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PROJECT REPORTSubmitted For the Partial Fulfillment of the

Degree

ON

METLIFE INDIA

Submitted By:

Anubhav TyagiMBA(IT)

IIIT Allahabad

Indian Institute Of Information Technology- Allahabad


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ACKNOWLEDGEMENT

Something I never thought about as a student, but that becomes

very clear as a trainee, in such a big organization is that while

making a project, you come to face or have different experiences

and by that you come to know that A project is not produced by

just one person, it takes lot of hard work by lot of talented people

who guide you with there expert advices and experiences.

And for making my project successful I have many person to

thank for helping and guiding me in completion of the project.

I would like to especially thank to Mr. Vijay Chourasia(Internal

guide) and Mr. Abhijeet Mukerji (Branch manager), who kept

the ship afloat for the past two months and shared there expert

advices to make my project full of content and also provided me

the facilities to prepare the project.

Also I would like to thanks, Mr. Sachin Tyagi and Mr. Kumud.

K. Tyagi for correcting, formatting and polishing my work with his

special advices and guidance. Also I appreciate the staff of Metlife

India, Kailash Colony and facility support provided by them for the

past two months.

Indian Institute Of Information Technology-Allahabad

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Anubhav Tyagi

MBA(IT)IIIT Allahabad

OBJECTIVE

The main objective of the project was to study the

recruitment methodologies of the High Net-Worth

Individuals and High Net-Work Individuals and at the same

time study their inclination towards the businessopportunity available in the insurance sector and their

awareness towards the same. The study also aimed at

knowing the brand recall of MetLife India Insurance.


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INSURANCE SECTOR IN INDIA

The insurance sector in India has come a full circle from being an

open competitive market to nationalisation and back to a

liberalised market again. Tracing the developments in the Indian

insurance sector reveals the 360-degree turn witnessed over a

period of almost two centuries.

A brief history of the Insurance sector

The business of life insurance in India in its existing form started

in India in the year 1818 with the establishment of the Oriental

Life Insurance Company in Calcutta.

Some of the important milestones in the life insurance business in

India are:

1912: The Indian Life Assurance Companies Act enacted as the

first statute to regulate the life insurance business.


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1928: The Indian Insurance Companies Act enacted to enable the

government to collect statistical information about both life and

non-life insurance businesses.

1938: Earlier legislation consolidated and amended to by the

Insurance Act with the objective of protecting the interests of the

insuring public.

1956: 245 Indian and foreign insurers and provident societies

taken over by the central government and nationalized. LIC

formed by an Act of Parliament, viz. LIC Act, 1956, with a capital

contribution of Rs. 5 crore from the Government of India.

The General insurance business in India, on the other hand, can

trace its roots to the Triton Insurance Company Ltd., the first

general insurance company established in the year 1850 inCalcutta by the British.

Some of the important milestones in the general insurance

business in India are:

1907: The Indian Mercantile Insurance Ltd. set up, the first

company to transact all classes of general insurance business.


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1957: General Insurance Council, a wing of the Insurance

Association of India, frames a code of conduct for ensuring fair

conduct and sound business practices.

1968: The Insurance Act amended to regulate investments and

set minimum solvency margins and the Tariff Advisory Committee

set up.

1972: The General Insurance Business (Nationalisation) Act,

1972 nationalised the general insurance business in India with

effect from 1st January 1973.

107 insurers amalgamated and grouped into four companies viz.

the National Insurance Company Ltd., the New India Assurance

Company Ltd., the Oriental Insurance Company Ltd. and the

United India Insurance Company Ltd. GIC incorporated as acompany.

Insurance sector reforms:

In 1993, Malhotra Committee headed by former Finance Secretary

and RBI Governor R.N. Malhotra was formed to evaluate the

Indian insurance industry and recommend its future direction.

The Malhotra committee was set up with the objective of

complementing the reforms initiated in the financial sector. The


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reforms were aimed at "creating a more efficient and competitive

financial system suitable for the requirements of the economy

keeping in mind the structural changes currently underway and

recognizing that insurance is an important part of the overall

financial system where it was necessary to address the need for

similar reforms"

In 1994, the committee submitted the report and some of the key

recommendations included:

1) Structure

Government stake in the insurance Companies to be brought

down to 50%

Government should take over the holdings of GIC and its

subsidiaries so that these subsidiaries can act as

independent corporations

All the insurance companies should be given greater freedom

to operate

2) Competition

Private Companies with a minimum paid up capital of Rs.1bnshould be allowed to enter the industry


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No Company should deal in both Life and General Insurance

through a single entity

Foreign companies may be allowed to enter the industry in

collaboration with the domestic companies

Postal Life Insurance should be allowed to operate in the

rural market

Only One State Level Life Insurance Company should be

allowed to operate in each state

3) Regulatory Body

The Insurance Act should be changed

An Insurance Regulatory body should be set up

Controller of Insurance (Currently a part from the Finance

Ministry) should be made independent

4) Investments

Mandatory Investments of LIC Life Fund in government

securities to be reduced from 75% to 50%


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GIC and its subsidiaries are not to hold more than 5% in any

company (There current holdings to be brought down to this

level over a period of time)

5) Customer Service

LIC should pay interest on delays in payments beyond 30

days

Insurance companies must be encouraged to set up unit

linked pension plans

Computerisation of operations and updating of technology to

be carried out in the insurance industry The committee

emphasized that in order to improve the customer services

and increase the coverage of the insurance industry should

be opened up to competition.

But at the same time, the committee felt the need to

exercise caution as any failure on the part of new players

could ruin the public confidence in the industry. Hence, it

was decided to allow competition in a limited way by

stipulating the minimum capital requirement of Rs.100

crores. The committee felt the need to provide greater

autonomy to insurance companies in order to improve theirperformance and enable them to act as independent

companies with economic motives. For this purpose, it had

proposed setting up an independent regulatory body.


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Why Insurance ?

Insurance is desired to safeguard oneself and one's family against

possible losses on account of risks and perils. It provides financial


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compensation for the losses suffered due to the happening of any

unforeseen events.

By taking life insurance a person can have peace of mind and need

not worry about the financial consequences in case of any

untimely death.

Certain Insurance contracts are also made compulsory by

legislation. For example, Motor Vehicles Act 1988, stipulates that a

person driving a vehicle in a public place should hold a valid

insurance policy covering " Act" risks. Another example of

compulsory insurance pertains to the Environmental ProtectionAct, wherein a person using or carrying hazardous substances (as

defined in the Act) must hold a valid public liability (Act) policy.

Basically there are two types of insurance:

1. Life Insurance

2. General Insurance

Insurance - Life

Your family counts on you every day for financial support: food,

shelter, transportation, education, and much more. Insurance

provides you with that unique sense of security that no other form

of investment provides. It gives you a sense of financial support

especially during that time of crisis irrespective of the fluctuations

in the stock market. Insurance provides for your career goals right

from your childhood years.


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Life insurance is all about making sure your family has adequate

financial resources to make those plans and dreams come true. It

provides financial protection to help your family or business to

manage after your death.

Few of the Life insurance policies are:

Whole life policies - Cover the insured for life. The insured does

not receive money while he is alive; the nominee receives the sum

assured plus bonus upon death of the insured..

Endowment policies - Cover the insured for a specific period.

The insured receives money on survival of the term and is not

covered thereafter.

Money back policies - The nominee receives money immediately

on death of the insured. On survival the insured receives money at

regular intervals during the term. These policies cost more than

endowment with profit policies.

Annuities / Children's policies - The nominee receives a

guaranteed amount of money at a pre-determined time and not

immediately on death of the insured. On survival the insured

receives money at the same pre-determined time. These policies

are best suited for planning children's future education and

marriage costs.

Pension schemes - are policies that provide benefits to the

insured only upon retirement. If the insured dies during the term

of the policy,


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his nominee would receive the benefits either as a lump sum or as

a pension every month.

Since a single policy cannot meet all the insurance objectives, one

should have a portfolio of policies covering all the needs.

Insurance - General

Every asset has a value and the business of general insurance is

related to the protection of economic value of assets. Assets would

have been created through the efforts of owner, which can be in

the form of building, vehicles, machinery and other tangible

properties. Since tangible property has a physical shape and

consistency, it is subject to many risks ranging from fire, allied

perils to theft and robbery.

Concepts of insurance have been extended beyond the coverage of

tangible asset. Now the risk of losses due to sudden changes incurrency exchange rates, political disturbance, negligence and

liability for the damages can also be covered.

But if a person judiciously invests in insurance for his property

prior to any unexpected contingency then he will be suitably

compensated for his loss as soon as the extent of damage is

ascertained.

Few of the General Insurance policies are:


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Property Insurance: The home is most valued possession. The

policy is designed to cover the various risks under a single policy.

It provides protection for property and interest of the insured and

family.

Health Insurance: It provides cover, which takes care of

medical expenses following hospitalization from sudden illness or

accident.

Personal Accident Insurance: This insurance policy provides

compensation for loss of life or injury (partial or permanent)

caused by an accident. This includes reimbursement of cost oftreatment and the use of hospital facilities for the treatment.

Travel Insurance: The policy covers the insured against various

eventualities while traveling abroad. It covers the insured against

personal accident, medical expenses and repatriation, loss of

checked baggage, passport etc.

Liability Insurance: This policy indemnifies the Directors or

Officers or other professionals against loss arising from claims

made against them by reason of any wrongful Act in their Official

capacity.

Motor Insurance: Motor Vehicles Act states that every motor

vehicle plying on the road has to be insured, with at least Liability

only policy. There are two types of policy one covering the act ofliability, while other covers insurers all liability and damage caused

to one's vehicles.


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Since a single policy cannot meet all the insurance objectives, one

should have a portfolio of policies covering all the needs.

Of the two types of insurances, MetLife deals in Life Insurance in

India.

MET-LIFE BEGINS::

The origins of Metropolitan Life Insurance Company (MetLife) go

back to 1863, when a group of New York City businessmen raised

$100,000 to found the National Union Life and Limb Insurance

Company.

The new company insured Civil War sailors and soldiers against

disabilities due to wartime wounds, accidents, and sickness. In

1868, after several reorganizations and five difficult years, the

company decided to focus on the life insurance business. A new

company was chartered to sell "ordinary" insurance to the middle

class. The founders chose the name because they had been most

successful in New York City, or the "Metropolitan" District.


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This new venture also faced difficulties. A severe business

depression that began in the early 1870s rapidly put half of the 70

life insurance companies operating in New York State out of

business. Only very large, long-established ordinary life insurance

companies remained strong. Policy lapses over successive years

forced the company to contract until it reached its lowest point in

the late 1870s.

In 1879, MetLife President Joseph F. Knapp turned his attention to

England, where "industrial" or "workingmen's" insurance programs

were widely successful. American companies had not bothered to

pursue industrial insurance up to that time because of the expense

involved in building and sustaining an agency force to sell policies

door

to door and to make the weekly collection of five- or ten-cent

premiums.

By importing English agents to train an American agency force,

MetLife quickly transferred successful British methods for use in

the United States. By 1880, the company was signing up 700 new

industrial policies a day. Rapidly increasing volume quickly drove

down distribution costs, and the new program proved immediately

successful.

The MetLife agent became an important person in the lives of

these striving families. Manuals instructed agents to call at a home

at the same time each week to ensure familiarity and contact. In

the process of collecting premiums, insurance agents listened to

the problems, concerns, and hopes of their clients. So successful


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was this approach that by 1909, MetLife became the nation's

largest life insurer in terms of insurance in force, a leadership

position we continue to hold today in North America.

MetLife Today

In 2001 MetLife was the first insurance company to establish a

financial holding company with a nationally chartered bank.

Leveraging its unparalleled distribution channels, MetLife entered

the retail-banking arena with the launch of MetLife Bank. This will

make an easier and more convenient way for MetLifes customers

to realize their financial goals.

After the tragic events of September 11, MetLife responded

quickly. First and foremost, MetLife was fully committed to its

policyholders. Chairman and CEO Bob Benmosche remarked that

"our focus today is on lending whatever support we can to our

customers," and that MetLife "is fully prepared financially to pay all

claims."

MetLifes support did not end there. In responding to the tragedy,

MetLife and MetLife Foundation made a number of grants to aid

those affected, including: $1 million Foundation grants to both the

September 11th Fund to meet longer-term needs of victims, and to

the Twin Towers fund to assist families and rescue workers.


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MetLife Foundation also matched employee contributions to the

American Red Cross Disaster Relief Fund.

At the same time MetLife, Inc. announced that it had invested $1

billion in a broad array of publicly traded common stocks. The

company said that this was the beginning of a program to

significantly increase MetLifes investment in the public equity

markets, and one way to get back to the basics of building

Americas future.

Additional grants for disaster relief were made in 2001 and 2002

to a number of different organizations including the ChildrensHealth Fund and the Renaissance Economic Development

Corporation.

In 2002 Working Mothermagazine honored MetLife by naming the

company one of the "100 Best Companies for Working Mothers,"

for the fourth consecutive year. In addition, the Minority Corporate

Counsel Association (MCCA) selected MetLifes Law Department as

a

recipient of the Employer of Choice Award for its commitment to

creating and maintaining a diverse and inclusive organization.

On the international front, the Mexican Government selected

MetLife to acquire Aseguradora Hidalgo, S.A., Mexicos largest life

insurer for approximately $965 million. MetLife "has the expertise,


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the resources and the commitment to provide exceptional products

and services to customers in Mexico, one of the fastest growing

life insurance markets," noted Bill Toppeta, president of MetLife

International.

MetLife announced in 2002 that it would be continuing its long-

standing relationship with Snoopy and the rest of the PEANUTS

characters. The company signed a new contract that would allow

the characters to appear in MetLifes domestic and international

advertising for the next 10 years. Commenting on the partnership,

Senior Executive Vice President and Chief Administrative Office

Lisa Weber noted that "Snoopy is our corporate ambassador and

has been an important part of our advertising campaign for 17

years."

For its future successes, the company can draw on the reservoir of

history that has produced an enduring set of corporate values

based on almost 135 years of integrity, social responsibility, strong

leadership, financial strength, and innovative products and

services

With over 137 years of experience and acquiring the 36th

position among the fortune 500 companies, the MetLife

companies serve millions of customers in the Americas and Asia

with one goal in mind to build financial freedom for everyone.

The MetLife companies are a


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leader in group benefits that serve 88 of the top one hundred

FORTUNE 500* companies, and provide benefits to 37 million

employees and family members through its plans sponsors in the

U.S.

The MetLife companies are also ranked #1 in group life and #1 in

commercial dental in the U.S. The MetLife companies are the

number one life insurer in the U.S. with approximately US $2.5

trillion of life insurance in force.

In India, MetLife was incorporated in 2001, and aims to

differentiate itself through customized need based selling, simple

and innovative products, and technology-backed service

experience, to tread its path to build financial freedom for

everyone.

MetLife's stated long-term goal is to become the recognized leader

throughout the world with over 100 million people as customers by

the year 2010. The company took a major step toward realizingthis goal in January 2005, when it announced its intention to

purchase Citigroup's Travelers Life & Annuity and substantially all

ofCitigroup's international business for $11.5 billion.

Vision/Mission

Is to build financial freedom for all through leadership in

providing financial advice and building long-term

relationships through innovative protection, accumulation and


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retirement products, robust underwriting processes and creating

world-class customer service experience for the customers.

Metlife want to provide customers in India with world-class

solutions for financial security, and in the process add significant

value to our shareholders, associates and society.

Core Values

Being Innovative in offering world class and competitive

products to customers.

To build Long Term Relationships with the customers by

creating a world class service experience through operational

excellence and the innovative use of technology

By creating a Customer Centered and Result Focused Vision

that inspires each of the Associates and has their buy-in

Committed to creating a High Performance Organization by

creating an environment that allows each of the Associates

to perform at their peak and hence recognized as an

Employer of Choice

Committed to Partnering with our internal and external

Customers for mutual success

Work with Integrity, Fairness and Financial Prudence in all

the dealings keeping the interests of the Shareholders,

Customers and Associates paramount .


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CORPORATE GOVERNANCE

Venkatesh Mysore Managing Director

Miro Farrugia Chief Financial Officer

Suraj Kaeley Chief Marketing Officer

B Ashwin - Chief Administrative Officer

Anil Kumar K R - Chief Planning Officer

Vikrant Pande Director (Bancassurance and Corporate Agency)

Gaurav Suri Director (Marketing)

Sudip Mukhopadhyay Director (Institutional Business)

Smitashree Menon Director (Human Resources)

K Sriram Chief Actuary

Ajith Vellat Director (Information Technology)

Kailash Kulkarni Director (Agency Sales)


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Rajen Jatar Director (Finance)

Neerav Kaushik Director (Service Delivery)

Shiva Belavadi Director (Institutional Service Delivery &Claims)

Corporate Partners

As the vital channel for MetLifes products,some exemplary banks

and financial institutions have been chosen. These serve as the

interface between the customers and Metlife to aid them to

understand the unique needs and aspirations of every Indian and

update the products of Metlife with features that form the

cornerstones of financial freedom.

METLIFE PRODUCT OVERVIEW:


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1) Met100

Met100 is a limited pay whole-life policy in a non-participating

form. The policy covers the entire life (or till 100 years of age) and

has a guaranteed up-front sum-assured and paid-up value.

Besides, the policyholder has the option to surrender the policy at

any point of time for cash at a pre-decided guaranteed "surrender

value". Met100 thus, assures guaranteed sum assured to the

policyholder on survival at age of 100 or, a guaranteed amount for

the nominee/beneficiary in case of death. Also, on payment of

additional premiums one or more of the various riders like

Accidental death benefit, Term Rider, Waiver of Premium Rider,

Critical Illness rider can be added to the policy.

Highlights

Life Time protection Affordable premiums

Tax Benefit

Access to cash value of the policy

Guaranteed returns in case of survival or death.

2) Met100 Gold

Met100 Gold is a limited pay whole-life policy in participating form,

covering the entire life or till the 100 years of age. A bonus is

declared after the first two years of holding the policy, which is


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credited as reversionary bonus. Besides, the company can also

declare terminal bonus. A unique feature about this policy is that

the participation in the profit continues even after the premium

paying term, provided the premiums have been paid for the full

term. The premium paying modes available are Annual, Semi-

annual, Quarterly, Monthly and Payroll Savings Scheme. Also, on

payment of additional premiums one or more of the various riders

like Accidental death benefit, Term Rider, Waiver of Premium

Rider, Critical Illness rider can be added to the policy.

Highlights:

Life Time protection

Affordable premiums

Tax Advantage

Access to the cash value of the policy

Future prosperity of the company is shared by getting

reversionary and terminal bonuses.

3) Met Sukh

Met Sukh is a money back non-participating policy where assured

lump-sum amount is paid to the policyholder at regular intervals.

Being a non-participating policy, the premium rates, sum assured,

surrender values and paid-up values are guaranteed up-front forMet Sukh. The plan can be availed for the term of 20 years, where

the money is paid every 5 yrs. Premiums for Met Sukh are ceased

on death or on expiry of term - whichever is earlier. Also, on


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survival at the end of 20th year the policyholder receives a 40%

accrued

guaranteed addition. The biggest benefit of Met Sukh however, is

that in case of death during the term of the plan, the nominee/

beneficiary receives the guaranteed sum assured plus accrued

guaranteed additions. On payment of additional premiums one or

more of the various riders like Accidental death benefit, Term

Rider, Waiver of Premium Rider, Critical Illness rider can be added

to the policy.

Highlights

Assured sum at regular intervals

Guaranteed returns at maturity

Waiver of premium in case of death

Protection

Savings

4) Met Bhavishya

Met Bhavishya, a non-participating money-back policy with

guaranteed returns, has been specially designed to meet the

financial requirements for children at their different stages of life.

The insured here is the parent and the child the beneficiary. Thepolicy is suitable for parents in the age group 20-50 years having

children of 0-12 years old. There are two options to choose from

and fixed term benefits periodic additions & terminal additions are


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payable based on the option that you select. The policy can be

customized through 4 riders - Accidental Death Benefit, Critical

Illness (10 illness), Waiver of Premium (Accidental Disability) and

Term Rider

Highlights

Guaranteed returns at regular intervals

Secures the present and the future for the child Waiver of Premium in case of death.

5) Met-Mortgage Protector

Met-Mortgage Protector is a single pay/limited pay policy, specially

designed to protect the dependants of the insurer against the

liabilities incurred on a housing loan. The individual here is insuredand not the asset. The biggest benefit of the policy is its

decreasing term-assurance plan, which reduces the burden on the

dependants, while providing guaranteed sum assured to the

beneficiary. Met Mortgage Protector is available for terms of 5-25

yrs

Highlights

Protect dependents against liabilities incurred on housing

loan.


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Cover continues even after the premium paying term is over.

Flexible terms

6) Met Suvidha

Met Suvidha is a participatory endowment plan that provides

savings and security in one policy. It provides a lot of flexibility in

choosing the

premium paying term between 15-30 years i.e terms are availablefor 15, 16, 17, 1830 years. Met Suvidha has been developed

keeping in

mind people with shorter and irregular earning spans eg.

celebrities. The policy allows for flexibility in paying provides

protection to an individual whenever required, and offers tax

advantage. Also, being a participatory policy it is suitable for

people who would like to share the future prosperity of thecompany by getting reversionary bonuses and terminal bonuses.

7) Met Suvidha(Non- Participating Endowment Assurance)

Met Suvidha provides the savings and security in one policy. It

provides a lot of flexibility for the policy terms between 15 - 30

year i.e for the terms 15,16,17,1830 years. This product isdeveloped keeping people in mind especially people who have

irregular and shorter earning spans. It provides protection to an


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individual during the need and whenever required. It provides tax

advantage

8) Met Suraksha

Met Suraksha is a term assurance plan and provides pure

protection at the cheapest price for a specified period of time. The

policy has a term of 5/10/15/20/25 years and level term is up-to

60 years of age. It is an participating endowment policy. The tax

benefits are provided throughout the premium paying terms. Met

Suraksha provides multiple premium paying options like annual,

semi-annual, quarterly, monthly and payroll savings scheme

(PSP).

USP

Financial security after retirement

Multiple premium paying options Tax benefits throughout the premium paying options.

9) Met Pension Participating Deferred Annuity

Met Pension is structured as a participating endowment and a

participating immediate annuity. This provides only one annuity

option i,e Life Annuity. Being a pension plan it is developed toprovide financial security after retirement. It provides tax benefits

throughout the premium paying options. The death benefit during

the endowment phase will be the return of premium plus the


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reversionary bonus if any. In case of the immediate annuity phase

there will be no benefits in this phase for the beneficiary of the

policy. The maturity benefits at the end of the endowment phase is

equal to the face amount plus guaranteed addition plus attached

reversionary bonuses, if any plus terminal bonus, if any. MetLifes

pension product offers multiple premium paying options.

Highlights

Financial security after retirement

Tax benefits throughout the premium paying options Multiple premium paying options

10) Met Ultimate-"A universal life insurance policy"

Met Ultimate acts as a flexible policy which combines elements of

protection and accumulation simultaneously and provides ready

access to the accumulated cash value. It also acts as a savings

account where

in the premiums are deposited, various charges deducted and

interest credited to the accumulated amount. Met Ultimateprovides minimum guaranteed return(net rate 3.5 p.a) an an

additional bonus interest declared on the investment performance.

It has the facility of tax free withdrawals after two policy years


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from the accumulation account. Met Ultimate offers "Premium

Holidays" where there is no schedule for premium payments after

third policy year which allows for skipping payment of premiums

without lapsing the policy.

Highlights

Flexiblity

Tax benefits

Provides coverage upto 100 years of age

Skipping of premium payments after the third policy yearwithout lapsing the policy.

Tax free withdrawals after two policy years from the

accumulated account.

Flexibility to increase/decrease the Face Amount

]

11) MET GROUP LIFE

Met Group Life is a flexible group insurance policy that would

enable both employer and employees to select the right mix of life

insurance to suit their individual needs. Its a yearly term

insurance product which pays a face amount to the employeesagainst the risk of death thereby assuring peace of mind. Met

Group Life presents a hassle free implementation and flexible

premium paying modes- annual, semi-


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annual, quarterly or monthly. It offers easy enrolment process

with no medical underwriting up to free cover limit, non-

transferable employer liability, non-taxable face-amount for

beneficiary and an additional cover on a contributory basis. Met

Group also offers the option of converting Group Coverage to

Individual Coverage if the employee desires, and the advantage of

covering spouse and children subject to minimum participation

levels.

Highlights

Flexible Group Insurance Policy

Provides protection for employees family

Provides significant increased employee motivation, morale

and loyalty leading to a better work environment

Unit-Linked Plans of MetLife

12)MET-SMART

Met Smart is a transparent, unit linked whole life plan that

matures at age 100. The premium you pay is used partly for


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insurance cover and the balance is invested in funds to buy units.

Met Smart offers 3 insurance options as well as 6 investment

options that you can choose from, based on your risk profile.

Met Smart at a glance:

A Unit linked whole life plan that matures at age 100

Offers you life protection and the advantage of investing in

stocks, debt instruments and government securities

3 insurance options

A never before choice of 6 investment options covering the

complete range of investment possibilities to suit your risk-return profile

Offers you the option of switching between funds

Convenient limited pay option that allows you to complete

premium payment over a fixed term and enjoy the full

benefits

Offers a premium holiday after 3 years

Gives you the freedom to withdraw from your funds.

13)MET-ADVANTAGE

Met Advantage is a unit-linked pension plan that works hard for

you when you stop working. And, like the name suggests, it comes

with the maximum number of advantages. For one, it ensures that

you lead a comfortable lifestyle. Always. More importantly, it helps

you plan ahead, keeping in mind the escalating cost of living.

Whats more, unlike any other plan, Met Advantage comes with six

investment options, seven annuity options, and, much more.


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Met Advantage at a glance:

Transparent unit-linked pension insurance plan

Choice of 6 investment options.

Dump-in option.

Life cover protection up to vesting age

Tax savings on premium up to Rs.3,366* per annum.

Postponement of vesting age

Option of switching between funds

No health check-up

Flexible premium paying terms

Option to commute up to 1/3rd of vesting benefits tax-free


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STRUCTURE OF THE SALES FUNCTION

MetLife India Insurance sales function previously dealt in two

functional structures within the organization. These two

Structures were:

Corporate sales

Agency sales

Corporate/Group Sales:

Corporate sales includes that part of MetLife India Insurance in

which the sales are affected through the various sales manager ,

who on behalf of the company meet various corporate heads and

try to sell group insurance on the condition that all the employees

of that particular corporate will have insurance from MetLife India

Insurance, automatically when they will join that organization.

Group Insurance has been recognized as an ideal tool to enhance

productivity and build employee satisfaction in business houses

and offer value-added benefits to customers of financial

institutions and members of various affinity groups. MetLife Indias

Group Insurance solutions have been created to satisfy the

changing needs of various group customers.


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Agency Sales:

Agency sales includes that part of Met-life in which sales are

affected through various individual agents known as Financial

advisors(or can be called agents) who are basically working with

the company on the commission basis. Leads are generated by

advisors themselves and sales are affected henceforth. The

hierarchy structure of the Agency sales is as under:

o Branch Sales Manager (BSM)/ Center Sales Manager

o Agency Manager (AM)

o Sales Manager(SM)

o Assistant Sales Manager (ASM)

o Financial Advisors(FA)

With the opening up of the insurance sector and with so many

players entering the Indian insurance industry, it is required by the

insurance companies to come up with innovative products, create

more consumer awareness about their products and offer them at

a competitive price. New entrants in the insurance sector had no

difficulty in matching their products with the customers' needs and

offering them at a price acceptable to the customer.

But, insurance not being an off the shelf product and one which

requiring personal counseling and persuasion, distribution posed a

major challenge for the insurance companies. Further insurable

population of over 1 billion spread all over the country has made


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the traditional channels of the insurance companies costlier. Also

due to

heavy competition, insurers do not enjoy the flexibility of incurring

heavy distribution expenses and passing them to the customer in

the form of high prices.

With these developments and increased pressures in combating

competition, companies are forced to come up with innovative

techniques to market their products and services. At this juncture,

banking sector with it's far and wide reach, was thought of as a

potential distribution channel, useful for the insurance companies.

This union of the two sectors is what is known as Bancassurance.

What is Bancassurance?

Bancassurance is the distribution of insurance products through

the bank's distribution channel. It is a phenomenon whereininsurance products are offered through the distribution channels of

the banking services along with a complete range of banking and

investment products and services. To put it simply,

Bancassurance, tries to exploit synergies between both the

insurance companies and banks.

Bancassurance if taken in right spirit and implemented properlycan be win-win situation for the all the participants' viz., banks,

insurers and the customer.


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Advantages to banks

Productivity of the employees increases.

By providing customers with both the services under one

roof, they can improve overall customer satisfaction

resulting in higher customer retention levels.

Increase in return on assets by building fee income through

the sale of insurance products.

Can leverage on face-to-face contacts and awareness about

the financial conditions of customers to sell insurance

products.

Banks can cross sell insurance products Eg: Term insurance

products with loans.

Advantages to insurers

Insurers can exploit the banks' wide network of branches for

distribution of products. The penetration of banks' branches

into the rural areas can be utilized to sell products in those

areas.

Customer database like customers' financial standing,

spending habits, investment and purchase capability can be

used to customize products and sell accordingly.

Since banks have already established relationship with

customers, conversion ratio of leads to sales is likely to be

high. Further service aspect can also be tackled easily.


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Advantages to consumers

Comprehensive financial advisory services under one roof.

i.e., insurance services along with other financial services

such as banking, mutual funds, personal loans etc.

Enhanced convenience on the part of the insured

Easy access for claims, as banks are a regular go.

Innovative and better product ranges


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HYPOTHESIS

This project is based on the study of High net worth individuals

and high net work individuals, there recruitment methodologies

and there inclination towards the available business opportunity in

insurance sector. Keeping this in mind we started thinking about,

that how to know the basic thinking of HNIs i.e what they all have

in there mind while investing there money and time in certain

business and how much they are aware of the opportunities in

which they are investing.

After meeting few clients and collecting some data it was known

that the clients are making their investment decisions with the

advice of different consultancy bodies.

TARGETING HNIs AND BOOST SALES

We are experiencing some of the most turbulent times in history.There are literally thousands of different marketing strategies one

would be using to grow ones business but only a few that one


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need to do consistently that will allow him to make all the money

he desire. Here are some of the strategies:

Do not rely on simple sources of Business

A Marketing Parthenon means having multiple/different sources of

revenue and lead generation instead of relying on just one.

For example, let's say your primary method for generating new

business is through direct mail. What happens if, for whatever

reason, your postcards stop working tomorrow? How will that

impact your business? Now imagine you also generate leads

through the internet, space advertising, referrals, word of mouth,

joint ventures, etc.?

You have now successfully diversified your portfolio like a good

money manager.

Start now by conservatively testing other methods of marketing so

that if one method stops working, it won't put down your entire

business.

Follow up

This is probably the most important marketing strategy, yet only

few follow it. It has been proved time and again that 70% of

people who respond to a cold call or letter will buy the

product/service. But they may not buy from the original caller; the

reason cited is lack of following up the leads.

Whenever a prospect responds to your cold call/letter, it only

shows that he is only interested and there may not be any


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immediate sale. Further, it must be remembered that because

people buy when THEY are ready to buy not when YOU are ready

to sell. So it is up to you to follow up till you close the sale.

Maintain Relationships

Did you know it's far easier to re-sell an existing client than to sell

to someone who doesn't know and trust you? Did you also know

that you lose 1/12 of the value of a client every 30 days you don't

communicate with them?

So knowing these two facts, what's the easiest, most profitable

way to maintain relationships and re-sell existing clients? You

guessed it right.

A Monthly Newsletter! But don't just send a monthly newsletter.

Make sure you also enclose inserts about other products and

services that you offer.

Create A Back-End For Your Business (Cross

Selling)

It's far easier to re-sell to an existing client. It's also... Far More

Profitable! to create a Back-End For Your Business. Once you've

spent the high upfront costs to acquire a new client, it's relatively

inexpensive to send them a letter promoting another product or

service.

For example, once you are successful in selling, say a car


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insurance product, you can sell other related insurance products

such as health insurance, householders insurance etc. by proper

follow up to promote these products.

For the purpose of checking the validity of hypothesis a sample

questionnaire (Refer to Appendix A) was prepared on the basis of

which the findings and analysis were being made.

ANALYSIS BASED ON QUESTIONNAIRE SURVEY

RISK BEARING CAPACITY OF HNIs

Risk is one of the primary factor that an individual have in mind

while investing his/her money or while analyzing any business

opportunity. Due to this I surveyed the people for the amount of

risk they are willing to take while investing there money.

Risk is the potential loss that may on the happening of

certain events.


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The major risks are:

Interest-Rate Risk:

When interest rates rise, bond prices will fall.

Existing bond portfolio will lose value and vice versa.

Reinvestment risk:

Risk is of interim cash flows being reinvested at a lower rate.

Call Risk:

If issuer calls back call option bonds,when interest rate falls,they

can be replaced with cheaper debt.The investor cannot keep a high

coupon bond.

Default risk:

Issuer may default on its obligation to make timely principal and

interest payments.

Inflation risk:

When inflation rates rises, the value of interest payment isreduced. Higher interest rates will make the existing bonds lose

value again.


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Risk and return co-relation:

Risk and return are closely related with each other, they are

inversely proportional to each other. With increase in risk the rate

of return rises and with decrease in risk the rate of return

decreases.

There is one more type of risk that an individual have to face while

investing his/her money in any kind of business or other activity,

and that is Inflation.

Inflation is an increase in the general price level of goods

and services.

Over time, inflation reduces the purchasing power of the rupee

and making it less worth year after year.

To find out the exact situation in the market, I surveyed different

persons and ask about the amount of risk they want to bear in

achieving returns while investing there money in any market orproduct. After collecting the responses I came to the conclusion

that maximum number of people are the one which are in the

category of

low risk ,this means that people are very much protective about

there money and does not want to invest at the places at where

the risk is high (for ex-equity). As seen in the Pie chart below that

people are not willing to take high risk ,but if there are returnsthen they can go towards the options where the risk are

medium(32%) or low(34%).


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Risk Bearing Capacit

high

10%

medium

32%low

34%

no risk

24%

high medium low no risk

The tendency of people to save is now changing and now people

want to earn more income by investing there money in a profit

giving activity. As shown in the chart below that a large mass ofpeople, i.e. 78%, had said yes to the question


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Extra Income Generation

yes

78%

no

22%

yes no

that whether they want to earn more money or not. This clearly

indicates that there is a huge market for the companies who are in

the sector of selling insurance products and other market linkedproducts.

The maximum people in this survey was the persons in the age

group of 25-35 who are young, dynamic and have a large network

of people around them. These young and dynamic persons should

be targeted because from them only there will be the upcoming

entrepreneurs.

INCLINATION OF HNIs TOWARDS FLEXIBLE WORKING

HOURS


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Flexible working hours means that there is no restriction of timings

while working. The need is that the work should be completed on

the due date, not necessary at what timing you have worked to

complete it.

Flexible working hours are nowadays very much accepted pattern

of doing work in an organization. It is very much prevalent in the

IT industries, but now it is being adopted by the other industries or

sector too. Due to the fact that it makes the person feel free in its

job, and also due this the work is being completed to the

perfection.

Our survey also signifies this fact that flexi-working hours are the

choice of today. We surveyed a number of people(High net work

and High net worth individuals) and found out that what actually

they inclined too, so that we understand that while investing there

money and time in the business opportunity available in the

insurance sector, will they be giving there free time to it.


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Flexible Working Hours

yes

80%

no

20%

yes no

As shown in the pie chart above, out of people HNIs surveyed a

large percentage of them showed interest in Flexible working

hours(i.e 80%) as compared to the people who were not

interested in it(i.e 20%).

So, while targeting the High network or High net worth individuals,we should try to make them feel that they need not have to work

at bounded timings, and should make them feel the easiness of

working in flexi working hours and how they can make there

unproductive time, a productive one.

INCLINATION OF HNIs TOWARDS BUSINESS

OPPURTUNITY


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Since the liberalistion of insurance industry the opening of

insurance industry has been a key landmark. The Indian insurance

industry is sitting on a volcano of growth and potential waiting to

explode. Since the last three years that the industry is opened to

private players it has shown a renewed vibrancy resulting in new

opportunities.

These opportunities are in terms of employment, savings,new

channels of insurance distribution, wider coverage to rural areas

and even to the economically deprived section of the society.

Insurance industry is providing business opportunity to HNIs, thatis very much profitable to both the parties i.e inurance company

and the Individual who is joining them. For insurance companies

they are getting there products and policies sold to large mass of

people who comes under the network of these HNIs. At the same

time these HNIs are getting a opportunity of extra income

generation, without effecting there present working or business or

job.


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Other Business Opportunity

yes

62%

no

38%

yes no

Nowadays people are becoming more and more inclined to

generate extra sources of income, They want to invest there

money and free time in fruitfull work which give in return huge

revenues to them.

To find out the exact thinking of HNIs towards these business

opportunities, we surveyed quite a number of people and found

out that the percentage of people who want to earn more

thorough these business opportunities are very much larger then

the ones who do not want to go towards these opportunity. The

pie chart below shows the exact pattern we got after the survey,

i.e 62% people are inclined towards it, while 38% are not.

So while targeting these High net worth and high net work

individuals, one should be clear about the opportunities available


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and have the adequate information to make the individual

understand the opportunity available.

The above analysis of our showed that HNIs are very much eager

to go for the business opportunities available, but the next thing is

that, how many of them are aware of the income generation

source, i.e awareness of the people about these opportunity.

Awareness about the exisiting

business oppurtunity

6

12

23

9

0

5

10

15

20

25

1

no. of people

awarenes

good little no idea want to know

The bar-diagram above clearly indicates that maximum percentage

of people are those who have no idea(around 50%)about the

business opportunities and the fact that really important that only

10-12% people are those who have a good knowledge of these.


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So, for tapping these section of individuals, insurance companies

should make there communication systems more stronger and

finer, so that the information about these opportunities should

reach the individuals adequately.

Also the companies who want to target these HNIs should know

the places where they will find these influential individuals. Such

influencial individual are generally attached to some or the other

community organizations such as by being a member of civic

group, social or political group or any of the religious groups.

The finding done through the questionnaire showed that each of

these HNIs are related to one or the other community

organizations.

Community Groups

14%

32%

12%12%

30%

political social civic religious none

WHY NOT METLIFE?


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MetLife being 136 years old private company in the insurance

sector and holding its 36th position in the list of fortune 500

companies, it is shocking that in the Indian market it is the leastknown company in comparison to other private sector insurance

companies.

The main reason for this is mainly its late entry in the Indian

market (in 2001) wherein the older companies have already

have a stronger foot hold it is just a beginning for this and so it

will have to pay for its share of time to get to the roots. Again itbeing a foreign company Indian mass cannot rely on the same

at such an early stage, they have this thinking that it may anytime

get shut down. They lack trust and faith in MetLife and so fear in

investing their money with it.

Know Met-life?

no

60%

yes

40%

yes no


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Again a reason to why more than 50% of the sample surveyed

doesnt know MetLife is because of its weaker tie-ups with banks

such as Jammu & Kashmir bank, Dhanlakshmi bank and the

Karnataka bank. If it would have made tie-ups with any of the

giants in this insurance sector than may be the competition would

have been much less than it is actually now. Even the other

partners of MetLife are not that strong that would have helped it

gain the same position as it has in the U.S.

MetLife is a private company that believes in its ethics very

strongly and stick to them very tightly. It believes in actions rather

than speech and so it hardly spends its funds in advertising and

publicity because it wants its work to speak for them, so its

advertising as compared to other companies is very weak.

But in here, in the Indian market most of the people go by seeing

the advertisements and the heights of publicity done. This is one

of the major reasons of people not being aware of such a big

company! But now they getting into advertisements and publicity

because this is one of the major pathways to reach out to its

customers and be at their doorsteps as this is what the mass

wants!


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VALIDITY OF HYPOTHESIS

The hypothesis we took when we had started the project was that

the HNIs while investing there money consult with some

consultants, that can be a banker, a investment consultant or a

chartered accountant, also that most of these person want to have

extra income, but the major concern is the risk associated with it

i.e the risk should be less or no risk should be there. Adding to itthese HNIs are inclined towards the new business opportunities

available and are pretty much aware about these opportunities

present. Also that they are not sure about the credibility of the

private companies and thats why they do not want to invest there

money in the private sector i.e they prefer the public sector

companies..

Taking the example of MetLife we also took in the hypothesis that

the foreign companies are the least wanted companies at present

in this sector.


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According to the data we have collected and analysis done that is

shown with the help of pie-charts and bar graphs above in the

project, it is clear that :

HNIs while investing there money use to consult either with

a banker(26%) or investment consultant(32%) or a

chartered accountant(28%).

Most of HNIs want to generate extra income

While investing and generating extra income maximum of

these HNIs major consideration is about the risk factor

associated with the investment. That is most of them were

not interested in taking risk or can only want to have a low

risk investment.

Met-life India pvt limited ,due to having foreign name and

due to the fact of having weak partners in India is lagging

behind as compared to the other companies having strong

Indian partners and a Indian company name attached with

them.

All of the above things we took in hypothesis were proved, to beaccepted but the only thing that our hypothesis failed to prove is

that the awareness about the business opportunities available in

the market is high. Our study showed that maximum


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percentage(23%),were the person who have no idea about these

opportunities and only 8% of the total were having good idea.

ISSUES AND CHALLENGES FACING THE INSURANCE

INDUSTRY

The liberalization followed by growth of the Indian Insurance

industry has opened wide opportunities for Service and

Infrastructure sectors. This growth has to be properly channelised.

Some of the major challenges which have to addressed for

channelising the growth of insurance sector are Product

Innovation, Distribution Network, Investment Management,

Customer Service and Education.

Product Innovation


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Customers are now looking at Insurance as complete financial

solution offering stable returns coupled with total protection.

Companies will need to constantly innovate in terms of product

development to meet ever changing consumer needs.

Understanding the customer better will enable Insurance

companies to design appropriate products, determine price

correctly and increase profitability. In this context Management

Guru Peter Drucker has rightly said "Markets are changing from

Cost lead Pricing to Price lead Costing".

Distribution Network

While companies have been successful in product innovation, most

of them are still grappling with right mix of Distribution Channels

for:

a. Capturing maximum market share to build brand equity.

b. Building strong and Effective Customer relationships.

c. Cost effective customer service.

This calls for Selection of right type of Distribution channel mix

along with prudent and efficient FOS (Fleet On Street)

Management.

1. Distribution Network:

While the traditional channel of tied up advisors or Agents

would be the chief distribution channel, insurer should


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innovate and find new methods of delivering the products to

customers. Corporate agency, brokerage, Bancassurance, e-

insurance, cooperative societies and panchayats are some of

the channels that can be tapped by the insurers to reach the

appropriate market segments.

2. FOS Management

The major issues to be addressed in Insurance FOS

management are High Attrition, lack of Motivation and

Product knowledge. Continuous training, performance linked

reward systems, and career counseling can effectively tacklethese issues.

Customer Education and Service

Insurance, particularly life insurance is never bought but sold. To

convince a large population, which is comparatively not well

informed about the intangible benefits of life insurance, is indeed

an onerous task. This apart, the task would be to position

Insurance as a risk planning tool rather than a tax saving and

investment tool.

In the present competitive scenario, a key differentiator would be

professional customer service in terms of quality of advice on

product choice along with policy servicing. Servicing should focus

on enhancing the customer experience and maximizing customer

convenience. This calls for effective CRM system which eventually


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would create sustainable competitive advantage and build long

lasting relationship.

Investment Management

The most difficult challenge would be to provide returns

comparable to other financial instruments. The problem is further

aggravated by interest rates moving south. Need of the hour for

an insurer is to follow prudent underwriting practices and

efficiently cut down management and administrative expenses.

Insurers must follow best investment practices and have a strong

Asset management Company to maximize returns.

Others

1. Untapped market Segments

Apart from meeting the above challenges, it is important to

increase customer base in semi urban and rural areas which

offer huge potential. The fact that major chunk of business

for life insurance giant, LIC comes from rural and semi urban

areas stands as a testimony. However, this ignores the

difficulties of approaching this segment. Much of the demand

may not be accessible because of large distances or high

costs relative to returns.

2. Health Insurance:


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Health insurance is another growth area which offers huge

potential. Estimates indicate that out of the total potential of

Rs.3000 - 4000 crores only Rs.450 - 500 crores is being

tapped. Lack of requisite infrastructure, non standardization

of pricing and procedures, lack of product variants has

hampered the growth of this lucrative market.

E BROKING

In the Indian market, where insurance is sold after considerable

persuasion , the selling over the net would take some more time.

Also, Insurers need to design products where auto underwriting is

feasible. Certain products like term insurances, vehicle insurances,

mediclaim and others can be sold through internet. But a pure e-

commerce model may not be possible for insurance sector where

Customer-Need-Analysis, Capital-Need-Analysis and other factors

go into determining the exact customer solution. But even then,

selling on internet is very attractive because of low distribution

costs. It makes sense for the insurance companies to supplement

their traditional sales channels withInternet.

The passage of IT bill has given legal sanctity to transactions over

the net and subsequent modification of insurance act allows

payment of premium through credit card. While the technology

capability is there, improvement in bandwidth and infrastructure

are needed to give the required boost to e-commerce on the net.


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FUTURE PERSPECTIVE

Competition will result in the market to grow beyond current rates

and offer additional consumer choice through the introduction of

new products, services and price options. Development of industry

code of conduct, contributing to a common catastrophe reserve

fund and chalking out agreements to settle claims to the benefit of

customer can be expected with concerted efforts from all the

players.

The current impediments such as 26% equity cap on foreign

partner, limited investment avenues, ill defined regulatory role of

IRDA in pension business etc are to be removed in near future. As

the industry evolves, the present classification of life and non life

insurance may change. There may be specialization in each class

of business. In the years to come, we may witness Insurers

underwriting only one or two classes of business such as health

insurance, auto insurance, life insurance, pension provider,property and casualty etc.

Challenges in Distribution

KPMG have prepared a report on `Insurance Trends and Issues`

which examines the future of distribution for both life and general

insurance in India once the sector is opened. It is based on KPMG

research in India and abroad and on insights gained throughworking with clients in different markets. There are four significant

issues which the report examines.


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1. The threat of new players taking over the market has been

overplayed.

2. Nationalized players will continue to hold strong market

share positions, but there will be enough business for new

entrants to be profitable.

3. New companies often overestimate the need for insurance

expertise. They assume that a joint venture is the most

appropriate type of alliance, when in fact many forms are

possible.

4. Both new and existing players must explore new distribution

and marketing channels.


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Insurance sector to drive Indian CRM market

After telecom and banking, its the turn of insurance companies to

deploy customer relationship management (CRM) solutions. As

competition intensifies, insurers are trying every trick in the book

to retain existing customers, with a wide range of services driving

the market for CRM applications in the process

CRM with BI tools can help insurance firms monitor the ebb andflow of customer behaviour, giving them a holistic 360-degree

view of their customers


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While the insurance sector is seeking to maintain a balance

between acquiring customers and developing existing ones,

customer acquisition is vital, as no retention strategy will entirely

stem customer defection. Insurance companies are experiencing

unacceptable levels of customer churn, thanks to which they are

focusing on keeping the customers they already have in a bid to

ensure a net growth in their customer base. Today, the focus is on

selling more products to existing customers to improve

profitability. Customer-focused strategies require CRM (customer

relationship management) to help acquire customers thorough

various touch points and translate operational data into actionable

insights for proactively serving customers.

CRM with BI (Business Intelligence) tools can help insurance firms

monitor the ebb and flow of customer behaviour, giving them a

holistic 360-degree view of their customers.

CRM has helped customers through effective event-basedmarketing and lead tracking to cross- and up-sell products. CRM

helps categorise and segment customers and align products that

best suit them. CRM is helps to expand into rural areas

Insurance companies with huge customer databases, servicing

their customers through numerous branches and call centres will

invest between 15 to 20 percent of their total IT budget on CRMapplications

Current market scenario


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Insurance firms are tactically rolling out an application here and

there rather than strategically implementing a complete CRM

suite. In this, they are on the right track. They (insurance firms)

are taking baby steps, starting with operational CRM to increase

sales force automation. Once they have a sufficiently large

customer database, they use BI tools to mine data from various

sources (such as contact centres and from banks with which they

align) pushing the need for analytical CRM solutions.

CRM technologies such as sales force automation, contact centre

segmentation and campaign management tools are maturing and

finding wider adoption with large insurance companies.

The banking, financial services and insurance (BFSI) sector and

telecom will continue to drive the CRM market, but the uptake of

CRM in the insurance vertical will climb steeply in 2004 and growth

will be rapid and higher [than in other verticals] The insurancevertical has

crossed the threshold of IT and process maturity beyond which an

investment in CRM investments starts yielding good returns. The

need to integrate customer data from multiple channels and to

increase sales force productivity (including that of agents) and

running productive marketing campaigns will continue to drivedemand for CRM software.

Spending on CRM is up


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Insurance firms spend close to 12 percent of their IT budgets on

CRM software and services. The cost includes operational CRM and

spending on BI tools. Industry pundits believe that insurance firms

are looking for CRM initiatives with budgets ranging from Rs 50

lakh going right up to Rs 3 crore. The sector is busy compiling data

on individuals, including their purchasing patterns and buying

preferences of policies, pension plans and the like. In many cases,

policy renewal marketing to existing customers remains an

unsophisticated exercise, often amounting to little more than a

request to renew, with no attempt at putting a value proposition

before the customer. With a little help from CRM software,

insurance firms can sell multiple insurance policies and pension

plans to the same customer.

The opportunity is huge

Within the financial services sector, IT investment in insurance is

expected to grow the fastest with a CAGR of 35 percent in the

five-year forecast period (2001-02 to 2004-05). [Source: IDC

India] Other sub-verticals of the financial services sector are

expected to grow at a

CAGR ranging from 21 to 25 percent. Much of this spending will be

on CRM applications and integrating multiple delivery channels.

IDC says that new delivery channels are evolving as the insurance

market expands.


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According to a report from Indian Infoline (January 2004), India

has the highest number of life insurance policies in force in the

world. The industry is pegged at Rs 400 billion in India. Gross

premium collections stand at 2 percent of the GDP and this has

been growing by 15 to 20 percent per year from the Life Insurance

Corporation of India (LIC) and other government-owned insurers.

Privatisation has led to new players entering this market and it is

expected to grow at a rapid pace.

More than three-fourths of Indias insurable population has no life

insurance, pension cover and post-retirement protection cover. A

substantial part of the insurance marketthe portion dealing in

pension plans and insurance as an investment optionis protected

by a tariff and administered price regime. Competition in pricing is

yet to emerge. Once that happens, as with all dynamic customer-

oriented service industries such as banking and telecom, the race

to gain and retain customer mind share will be on.

Business drivers for CRM

Margins are under pressure: A couple of years ago, LIC dominated

the insurance market with the help of its sales force and channels

and margins were reasonably high. Today, there are close to 20

companies offering both life and general insurance products. All of

them have equally strong international and local partners; all are

focusing upon

similar geographies and target audiences. The new firms selling

life insurance and non-life insurance [pensions, insurance as


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saving, etc] have failed to emulate the LIC model because margins

are getting squeezed. There are several pain areas that new

insurance firms faceacquiring new customers, retaining them,

cross-selling products and controlling rising costs while providing

comprehensive support.

Insurers have added a plethora of products and services to their

kitty. These range from insurance as an investment option to

pension plans. They target the younger generation in the 20 to 30

years age group. The convergence of four factorsprotection,

saving (investment option), loans and pensionhave compelled

insurance companies to align with banks in reaching out to a larger

audience

This trend has led to anotherinsurance companies are joining

hands with banks by becoming channel partners for insurance.

This strategy helps insurance firms increase their footprint to cover

a larger part of the customer base in the 20-30 yearsdemographic. CRM helps connect a banks high net worth

customers with insurance firms.

More than three-fourths of India's insurable population has no life

insurance, pension cover and post-retirement protection cover

giving an indication of the insurance opportunity in India

Customer expectations are rising: Customers, faced with a

dizzying array of insurance products expect customised offerings,

value, ease of access, and personalisation from insurers. Today,


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customers are expecting individual attention, responsiveness,

customisation and

access. At the same time, they dont want to pay a premium for

these services. High customer expectations and lower exit barriers

could lead to increased customer attrition.

Where to beginoperational CRM or analytical

CRM?

The choice between operational and analytical CRM as a starting

point depends upon the insurers needs. Insurance companies with

multiple financial products and a big customer base, such as

integrated insurance solution providers, will leverage their

customer base to cross- and up-sell different financial products,

including insurance. Such providers will benefit from adopting

analytical CRM. Market segmentation, campaign management and

data mining applications will benefit them in many ways.

Call center text mining: This tool can help improve the customer

experience by resolving complaints rapidly. Insurers are using

these tools to mine text from call center transcripts to identify

issues faced by customers.

Text mining tools also help detect and capture other useful

pieces of information around a customers life stage, financial

needs and product interests. These can be used to generate leads

and trigger cross selling. However, to be fully effective, customer


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service representatives must be trained to probe for information

that will help in cross selling during the text-mining phase. Text

mining tools are leading edge today, but are predicted to take off

quickly.

Insurers can use event triggers to generate leads that can be

acted upon quickly, usually within 24 hours

Event-triggering tools monitor incoming transaction and contact

data in near-real-time to recognize changes in a customers

behavior or profile to trigger actions or alerts.

Lead management gets sophisticated: Often the ability of an

insurer to generate leads by means of event-triggering, re-

engineered touch points and cross line-of-business referral can

outstrip their ability to manage said leads. In such a situation,

though the number of leads generated rises, the conversion ratedoes not. It may even drop.

CRM can help provide sales representatives with a mechanism to

prioritise and manage leads.

Pure insurance providers who do not have a large customer base

will derive the maximum value from operational improvements,especially in integrating customer information from multiple

channels and sales force automation.


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Most insurers will look to empower their agents by deploying

partner-facing applications. Apart from making agents more

productive, it will let insurers keep in touch with customers,

otherwise difficult in a primarily channel-driven business.

Analytical CRM insurance companies can enhance Cross- and

up-selling capability to provide market opportunities within an

existing customer database. Information regarding customer

retention or attrition helps determine the likelihood of policy lapses

and helps identify customers worth targeting for retention

campaigns.

Customer segmentation , leverages data to create accurate

categories for use in marketing strategies.

Market automation , combines analytics with campaign

management functionality to help drive a more effective and

efficient marketing campaign.

Broad CRM perspective

CRM module Areas where it can be applied

Collaborative CRM


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Applying collaborative interfaces (such as e-mail, conferencing,

chat, real-time) to facilitate interaction between customers and

organisations, as well as between organisational entities dealing

with customer information

(customers to sales representatives, sales to marketing, agent to

provider)

Operational CRM

Automating horizontal integrated business processes involving

front-office customer touch points-sales, marketing, and customer

service-via multiple, interconnected delivery channels and

integration between front-office and back-office

Analytical CRM

Analysing data created on the operational side of the CRM

equation for the purpose of business performance management.

Analytical CRM is tied to a data warehouse architecture; it is most

often evident in analytical applications that leverage data marts.


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SWOT ANALYSIS:

1. STRENGHTS:

Brand name:

The Metropolitan Life Insurance Company (MetLife ) is the

number one insurer in the U.S. based on over US$2

trillion of life insurance in force. MetLife serves

approximately 9 million individual households in the U.S.

as well as 87 of the Fortune 100 companies. MetLife's

institutional clients have approximately 33 million

employees and members. Headquartered in New York,

MetLife through its affiliates, subsidiaries and

representative offices operates in 15 countries throughout

the Americas, Europe and Asia. The MetLife brand, known

for empowering people

Documents

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