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A REPORT ON

Customer satisfaction and retention of IDBI Federal life
Insurance Company LTD


By

(AKSHIT DUBE, ID- 13A3HP011)

A report submitted in partial fulfillment of the requirements
of 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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Customer satisfaction and retention of IDBI
Federal Life Insurance Company LTD
By
(AKSHIT DUBE)



Company Guide Faculty Guide
Mrs.C.Shanthi Dr.Sridhar Vaithianathan
Asst. Branch manager Associate Professor
IDBI Federal Life Insurance Co Ltd. IMT, Hyderabad
Coimbatore

IMT Hyderabad
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ACKNOWLEDGMENT

I sincerely thank Mrs.C.Shanthi (Asst. Branch head), Jay Mala
and Mr.Sankeerth (Coordinator) for providing me this
wonderful opportunity of working on this particular project. I
have been provided help and got the chance to learning a lot
throughout this project.
I am also thankful to my faculty guide Mr. Sridhar Vaithianathan
for guiding and encouraging me throughout the internship.
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EXECUTIVE SUMMARY

Customer retention and satisfaction are 2 of the most
important factors regarding long term success of the company.
These factors are known to be huge influencing factors in the
economic growth of a company.
The aim of the research is to determine the current customer
satisfaction and retention scenario of IDBI Federal Life
Insurance Company Ltd.
The report contains brief introduction about the insurance
industry in India and IDBI Federal Life Insurance Company Ltd.
The sample size of the report is 100 respondents and the data is
collected through phone interview and questionnaire method.






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TABLE OF CONTENTS
The 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 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.


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Company profile

IDBI Federal Life Insurance Co Ltd. is a joint-venture of IDBI
Bank, India's premier development and commercial bank,
Federal Bank, one of India's leading private sector banks and
Ageas, a multinational insurance giant based out of Europe. In
this venture, IDBI Bank owns 48% equity while Federal Bank
and Ageas own 26% equity each. Having started in March 2008,
in just five months of inception, IDBI Federal became one of the
fastest growing new insurance companies by garnering Rs.100
Cr in premiums. Through a continuous process of innovation in
product and service delivery IDBI Federal aims to deliver world-
class wealth management, protection and retirement solutions
that provide value and convenience to the Indian customer.
The company offers its services through a vast nationwide
network 2,308 partner bank branches of IDBI Bank and Federal
Bank 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 the
expectations.
Customer retention and satisfaction are 2 of the most
important factors regarding long term success of the company.
These factors are known to be huge influencing factors in the
economic growth of a company.
In todays world it is essential to effectively manage customer
satisfaction and retention. Many institutions including
insurance companies spend a lot of resources, time and energy
to keep and enhance their customer base.
There are many factors such as courteous employees, problems
being solved fast, service quality, usefulness of the
product/service which helps in measuring how satisfied a
customer is with the company and only a satisfied customer will
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purchase another product of the company and recommend it
to others.
The process of measuring customer satisfaction and obtaining
feedback on organization performance is a important tool
quality 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 and
suggest ways to improve it.

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Problem statement

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

1. To identify the current scenario of IDBI Federal Life
Insurance Ltd.
2. To identify ways to improve the customer satisfaction and
retention levels.

Scope of the project

Successful companies are continuous working in the field of
customer satisfaction and retention. It is not possible to be
successful without keeping the customers happy and retaining
them for future business. This study will help IDBI Federal Life
Insurance in knowing the relinquishment level and how to
retain the customers.
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PERIOD OF STUDY

The period of the report project is 14 weeks.
Sample design

The research will be carried out among the customers of IDBI
Federal Life Insurance. The sample would be around 100.

Limitation

Survey will have a sample size of 100 people and therefore may
not be entirely accurate and not depict the views of the whole.





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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 to seek new, single-transaction 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
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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.
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. Following are some of the ways -

1. Delivering service thats consistent with your value
proposition and brand.
2. Cross-selling, up-selling and asking for referrals from existing
customers
3. Developing programs to increase customer loyalty and
decrease turnover
4. Prioritizing retention as a major focus in your annual
marketing plan.
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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.

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

1. The cost of acquisition occurs only at the beginning of the
relationship, so the longer the relationship, the lower the
amortized cost.
2. Long-term customers tend to be less inclined to switch.
3. Long-term customer may initiate free word of mouth
promotions and referrals.
4. Long-term customers are more likely to purchase ancillary
products and high margin supplemental products.
5. 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.

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Questionnaire



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REFERENCES

1. http://www.idbifederal.com/
2. http://www.ibef.org/industry/insurance-sector-india.aspx
3. http://www.irda.gov.in/ADMINCMS/cms/NormalData_Layout.a
spx?page=PageNo4&mid=2

4. http://www.accenture.com/SiteCollectionDocuments/PDF/Acce
nture-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 Context
Alok Kumar Rai, Srivastava Medha

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