STUDY OF CUSTOMER RETENTION IN IDBI FEDERAL LIFE INSURANCE CORPORATION LIMITED

A Project Report submitted in partial fulfillment of the requirements for the award of the degree of Masters of Business Administration

by

U.SINDHU
11MBA0108

Under the Guidance of Prof. Sudipto Battacharya PhD

VIT Business School

fostering innovation

JULY 2012

CERTIFICATE

This is to certify that Institutional Training Report submitted by Ms.U.sindhu, Reg. No. 11MBA0108 to VIT Business School, VIT University, Vellore in partial fulfillment of the requirements for the degree of Master of Business Administration is a bonafide record of work carried out by her under my supervision. The contents of this report, in full or in parts have not been submitted in any form to any other institute or university for the award of any degree or diploma

Faculty Guide

Programme Manager

Internal Examiner

External Examiner

Declaration

I, Sindhu.U (11MBA0108), a Bonafide student of the VIT Business School, VIT University, Vellore, hereby declare that the Institutional Training Report submitted in partial fulfillment of the requirements of the Degree of Master of Business Administration of the VIT University, is my original work.

. Date:

Place: Vellore

Sindhu.U

ACKNOWLEDGEMENT
I express my sincere thanks to the Chancellor, Dr. G. Vishwanathan for providing me with adequate infrastructure and a congenial academic environment. I wish to express my thanks to the Vice Chancellor, Dr. V. Raju, for his patronage. I am grateful to the Programme Manager of VIT Business School, Dr. Bhanu Sree Reddy, for encouraging and providing me with the necessary assistance in accomplishing the project. I am also thankful to my guides, Dr. Sudipto Bhattacharya PhD, VIT Business School and Mrs.Shanthi Yagyanath , IDBI Federal Life Insurance Corporation Limited, whose timely guidance and persistent encouragement helped me in completing the project successfully and making it a wonderful learning experience. I convey my sincere thanks to all the teaching and non-teaching staff of the business school for their support and co-operation during the project. Finally I thank my parents and colleagues who have helped me in the successful completion of the project.

(SINDHU.U)

CONTENTS

S.NO

TITLE List of Tables and Charts

PAGE NO 2 4 8 17 27 29 51 53 55 57 62

1 2 3 4 5 6 7 8 9 10

Introduction Review of Literature Company Profile Research Methodology Analysis and Interpretation Findings Recommendation Conclusion Appendix Bibliography

LIST OF TABLES AND CHARTS

S.NO 1 2 3 4 5 6 7 8 9 10 11 12

TITLE Decision Criteria for Univariate Analysis Age Distribution Gender Marital Status Education Qualification Occupation Income Service Satisfaction Concern Solvation Benefit Satisfaction Courteous Service Quick Call

PAGE NO 30 31 32 33 34 35 36 37 38 39 40 41

13 14 15 16 17 18 19 20 21

Knowledge Representative Highest Benefits Policy & Procedure Understanding Easy Payment Mode Long Relationship Recommend IDBI Friends Insisted Another Policy in IDBI Overall Mean & Stranded Deviation Value

42 43 44 45 46 47 48 49 50

1. INTRODUCTION

IMPORTANCE OF THE STUDY

Customer satisfaction and customer retention are two of the most important factors regarding the long term success of a company. These factors are known to be a huge influencing factor in relation to the economic success of a company. Customer retention is one of the most important factors of profit growth. It's so important because it costs so much to influence customers to buy and so little to induce a repurchase. These are the benefits of customer retention: i. New customers cost more than keeping existing ones. Help executives make the most of existing relationships by helping their customers make repeat purchases. Existing customers have made an emotional commitment that required a large investment of time to earn. ii. Company already knows how to do business with existing customer. An executive doesn't have to invest additional resources training to do business with the existing customer. This saves time and allows them to serve existing customers faster. iii. Satisfied customers are already convinced of value. They have already proven they can serve the customer, and have provided proof. Executives don't have to invest the resources necessary to start from scratch again. iv. Strengthening of the unique selling proposition

STATEMENT OF PROBLEM
IDBI Federal life insurance co ltd is a joint venture company between three financial companies IDBI Bank, federal Bank and European Insurer Ageas. With effective utilization of digital marketing tools IDBI federal life insurance are able to reach potential customers. IDBI inhouse technology for customer inquiries and query resolution are deeply entrenched in terms of processes and call to action with respective customer. Though such technologies for the customer retention are prevailed there are some drawbacks in it. Premium collection of the insurance company fell down by 34% during April December 2011.I wanted to know the relinquishment level of IDBI federal life insurance corporation limited and the ways that could make the customer retain.
9

OBJECTIVES OF THE PROJECT

1. To identify the present situation of IDBI Federal Life Insurance 2. To identify the ways to retain the customer

SCOPE OF THE PROJECT

Successful companies are constantly working in the field of customer retention, because without customer retention it isnt and wasnt possible to be successful in the long term. Currently many companies are facing an aggressive battle regarding customer retention. This study will help IDBI to know the relinquishment level and how to retain the customers.

PERIOD OF THE STUDY

The Period of Study is 6 weeks.

COLLECTION OF DATA
Two types of data are collected: Primary and secondary data

Primary data
The data are collected by the questionnaire method. The questionnaire consists of a number of questions interviewed to the customers for their response. Interview: Telephonic Interview

Secondary data
Secondary data is the data that have been already collected by and readily available from other source. The secondary data for this study are already available in the firm's enrolled feedback, journals, books, newspapers and other related report - policy book, Magazine

SAMPLE DESIGN
The research will be carried out among the customers of IDBI federal life insurance. And sample will be around 100.
10

LIMITATIONS OF THE STUDY

Although there were very few limitations to enlist but every research work carried out has to face some limitations. i. It is planned to collect 200 responses from the company .Due to some restrictions only 100 responses are collected. ii. The survey conducted was more objective and completely based on the views of the respondent. iii. Survey was conducted among customers of Coimbatore branch only so the result may not be accurate.

11

2. REVIEW OF LITERATURE

12

INTRODUCTION
A literature review discusses published information in a particular subject area, and sometimes information in a particular subject area within a certain time period. A literature review can be just a simple summary of the sources, but it usually has an organizational pattern and combines both summary and synthesis. A summary is a recap of the important information of the source, but a synthesis is a re-organization, or a reshuffling, of that information. It might give a new interpretation of old material or combine new with old interpretations. Or it might trace the intellectual progression of the field, including major debates. And depending on the situation; the literature view may evaluate the sources and advice the reader on the pertinent or relevant. This chapter began with retention, measuring retention, importance of customer retention, advantage of customer retention, benefits of customer retention.

CUSTOMER RETENTION
In todays challenging economy and competitive business world, retaining their customer base is critical to organization success. If the company doesnt give their customer some good reason to stay, organizations competitors will give the customer a reason to leave. Customer retention and customer satisfaction drive profits. Its far less expensive to cultivate organization existing customer base and sell more service to the customer than it to seek new, singletransaction customers. Most surveys across industries shows that keeping one existing customer is five to seven times more profitable than attracting one new customer. A customer-focused approach among its employees is still not present. In this era of intense competition .it is very important for any service company to understand that merely acquiring customer is not sufficient because there is a direct link between customer retention over time and profitability & growth. Customer retention to a great extent depends on service quality and customer satisfaction. Complaints are natural part of any service activity as mistakes are an unavoidable feature of all human endeavor and thus also of service recovery. Service recovery is the process of putting things right after something goes wrong in the service delivery. Customer retention is the maintenance of continuous trading relationships with customers over the long term. Customer retention is the mirror image of customer defection or chum.

13

High retention is equivalent to low defection. In an industry where there are a multiple purchases over the years, organizations entire team should be very focused on retaining those customers: i. ii. iii. iv. v. Delivering service thats consistent with your value proposition and brand Cross-selling, up-selling and asking for referrals from existing customers Developing programs to increase customer loyalty and decrease turnover Prioritizing retention as a major focus in your annual marketing plan. Knowing the lifetime value for different segments and using that data to improve the marketing. Studies say it costs ten times more to generate a new customer than to maintain an existing one. If organization has a small number of customers, losing a few could cripple company. Even if there are a large number of customers, a small increase in the rate should dramatically increase profits. The maintenance of the patronage of people who have purchased a companys goods or services once and the gaining of repeat purchases. Customer retention occurs when a customer is loyal to a company, brand, or to a specific product or service, expressing long-term commitment and refusing to purchase from competitors. Of critical importance to such strategies are the wider concepts of customer service, customer relations, and relationship marketing. Companies can build loyalty and retention through the use of a number of techniques, including database marketing, the issue of loyalty cards, redeemable against a variety of goods or service, preferential discounts, free gifts, special promotions, newsletters or magazines, members clubs or customized products in limited editions. It has been argued that customer retention is linked to employee loyalty, since loyal employees build up long-term relationships with customers. Customer retention has always been an important topic for the marketing. For sure, the advantages of loyal clients are obvious. Often CRM is only implementing new systems for data mining and client segmentation or operational system like a complaint management. But the thing is: data mining system or client clubs are not the basis. They are the cherry of the cake called client retention. A key principle of relationship marketing is the retention of customers through varying means and practices to ensure repeated trade from preexisting customers by satisfying requirements above those of competing companies through a mutually beneficial relationship.
14

This techniques is now used as a means of counter balancing new customer and opportunities with current and existing customers as a means of maximizing profit and counteracting the leaky bucket theory of business in which new customer gained in order direct marketing oriented businesses were at the expense of or coincided with the loss of older customers. This process of "churning" is less economically viable than retaining all or the majority of customers using both direct and relationship management as lead generation via new customers requires more investment. Many companies in competing markets will redirect or allocate large amounts of resources or attention towards customer retention as in markets with increasing competition it may cost 5 times more to attract new customers than it would to retain current customers, as direct or "offensive" marketing requires much more extensive resources to cause defection from competitors. However, it is suggested that because of the extensive classic marketing theories center on means of attracting customer and creating transactions rather than maintaining them, the majority usage of direct marketing used in the past is now gradually being used more alongside relationship marketing as its importance becomes more recognizable. According to Buchanan and Gilles the increased profitability associated with customer retention efforts occurs because of several factors that occur once a relationship has been established with a

customer.
i. The cost of acquisition occurs only at the beginning of the relationship, so the longer the relationship, the lower the amortized cost. ii. Account maintenance costs decline as a percentage of total costs or as a percentage of revenue. iii. Long-term customers tend to be less inclined to switch, and also tend to be fewer prices sensitive. This can result in stable unit sales volume and increase in dollar-sales volume. iv. v. Long-term customer may initiate free word of mouth promotions and referrals. Long-term customers are more likely to purchase ancillary products and high margin supplemental products. vi. Customer that stay with company tend to be satisfied with the relationship and are less likely to switch to competitors, making it difficult for competitors to enter the market or gain market share.
15

IMPORTANCE OF CUSTOMER RETENTION

There are a number of reasons for this. To begin with, to acquire a customer a company incurs promotional costs like advertising, sales promotion etc. It is said that it costs five times more to attract a new customer than retaining one. The operating cost decrease when a customer stays. Service being rich in experience and credence qualities, it takes some time for customers to get accustomed to it and once they are used to the service and are satisfied with the service provider, they tend to purchase more over a period of time. As they remain satisfied with a service provider, they spread a positive word of mouth, which is very effective in case of service for attracting new customers. Longer the customer stays with an organization, more the organization knows about him, which enables it to offer a customized service which makes it difficult for the customer to defect. This may even provide opportunities to the organization to charge price premium by offering individualized service which may be difficult for the competitors to offer. Considering the importance of retaining customers in service business, Reichheld & Sasser coined a term Zero Defection. They highlighted that companies can boost profits by almost 100% by retaining just 5% more of their customers. Further, it is also very important to understand the life time value of a customer. Further, if by a positive word of mouth, he brings just one more customer to the organization, his value to the organization doubles. Therefore, it is important for all the employees in the organization to understand the life time value of their customers.

ADVANTAGES OF CUSTOMER RETENTION

POSSIBILITY OF REPEAT BUSINESS

This is probably the most obvious advantage of customer retention. Effective services that lead to customer satisfaction will make customer coming back to again, thus giving repeat business. Repeat business is a win-win proposition for the business or service and the customer. The business reduces the cost of customer acquisition, while the customer reduces the cost of finding a reliable vendor and thus also saves on costs associated with switching vendors.

16

REDUCED COSTS FOR CUSTOMER ACQUISITION

Acquiring a customer has certain associated costs. These include the costs associated with advertising, following up, sales demos, travel and meeting cost etc. having a repeat customer means that the customer means that the customer is already aware of your processes and can predict certain quality of output, thus minimizing the cost involved in new customer acquisition. Having a repeat customer also has the potential to open up another channel to advertise your business word of mouth. Word of mouth advertising / recommendations are perhaps the most important outcome of having a satisfied customer.

FOSTERING

GREATER

INTERACTION

BETWEEN

BUSINESS

AND CUSTOMER
Todays markets are increasingly moving away from mass produced standard products and service, towards a more customized market, where products and service are tailored to meet customers specific requirements. Having a repeat customer is an opportunity for you to build a more focused relationship based on your customers specific needs and requirements. Being ensured of having a customer who comes back, you have more confidence to suggest improvements, provide an insight to better understand their needs and consequently design products and services that are relevant. Having a repeat business also provides an opportunity for the buyer and the seller to co-create products and services.

HAVING MORE DELIGHTED CUSTOMERS

Effective customer retention strategies allow you to move from the zone of customer satisfaction to customer delight. Studies have shown that customer delight is achieved only when there is a perfect synergy between the buyer needs and the buyer understands what the seller can deliver exactly what the customer need. If you are able to deliver your customers, you have better chance of them coming back to you, since they now know why you are different from the rest of competition.

17

CUSTOMER RETENTION: STATISTICS

i. Acquiring new customer can cost five times more than satisfying and retaining current customers. (Source: http://www.parature.com/tag/customer-service-statistics-2012)

ii.

2% increase in customer retention has same effect on profits as cutting costs by 10%. (Source: http://www.bautomation.com/resources/articles/startling-statistics-on-customerretention-acquisition/489/)

iii.

The

average

company

losses

10%

of

its

customer

each

year.(Source:

http:/www.dbmarketing.com/index.html)

iv.

5% reduction in the customer defection rate can increase profits by 25-125%, depending on the industries. (Source: http://www.parature.com/tag/customer-service-statistics-2012)

v.

The customer profitability rate tends to increase over the life of a retained customer.(Source: http:/www.dbmarketing.com/index.html)

vi.

Companies can boost profits anywhere from 25 to 125% by retaining merely5% more existing customers. (Source: http://www.parature.com/tag/customer-service-statistics2012)

vii.

Only one out of 25 dissatisfied customers will express dissatisfaction. (Source: http://www.bautomation.com/resources/articles/startling-statistics-on-customer-retentionacquisition/489/)

viii.

Happy customer tells 4 to 5 others of their positive experience. Dissatisfied customers tell 9 to 12 how bad it was. ( Source: http://www.parature.com/tag/customer-servicestatistics-2012)

ix.

Two-thirds of customers do not feel valued by those serving them. (Source: http://www.dbmarketing.com/article/Art232.htm)

18

MEASURING CUSTOMER RETENTION

Retention rate is normally calculated as the number of customers who have been lost over a period of time, usually calculated over a quarterly or annual period. The key is to calculate the percentage versus existing customers, and not underestimate the loss rate by tallying new customer acquisitions into the mix. The customer retention rate refers to the number of customer lost over a period of time. It is normally calculated by the percentage of lost customer versus existing customers over a quarterly or annual period, without tallying new customer acquisitions. While there are obvious benefits to keeping customers loyal and maintaining retention rates, it can be extremely challenging for management to keep retention rates up. Some companies can measure retention rate using their CRM system, since any of the vendors with solid sales modules should offer this capability. Customer service expert Lori Bocklund recommends that companies look for this functionality when evaluating CRM solutions, even though it is unlikely to be the differentiating factor. Companies like witness, Performix, AIM, and Merced offer these types of tools. To measure this, some companies combines data from the CRM system and data from other systems, such as your systems, such as your quality monitoring system, ACD or CTI solution handling contact routing and reporting. There are no hard and fast rules on calculating customer defection and customer retention, according to Lowenstein. It can depend on the industries or the type of business, since companies have long-term arrangements with customers. However, several consulting and database management companies have succeeded in creating them. However, the appropriate interval over which retention rate should be measured is not always one year. Rather, it depends on the customer repurchase cycle. Car insurance and magazine subscriptions are bought on an annual basis. Carpet tiles and hi-fis are not. If the normal hi-fi replacement cycle is four years, then retention rate is more meaningful if it is measured over four years instead of twelve months. Additional complexity is added when companies a sell a range of products and services, each with different repurchase cycles. Automobile dealers might sell cars, parts, fuel and service to a single customer. These products have different repurchase cycles which make it very difficult for the dealer to have a whole of customer perspective on retention. Sometimes companies are not clear about whether an individual customer has defected. This is because of the location of customer related data, which might be retained in product silos, channel silos or functional silos.
19

TYPE OF CUSTOMER RETENTION RATE

RAW CUSTOMER RETENTION RATE

This is the number of customer doing business with a firm at the end of a trading period, expressed as percentage of those who were active customer at the beginning of the period.

SALES-ADJUSTED RETENTION RATE:

This is the value of sales achieved from the retained customers, expressed as a percentage of the sales achieved from all customers who were active at the beginning of the period.

PROFIT-ADJUSTED RETENTION RATE:

This is the profit earned from the retained customers, expressed as a percentage of the profit earned from all customers who were active at the beginning of the period.

20

3. COMPANY PROFILE

21

THE INSURANCE INDUSTRY:

The insurance sector has gone through a number of phases and changes. Insurance in India used to be tightly regulated and monopolized by state-run insurers. Following the move towards economic reform in the early 1990s, various plans to revamp the sector finally resulted in the passage of the Insurance Regulatory and Development Authority (IRDA) Act of 1999. Significantly, the insurance business was opened on two fronts. Firstly, domestic private-sector companies were permitted to enter both life and non-life insurance business. Secondly, foreign companies were allowed to participate, albeit with a cap on shareholding at 26%. With the introduction of the 1999 IRDA Act, the insurance sector joined a set of other economic sectors on the growth march. During the 2003 financial year, life insurance premiums increased by an estimated 12.3% in real terms to INR 650 billion (USD 14 billion) while non-life insurance premiums rose 12.2% to INR 178 billion (USD 3.8 billion). Growth in insurance premiums has been averaging at 11.3% in real terms over the last decade. There are strong arguments in favor of sustained rapid insurance business growth in the coming years, including Indias robust economic growth prospects and the nations high savings rates.

COMPANY PROFILE IDBI FEDERAL LIFE INSURANCE CO. LTD.:

IDBI Fortis Life Insurance Co. Ltd., is a joint venture between three financial companiesDevelopment and Commercial Bank, IDBI Bank, Indias private sector

Bank, Federal Bank and European insurer Ageas (formerly Fortis). IDBI Fortis Life Insurance Co. Ltd. was formed on March 2008. In this venture, IDBI Bank owns 48% equity while Federal Bank and Ageas own 26% equity each. The Headquarters is located in Mumbai, India. IDBI Bank Ltd. continues to be, since its inception, Indias premier industrial development bank. Created in 1956 to support Indias industrial backbone, IDBI Bank has since evolved into a powerhouse of industrial and retail finance.
22

Today, it is amongst Indias foremost commercial banks, with a wide range of innovative products and services, serving retail and corporate customers in all corners of the country from 720 branches and 1228 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 Indias financial sector such as the Securities and Exchange Board of India (SEBI), National Stock Exchange of India Limited (NSE) and National Securities Depository Ltd. Federal Bank is one of Indias leading private sector banks, with a dominant presence in the state of Kerala. It has a strong network of 708 branches and 749 ATMs spread across India. The bank provides over four million retail customers with a wide variety of financial products. Federal Bank is one of the first large Indian banks to have an entirely automated and interconnected branch network. In addition to interconnected branches and ATMs, the Bank has a wide range of services like Internet Banking, Mobile Banking, Tele Banking, and Any Where Banking, debit cards, online bill payment and call center facilities to offer round the clock banking convenience to its customers. The Bank has been a pioneer in providing innovative technological solutions to its customers and the Bank has won several awards and recommendations. Fortis is an international insurance group composed of AG Insurance, the overall market leader in life and non-life insurance in Belgium, distributing its insurance products through the network of BNP Paribas Fortis Bank and independent insurance brokers, and Fortis Insurance International with subsidiaries in the UK, France, Hong Kong, Luxembourg (Non-life), Germany, Turkey, Russia and Ukraine, and joint ventures in Luxembourg (Life), Portugal, China, Malaysia, Thailand and India.

23

VISION AND VALUES VISION

To be the leading provider of wealth management, protection and retirement solutions that meets the needs of our customers and adds value to their lives.

MISSION
To continually strive to enhance customer experience through innovative product offerings, dedicated relationship management and superior service delivery while striving to interact with our customers in the most convenient and cost effective manner. To be transparent in the way we deal with our customers and to act with integrity. To invest in and build quality human capital in order to achieve our mission.

VALUES
Transparency: Crystal Clear communication to our partners and Stakeholders. Value to Customers: A product and service offering in which customers perceive value. Rock Solid and Delivery on Promise: This translates into being financially strong, operationally robust and having clarity in claims. Customer-friendly: Advice and support in working with customers and partners. Profit to Stakeholders: Balance the interests of customers, partners, employees, shareholders and the community at large.

EXCELLENCE
"In every aspect of work ranging from the in-house training institute to the detailed Personal Insurance Plan. IDBI Fortis is focused on achieving the highest standards of quality in every aspect of their business".

24

HONESTY
"Is the heart of the Life Insurance business? IDBI Fortis believes that above all, Life Insurance is based on trust. Transparency, Dependability and Integrity will form the cornerstones of the IDBI Fortis experience."

KNOWLEDGE
"Is what makes experts. IDBI Fortis is focused on the Life Insurance business. Perfectly combining global expertise with local knowledge, IDBI Fortis is the Indian Life Insurance specialist."

CARING
"For the customer IDBI Fortis is redefining the Life Insurance paradigm to focus on the needs of the customers. The IDBI Fortis service process is responsive, personalized, humane and empathetic."

CULTURE
Our "in house culture recipe" has some of the finest ingredients going into its making. Some of the more prominent aspects of our culture are stated below: i. ii. iii. iv. v. vi. vii. viii. ix. x. Customer comes first Do it right the first time Bias for result oriented action Financial strength and discipline Clarity of purpose International quality standards Inclusive Meritocracy learning opportunities Fun at work Commitment to published value system

25

TECHNOLOGY
To monitor and manage its network equipment across 34 sites, IDBI Fortis uses Tulip Proactive Managed CE solution. The solution includes device management, proactive troubleshooting and notification support. With the implementation of the solution, IDBI has reported improvement of network performance and availability, with a faster, more effective change and configuration management.

PRODUCTS
IDBI Fortis launched its first set of products across India in March 2008, after receiving the requisite approvals from the Insurance Regulatory and Development Authority (IRDA). IDBI Fortis offers services through a nationwide network across the branches of IDBI Bank and Federal Bank in addition to a network of advisors and partners. IDBI Fortis has 35 branches across the country.

SPONSORSHIPS, AWARDS
IDBI Fortis Life Insurance Company was selected as the title sponsor for the India-Sri Lanka Cricket Series. This was followed by the IDBI Fortis Wealthsurance Twenty20. Wealthsurance Made Easy (WME), a knowledge aid by IDBI Fortis for its sales force, won The Bronze Dragon in the category for Best Dealer/Sales Force activity at the Promotion Marketing Awards of Asia (PMAA).

26

ORGANIZATIONAL STRUCTURE SALES ORGANIZATIONAL STRUCTURE

G.V NAGESHVAR RAO (MD & CEO)

MURLIIYER (country Head sales)

North Zonal Head

South Zonal Head

East Zonal Head

West Zonal Head

Area agency head

Bank assurance head

Area agency head

Bank assurance head

Area agency head

Bank assurance head

Area agency head

Bank assurance head

Manager distribution deputy chief senior

Manager distribution deputy chief senior

Manager distribution deputy chief senior

Manager distribution deputy chief senior

Corporate head Distributer & trainees & agencies

Corporate head Distributer & trainees & agencies

Corporate head Distributer & trainees & agencies

Corporate head Distributer & trainees & agencies

27

HUMAN RESOURCE ORGANIZATIONAL STRUCTURE

G.V NAGESHVAR RAO (MD &CEO)

MURLIYER (Country Head Sales)

MALLIKA SARASWATH (Human Resource Head)

Service Department

Pay Roll

Recruitment

Senior Manager Chief Manager

Assistant Manager

There are no Zonal Heads in the Human Resource Department the area Human Resource executive only acts as the Human Resource Manager and reports all the activities to the Head Office that is in MUMBAI.
28

OPERATIONS ORGANIZATIONAL STRUCTURE

G.V NAGESHVAR RAO (MD &CEO)

MURLIYER (Country Head Sales)

MARKET & PROMOTION DEPARTMENT

UNDERWRITING DEPARTMENT

FINIANCE DEPARTMENT ANIL SHRIVATSAV

PRODUCT DEPARTMENT

North Zonal Support Manager

South Zonal Support Manager

East Zonal Support Manager

West Zonal Support Manager

The Zonal Managers are supported by Branch Support Executives and the Operations department is present only in the Head Office which is in MUMBAI.

29

PRODUCT PROFILE:
WEALTHSURANCE: The Wealthsurance Milestone Plan enables the policyholder to save and build wealth to meet their financial goals. This Plan comes with a wide range of 13 investment options and 7 insurance benefits - all packaged with a low charge structure and unmatched flexibility. HOMESURANCE: IDBI Federal Homesurance Protection Plan provides full insurance cover for properties even under construction, thus ensuring that the beneficiary gets the full sanctioned amount in case of any unfortunate event. It also has an innovative fixed period cover for those who would aim to prepay their loans early. BONDSURANCE: Bondsurance is designed for customers looking for guaranteed returns which will not get affected by financial market conditions. It offers guaranteed return on investment along with life insurance cover. MICROSURANCE: IDBI Federal Microsurance Plan is a one of its kind insurance plan which can be very useful for various Micro Financial Institutions and NGOs, wherein not only the members but even the members family gets an insurance cover. TERMSURANCE: IDBI Federal Termsurance Protection Plan offers the unique Increasing Cover option that automatically increases the cover every year without increasing the premium. INCOMESURANCE: Knowing the customer helped us to combine the Endowment & Money Back plans into a single plan. It linked the returns to the G-Sec rates, transparently declared by the government. Also, the Guaranteed Annual Payout and other benefits upon death are tax-free under Sec 10(10D).

30

4. RESEARCH METHODOLOGY

31

INTRODUCTION
The system of collecting data for research projects is known as research methodology. The data may be collected for either theoretical or practical research for example management research may be strategically conceptualized along with operational planning methods and change management. Research methodology is to describe how to gather information (method) this can be survey interview, litterateur review etc. And then explain each method what are they, what are the method. Some important factors in research methodology of measure most of your work is finished by the time you finish the analysis of data. Formulation of research questions along with sampling weather probable or non-probable is followed by measurement that includes surveys and scaling. This is followed by research design, which may be either experimental or quasi-experimental. Methodology includes a philosophically coherent collection of theories, concepts or ideas as they relate to a particular discipline or field of inquiry.

METHOD OF DATA PRESENTATION

Any research finally leads to a result, which would be analyzed, from the data that have been received by the researcher. Data analysis is meant to be the most sensitive part of any research work. On achieving this various methods can be adopted there are three different methods using for data analysis such as univariate statistic.

The univariate analysis consist of mean, standard deviation, percentage etc. although the mean most commonly seen representation of central tendency and the stranded deviation takes into account each observations distance from the mean. The obtained data were presented through table based on the percentage of the respondents and were analysis through spread sheet under the univariate measures such as mean, standard deviation.

32

5. ANALYSIS & INTERPRETATION

33

METHOD OF DATA EVALUATION

After the data analysis, it must be evaluate to get the decision. Here the decision rule will be applied that is univariate measure calculated to the decision. The likers scale is given 1-3 to each statement in the questionnaires. Based on the value indicated in the questionnaire, the average value for each factor is considered. The mean value lies between 1-3 which follows. 1) Agree 2) Neutral 3) Disagree

Further three types of degree of consideration that can be derived regarding differentiation variables are show in the following table

Decision Criteria for Univariate Analysis Range 1<X=2.5 2.5<X=3.5 3.5<X<=5.0 Decision Attribute Low Level Relinquishment Moderate Level Relinquishment High Level Relinquishment

PERSONAL INFORMATION
The research is to identify the customer retention in IDBI federal insurance Co limited in Coimbatore branch. Retaining the customer is based on the customer satisfaction. Age, sex, civil status, education level, occupation, income also decide the satisfaction.

34

AGE DISTRIBUTION
Age distribution pattern of the customer in Coimbatore branch its represented by the sample 100. Age distribution class was categories in to three classes.63% of customer represented the age categories of 18-35 years. 5% of customer represented the age categories of 36-50 years. 32% of customer represented the age categories of over 50 years. Age Distribution 18-35 Years 36-50years Over 50 Years Total Frequency 63 5 32 100 Percentage 63% 5% 32% 100%

Age Distribution
70 60 50 40 30 20 10 0 18 - 35 36 - 50 above 50

35

GENDER
In this research the factor of gender represent 76% of sample male & 24% of samples female. Gender Frequency Percentage

Male

76

76%

Female

24

24%

Total

100

100%

Gender
80 70 60 50 40 30 20 10 0 Male Female

36

MARITAL STATUS
Out of 100 samples, 77% samples were unmarried and 23% of samples were married. Marital status Unmarried Married Total Frequency 77 23 100 Percentage 77% 23% 100%

Marital status
90 80 70 60 50 40 30 20 10 0 Unmarried Married

37

EDUCATION QUALIFICATION
33% of samples were found in the category of UG degree holder. 58% of samples were found in the category of PG degree holder. 19% of samples were found in the category of other or none. Education Qualification UG degree holder PG degree holder Other or none Total Frequency 33 58 19 100 Percentage 33% 58% 19% 100%

Education Qualification
70 60 50 40 30 20 10 0 UG Degree Holder PG Degree Holder Other or None

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OCCUPATION
64% of samples were found in the category of professional. 10% of samples were found in the category of clerical. 26% of samples were found in the category of unskilled workers. Occupation Professional Teacher Clerical Unskilled workers Total Frequency 64 0 10 26 100 Percentage 64% 0% 10% 26% 100%

Occupation
70 60 50 40

30
20 10 0 Professional Teacher Clerical Unskilled workers

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INCOME
Income was categories in to four classes. 5% customer represents the income Rs 1000020000.12% customer represents the income Rs 20000-30000. 83% customer represents the income above Rs 300000. Income range (per month) Rs 10000-20000 Rs 20001-30000 Above Rs 300000 Total Frequency 5 12 83 100 Percentage 5% 12% 83% 100%

Income
14

12
10 8 6 4

2
0 10000 - 20000 20001 - 30000 Above 30000

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RESEARCH INFORMATION
The data collected from 100 customers who were statement in order to evaluate. The mean and standard deviation are calculated to evaluate the research details. Mean = fx / f Standard deviation = (fx^2 / f)-(fx / f) ^2

EVALUATED RESEARCH DATA

7. In thinking about the recent experience with IDBI Federal life insurance, rate the satisfaction with the customer service received by you? Frequency Agree Neutral Disagree Total 78 0 22 100 Percentage 78% 0% 22% 100%

Service Satisfaction
100 80 60

40
20 0 Agree Neutral Disagree

X Agree Neutral Disagree 1 2 3

f 78 0 22 100

fx 78 0 66 144

x^2 1 4 9

fx^2 78 0 198 276

Mean = 1.44 Standard deviation = 0.69

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8. The process for getting your concerns resolved is fast? Frequency Agree Neutral Disagree Total 83 0 17 100 Percentage 83% 0% 17% 100%

Concern Solvation
90 80 70 60 50 40 30 20 10

0
Agree Neutral Disagree

X Agree Neutral Disagree 1 2 3

f 83 0 17 100

fx 83 0 51 134

x^2 1 4 9

fx^2 83 0 153 236

Mean = 1.34 Standard deviation = 0.56

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9. Please think about the features and the benefits of the insurance you took. Are you satisfied with the insurance? Frequency Agree Neutral Disagree Total 32 45 23 100 Percentage 32% 45% 23% 100%

Benefit Satisfaction
50 45 40 35 30 25 20 15

10
5 0 Agree Neutral Disagree

X Agree Neutral Disagree 1 2 3

f 32 45 23 100

fx 32 90 69 191

x^2 1 4 9

fx^2 32 180 207 419

Mean = 1.91 Standard deviation = 0.54

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10. a. The customer service representative was very courteous Frequency Agree Neutral Disagree Total 53 17 30 100 Percentage 53% 17% 30% 100%

Courteous Service
60 50 40 30

20 10
0 Agree Neutral Disagree

X Agree Neutral Disagree 1 2 3

f 53 17 30 100

fx 53 34 90 177

x^2 1 4 9

fx^2 53 68 270 391

Mean = 1.77 Standard deviation = 0.78

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b. The customer service representative handled your call quickly Frequency Agree Neutral Disagree Total 56 5 39 100 Percentage 56% 5% 39% 100%

Quick Call
60

50
40 30 20 10 0 Agree Neutral Disagree

X Agree Neutral Disagree 1 2 3

f 56 5 39 100

fx 56 10 117 183

x^2 1 4 9

fx^2 56 20 315 391

Mean = 1.83 Standard deviation = 0.56

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c. The customer service representative was knowledgeable Frequency Agree Neutral Disagree Total 68 12 20 100 Percentage 68% 12% 20% 100%

Knowledge Representative
80 70 60 50 40 30

20
10 0 Agree Neutral Disagree

X Agree Neutral Disagree 1 2 3

f 68 12 20 100

fx 68 24 60 152

x^2 1 4 9

fx^2 68 48 180 296

Mean = 1.52 Standard deviation = 0.65

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11. The policy plans of IDBI Federal Company provide highest benefits for you? Frequency Agree Neutral Disagree Total 80 15 5 100 Percentage 80% 15% 5% 100%

Highest Benifits
90 80 70 60 50 40 30 20 10 0 Agree Neutral Disagree

X Agree Neutral Disagree 1 2 3

f 80 15 5 100

fx 80 30 15 125

x^2 1 4 9

fx^2 80 60 45 185

Mean = 1.25 Standard deviation = 0.25

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12. The insurance plans policy and procedure of IDBI insurance company are understandable easily? Frequency Agree Neutral Disagree Total 100 0 0 100 Percentage 100% 0% 0% 100%

Policy & Procedures Understandability

120 100 80 60 40 20 0 Agree Neutral Disagree

X Agree Neutral Disagree 1 2 3

f 100 0 0 100

fx 100 0 0 100

x^2 1 4 9

fx^2 100 0 0 100

Mean = 1 Standard deviation = 0

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13. Is the premium payment mode of IDBI federal insurance is easy? Frequency Agree Neutral Disagree Total 100 0 0 100 Percentage 100% 0% 0% 100%

Easy Payment Mode

120 100 80 60 40 20 0 Agree Neutral Disagree

X Agree Neutral Disagree 1 2 3

f 100 0 0 100

fx 100 0 0 100

x^2 1 4 9

fx^2 100 0 0 100

Mean = 1 Standard deviation = 0

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14. Do you like to have a long term relation with IDBI insurance company? Frequency Agree Neutral Disagree Total 34 24 42 100 Percentage 34% 24% 42% 100%

Long Relationship
45 40 35 30 25 20 15 10 5

0
Agree Neutral Disagree

X Agree Neutral Disagree 1 2 3

f 34 24 42 100

fx 34 48 126 208

x^2 1 4 9

fx^2 34 96 378 508

Mean = 2.08 Standard deviation = 0.73

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15. Do you recommend IDBI Insurance Company to your friends? Frequency Agree Neutral Disagree Total 43 52 31 100 Percentage 43% 52% 31% 100%

Recommend IDBI
60 50 40 30 20

10
0 Agree Neutral Disagree

X Agree Neutral Disagree 1 2 3

f 43 26 31 100

fx 43 52 93 188

x^2 1 4 9

fx^2 43 104 279 426

Mean = 1.88 Standard deviation = 0.73

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16. You insure in IDBI because friends insisted? Frequency Agree Neutral Disagree Total 68 10 22 100 Percentage 68% 10% 22% 100%

Friends Insisted
80 70 60 50 40 30 20 10 0 Agree Neutral Disagree

X Agree Neutral Disagree 1 2 3

f 68 10 22 100

fx 68 20 66 154

x^2 1 4 9

fx^2 68 40 198 306

Mean = 1.54 Standard deviation = 0.69

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17. Would you like to have another insurance policy in IDBI in future? Frequency Agree Neutral Disagree Total 32 23 45 100 Percentage 32% 23% 45% 100%

Another Policy In IDBI

50 45 40 35 30 25 20 15 10 5 0 Agree Neutal Disagree

X Agree Neutral Disagree 1 2 3

f 32 23 45 100

fx 32 46 135 213

x^2 1 4 9

fx^2 32 92 405 529

Mean = 2.13 Standard deviation = 0.75

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OVERALL MEANS & STANDARD DEVIATION VALUE

Statement In thinking about the recent experience with IDBI Federal life insurance, rate the satisfaction with the customer service received by you? The process for getting your concerns resolved is fast? Please think about the features and the benefits of the insurance you took. Are you satisfied with the insurance The customer service representative was very courteous The customer service representative handled your call quickly The customer service representative was knowledgeable The policy plans of IDBI Federal company provide highest benefits for you? The insurance plans policy and procedure of IDBI insurance company are understandable easily? Is the premium payment mode of IDBI federal insurance is easy? Do you like to have a long term relation with IDBI insurance company? Do you recommend IDBI Insurance company to your friends? You insure in IDBI because friends insisted? Would you like to have another insure policy in IDBI in future? Agree 78 Neutral 0 Disagree 22 Mean 1.44 Std.Dev 0.69

83 32

0 45

17 23

1.34 1.91

0.56 0.54

53 56 68 80

17 5 12 15

30 39 20 5

1.77 1.83 1.52 1.25

0.78 0.56 0.65 0.25

100

100 34 43 68 32

0 24 26 10 23

0 42 31 22 45

1 2.08 1.88 1.54 2.13

0 0.75 0.73 0.69 0.75

No of Response 100

Mean 20.69

Std deviation 6.95

The above table shows that IDBI federal insurance is having a high level of customer relinquishment.
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6. FINDINGS

55

CUSTOMER RELINQUISHMENT
IDBI federal insurance is having a high level of customer relinquishment.

WAYS TO RETAIN THE CUSTOMER

The IDBI federal insurance company in Coimbatore branch has to take some action to have customers for long time. i. ii. iii. iv. v. Free some amount of premium on continuous purchase. Give some gifts which must satisfy the needs of the customers. Establish membership cards and membership programs Frequent buyer programs which permit customers to build up fair play Databases that keep track of customers purchases, preferences, complements and complaints, which are used to carry out loyalty building services and dialogs. vi. Integrated marketing programs where the advertising, direct communications, customer service, database marketing and sales programs are all orchestrated together and designed to build loyalty.

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7. RECOMMENDATION

57

RECOMMENDATIONS
The unmarried people are actually not interested to take insurance. They wanted to invest their money in other fields like buying a house, bike, buildings, and real-estate etc. They are even ready to take risk for more earnings.

The married peoples are interested in insurance for the benefit of their partner as well as their children and medical expenses. Generally educated people understand easily so most of graduate clearly understand the benefits of insurance policies.

So IDBI Federal Life Insurance Corporation Limited can develop a new policy by targeting the unmarried people.

IDBI have to increase their promotional activities in such a way that even unskilled persons understand the importance of their Insurance add value to their customer.

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8. CONCLUSION

59

CONCLUSIONS
The data were collected from the customers response of the IDBI Federal Life Insurance Corporation Limited Coimbatore branch. Based on the percentage of the customers 100 sample size was collected. The age, gender, marital statuses, educational qualification, occupation, monthly income, were analyzed as personal information in the questionnaire. According to the collected personal information, most of the sample customers were young age, single, educated, higher income customers who got insurance. According to the research the IDBI Federal Life Insurance Corporation Limited Coimbatore have high customer relinquishment because most of the customers did not insure out of their own interest. Parents, Friends who are working or doing their project or internship in IDBI Federal Life Insurance wanted them to have a policy. This is the reason why customers move out of IDBI Federal.

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9. APPENDIX

61

QUESTIONNAIRE
Good morning is this Mr./Ms. I am Sindhu from IDBI federal one of the leading wealthsurance solution provider in India. Do you have a moment to talk? I work extensively in the area of proving future financial planning solution to people. My expertise includes planning for your familys financial security, your childrens education, marriage or your personal retirement. The reason why I called you today is to get your idea and feedback about IDBI federal can I continue?

PART A: PERSONAL DETAILS

1. Is your age a) 18-36 years b) 36-45 years c) Over 50 years

2. Gender a) Male b) Female

3. Marital status a) Single b) Married

4. Education qualification a) UG degree holder b) PG degree holder c) Other or none

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5. Occupation a) Professional b) Teacher c) Clerical d) Unskilled workers

6. Monthly income a) Rs 10000-20000 b) Rs 20000-30000 c) Above Rs 300000

PART B: RESEARCH DETAILS

Evaluate the statement on the basis of the point given below 1. Agree 2. Neutral 3. Disagree

7. In thinking about the recent experience with IDBI Federal life insurance, rate the satisfaction with the customer service received by you?

8. The process for getting your concerns resolved is fast?

9. Please think about the features and the benefits of the insurance you took. Are you satisfied with the insurance?

63

10. Customer service Representative Pertain to the customer service representative you spoke with most recently please indicate whether you agree or disagree or none to the following statements 1 The customer service Representative was Very courteous O O O 2 3

The customer service Representative handled your call quickly O O O

The customer service Representative was Knowledgeable O O O

11. The policy plans of IDBI Federal Company provide highest benefits for you?

12. The insurance plans policy and procedure of IDBI insurance company are understandable easily?

13. Is the premium payment mode of IDBI federal insurance is easy?

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14. Do you like work or held the relationship between you and IDBI insurance company at long time?

15. Do you recommend IDBI Insurance Company to your friends?

16. You insure in IDBI because friends insisted?

17. Would you like to have another insure policy in IDBI in future?

Thanks a lot for your response Have a nice day

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10. BIBLIOGRAPHY

66

Books

1. Research Method for Business Students-Pearson Education-Mark Saunders, Philip Lewis, and Adrian Thorn hill.

2. Questioner design-Ian Brace

3. Developing a Questionnaire (Real World Research) by Bill Gill ham

4. Questionnaire Design by A.N. Oppenheim

5. Analysis of Questionnaire Data with R by Bruno Falissard

6. Kothari C.R. (1990) Research Methodology: Method and Techniques, WishvaParkashan, New Delhi. PP115-117

7. Bodie. Z, Kane. A & Marcus. J: Essentials of Investments PP242-243

Websites
1. http://www.economywatch.com/indianeconomy/indian-insurance-sector.html

2. http://www.indianmba.com/Occasional_Papers/OP85/op85.html

3. http://www.banknetindia.com/finance/insure2011.htm

4. Student Insurance: www.ingletravel.com

5. Vehicle Insurance OffersApnaPaisa.com/Vehicle-Insurance

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