Project Report 2 Akshit Dube Idbi Federal Life Insurance

8/11/2019 Project Report 2 Akshit Dube Idbi Federal Life Insurance

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A REPORT ON

Customer satisfaction and retention of IDBI Federal lifeInsurance Company LTD

By

(AKSHIT DUBE, ID- 13A3HP011)

A report submitted in partial fulfillment of the requirementsof MBA program of IMT HYDERABAD

(IDBI Federal Life Insurance Co Ltd.)

Faculty Guide Company Guide

DR.Sridhar vaithianathan MRS.C.Shanthi

Associate Professor Asst. Branch manager

IMT,Hyderabad IDBI Federal Life

Insurance Ltd


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ACKNOWLEDGMENT

I sincerely thank Mrs.C.Shanthi (Asst. Branch head), Jay Malaand Mr.Sankeerth (Coordinator) for providing me thiswonderful opportunity of working on this particular project. Ihave been provided help and got the chance to learning a lotthroughout this project.

I am also thankful to my faculty guide Mr. Sridhar Vaithianathanfor guiding and encouraging me throughout the internship.


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EXECUTIVE SUMMARY

Customer retention and satisfaction are 2 of the mostimportant factors regarding long term success of the company.These factors are known to be huge influencing factors in theeconomic growth of a company.

The aim of the research is to determine the current customer

satisfaction and retention scenario of IDBI Federal LifeInsurance Company Ltd.

The report contains brief introduction about the insuranceindustry in India and IDBI Federal Life Insurance Company Ltd.

The sample size of the report is 100 respondents and the data iscollected through phone interview and questionnaire method.


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TABLE OF CONTENTSThe insurance industry .................................................................................................................................. 6

Company profile ............................................................................................................................................ 7

Introduction of the project ........................................................................................................................... 8

Problem statement ................................................................................................................................. 10

Research objective .............................................................................................................................. 10

Scope of the project ........................................................................................................................ 10

PERIOD OF STUDY....................................................................................................................... 11

Sample design ......................................................................................................................... 11

Limitation ............................................................................................................................ 11

CUSTOMER RETENTION .............................................................................................................................. 12

Questionnaire ............................................................................................................................................. 15

REFERENCES ................................................................................................................................................ 17


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The insurance industry

The insurance sector has gone through a number of phases andchanges. Insurance in India used to be tightly regulated andmonopolized by state-run insurers. Following the move towardseconomic reform in the early 1990s, various plans to revamp the sectorfinally resulted in the passage of the Insurance Regulatory andDevelopment Authority (IRDA) Act of 1999.Significantly, the insurancebusiness was opened on two fronts. Firstly, domestic private-sector

companies were permitted to enter both life and non-life insurancebusiness. Secondly, foreign companies were allowed to participate,albeit with a cap on shareholding at 26%. With the introduction of the1999 IRDA Act, the insurance sector joined a set of other economicsectors on the growth march. During the 2003 financial year, lifeinsurance premiums increased by an estimated 12.3%in real terms toINR 650 billion (USD 14 billion) while non-life insurance premiums rose12.2%to INR 178 billion (USD 3.8 billion). Growth in insurancepremiums has been averaging at 11.3% in real terms over the lastdecade. There are strong arguments in favor of sustained rapidinsurance business growth in the coming years, including Indias robust

economic growth prospects and the nations high savings rates.


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Company profile

IDBI Federal Life Insurance Co Ltd. is a joint-venture of IDBIBank, India's premier development and commercial bank,Federal Bank, one of India's leading private sector banks andAgeas, a multinational insurance giant based out of Europe. In

this venture, IDBI Bank owns 48% equity while Federal Bankand Ageas own 26% equity each. Having started in March 2008,in just five months of inception, IDBI Federal became one of thefastest growing new insurance companies by garnering Rs.100Cr in premiums. Through a continuous process of innovation inproduct and service delivery IDBI Federal aims to deliver world-

class wealth management, protection and retirement solutionsthat provide value and convenience to the Indian customer.The company offers its services through a vast nationwidenetwork 2,308 partner bank branches of IDBI Bank and FederalBank in addition to a sizeable network of advisors and partners.As on 31st December 2013, the company has issued nearly 5.5

lakh policies with a sum assured of over Rs. 32,110.48 crores

Currently it is offering 7 products in the market lifesurance,childsurance, incomesurance, termsurance, microsurance,loansurance, wealthsurance.


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Introduction of the project

Customer is the king of any business whether it may be big,medium or small. Customer satisfaction is a measure of how

services/products supplied by a company meet or surpass theexpectations.

Customer retention and satisfaction are 2 of the mostimportant factors regarding long term success of the company.These factors are known to be huge influencing factors in theeconomic growth of a company.

In todays world it is essential to effectively manage customer

satisfaction and retention. Many institutions includinginsurance companies spend a lot of resources, time and energyto keep and enhance their customer base.

There are many factors such as courteous employees, problems

being solved fast, service quality, usefulness of theproduct/service which helps in measuring how satisfied acustomer is with the company and only a satisfied customer will


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purchase another product of the company and recommend itto others.

The process of measuring customer satisfaction and obtainingfeedback on organization performance is a important toolquality and continuous improvement.

Customer retention is of the main factor of profit growth.

Following are some of the benefits of customer retention

1. New customers cost more than keeping existing ones.2. Companies already know how to do business with the

existing customers.3. Long term customers initiate free promotion through word

of mouth and referrals.

My research aims to study the current customer satisfaction

and retention scenario of IDBI federal life insurance andsuggest ways to improve it.


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Problem statement

IDBI Federal Life Insurance Co Ltd. Is a joint venture companyamong three financial companies IDBI Bank, Federal Bank,European insurance company AGEAS. It has grown remarkablyin the last 6 years but it still has a long way to go and customersatisfaction and retention are 2 factors which will help thecompany in the long run.

Research objective

1. To identify the current scenario of IDBI Federal LifeInsurance Ltd.

2. To identify ways to improve the customer satisfaction andretention levels.

Scope of the project

Successful companies are continuous working in the field ofcustomer satisfaction and retention. It is not possible to besuccessful without keeping the customers happy and retainingthem for future business. This study will help IDBI Federal LifeInsurance in knowing the relinquishment level and how toretain the customers.


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CUSTOMER RETENTION

In todays challenging economy and c ompetitive business

world, retaining their customer base is critical to organizationsuccess. If the company doesnt give their customer some goodreason to stay, organizations competitors will give thecustomer a reason to leave. Customer retention and customersatisfaction drive profits. Its far less expensive to cultivateorganization existing customer base and sell more service tothe customer than to seek new, single-transaction customers.

Most surveys across industries shows that keeping one existingcustomer is five to seven times more profitable than attractingone new customer. A customer-focused approach among itsemployees is still not present. In this era of intense competition.it is very important for any service company to understand thatmerely acquiring customer is not sufficient because there is adirect link between customer retention over time and

profitability & growth.

Customer retention to a great extent depends on servicequality and customer satisfaction. Complaints are natural partof any service activity as mistakes are an unavoidable feature of


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all human endeavor and thus also of service recovery. Servicerecovery is the process of putting things right after somethinggoes wrong in the service delivery. Customer retention is the

maintenance of continuous trading relationships withcustomers over the long term. Customer retention is the mirrorimage of customer defection or chum.High retention is equivalent to low defection. In an industrywhere there are a multiple purchases over the years,organizations entire team should be very focused on retainingthose customers. Following are some of the ways -

1. Delivering service thats consistent with your valueproposition and brand.2. Cross-selling, up-selling and asking for referrals from existingcustomers3. Developing programs to increase customer loyalty anddecrease turnover

4. Prioritizing retention as a major focus in your annualmarketing plan.


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Customer retention occurs when a customer is loyal to acompany, brand, or to a specific product or service, expressinglong-term commitment and refusing to purchase from

competitors. Of critical importance to such strategies are thewider concepts of customer service, customer relations, andrelationship marketing. Companies can build loyalty andretention through the use of a number of techniques, includingdatabase marketing, the issue of loyalty cards, redeemableagainst a variety of goods or service, preferential discounts,free gifts, special promotions, newsletters or magazines,

members clubs or customized products in limited editions.

Following are few of the advantages of a satisfied customer -:

1. The cost of acquisition occurs only at the beginning of therelationship, so the longer the relationship, the lower theamortized cost.

2. Long-term customers tend to be less inclined to switch.3. Long-term customer may initiate free word of mouthpromotions and referrals.4. Long-term customers are more likely to purchase ancillaryproducts and high margin supplemental products.5. Customer that stay with company tend to be satisfied withthe relationship and are less likely to switch to competitors,

making it difficult for competitors to enter the market or gainmarket share.


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Questionnaire


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REFERENCES

1. http://www.idbifederal.com/2. http://www.ibef.org/industry/insurance-sector-india.aspx3. http://www.irda.gov.in/ADMINCMS/cms/NormalData_Layout.a

spx?page=PageNo4&mid=2

4. http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture-Maximizing-Customer-Retention.pdf

5. http://www.customer-retention.co.uk/advantages-of-customer-retention.html

6. The Antecedents of Customer Loyalty:An Empirical Investigation in Life Insurance ContextAlok Kumar Rai, Srivastava Medha

7. http://www.thefreelibrary.com/A+study+of+customer+satisfaction+with+life+insurance+in+Chandigarh...-a0297309481

Project Report 2 Akshit Dube Idbi Federal Life Insurance

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