A PROJECT REPORT ON STUDY ON AFTER SALES SERVICE AND CUSTOMER SATISFACTION OF THE ICICI PRUDENTIAL LIFE INSURANCE COMPANY IN BANCASSURACE, KOLKATA.
A Project Report Submitted in Partial Fulfillment of Master of Business Administration (MBA) In NORTH EASTERN REGIONAL INSTITUTE OF MANAGEMENT Affiliated to Dibrugarh University and Appoved by AICTE
Under the Guidance of Institutional Guide Mr.Rahul Purkayastha
Organizational Guide Mr. Faculty,NERIM,Guwahati
Submitted by Soma Chakraborty MBA 3RD SEMESTER, ROLL-68
What is Life Insurance? Life insurance is a guarantee that your family will receive financial support, even in your absence. Put simply, life insurance provides your family with a sum of money should something happen to you. It thus permanently protects your family from financial crises. In addition to serving as a protective cover, life insurance acts as a flexible money-saving
scheme, which empowers you to accumulate wealth-to buy a new car, get your children married and even retire comfortably. Key Benefits of Life Insurance Need for Life Insurance Today, there is no shortage of investment options for a person to choose from. Modern day investments include gold, property, fixed income instruments, mutual funds and of course, life insurance. Given the plethora of choices, it becomes imperative to make the right choice when investing your hard-earned money. Life insurance Is a unique investment that helps you to meet your dual needs –? saving for life's important goals, and protecting your assets. Asset Protection From an investor's point of view, an investment can play two roles – asset appreciation or asset protection. While most financial instruments have the underlying benefit of asset appreciation, life insurance is unique in that it gives the customer the reassurance of asset protection, along with a strong element of asset appreciation. The core benefit of life insurance is that the financial interests of One’s family remains protected from circumstances such as loss of income due to critical illness or death of the policyholder. Simultaneously, insurance products also have a strong inbuilt wealth creation proposition. The customer therefore benefits on two counts and life insurance occupies a unique space in the landscape of investment options available to a customer.
Goal based savings Each of us has some goals in life for which we need to save. For a young, newly married couple, it could be buying a house. Once, they decide to start a family, the goal changes to planning for the education or marriage of their children. As one grows older, planning for one's retirement will begin to take precedence. Clearly, as your life stage and therefore your financial goals change, the instrument in which you invest should offer corresponding benefits pertinent to the new life stage. Life insurance is the only investment option that offers specific products tailor-made for different life stages. It thus ensures that the benefits offered to the customer reflect the needs of the customer at that particular life stage, and hence ensures that the financial goals of those life stages are met. The table below gives a general guide to the plans that are Appropriate
for
different
life
stages.
Life Stage Primary Need Life Insurance Product Young & Single Asset creation Wealth creation plans Young & JustAsset creation & protection Wealth creation and mortgage married protection plans Married with kids Children's education, AssetEducation insurance, mortgage creation and protection protection & wealth creation plans Middle aged withPlanning for retirement &Retirement solutions & mortgage grown up kids asset protection protection Across all life-Health plans Health Insurance stages
CONCEPTUAL BACKGROUND •
Satisfaction is defined as . . .
“A person’s feeling of pleasure or disappointment resulting from comparing a product’s perceived performance (or outcome) in relation to his or her expectations.” Customer Satisfaction can be defined as supplying or gratifying all wants or wishes, fulfilling conditions or desires, or the state of the mind anything that makes a customer feel pleased or contented. Consumer Behavior: Consumer behavior is defined as the behavior that consumers display in searching for, purchasing, using, evaluating and disposing of products and services that they expect will satisfy their needs. The study of the processes involved when individuals or groups select, purchase, use, or dispose of products, services ideas, or experiences to satisfy needs and desires Customer value: The ratio between the customers’s perceived benefits (economic, functional and psychological) and the resources (momentary, time, effort, psychological) used to obtain those benefits. Customer satisfaction: Customer satisfaction is the individual’s perception of the performance of the product or service in relation to his or her expectations. Motivation: The processes that account for an individual’s intensity, direction, and persistence of effort toward attaining a goal. Personality can be described ad the psychological characteristics that both determine and reflect how person responds to his or her environment. Perception is defined as the process by which an individual selects, organizes, and interprets stimuli into a meaningful and coherent picture of the world. Consumer learning is the process by which individuals acquire the purchase and consumption knowledge and experience they apply to future related behavior. THE CONSUMER ADOPTION PROCESS The consumer adoption process is the process by which customers learn about new products, try them, and adopt or reject them. Today many marketers are targeting heavy users and early adopters of new products recognizing that specific media can reach both groups and tend to be opinion leaders. The consumer adoption process is influenced by many factors beyond the marketer’s control, including consumers and organizations
willingness to try new products, personal influences and the characteristics of the new products or innovations
STAGES OF ADOPTION PROCESS An innovation refers to any good, service, or idea. That is perceived by someone as new. The idea may have long history, but it is an innovation to the person who sees it as new. Innovation takes time to spread through the special system. The consumer adoption process focuses on the mental process through which an individual passes from first hearing about an innovation to final adoption. Adopters of new products have moved through the following five stages. 1. AWARENESS: The consumer becomes aware of the innovation but lacks information about it. 2. INTEREST: The consumer is stimulated to see the information about the innovation. 3. EVALUATION: The Consumer considers whether to try the innovation or not. 4. TRIAL: The consumer tries the innovation to improve his estimate of its value. 5. ADOPTION: The consumer decides to make full and regular use of the innovation. STATEMENT OF PROBLEM: “STUDY ON AFTER SALES SERVICE AND CUSTOMER SATISFACTION OF THE ICICI PRUDENTIAL LIFE INSURANCE COMPANY IN KOLKATA.” OBJECTIVES OF THE PROJECT: The objective behind the conducting project exercise was to get useful insight about the insurance sector. I have prepared this report with some specific objectives. The objective is as under: 1. Identify the diverse customer requirement. 2. Sell insurance professionally. 3. To find out how people think about private life insurance. 4. To find out what respondents expect from life insurance.
5. To understand the present after sales-service and how it can be improved. 6. To come out with conclusion and suggestions based on the analysis and the Interpretation of data. PURPOSE, SCOPE AND LIMITATION OF THE STUDY: The main purpose of the project is to study the after sales service of ICICI Pru in Kolkata and to focus on improvement of customer relationship building.The scope of the project has two parts first,analyzing the present after sales service and second finding out new and innovative means to retain the existing customers by enhancing their satisfaction level. The limitation of the study is the major perception of the people towards private insurance players . SIGNIFICANCE OF THE STUDY: The project is concerned with the Study on after sales service and customer satisfaction of the ICICI Prudential Life Insurance Company in Kolkata. This study is very useful as the financial market become more sophisticated and complex, investor needs a financial intermediary who provides the required knowledge and professional expertise on successful investing and Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy. As after sales service plays a very crucial role in generating more leads because of obvious reason that it builds customer relationship more productive.
RESEARCH METHODOLOGY Research in common parlance refers to a search for knowledge. One can also define research as a scientific and systematic search for pertinent information on a specific topic. The word research has been derived from French word Researcher means to search.
FRANCIES RUMMER defined “Research: It is a careful inquiry or examination to discover new information or relationship and to expand or verify existing knowledge. Research is the solution of the problem, whether created or already generated. When research is done, some new out come, so that the problem (created or generated) to be solved. RESEARCH DESIGN:
Research Design is the conceptual structure within which research is conducted. It constitutes the blueprint for collection, measurement and analysis of data. The design used for carrying out this research is Descriptive. DATA TYPE: In this research the type of data collection is • •
Primary data Secondary data
SOURCES OF DATA Primary Data: Filling up questionnaire by past and existing customers of ICICI Pru. Secondary Data: Books,newspapers, Websites, and data from company officials. SAMPLING PLAN: It is very difficult to collect information from every member of a population .As time and costs are the major limitation that the researcher faces. A sample of 50 was taken the sample size of 50 individuals were selected on the basis of convenient sampling technique. The individuals were selected from past and existing list of the customers to form sample and data were collected from them for the research study. ANALYSIS AND INTERPRETATION: Data collection through questionnaire resulted in availability of the desired information but these were useless until there were analyzed. Various steps required for this purpose were editing, coding and tabulating. Tabulating refers to bringing together similar data and compiling them in an accurate and meaningful manner. The data collected by questionnaire was analyzed, interpreted with the help of table, bar chart and pie chart. INDUSTRY PROFILE: 0VERVIEW OF THE INSURANCE INDUSTRY IN INDIA: The economic reforms undertaken in the last 15 years have brought about a considerable improvement in the health of banks and financial institutions in India. The banking sector
is a very important sector of the Indian economy. The sector has made a marked improvement in the liberalization period. There has been extraordinary progress in the financial health of the commercial banks with respect to capital adequacy, profitability, asset quality and risk management. Deregulation has opened new doors for banks to increase revenues by entering into investment banking, insurance, credit cards, depository services, mortgage, securitization, etc. The limit for foreign direct investment in private banks has been increased from 49% to 74%. In addition, the limit for foreign institutional investment in private banks is 49%. Liberalization and globalization have created a more challenging environment in the banking sector as well as in the other segments of the financial sector such as mutual funds, Non Banking Finance Companies, post offices, capital markets, venture capitalists, etc. Now the challenges faced by the sector would be gaining profitability, reinforcing technology, maintaining global standards, corporate governance, sharpening skills, risk management and, the most important of all, to establish 'Customer Intimacy'. The insurance business is one of the most rapidly growing areas in the financial sector. As an economy grows over the years, insurance sector intensifies and broadens its reach. Every practical and futuristic individual would want himself, his family and his assets to be insured. Insurance deals mainly with life and general insurance. India has a large insurance market commensurate with its population. The IRDA Act 1999 (Insurance Regulatory and Development Authority of India Act) has given new opportunities to private players to enter into the market on the fulfillment of certain prerequisites. The IRDA is the licensing authority in the sector; the current FDI cap/Equity in the sector stands at 26 percent. There is no doubt the challenges ahead will become tougher with more companies competing both in general and life Insurance. Also mortgage insurance will soon be coming into the industry. New players have contributed to the launch of innovative products, services and value-added benefits. Major foreign players have entered the country and announced joint ventures in both life and non-life areas. These include New York Life, Aviva, Tokio Marine, Allianz, Standard Life, Lombard General, AIG, AMP and Sun Life among others. Commercial banks are coming up with more and more vacancies, and the banking sector now has more new jobs than any other sector. Right from the branch level to the highest level, there is tremendous range of opportunities available in the sector. PRESENT SCENARIO OF INSURANCE INDUSTRY
India with about 200 million middle class household shows a huge untapped potential for players in the insurance industry. Saturation of markets in many developed economies has made the Indian market even more attractive for global insurance majors. The insurance sector in India has come to a position of very
high potential and competitiveness in the market. Indians, have always seen life insurance as a tax saving device, are now suddenly turning to the private sector that are providing them new products and variety for their choice. Consumers remain the most important centre of the insurance sector. After the entry of the foreign players the industry is seeing a lot of competition and thus improvement of the customer service in the industry. Computerisation of operations and updating of technology has become imperative in the current scenario. Foreign players are bringing in international best practices in service through use of latest technologies The insurance agents still remain the main source through which insurance products are sold. The concept is very well established in the country like India but still the increasing use of other sources is imperative. At present the distribution channels that are available in the market are listed below. Direct selling Corporate agents Group selling Brokers and cooperative societies Bancassurance Customers have tremendous choice from a large variety of products from pure term (risk) insurance to unit-linked investment products. Customers are offered unbundled products with a variety of benefits as riders from which they can choose. More customers are buying products and services based on their true needs and not just traditional moneyback policies, which is not considered very appropriate for long-term protection and savings. There is lots of saving and investment plans in the market. However, there are still some key new products yet to be introduced - e.g. health products. The rural consumer is now exhibiting an increasing propensity for insurance products. A research conducted exhibited that the rural consumers are willing to dole out anything between Rs 3,500 and Rs 2,900 as premium each year. The perceived benefits of buying a life policy range from security of income bulk return in future, daughter's marriage, children's education and good return on savings, in that order, the study adds. The Insurance Regulatory and Development Authority (IRDA): Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in Parliament in December 1999. The IRDA since its incorporation as a statutory body in
April 2000 has fastidiously stuck to its schedule of framing regulations and registering the private sector insurance companies. The other decisions taken simultaneously to provide the supporting systems to the insurance sector and in particular the life insurance companies were the launch of the IRDA’s online service for issue and renewal of licenses to agents. The approval of institutions for imparting training to agents has also ensured that the insurance companies would have a trained workforce of insurance agents in place to sell their products, which are expected to be introduced by early next year. Since being set up as an independent statutory body the IRDA has put in a framework of globally compatible regulations. In the private sector 12 life insurance and 6 general insurance companies have been registered. With the demographic changes and changing life styles, the demand for insurance cover has also evolved taking into consideration the needs of prospective policyholder for packaged products. There have been innovations in the types of products developed by the insurers, which are relevant to the people of different age groups, and suit their requirements. Continued innovations in product development has resulted in a wide range of flexible products to meet the requirements for cover at different stages of life -today a variety of products are available ranging from traditional to Unit linked providing protection towards child, endowment, capital guarantee, pension and group solutions. A number of new products have been introduced in the life segment with guaranteed additions, which were subsequently withdrawn/toned down; single premium mode has been popularized; unit linked products; and add-on/riders including accidental death; dismemberment, critical illness, fixed term assurance risk cover, group hospital and surgical treatment, hospital cash benefits, etc. Comprehensive packaged products have been popularized with features of endowment, money back, whole life, single premium, regular premium, rebate in premium for higher sum assured, premium mode rebate, etc., together with riders to the base products. 1.5 Historical Perspective • • •
Prior to 1956 -242 companies operating 1956 -Nationalization- LIC monopoly player -Government control 2001 -Opened up sector
1.6 Contribution to Indian Economy • • •
Life Insurance is the only sector which garners long term savings. Spread of financial services in rural areas and amongst socially less privileged. Long term funds for infrastructure.
• •
Strong positive correlation between development of capital markets and insurance/pension structure. Employment generation.
1.7 Insurance Industry prior to de-regulation Prior to deregulation in 2000, market was a public monopoly. •
Public Monopoly - 2000 Offices - Over 800,000 agents
• • • • • •
Distribution through tied agents only Sales approach primarily on a tax savings platform Traditional style product offering : Endowment and money back plans Inadequate and inflexible products Pensions: Small part of product offer Limited focus on customer needs
1.8
Improving •
Service
Pre Deregulation – Limited Distribution
Channel Access • Advisors
Service Points • Branch Network
Use of IT • Limited use of IT
•
•
Post Deregulation – Service through Distribution
Standards
Multi Channel Access • •
•
Multiple Service Use of IT Points Advisors • Call Centers • Shorter time around Brokers & Corporate • Email time agents • Website • Claims Bancassurance
•
Branch Network
•
Policy Issuance
•
COMPANY PROFILE: ICICI Prudential Life Insurance Company Limited (‘the Company’) a joint venture between ICICI Bank Limited and Prudential plc of UK was incorporated on July 20, 2000 as a company under the Companies Act, 1956 (‘the Act’). The Company is licensed by the Insurance Regulatory and Development Authority (‘IRDA’) for carrying life insurance business in India. ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse and prudential plc, a leading international financial services group headquartered in the United Kingdom (UK). The company brings together the local market expertise and financial strength of ICICI Bank and Prudential’s International life insurance experience. The company was granted a certificate of Registration by the IRDA on November 24, 2000 and eighteen days later, issued its first policy on December 12. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA).
From its early days, ICICI Prudential seemed to have the wherewithal for a large-scale business. By March 31, 2002, a little over a year since its launch, the company had issued 100,000 policies translating into premium income of approximately Rs. 1,200 million on a sum assured of over Rs.23 billion. When the company began its operations, the need was to build a brand that was relatable to, symbolized trust and was easily recognized and understood. It launched a corporate campaign ICICI Prudential also made using the theme of ‘Sindoor’ to epitomize protection, trust, togetherness and all that is Indian; endearing itself to the masses. The success of the campaign, ‘the calling card of the company’ saw the brand awareness scores almost at par with its 40 year old competitor. The theme of protection was also extended to subsequent product and category specific campaigns –from child plans to retirement solutions –which highlight how the company will be with its customers at every step of life. From day one, the company has unflinchingly focused on being mass-market player, developing products, creating a distribution network and deploying resources that would further its goal. Apart from ramping up thoroughly training its advisors, the company has twelve ‘Bancasurance’ partners –the largest in the country. It swiftly revised and added to its initial range of products, pioneering market-linked products and pension plans, to offer customers the most flexible life insurance policies in the country. In February 2004, ICICI Prudential increased its capital base by Rs. 500 million, its ninth capital hike, bringing the total paid –up equity capital to Rs. 6,750 million. With the authorized capital of the company standing at Rs. 12 billion, ICICI Prudential continues to have the highest capital base amongst all life insurers in the country. The challenge ICICI Prudential now faces is to retain its top-notch position and continue to deliver the finest life insurance and pension solutions to its ever-growing customer base. ICICI Prudential’s equity base stands at Rs. 1185 crore with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. For the year ended March 31, 2006, the company garnered Rs.2, 412 crore of weighted new business premium and wrote 837,963 policies. The sum assured in force stands at Rs.45, 888 crore. The company has a network of over 72,000 advisors; as well as 9 bancasurance partners and over 200 corporate agent and broker tie-ups. ICICI Prudential is also the only private life insurer in India to receive a National Insurer Financial Strength rating of AAA (Ind) from Fitch ratings. The AAA rating is the highest credit rating, and is a clear assurance of ICICI Prudential’s ability to meet its obligations to customers at the time of maturity or claims. For the past five years, ICICI Prudential has retained its position as the No.1 private insurer in the country, with a wide range of flexible products that meet the needs of the Indian customer at every step in life. Beginning operations in December 2000, ICICI Prudential’s success has been meteoric, becoming the number one private life insurer within months of launch. Today, it has one of the largest distribution networks amongst private life insurers in India, with branches
in 54 cities. The total number of policies issued stands at more than 780,000 with a total sum assured in excess of Rs.160 billion. ICICI Prudential closed the financial year ended march 31, 2010 with a total received premium income of Rs. 9.9 billion; up 135% last years total premium income of Rs.4.20 billion. New business premium income shows a 106% growth at Rs. 7.5 billion, driven mainly by the company’s range of unique unit-linked policies and pension plans. The company’s retail market share amongst private companies stood at 36%, making it clear leader in the segment. To add to its achievements, in the year 2009/10 it was adjudged Most Trusted Private Life Insurer (Economic Times ‘Most Trusted Brand Survey’ by AC Nielsen ORG-MARG). It was also conferred the ‘Outlook Money-Best Life Insurer’ award for the second year running. The company is also proud to have won Silver at EFFIES 2009 for its ‘Retire from work, not life’ campaign. Notably, ICICI Prudential was also short-listed to the final round for its ‘Sindoor campaign in EFFIES 2008. ICICI Prudential’s success is rooted in its philosophy to always offer the customer a choice. This has been the driving force behind its multi-channel distribution strategy, which includes advisors, banks, direct marketing and corporate agents. In fact, ICICI Prudential was the first life insurer to invest in multiple channels and offer the customer choice and access; thus reducing dependency on any one channel, great strides in the retirement solutions and pensions market. The Company’s penetration of the retirement market was driven by the focused approach towards creating awareness through sustained campaign; ‘Retire from work, not life’. Within six months, the campaign rewarded ICICI Prudential with an increased share of 23% of the total pensions market and 78% amongst private players. ICICI Prudential has one of the largest distribution networks amongst private life insurers in India, having commenced operations in 132 cities and towns in India, stretching from Bhuj in the west to Guwahati in the east, and Jammu in the north to Trivandrum in the south. The company has 9 bank partnerships for distribution, having agreements with ICICI Bank, Bank of India, Federal Bank, South Indian Bank, Lord Krishna Bank, and some co-operative banks, as well as over 200 corporate agents and brokers, it has also tied up with NGOs, MFIs and corporates for the distribution of rural policies. ICICI Prudential has recruited and trained more than 72,000 insurance advisors to interface with and advise customers. Further, it leverages its state-of-the-art IT infrastructure to provide superior quality of service to customers. About the Promoters ICICI Bank (NYSE:IBN) is India’s second largest bank with an asset base of Rs.2513.89 billion as on March 31, 2006. ICICI Bank provides a broad spectrum of financial services to individuals and companies. This includes mortgages, car and personal loans, credit and debit cards, corporate and agricultural finance. The Bank services a growing a customer base of more than 17 million customers through a multi
channel access network which includes over 620 branches and extension counters, 2200 ATMs, call centers and internet banking (www.icicibank.com) PRUDENTIAL plc, Established in London in 1848, through its business in the UK and Europe, the US and Asia, provides retail financial services products and services to more than 16 million customers, policy holder and unit holders world wide. As of December 31, 2005, the company had over US$ 400 billion in funds under management. Prudential has brought to market an integrated range of financial services products that now includes life assurance, pensions, mutual funds, banking, investment management and general insurance. In Asia, Prudential is the leading European life insurance company with a vast network of 23 life and mutual fund operations in twelve countries –China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand and Vietnam. Vision and Mission Their vision is to make ICICI Prudential Life Insurance Company the dominant new insurer in the life insurance industry. This they hope to achieve through their commitment to excellence, focus on service, speed
and
innovation,
and
leveraging
our
technological
expertise.
The success of the organisation will be founded on its strong focus on values and clarity of purpose. These include: Understanding the needs of customers and offering them
•
superior products and service •
Building long lasting relationships with their partners
•
Providing an enabling environment to foster growth and learning for their employees
Management Board
of
Directors
The ICICI Prudential Life Insurance Company Limited Board comprises reputed people
from
the
finance
industry
both
from
India
and
abroad.
Shri K.V. Kamath, Chairman Mr. Mark Tucker Smt. Lalita D. Gupte Mr. Danny Bardin Mrs. Kalpana Morparia Shri M.P. Modi Mr. John Caouette Shri S.P.Subhedar, (Alternate Director to Mr. Danny Bardin) Mr. Derek Stott, (Alternate Director to Mr. Mark Tucker) Smt. Shikha Sharma, Managing Director Management
Team
Ms. Shikha Sharma, Managing Director Mr. Kevin Wright, Executive Vice President - Sales & Distribution Ms. Madhavi Soman, Chief - Strategic Initiatives Mr. V. Rajagopalan, Appointed Actuary Mr. Sandeep Batra, Chief Financial Officer & Company Secretary Mr. Saugata Gupta, Chief - Marketing & Service Mr. Shubhro J. Mitra, Chief - Human Resources Corporate Office: ICCI 1089, Prabhadevi, Mumbai
Prulife Appasahab
Marathe 400
Towers, Marg, 025.
Telephone Number: Website : http://www.iciciprulife.com
022-462
1600
DISTRIBUTION SYSTEM Tied Agency Tied Agency is the largest distribution channel of ICICI Prudential, comprising a large advisor force that targets various customer segments. The strength of tied agency lies in an aggressive strategy of expanding and procuring quality business. With focus on sales & people development, tied agency has emerged as a robust, predictable and sustainable business model. Bancassurance and Alliances ICICI Prudential was a pioneer in offering life insurance solutions through banks and alliances. Within a short span of two years, and with nearly a large number of partners, B & A has emerged as a vital component of the company’s sales and distribution strategy, contributing to approximately one third of company’s total business. The business philosophy at B&A is to leverage distribution synergies with our partners and add value to its customers as well as the partners. Flexibility, adaptation and experimenting with new ideas are the hallmarks of this channel.
CUSTOMER SERVICE AND OPERATIONS The Operations department oils the work processes between the customer and the company to ensure consistent and quality service to the customer. To streamline the operations, the Operations department interfaces between the clients and the agents, the branches and the underwriters, and manages work processes. The Vision at Customer Service is to deliver ‘World Class Service’ at every opportunity. Units such as the 9 to 9 contact centre, Outbound Call Centre, Customer Care and Query Resolution Unit are all committed to providing effective solutions to over lakhs of customers across the country. Information Technology
The Information Technology function at ICICI Prudential is committed to enable business through the use of technology. It is segmented into 4 groups to enable highest levels of delivery to the customers: Life Asia Solutions Group that provides flexibility in designing better product offerings to end-users, the Solutions Group- Web that provides real-time information to customers and is responsible for customer relationship management, IT Architecture & Corporate Solutions Group is in charge of developing and maintaining a blueprint for the IT architecture for the enterprise as a whole. This team works as an in house R&D Solution Group, exploring new technological initiatives and also caters to information needs of corporate functions in the organization. IT Infrastructure group is responsible for providing hardware, software, network services to the whole organization. This group runs the 'Digital Nervous System' of the Enterprise at the highest levels of efficiency and provide robust, scalable and highly available platform for deployment of business application.
Marketing The Marketing function at ICICI Pru covers an array of activities - brand and media management, channel support, direct marketing and corporate communications. The Brand and Communications team is in charge of advertising, consumer research, media planning & buying and Public Relations; that helps develop and nurture ICICI Prudential's corporate identity while effectively communicating its varied product offerings to the customer. Channel marketing provides support to the sales force by streamlining the design and development of collaterals and sales tools across distribution channels. The Direct marketing team was set up to generate high quality leads for profitable business. The team achieves this through target database acquisition and communicating customized product information through e-mailers, telemarketing and innovative direct mailers. Finance Finance function in ICICI Prudential is committed to create an infrastructure that is aligned to shareholder expectations. Finance basically comprises of four functions. . Corporate Planning and MIS provide feedback on business strategies. This includes driving the budgeting process, providing strategic inputs for decision-making and management reporting and analysis. The Accounts function includes preparation and maintenance of financial records, funds management, and expense processing and treasury operations. Compliance ensures that every action is within the regulatory framework. This includes reviewing compliance requirements and supporting the ethical framework of ICICI Pru life. Internal audit provides assurance to the management over the organizations' control framework and includes process risk management, information security assessment and business continuity assessment.
Human Resource
The people strategy of ICICI Prudential is “To build a committed team with a culture of innovation, learning and growth. The Human Resource Function at ICICI Prudential drives the people strategy of the business. With its initial focus on operational excellence to deliver benefits and services to staff members, HR is now committed to building capability through state of the art processes. A robust performance management system, compensation system and a segmented training architecture enable it to deliver value to the organization. Business Excellence The Business Excellence function is committed to building a quality mindset across the organization. ICICI Prudential is the first organization in the Insurance Industry that has adopted the Six Sigma Methodology for process efficiency and measurement. The team is also driving the Malcolm Baldrige framework across the organization, an intervention that examines management of key inputs for Business Excellence. Bancassurance One of the most significant advances in the financial services sector over the past couple of years has been the growth of Bancassurance – which, in simplest terms, means the distribution of insurance products through a bank’s distribution channels. In other words, Bancassurance is a service which can fulfill both banking and insurance needs at the same time. Bancassurance as a concept first began in India with the opening up of the insurance industry to private sector participation in December 1999 which saw the entry of 20 new players - with 12 in the life insurance sector and 8 in the non-life sector. Bancassurance has also seen significant rise in other Asian markets. For example, Bancassurance accounted for 24% of new life insurance sales by ‘weighted’ premium income in Singapore in 2002. This is a significant increase on the equivalent 2001 statistic of 15% and is as a result of growth in significant bank-centric Bancassurance operations. Although the concept of Bancassurance looks simple enough, it is far from that in real life practice. Legislative differences, consumer behavior, impact of history and culture, product complexity, employee work culture and many such other factors have contributed to significant differences in results across countries. For example, in France and Spain 60% to 80% of life insurance products are sold through bank branches compared to 10% in UK and USA. Bancassurance Models Globally we have 4 kinds of Bancassurance business models: • • •
Distribution alliance between the insurance company and the bank JV between the two Merger between bank and insurer
•
Bank builds or buys own insurance products
Most of the Bancassurance operations in India fall into the first model, which in a way is quite a prudent decision. The Indian Bancassurance scene as of now looks as promising as perilous, being a vast, unexplored and uncharted expanse. As banks are quite risk averse, it is but natural for them to withhold from making any long term commitment, which would be quite costly if the Bancassurance business runs into trouble. In terms of the present regulatory framework, one bank can tie-up with only one life and one non-life insurer, while insurers have the choice to tie-up with any number of banks. We also have examples of joint ventures between the bank and insurer such as SBI Life and ICICI Prudential. Stages in Policy Issuance 1) Proposal A Proposal Stage is the First stage before the policy is issued at COPS. At this stage, the application form is received by COPS, but it is pending for issuance due to further clarifications required from the customer. 2) Login A proposal which is complete i.e., duly filled with all necessary documents attached to it & accepted by the Branch ops, is called a Login 3) Reject An Application gets rejected at the Branch Ops level due to necessary details not filled in the form or necessary documents not submitted is a Reject. It is then sent back to the Advisor for completion. 4) Issuance Issuance means a policy that is issued to the Customer by Central Ops. 5) Decline Status When a customer refuses to take a policy post login but before Issuance is called a Decline 6) Cancellation When the cheque given by the customer bounces, it amounts to cancellation of the policy. 7) Lapse
A policy for which the Customer fails to pay subsequent premiums is a Lapsed Policy. 8) Freelook Post issuance of the policy, the policyholder has the option to turn down the policy within 15 days from the date of issuance. This period of 15 days is called Freelook Period. 9) Surrender: When a customer wants to discontinue with the policy.
PRODUCT AND SERVICE PROFILE: ICICI Prudential’s ultimate promise is financial security. A strong brand certainly boosts sale, but without customer-friendly, innovative products, even the best brand would not last long. ICICI Prudential’s product range has been developed on the understanding that different people have their own sets of needs at various stages of their lives. It has thus built a flexible portfolio of products that can be customized to cater to varying needs of people at each stage, and thus ensure protection in every step of life. The company’s philosophy has been to help customers understand their financial needs and work closely with them to customize a product that would meet. Advisors can offer a complete range of products –Savings plans, Child plans, Market-linked plans, Protection plans, and Retirement plans – and tailor a flexible solution to meet customers’ changing needs at every stage of life. In fact, ICICI Prudential was the first to un-bundle product benefits, pioneering the concept of ‘riders’ and soon after introduce comprehensive market-linked and retirement plans. ICICI Prudential has launched a handful of products that are analyzed below: ICICI Prudential's life insurance products may be loosely categorized under three forms: pure life insurance products without an investment angle to them; a product that is a mix of a cumulative investment scheme and an insurance product; and, finally, standard products such as money-back and endowment policies. Single Premium Bond: The Single Premium Bond is the name of a policy that combines the features of an investment in a cumulative deposit scheme with that of an insurance product. Policy-holders are required to pay a one-time premium based on a target sum assured. At maturity, the policy-holder gets the sum assured and guaranteed additions that work out to a compound return of 4.5 per cent the sum assured.
The insurance part of the package comes in the form of death benefits that are paid in the case of the demise of the policy-holder. The size of the death benefit is linked to the number of years left for the policy to expire. On maturity date, the maturity value is also paid in addition to the death benefits that would have been paid earlier. Life Guard policies: The company offers two pure life insurance products that have an umbrella name, Life Guard. One of them involves a one-time premium for which there are no maturity benefits. The other requires regular premium payments that are returned at the end of the policy. Life Guard offers absolutely no investment-related return and is suitable for individuals looking for an unadulterated insurance package. Insurance Solutions for Individuals ICICI Prudential Life Insurance offers a range of innovative, customer-centric products that meet the needs of customers at every life stage. Its products can be enhanced with up to 5 riders, to create a customized solution for each policyholder. Savings Solutions • • • •
•
• • • •
•
Secure Plus is a transparent and feature-packed savings plan that offers 3 levels of protection. Cash Plus is a transparent, feature-packed savings plan that offers 3 levels of protection as well as liquidity options. Save ‘n’ Protect is a traditional endowment savings plan that offers life protection along with adequate returns CashBak is an anticipated endowment policy ideal for meeting milestone expenses like a child’s marriage, expenses for a child’s higher education or purchase of an asset. LifeTime and LifeTime II offer customers the flexibility and control to customize the policy to meet the changing needs at different life stages. Each offer 4 fund options –Preserver, Protector, Balancer and Maximiser. LifeLink Super is a single premium Unit Linked Insurance Plan which combines life insurance cover with the opportunity to stay invested in the stock market. Premier Life is a limited premium paying plan that offers customers life insurance cover till age of 75. InvestShield Life is a Unit Linked plan that provides capital guarantee on the invested premiums and declared bonus interest. InvestShield Cash is a Unit Linked plan that provides capital guarantee on the invested premiums and declares bonus interest along with flexible liquidity options. InvestShield Gold is a Unit Linked plan that provides capital guarantee on the invested premiums and declares bonus interest along with limited premium payment terms.
Protection Solutions •
•
LifeGuard is a protection plan, which offers life cover at very low cost. It is available in 3 options –level term assurance with return of premium and single premium. HomeAssure is a mortgage reducing term assurance plan designed specifically to help customers cover their home loans in a simple and cost-effective manner.
Child Plans •
SmartKid education plans provide guaranteed educational benefits to a child along with life insurance cover for the parent who purchases the policy. The policy is designed to provide money at important milestones in the child’s life. SmartKid plans are also available in unit-linked form – both single premium and regular premium.
Retirement Solutions • • • • • • •
ForeverLife is a retirement product targeted at individuals in their thirties. SecurePlus Pension is a flexible pension plan that allows one to select between 3 levels of cover. Market-linked retirement products LifeTime Pension II is a regular premium market-linked pension plan. LifeLink Pension II is single premium market linked pension plan. InvestShield Pension is a regular premium pension plan with a capital guarantee on the investible premium and declared bonuses Golden Years: is a limited premium paying retirement solution that offers tax benefits up to Rs 100,000 u/s 80C, with flexibility in both the accumulation and payout stages.
Health Solutions o
Health Assure and Health Assure Plus: Health Assure is a regular premium plan which provides long term cover against 6 critical illnesses by providing policy holder with financial assistance, irrespective of the actual medical expenses. Health Assure Plus offers the added advantage of an equivalent life insurance cover
o
Cancer Care: is a regular premium plan that pays cash benefit on the diagnosis as well as at different stages in the treatment of various cancer conditions.
Group Insurance Solutions ICICI Prudential also offers Group Insurance Solutions for companies seeking to enhance benefits to their employees. ICICI Pru Group Gratuity Plan: ICICI Pru’s group gratuity plan helps employers fund their statutory gratuity obligation in a scientific manner. The plan can also be customized to structure schemes that can provide benefits beyond the statutory obligations. ICICI Pru Group Superannuation Plan: ICICI Pru offers a flexible defined contribution superannuation scheme to provide a retirement kitty for each member of the group. Employees have the option of choosing from various annuity options or opting for a partial commutation of the annuity at the time of retirement. ICICI Pru Group Term Plan: ICICI Pru’s flexible group term solution helps provide affordable cover to members of a group. The cover could be uniform or based on designation/rank or a multiple of salary. The benefit under the policy is paid to the beneficiary nominated by the member on his/her death. Flexible Rider Options ICICI Pru Life offers flexible riders, which can be added to the basic policy at a marginal cost, depending on the specific needs of the customer. 1. Accident and disability benefit: If death occurs as the result of an accident during the term of the policy, the beneficiary receives an additional amount equal to the rider sum assured under the policy. If the death occurs while traveling in an authorized mass transport vehicle, the beneficiary will be entitled to twice the sum assured as additional benefit. 2. Accident Benefit: This rider option pays the sum assured under the rider on death due to accident. 3. Critical Illness Benefit: Protects the insured against financial loss in the event of 9 specified critical illnesses. Benefits are payable to the insured for medical expenses prior to death 4. Income Benefit: This rider pays the 10% of the sum assured to the nominee every year, till maturity, in the event of the death of the life assured. It is available in SmartKid, SecurePlus, and CashPlus.
5. Waiver of Premium: In case of total and permanent disability due to an accident, the premiums are waived till maturity. This rider is available with SecurePlus and CashPlus.
ANALYSIS AND INTERPRETATION OF THE QUESTIONNAIRE: 1st Question was asked to know for how long one has been the customer of ICICI Pru? The responses of the 50 customers are shown in the table and graph drawn below: Option 0-3yrs 4-6yrs 6-9yrs 10-more yrs Total
No.of people agreed 27 12 6 5 50
Percentage% 54 24 12 10 100
From the graph it can be clear it can be seen that more than 50% respondents have been a customer for 0-3yrs. 24% have been a customer for4-6years and 12% for 6-9yrs and only 10% have been a customer for 10years or more.The above question was asked to know whether the customer satisfaction level high more for newly acquired customers or whter the satisfaction level remains same over long duration.
2nd question was asked how satisfied a respondent is with the behavior of the Customer Service Executive(CSE)? The question was asked to have an insight into upto what extent The responses of the customers are in the following table and graph: Option Highly Satisfied Satisfied Moderate Unsatisfied Highly Unsatisfied Total
No. of responses 10 24 13 02 01 50
Percentage% 20 48 26 04 02 100
The graphical representation shows clearly that only 20% are highly satisfied. 48% were satisfied which is really challenging for the organistion and 26% are moderately satisfied and rest 4% and 2% are unsatisfied and highly unsatisfied with the behavior of the CSE. Q NO 3: was asked to know how satisfied the customers are with the communication skill of their respective CSE’s as effective and adequate communication plays a very important role in achieving desired customer satisfaction in service sector like insurance. The responses of the customers are as follows: Option Highly satisfied Satisfied Moderate Unsatisfied Highly Unsatisfied Total
No. of responses 12 28 06 04 00 50
Percentage% 24 56 12 8 0 100
Here only 24% respondents said they were highly satisfied with the communication skills of the CSE. However 56% were satisfied,12% were moderately satisfied and 8% were unsatisfied with the communication skills of the respondents.It must be noted that none of the customers were highly unsatisfied with the communication skills of their CSE’s. Q NO: 4 was asked to know the responsiveness of the CSE’s in processing the requests of the customers. The
Option Highly Satisfied Satisfied Moderate Unsatisfied Highly Unsatisfied Total
responses
are
No. of responses 15 20 12 03 0 50
as
follows:
Percentage 30 40 24 06 00 100
From the above graph it is clear that 30% respondents are highly satisfied with the CSE as reagards processing of their requests,40% are satisfied 24% are moderately satisfied and 6% are unsatisfied ,here also the number of highly unsatisfied customers are nil. QN0:5 was asked to know how satisfied a customer is with the efficiency of the CSE’s? The question was asked to understand how the customers perceive the efficiency level of the CSE’s. The responses of the customers are as follows: Option Highly Unsatisfied Satisfied Moderate Unsatisfied Highly Unsatisfied
No.of responses 10 27 10 2 1
Percentage. 20 54 20 4 2
Total
50
100
From the graph it can be seen that only 20% are highly satisfied ,54% are satisfied,20% customers are moderately satisfied with the efficiency level of their CSE’s however 4% and 2% customers were unsatisfied and highly unsatisfied respectively with their CSE’s efficiency. The next phase of questions were asked regarding the behavioural aspect of sales team. QNo: 6 was asked to know how satisfied a customer is with the behavior of their respective advisor/manager. The
Option Highly Satisfied Satisfied Moderate Unsatisfied Highly Unsatisfied Total
responses
were
No. of responses 19 22 6 3 0 50
as
follows:
Percentage 38 44 12 6 0 100
It can be seen that 44% were satisfied ,38% were highly satisfied,12% were moderately satisfied and 6% were unsatisfied with the behavior of their respective advisor/manager.However none of the customers expressed highly unsatisfied in this respect. QNo 7 was asked to know how satisfied the customers are with the communication skill of their respective advisor or manager?
The responses of the customers are as follows:
Option Highly satisfied Satisfied Moderate Unsatisfied Highly Unsatisfied Total
No. of responses 16 25 07 02 00 50
Percentage% 32 50 14 4 0 100
We can see that 32% were highly satisfied,50% were satisfied,14% were moderately satisfied and 4% were unsatisfied with the communication skills of their advisor/manager. QNo8: was asked to know the responsiveness of the advisor/manager in processing the requests of the customers. The
responses
Option Highly Satisfied Satisfied Moderate Unsatisfied Highly Unsatisfied Total
are
as
No. of responses 10 28 10 2 0 50
follows:
Percentage 20 56 20 04 0 100
Thus we can see that 20% customers are highly satisfied,56% are satisfied,20% are moderately satisfied and 4% are unsatisfied with the responsiveness of the advisor/manager in processing the requests. However none of the customers opined that they are highly unsatisfied in this regard. Q No 9: was asked to know the efficiency level of the advisor/manager. The
various
responses
of
the
customers
are:
Option Highly Unsatisfied Satisfied Moderate Unsatisfied Highly Unsatisfied Total
No.of responses 08 30 07 04 01 50
Percentage. 16 60 14 08 02 100
From the graph it can be seen that 16% customers are highly satisfied, 60% are satisfied, 14% moderately satisfied, 8% unsatisfied and rest 2% are highly unsatisfied with the efficiency of the advisor/manager. QNo: 10 was asked to know whether the advisors are in regular contact with their customers so that paying of premiums, pitching of new products become easy. The response to the above question is as follows: Option Yes No Total
No of responses 27 23 50
Percentage 54 46 100
QNo: 11 was asked how satisfied a customer is with respect to knowledge of the their advisor/manager with regards to knowledge of the policies and products. The various responses of the customers are as follows: Option Highly Unsatisfied Satisfied Moderate Unsatisfied Highly Unsatisfied
No.of responses 12 18 16 3 1
Percentage. 24 36 32 9 2
Total
50
100
From the graph below it can be seen that out of the total respondent 24% were highly satisfied,36% were satisfied,32% moderately satisfied and rest 9% & 2% were unsatisfied and highly unsatisfied respectively with respect to the above stated question.
QNo 12 was how satisfied a customer is regarding the suitability of the product offered and their own requirements. The reponses are as follows: Option Highly Unsatisfied Satisfied Moderate Unsatisfied Highly Unsatisfied Total
No.of responses 8 22 11 5 4 50
Percentage. 16 44 22 10 8 100
16% were highly satisfied,44% were satisfied,22% were moderately satisfied & 10% & 8% were unsatisfied and highly unsatisfied respectivelyin this regard. QNo 13 was asked how satisfied a customer is regarding the transparency of the information & product features? The responses are as follows: Option Highly Unsatisfied Satisfied Moderate Unsatisfied Highly Unsatisfied Total
No.of responses 6 18 14 7 5 50
Percentage. 12 36 28 14 10 100
12% were highly satisfied, 36% were satisfied, 28% moderately satisfied and 14% were unsatisfied and 10% were unsatisfied in this regard. Q14was asked how satisfied a customer is in terms of refreshing new product attributes and features by their respective advisor. The responses are as follows: Option Highly Unsatisfied Satisfied Moderate Unsatisfied Highly Unsatisfied Total
No.of responses 6 17 13 10 4 50
Percentage. 12 34 26 20 8 100
Only 12% respondents were highly satisfied in this regard,34% were satisfied,26% moderately satisfied and 8% were unsatisfied in this regard. QNo 15 was which factor the customer would give highest priority for being a customer of ICICI Pru. The responses are as follows: Option Behavior Relationship Product Brand Transparency Total
No.of responses 11 16 8 2 13 50
Percentage. 22 32 16 4 26 100
22% respondents gave behavior as the highest priority,32% said relationship is the highest priority for them,16% said it was the product for them,4% opined it’s the brandname & 26% said it is the transparency factor which they gave highest priority. Q No 16 was “Do you think the promises made by ICICI pru are honoured?” Option Yes No Total
No of responses 31 19 50
Percentage 62 38 100
FINDINGS: 1)50% respondents have been a customer for 0-3yrs. 2)48% were satisfied with the behavior of the CSE. 3) 56% were satisfied with the communication skills of their CSE’s. 4)40% are satisfied with the CSE as regards processing of their requests. 5) 54% are satisfied with their CSE’s efficiency. 6) It can be seen that 44% were satisfied with the behavior of their respective advisor/manager. 7) 50% were satisfied with the communication skills of their advisor/manager. 8) 56% are satisfied with the responsiveness of the advisor/manager in processing the requests. 9) 60% are satisfied with the efficiency of the advisor/manager. 10) 54% respondents are in regular contact with their advisors. 11) 36% were satisfied with respect to knowledge of the advisor/manager with regards to knowledge of the policies and products. 12) 44% were satisfied regarding the suitability of the product offered and their own requirements.
13) 36% were satisfied regarding the transparency of the information & product features. 14) 34% were satisfied in terms of refreshing new product attributes and features by their respective advisor. 15) 32% said relationship is the highest priority for them. 16) 62% respondents think that the promises made by ICICI Prudential are honoured. RECOMMENDATIONS: The sales officials of the company should provide detailed and transparent information to the customers which would help the customers to do their financial planning. This would also help in building up of trust among the customers thus helping in a formation of long term relationship between the customers and the company. Before login of the policy the company should ensure to take a feedback from the customers about the disclosure of all the details of the product. This could be done by the customer care. The company should also focus on its traditional products rather than just heavily focusing on ULIP products. This would improve the image of the company as one with all kind of products under its kitty to suit each and every requirement of the customers looking for any kind of insurance. The company should devise incentive plans for its employees to remind the customers for premium renewal and collection of the same. For bancassurance channel ICICI Bank and ICICI Prudential both together should devise some incentive and rewards plan for the bank staffs as they are the main contributors for business through this channel. The management should action for motivating the bank staff rather than just setting hard targets.
