effectively process the information it can be overwhelmed by too much information.
No matter how well implemented, the customer relationship management system cannot replace a solid
strategy, focusing on the client. In fact, such a strategy must already exist when implementing CRM. To

55 | P a g e
develop such a client-oriented strategy the company must first of all understand who the target customer
is and for this he should answer some questions:

o What are your most profitable customers? What makes them profitable?

o Why do they buy from you and not from your competitors?

o What percentage from the total population in represented by these clients? Can you find more clients
with the same profile?

o How can you determine these customers to buy more from you?

o How will you manage the less profitable clients in order to reduce the costs they imply?

The answers to the above questions are shaping what is called customer segmentation analysis. Until you
understand who your profitable customers are you will not be able to use the customer relationship
management system at its full capacity. The CRM system can help in many ways such as analysis of data
related to costs and revenues of the clients, consumer behavior related to products and services,
identifying profitable customers and those with potential, but it cannot replace human labor which can
develop a unique strategy for acquiring and building relationships with customers and retaining them on
the long term.

We do recognize the limitations of our study, which essentially stand in the lack of a case study.
However, we consider the topic of customer relationship management very relevant in the field of
insurance and we believe that this topic deserves wider research on a really relevant sample, analyzing the
way insurance companies manage to retain or lose clients by enforcing CRM strategies or by neglecting
to do so.

Regarding the insurance industry it has been often accused of being reluctant to change. It must however
be noted that this industry is built on the notion of risk management. Avoiding excessive risks, insurers
make profit by investing the client’s money and paying less than they receive, therefore the reluctance to
risk is exactly the thing that characterizes them. The CRM implementation process, as well as all the
requirements of such a large project, has been the main source of innovation in the insurance industry. In
general, insurers have focused on four types of projects: optimizing the customer relation center, sales
force transformation, industrialization / automation of sales and monitoring of social networks

LIC, ICICI Prudential and HDFC offer various ULIPs under the same banner i.e., wealthsurance as
compared to IDBI Federal. Hence, they give more flexibility to the customer which helps to optimize the
relationship with the customer.

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 Bank deposits, mutual funds and insurance are considered to be the most preferred investment
instrument by the respondents.

 CRM practices of life insurance companies have seen a dramatic change over the past few years.
Most of the insurance companies have very transparent and effective CRM models. However, it is
evident that the private companies have been the pioneers in initiating the CRM strategies because
of service quality perceptions and increased competition in the industry. 

 However, life insurance products are now need based and customer centric. Customers have
shown a clear preference for private life insurance companies due to their persistent efforts to
build new clients and retain existing clients. Private companies also made it relatively easy for
clients to revalidate lapsed policies and are very effective in quick claim settlements.

 Today most of the insurance companies are recruiting agents who are professionals who can sell
their unsought insurance products.

 Companies also provide better policies based on customer needs and demands.

 In this competitive market companies provide better service quality, pricing, advertising and
promotional activities.

 CRM is used to retain the customer and communicate with them.

 CRM solutions can help the sales team make clear decisions.

 CRM solution can go a long way in helping companies implement effective measures to manage
risk.

 There is definitely a shift of customers’ preference from public sector LIC to private life insurance
companies. This would be even more evident if private companies continue to reinvent
themselves, develop customer need-based products, eliminate mis-selling and concentrate on
customer satisfaction and customer relationship building as its main prerogative.

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  The major competitive forces which are necessary to build the strong customer relationships are:
a) Better Quality
b) Low cost
c) Reliability –Delivering on Promises
d) Responsiveness- Willing to Help
e) Brand Image

BIBLIOGRAPHY

This project has been made with the references taken from the following portals:

➢ Newspapers

➢ Magazines Published

➢ Annual Reports

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➢ Online Journals

Websites:

http://www.google.co.in/

www.idbifederal.com

www.metlife.co.in

https://www.licindia.in/

www.eagonreligare.com

http://www.scribd.com

www.irda.org

www.weki.comipedia.com

http://wikipidia.com

https://www.investopedia.com/terms/i/insurance.asp

ANNEXURES

1.Gender

2.The Age group of respondents

a) 20-30 year
b) 30-40 year
c) 40-50 year

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 d) 50-above

3.What is Occupation of respondent?

a) Government service
b) Self-employee
c) Student
d) Private companies

4.What do you think is the main reason to choose particular Insurance company?

a) Service
b) Reliability
c) Image
d) Accessibility

5.Which will be your preferable company to buy Insurance?

a) LIC
b) IDBI Federal
c) ICICI prudential
d) SBI Life Insurance

6.What is the reason to take insurance policy?

a) Risk management
b) Tax saving
c) Pension
d) Savings

7.What medium they use to contact you?

a) Telephones
b) Letters
c) Face to Face
60 | P a g e
 d) Emails

8.Does the service provider / insurance company disclose correct and fair Terms and conditions while
selling the Insurance?

a) Yes
b) No

9.How is the Documentation process while taking of an insurance?

a) Lengthy/ Time consuming

b) Quick

10.Which policy option you generally prefer while paying Life Insurance Premium?

a) Term life insurance

b) Whole life insurance
c) Endowment life insurance policy
d) Money back insurance policy

11.How generally the CRM representatives cooperate with you to provide Service?

a) Prompt service
b) Delay service

12.How long do they take to resolve the complaints?

a) 1-3 days
b) 3-6 days
c) 7-10 days
d) 10 days-above

13.How often Companies contact you after purchase of policy?

a) Monthly
b) Quarterly

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 c) Semi-Annually
d) Annually

14.What is the strategies adopted by the companies to established loyal customers?

a) Provide Gifts
b) Additional bonus
c) Regular feedback
d) Provide quality service

15.After taking an insurance how is After Sales Service of Insurance company?

a) Prompt
b) Satisfactory
c) Dissatisfactory

16.Do your insurance company conduct feedback?

a) Yes
b) No

CASE STUDY

Reliance General Insurance

CRM next improves adherence to turn-around-time by 400%.

Company Profile
Region: India
Revenue: USD 16.98 million

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Industry: Insurance
Function: Executive, IT, marketing, operations, sales, service & support

CRM next has significantly improved our processes across enterprise. Now we get end-to-end visibility of
information including process flows across departments and systems. Our users love it and our customers
are much happier. It is truly our star investment.

Naganathan Sriram
Chief Technology & Operations Office

Background
 Leading providers of Health, Car, Home, Travel and Business insurance.

 Network of over 200 offices spread across 173 cities in 22 states of India.

 Founded in 2000.

Challenges
 Different processes for different customer segments.

 Reorganize and streamline reporting systems.

 Eliminate multiple reporting tools and constant data reconciliation.

 Implement "one version of the truth" solution across information silos.

Solutions
 Targeted sale for corporate customers with a greater focus on relationship building.
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 Effective lead management through direct channel & Tele sales.

 Lead capture through various source & distribution across agencies for a quicker inspection & sale
of policy.

 Effective customer servicing by intelligent allocation of cases to specialist teams & closures
within SLA.

 Integration between various core systems for effective customer servicing/operations

management.

 Sales Force Automation, Marketing Automation, Customer Service & Support along with
Analytics module from CRM next.

 Sales processes for Corporate and Government Services Group, Retail and Tele sales.

 Starting with 500 users in 2008, Reliance General Insurance has now CRM next user base of 950.

Benefits
 Enhanced the capabilities of customer servicing by increasing first time right
(FTR) and turnaround time (TAT) adherence by 400%.

 Reduced the cost of servicing by a great margin.

 Improved lead conversion.

 Increased the capability of customer retention.

 Reduced time and IT resource requirements for regulatory reporting.

How "People" is Going to Make an Impact on Insurance's CRM

The Mysterious Power of Cross-Functional Team and Agent Buy-In

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Ms. Ro King, GCCRM Associate (US) 

This article is exclusively written for GCCRM.

Over the past ten years, the business case for implementing a CRM approach in the insurance industry has
not changed significantly. Property and casualty insurers along with life insurers continue to view CRM
as a means of improving customer service and reducing the cost to deliver that service in an industry
marked by tightening profit margins due to convergence and product commoditization. Unfortunately,
the obstacles to implementing a CRM approach have also remained about the same over the last
decade. From a technical systems perspective, most firms still have difficulty generating a single,
common customer view. 

While this obstacle might be overcome through business processes or organizational alignment, the key
people in an insurance company have different objectives: marketers focus on generating leads; agents
concentrate on sales, often to their own "book" of customers; CSRs are charged with service, sometimes
ignoring their potential for cross-selling or up-selling, and claims adjusters work toward settling claims.
Each group may work efficiently and effectively to reach their goals; yet, without coordinated direction
and a single customer view, multiple customer touch points are bound to compete or, at the very least,
confuse the customer. 

It is not that insurance firms are not attempting to implement CRM to help each employee group work
together and work more effectively. Many case studies cite reasonable objectives for insurance company
CRM plans. They look for more accurate targeting of campaigns for marketers or to create better
customer interactions for agents. Some plans offer better cross-selling for CSRs or increased retention of
high-value customers across all channels. Yet, studies over the past several years show that only between
30 and 50% of these CRM efforts succeed. 

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In reviewing insurance client successes to try to spot best practices, it became apparent that success did
not depend solely on choosing the appropriate technology or re-engineering customer-facing processes.
The common thread in each case was people. In one case study, the creation of an effective cross-
functional team led to the success of a CRM approach to marketing and analysis. In another, the buy-in of
sales agents or CSRs enabled an insurer to achieve their CRM objectives. 

Case Study: Accomplishments of a Cross-Functional Team 

Situation 

A US life insurance client approached CRM from the perspective of their marketing department.
Marketing wanted to reach consumers at the appropriate time with the appropriate product. However,
their ability to market effectively based on triggers (changes in interest rates) and lifecycle events
(marriage, childbirth, home purchase) was limited by the customer and prospect data available to them. 

In addition to these timing and targeting issues, they had contact management concerns. For example,
multiple contacts about the same product to the same consumer due to limited ability to suppress data
across multiple databases increased their overall cost per sale. Also, selecting consumers from a variety of
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databases lead to inconsistent processing of suppressions including consumer privacy preferences. 

Finally, marketing was hindered by incomplete data feedback loops from the sales force (captive agents)
as well as the call center (CSRs). Without consistent and reliable information about sales and the sales
process, marketing was only able to perform cursory response analysis for their campaigns. In effect, the
insurer determined that their marketing environment was not conducive to CRM and closed-loop
marketing and analysis and the current situation restricted the firm's ability to maximize return on
investment from marketing activities. 

Proposed Solution 

The client's approach to their situation combined technology and process solutions in support of their
customer-focused strategy. On the technology front, the client had identified a need for a single,
integrated view of the customer or prospect. This single view would alleviate current targeting and
contact management issues. They began with business requirements and included defining the data about
customers and prospects that needed to be collected to support marketing activities. 

To facilitate the translation of business requirements into technical requirements, the insurer formed a
cross-functional team including members from the information technology (IT) department, marketers
and representatives from sales and the call center. The formation of this team at an early stage, their
strength at project management, and their early adoption of progress measures proved to be a critical
success factor for the entire project. This team led the design and guided the development of the
Integrated Customer and Prospect Database (IPCD). 

The representatives from IT, ensured that the design was technologically efficient, that it matched the
technical standards of other systems within the company and that the project stayed on time and within
budget. The representatives from marketing made certain that the design would meet their information
requirements for targeting and for post-campaign analysis. The sales and call center reps tested the system
for ease of use as they would be entering manually some of the data that marketing required for analysis.
These front-office representatives were familiar with the sales and service processes and the day-to-day
workload of agents and CSRs so they were able to adjust designs that looked good in theory but would
prove too cumbersome to maintain in the field. 

The project team was also charged with automating the business processes supporting marketing.
Selecting and installing campaign management software was the primary component of the business

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process automation. Once again the varied experience of the cross-functional team came into play. In the
original process, marketers called upon the IT department to pull customer and prospect data from
multiple databases for pre-campaign analysis and to complete selections from the databases as targets of
the campaigns. By implementing the IPCD and choosing a campaign management tool to sit on top of
that database, the marketers were empowered to pull customer and prospect data on their own, analyze
the data to design campaigns and even perform campaign selections on their own. 

The overall process changes were more substantial than simply adding campaign management software.
However, this technological change was the most significant. Marketers worked with mentors from IT
during a training and transition period to better understand the intricacies of the data. Campaigns
transitioned from the "old" process to the "new" in order of their complexity, with simple, recurring
campaigns transferred to the new process initially. In all, it took more than nine months to transition all
campaigns to the new process, to provide marketers with the skills and knowledge they needed to succeed
and to re-assign IT staff to other areas. 

Success Metrics 

After eighteen months, the project team reviewed the success metrics they developed at the beginning of
the project to measure their progress. The project timing had changed - another large systems project had
pushed the IPCD back several months, and the team decided to push ahead with the implementation of
the campaign management software and the process changes. They were able to create a small, integrated
data mart for the campaign management tool to support the simple, recurring campaigns. And, of course,
with missed project deadlines and changes to project scope came increases to project budget. 

While no project team likes to see their project rated behind schedule or over-budget, they were pleased
to review other metrics. From a cost perspective, the project enabled staff savings of three full-time
technology consultants who had been assigned to marketing previously. Process improvements also
afforded a decrease in campaign execution from 6-8 weeks to 2 - 3 weeks. Improvements in the quality of
data, targeting capability and the ability to eliminate duplicate mailings nearly doubled the response rate
on some mailings. All told, the team was able to report an expected return of about $1.50 for every dollar
invested in the project. 

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Case Study: Agent Buy-In Ensures CRM System Success

Situation 

At another US insurer whose products include property and casualty and life insurance as well as
annuities and other investment products, the project began after the implementation of a CRM system.
The client had completed a CRM project which included the development of a data warehouse that
provided a single, common customer view. A "CRM system" had been installed in the call center and in
sales offices. Marketing and sales processes had been revamped to include the use of the new system and
the newly available data. Everyone had been trained and sent back into the field...yet the promised returns
on the investment in the systems, processes and training had failed to materialize. This project began with
diagnostic interviews to determine what was going on. 

It seemed that the agents in the field and the CSRs in the call center had not been part of the original
CRM implementation. Yes, they had been included in kick-off meetings and two-day training sessions,
but for the most part, they did not believe that there was much benefit to using the new system. For one
thing, they thought that much of the customer data was "wrong" or "out of date." They preferred to use
their individual laptops, PDAs and rolodexes for customer information. At the call center, many of the
data fields could be easily skipped by typing "9999" or picking "other" in the drop down box rather than
asking a prospect the question. As incentives were based on call times, there did not seem to be a reason
to spend extra time with prospects or customers to correct addresses or gather data requested by the
marketing department. 

Proposed Solution 

While the project's aims included data cleaning and data collection, the primary objectives were about
people - getting the agents and CSRs' buy-in so they would use the system and maintain the data. In the
case of the CSRs, the approach was two-pronged. First, each call center team was partnered with a
marketing team. In brief monthly meetings, the marketers explained how they used the data collected by
the CSRs using the CRM system. In these meetings, CSRs were often able to add texture to the data
collected and offer ideas for other data they might gather or changes to the drop down menus that would
make them easier to use. The meetings benefited marketers and CSRs and helped to create an effective
working relationship between the groups from their previous antagonistic stance toward each other. The

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call center measurement and incentive programs were also changed over time to balance call time with
data correction and collection. 

Getting buy-in from the agents proved to be a bit more difficult. Many of them had worked with the
company during a previous failed attempt to centralize information and so maintained a "this too shall
pass" attitude toward the new system. Like CSR buy-in, agent buy-in required two simultaneous projects.
In the first project, the top customers (based on profitability) were chosen and categorized by agent.
Reports about these clients were produced on a weekly basis for sales management and the agents and
sales management meetings began including a section on cross-sales and clean data about these clients.
Data updates were tracked in a report and agents received a higher incentive for cross-selling to clients
where data had been improved. 

In addition, a group of newer agents were selected for a pilot project where they worked with consultants
to learn how to use the new system and new process more effectively in their daily routines. In exchange
for their cooperation, they received access to orphaned accounts and new leads generated by marketing
that were not available to the rest of the sales force. As their weekly sales numbers improved, they acted
as advocates for the new system and processes. Other agents began to ask to be included in the pilot
program to help improve their own results. In this way, the system and processes were actually rolled-out
to the agents again, however, this time they were asking to be included in the project rather than required
to attend a kick-off meeting and training session. 

Success Metrics 

Unlike the insurer in the first case study, there was no baseline business case for this company so there
are not relevant comparisons for time to sale or return on the investment in hardware, software, training or
consulting. The success metric used by the firm was the number of agents using the system and the
improvement in the cleanliness of their data as measured by things like returned mail and wrong phone
numbers. In each case, the client was pleased. Data cleanliness improved to the point that it became a
much smaller part of monthly marketing meetings and weekly sales meeting. In fact, people began to take
the quality of the data for granted when they did analyses or tried to contact customers.

At the end of the project, there were still some hold-outs in the agent ranks who continued to use their
own homegrown systems, paper and rolodexes to manage their sales. As long as this was a small number
of agents and as long as all new agents used the new system and processes, the firm decided not to require
them to change. Even after more than two years, some of the hold-out agents have requested inclusion in

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the new system. 

Each of these cases illustrates the importance of people throughout any project which requires the high
level of organizational change needed by a CRM project. 
Given the various goals and objectives of departments within an insurance company, the need to handle
the people portion of a CRM project effectively is magnified. Whether it is including the right people in
the project team from the beginning or effectively managing change during implementation, without
people and their ideas, expertise, and buy-in, no CRM project in the insurance industry can expect
success. 

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THANK YOU

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