divya ramesh1-icici prudential

8/6/2019 Divya Ramesh1-ICICI Prudential

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CUSTOMER VALUE MANAGEMENT AT

ICICI PRUDENTIAL LIFE INSURANCE COMPANY LTD.

BANGALORE

Submitted in partial fulfillment of the requirements for the award

ofMasters of Business Administration Degree of Bangalore University

Submitted

By:Ms. Divya Ramesh

( Reg. No. 02XQCM6019 )

Under the guidanceof

Dr. K.V.PRABHAKAR

(Adjunct

Professor)

M.P.BIRLA INSTITUTE OF MANAGEMENT

( Associate BHARATIYA VIDYA BHAVAN )

RACE COURSE ROAD, BANGALORE 560 001

OCTOBER 2004


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DECLARATION

The research work embodied in the dissertation entitled

CustomerValue Management at ICICI Prudential Life Insurance Company

Ltd.,is an original work carried out by me under the guidance

andsupervision of Dr.K.V.Prabhakar, Adjunct Professor, M.P.Birla

Institute of Management, Bangalore (Internal Guide)

and

Mr.Raghavendra Bhat, Unit Manager, ICICI Prudential Life InsuranceCompany Ltd., Bangalore (External Guide) and has been submitted

inpartial fulfillment of the requirements for the award of MBA degree

ofBangalore University.

The findings of this study are based on the data collected by me

andhave not formed the basis for the award of any other

Degree/Diplomaof any other University or

Institution.

Place : Bangalore ( Ms.Divya Ramesh)

Date : 13 September 2004


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COMPANY

CERTIFICATE

September 13, 2004

TO WHOMSOEVER IT MAY

CONCERN

This is to certify that Ms. Divya Ramesh, bearing register no. 02XQCM6019, astudentof M.P.Birla Institute of Management, Bangalore has succesfuly completed theProjectWork titled Customer Value M anagement at ICICI Prudential Life InsuranceCompanyLtd., Bangalore as a partial fulfilment of MBA program, during the months of MaytoAugust 2004.

We wish her a ll success in her futureendeavors.

Mr.Raghavendra Bhat, Mr.Sivaram,

Unit Manager Sales Mana ger


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CERTIFICATE

I hereby certify that the research work embodied in this dissertation

entitled,Customer Value Management at ICICI Prudential Life Insurance Company

Ltd.,Bangalore has been undertaken and compl eted by Ms.Divya Ramesh,

bearingRegister Number 02XQCM6019 under my guidance and

supervision.

I also certify that she has fulfilled all the requirements under the

covenantgoverning the submission of dissertation to the Bangalore University for the

awardof MBA

Degree.

Place : Bangalore Dr.K.V.Prabhakar

Adjunct

ProfessorDate : 13 September 2004 (Internal Guide)


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CERTIFICATE

This is to certify that this dissertation entitled, Customer Value Management

atICICI Prudential Life Insurance Company Ltd., Bangalore is an offshoot oftheresearch work undertaken and completed by Ms.Divya Ramesh under the

guidanceof Dr.K.V.Prabhakar, Adjunct Professor, MPBIM, Bangalore (Internal Guide)

andMr.Raghavendra Bhat, Unit Manager, ICICI Prudential Life Insur ance

CompanyLtd., Bangalore (External

Guide)

Place : Bangalore (Dr.N.S.Malavalli)

Date : 13 September 2004

Principal


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ACKNOWLEDGEMENT

I express my immense gratitudeto

Dr.K.V.Prabhakar , Adjunct Professor

,M.P.Birla

Institute of Management, Bangalore. He has been my mentor and guide andhiscontinuos enc ouragement and valuable suggestions helped me at e very stage ofthis

project.

I am grateful to Principal, Directors and the staff of M.P.Birla Institute ofManagementfor their comments and encouragement a t various phases of this

project.

I thank Mr.Raghavendra Bhat , Unit Manager , ICICI Prudential LifeInsurance

Company Ltd., Bangalore for giving me this opportunity to successfully completethis

project. His ideas, continuous support and comments have been quite useful forthecompletion of thisstudy.I alsothank

Mr.Sivaram , SalesManager

at ICICI Prudential Life InsuranceCompany

Ltd., Bangalore for giving me permission to carry out this project in theCompany.

I extend my gratitude to the staff ofthe

Sales

Department

at ICICI PrudentialLife

Insurance Company Ltd., Bangalore for their co-operation while carrying outthis

project.

My grateful thanks are also dueto

Ms.Veen

a

, InsuranceAdvisor

with ICICIPrudential

Life Insurance Compa ny Ltd., Bangalore andmy

parent

s

for their incrediblesupport.

Place :

Bangalore

Date : 13 Sept. 2004 (Ms. DIVYA RAMESH)


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CONTENTS

Sl. No. CHAPTERS Page No.

Executive Summary 1 - 2

PART A THEORITICAL

SETTING

I

Introduction1. Conceptual Framework ofCVM

3 4

2. ProblemStatement

5

3. Need & Significanc e of theStudy

6 7

4. Objectives of the

Research

8

II Review of

Literature1. Purpose 9 14

2. Conclusion 15

3. Methodology 16

4. Benefits from the LiteratureReview

16

III Research

Methodology

17 -18

1. Scope of the Study2. Type of Research3. DataCollection4. Sampling Technique

5. SampleSize6. SampleDescription7. InstrumentationTechnique8. Tools used for Hypothesestesting9. Limitations of theStudy

IV Company Profile 19 - 26


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CONTENTS

Sl. No. CHAPTERS Page No.

PART B SURVEY FINDINGS

V Data Analysis &

Interpretation1. Statement of Hypotheses

27

2. HypothesesTesting

28 36

3. Inferences from theanalysis

37 - 50

PART C CONCLUSION &

RECOMMENDATIONS

VI Summary, Conclusion & A scheme of

Recommendation1. Major ResearchFindings

51 52

2. A scheme of Recommendation

53 54

3. Directions for furtherresearch

55

Annexure

1. SelectBibliography

56 - 57

2.Questionnaire

58 61

3. Research instrumentused

62

4. Data incidental toresearch

IEPA AttributeModel

63 65

ProductComparison

66 71

Task assigned by the company -Survey

72 - 79


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EXECUTIVE

SUMMARY


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EXECUTIVE SUMMARY

This project is done for ICICI Prudential Life Insurance Company Ltd. Intodaysenvironment the customers have become sovereign authorities. They constitute thefocal

point for any business. The effectiveness of Customer Value Management helpsa

business enterprise to create and sustain differentiating value, which has been focussedinthis study.

Customer Value Management represents the best prac tices use d today bycompaniesworldwide to attain their visions of finding out what customers want and giving ittothem. Customer Value Manage ment provides a rational set of technology; methodsand

strategies to weave needs and wants of customers into key process designsandmanagement activities of acompany.

Customer Va lue Management is a vehicle to understand what the customers wantfromthe Company and how it can go about aligning its business to deliver thesameconsistently. Every Company has perspectives about Finance, Customers,InternalBusiness & Growth. Customer Value Management deals with theCustomerPerspective which along with the other perspectives are aligned with the strategicintentand posture of thecompany.

The Customer Value Map will be designed to assess where the companys servicestandsagainst compe titors on the relative quality versus pricematrix.

This Study is based on certain objectives and the re search on CustomerValueManagement has been developed based on these objectives. The objectives are

asfollows:

To identify the route to provide superior delivered value tocustomers

To unzip the direct link between customer value and the marketshare

To determine whether the Customer Value Map can assess the position ofthe

companys service against its competitors on the relative quality pricematrix

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The important findings of this studyare :

The most important reasons for buying a Life Insurance Policy from ICICIPrudentialare brand name, wide varieties of policies to choose from and good servicingof

policies

The most important value added features in ICICI Prudentials policies arewiderange of options within the same policy, multiple benefits packed in a single

policy,flexibility and goodreturnsThe manifestations of value of ICICI Prudential in order of ranking are maximumrisk cover, profitable mode of investment, tax rebate, multiple benefits,

pre -sales/during-sales/after-sales service and

premium.

Some of the prominent recommendationsare :The positive fe atures already e xisting in policies should be highlighted. Thusthecustomers will find extra value in their

policiesThe settlement of policy amount should be expedited and never unduly delayedsothat the customer is not aggrieved. This will also help the company toavoidmigration of itscustomersThe value of ICICI Prudential can be enhanced by being customer centric,increasingawareness about the company among customers, introduce new policies accordingtochanging needs of customers, to provide switching between various optionsmorethan once a year, give guaranteed returns, handle complaints effectively and

providevalue for money for thecustomersCompanies must be customer creating and customer satisfying organisationsi.e.they must do the things that induce customers to do business with them.Werecommend this strategy to ICICIPrudential.

The Company ca n use this information to reengineer their business capabilities

with afocus on customer envisionedvalue.

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INTRODUCTIO

N

1) Conceptual Framework of

CVM2) Problem

Statement3) Need and Significance of the

study4) Objectives of the research


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CONCEPTUAL FRAMEWORK OF CVM

The concept of Customer Value Management was developed by Dr.John HendersonofBoston University together with an IBM consultant to enable management teams togetan actionable customer view and take actions resulting in increased

customersatisfaction, loyalty and marketshare.

Customer Value Management (CVM) represents the very best practices usedbycompanies worldwide to attain their visions of finding out what customers wantandgiving it to them. It has become a leading approach to attract market share. It is ameans,

by which a company can balance the demand for service and products withaninfrastructure that is customer centric, delivers increased productivity & benefitsthecustomers productline.

Customer Value Management is a way to build customer loyalty and improve valueforthe company. It provides a way to understand customers values and then leveragethatknowledge to prevent customer dissatisfaction or to influence buyer behavior. Itcreatesan alignment between customers dyn amic vision of ideal value delivery and

businesscapability to deliver that value. The company should focus on specific c apabilitie sand

infrastructure to delive r value a nd also reengineer business capabilities with a focusoncustomer envisionedvalue.

Customer Value Management is a very powerful tool to make the companytrulycustomer oriented, attain top of the line growth and bottom line results. It is aformal,systematic approach to compete and grow, based on delivering customer value. CVMisalso fast emerging as the Ruling Currency to the growth of thecompany.

In implementing CVM, how a customer perceives the company and obtains valueshould

be identified and managed. If employed correctly it can help a business enterprisecreateand sustain differentiating value. CVM helps a company in the following ways:a) Develop and implement a business vision to become customer centered i.e.

benumber one in the eyes of theircustomers

b) Implement strategy to differentiate and compete on service and value tocustomers,

not merely on products andprice

c) Understand what drives customers loyalty a nd give it tothem

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The implementation of CVM be gins with the company identifying the needs/wantsoftheir customers and building on specific capabilities and business practices tofulfillthese needs/wants. CVM is thus a top downapproach.

Customer Value Management is a methodical approach that enables a company tofulfillits vision of becoming a premier service provider to its target customers. This can

beapplied at the level of an individual service or on an organisation wide basis. CVM isanongoing proce ss thatincludes :a) Monitor changing needs of targetsegment

b) Monitor changing customer perceptions of companysperformancec) Input businessimprovementsd) Monitor and measureresults.Customer Value management is a way of thinking and running an organisation. Ithelpsthe company to provide high value experience to customers and thus forms awinningstrategy for customer loyalty andgrowth.

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PROBLEM STATEMENT

To meet the challenges faced in the Life Insurance Industry, ICICI PrudentialLifeInsurance Company Ltd. has to gear up itself. Customer Value Management is a

leadingapproach to attract market share. It can emerge as the ruling currency to the growthofthe company.

The emphasis is on how ICICI Prudential Life Insurance Company Ltd. can arrestthevalue migration of their customers and capture new value of the customers bymodifyingtheir businessdesign.Specifically, the problem statement is How can ICICI Prudential ensurecustomerequity through an effective Customer Value Manage ment Program?. The study

willfocus on the three aspects of Customer Value Managementi.e.a) Being customer centric

b) Delivering increasedproductivityc) Benefits provided to the consumers productline

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NEED AND SIGNIFICANCE OF STUDY

Customer Value Management is a relatively new concept. It is now as an emerging artand science that is proving its worth in increased market share and shareholder valueforthe companies that prac tice

it.Virtually every company has a vision and a strategy to achieve it. But missingelementfrom all of these companies is the very presence of the word Customer.Incorporatingthe word custome

r

into the vision statement has been a fairly recent phenomenon.In

todays environment the customers ha ve become monarchs. They have taken onnewimportance as the focal point for business. Todays management philosophy is tofindout what the customers want and give it to them. This helps company to stay headofcompetition.

There are key issues for major companies that need to be addressed. These canbesummarised asfollows :

Just having a clear vision and strategy to achieve that vision is not enough.Even

when a strategic vision is in place it might have little impact on the goals ofthecompany. Hence this strategic vision has to be tied to the custome rsexpectationsfrom the

company.

To remain successful today, the theme for a businesss vision and strategymust

change from, Where do we want to be in five years? to Where do ourcustomerswant us to be, and how do we getthere?

Another thing shared by many companies is a marked absence of an approach toput

a customer-focused vision into real action. The companys ability to develop avisionhas often exceeded its grasp in terms of being able to implement the realities of

therequired changes down to their organisa tionallevel.

For every given customer desired outcome, the full value chain relating to howa

customer perceives and obtains value from the company must be identifiedandmanaged having the customer as the focal

point.

Customer Va lue Management he lps address all the above issues. It he lps toleveragecustomer value to drive business performance. Organizations can successfully

employcustomer value management system to know their customers precisely. They canalso


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know their competitors customers. Effective customer value managementallowsorganizations to assess which products and services meet customer needsandappropriately define their value proposition relative to theircompetitors.

According to a research conducted by Dr.John Henderson of Boston University and

anIBM consultant, it was concluded that Companies th at fully lever the potentialofCustomer Value Management will become ideally customer centered and attain itsvisionto become the superior provider to itscustomers.

Customer Value Management acts as a source of sustainable competitive advantageanda driver of customer valuecreation.

The need for the study stems from the fact that the Management at ICICI Prudential

LifeInsurance Company Ltd. has to observe the effectiveness of CustomerValueManagement. This study will help the company to understand as to how it canarrestvalue migration, protect existing va lue of customers and capture new value bymodifyingtheir businessdesign.

The significance

of the study is that the company would benefit by knowinghow

effective the perspective of Customer Value Management presently is. Thepolicyholdersand the employees of the company have been involved in this study to give the

companyan in depth picture of the views of both of these two categories of people. The areasofimprovement (recommendations) will be highlighted in the study, which willimmensely

benefit thecompany.

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OBJECTIVES O F THE RESEARCH

The Life Insurance industry currently is characterized by speed, quality,customersatisfaction, innovativeness etc. Also all the Life Insurance companies are vyingwitheach other to increase their market share and profitability. This highlightsthesignificance for Life Insurance companies to develop new ways of keeping theircustomers satisfied and hence minimise the risk of losing

customers.The most relevant objective is to develop and examine the market perceivedquality

profile and also customervalue.

Specifically the following objectives have been set for our researchinvestigation :

To identify the route to provide superior delivered value tocustomers

To unzip the direct link between customer value and the marketshare

To determine whether the Customer Value Map can assess the position ofthe

companys service against its competitors on the relative quality pricematrix

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REVIEW OF LI TERATURE

1) Purpose

2) Methodology of review

3) Conclusion

4) Benefits


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Purpose of the Review of

LiteratureTo identify the problemstatement

To understand the secondary data that has been gathered in the field of thestudy

To attempt to make new findings on the problem stateme nt without reinventing

what has already been done in this field ofstudy

If CRM is the "pipes" of a system for two-way communica tion with customers,thenCVM is the human factor. Businesses that know what customers value, know howtodeliver this value better than the compe tition, and know when it's importanttocommunicate with customers so that they perce ive the true value deliveredachievecompetitive advantage, better business results and shareholder value. The challengefor

business is to turn this understanding into practica l action that delivers

measurableresults. The idea that business success comes from focusing on customers is not new,andvision andmission

statements are full of aspirational language about creating valuefor

customers. Yet some of the most metrics-driven companies would be hard pressedtoexplain how they are measuring and managing customer value. There is nowanemerging art and science of customer value management that is proving its worthinincreased market sha re and shareholder value for the companies that practiceit.Companies that capture and use customer data with the same kind of discipline,

passionand understanding they give to operational and financial data are learning thatthis

business practice is well worth the time and money invested. By focusing on winninginthe customer market, they also win in attracting and retaining talented people and inthefinancial market. Customer value managementis

about:

Choosing value: Asking customers in the target market what they value, finding outhowthey rate the value that is de livered compared to the compe tition, and usingthisunderstanding to focus priorities and then decide what value proposition to taketomarket.Delivering value: Making sure that the business processes are aligned with thevalue

proposition, and determining what business improvements will delive r the greatestvaluetocustomers.

Communicating value: Educating the market on the value proposition and howthecompany is focusing investment to delive r greater value than thecompetition.

Source :

Playing a People Tune on the CRMPipes

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1. Customer ValueManagement

Customer Value Management (CVM) helps leverage customer value to drivethecompanys business performance. Organizations successfully employing acustomervalue manage ment system know their customers. They also know theircompetitorscustomers. Effective customer value management a llows organizations to assesswhich

products and services their customers demand and need, and appropriately definetheirvalue proposition relative to their competitors. Focus Areasare :

Internal/External CVMAssessments

CompetitiveAnalysis

Strategic CVM BusinessPlans

Customer Relationship ManagementSystem

Implementation Plans/StaffTraining

CVM integrates a range of strategies that allow your organization to be more valuabletoyour current and futurecustomers:

Implement innovative methodologies to manage customer transactionsand

engagements and improve the efficiency of customer servicedelivery.Develop systematic ways to teach, encourage, and support your staff

with

consultative customer solution skills andtechniques.Add value to customers through a disciplined approach to listening tothe

marketplace and understanding their business better than thecompetition.Improve your capability to strategically assemble enterprise-wide expertiseand

experience to empower each staff member to become more valuableandresponsive tocustomers.Maximize the future value of products and services by strategicallydirecting

research and development investment dollars to those areas generatingtheoptimal value to the

customers.The process of developing and implementing effective CVM strategies can be done

bytools and techniqueslike :

Internal CVMReview

Map of customer acquisition, service and deliveryprocesses

Employee perceptions of where and how they add customervalue

Review Consolidated

Findings10


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Identify major business processes and products/services valued highestby

customers.Present gaps between employee and customer value

perceptions.

Identify strategic market segments and competitive positioning ofyour

products/services

.CVM PlanImplementation

Phase-in required organizational alignmentchanges.

Conduct Customer Relationship Management (CRM) a nd CVMemployee

training.

Implement customer business process and product/serviceimprovements.

Launch customer marke ting and communication programadvancements.

Implement CRM and CVM performance trackingsystems.

Benefits of Customer Value Managementare

Know and understand your customersneeds

Increase customerloyalty

Assess product and service lines to align with clientneeds

Source : John Re nner, Vice President, Sabres Customer Value

Managementsolutions (25/6/2004)

2. Leveraging Customer ValueManagement

How companies in the insurance industry can improve financial

performance?The life insurance industry, long considered a rock of stability, is now facingmajorchallenges brought about by several factors like increased competition,newtechnologies, pricing pressures, declining industry profitability & incre asedcustomerdemand for better service, timely claim settlement, and dispute resolution.Howinsurance firms respond to these challenges affects not only short-term profitability,

butalso long-term survival. Many companies will be forced out of specific marketsegmentsor whole markets because of poorly defined customer mana gement & customerservicestrategies. The need has never been greater for solutions based on animprovedunderstanding of customer behavior and customer lifetime value. An integrated viewof

behavioral data contributes to an improved understanding of customer potentialvalue.The benefits of proactive view of customer value:

Life insurance companies have made significant IT investments and are increasingtheiradoption rate of CRM technologies. The industry lags others in leveragingthis


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information to improve customer profitability and gain competitive advantage inthemarket. Customer Value Management (CVM) views data as a strate gic resourcethatenables the organization to make better and more informed decisions. Its focusis

prediction and explanation - the identification, quantification, and prioritizationoffactors having a n impact on the value chain and customers' current and potentialvalue.Being able to accurately identify and rank order customer characteristics and

behaviorshaving the highest impact on risk, premium and servicing costs can yieldimmediate,

bottom-line benefits to insurance companies.W

ith this insurance companies can more

quickly identify which factors are significant to improve pricing and refocus salesandmarketing

programs.The result of this proactive CVM approach to insuranceis:Risk

segments

: Groups of customers and policy claims having similar risk profiles

andidentification of key risk factors and value differentiators acrosssegments.Propensity-to-claimscores

: Predictive models that quantify the like lihood ofsubmitting

claims, size of claim, fraudpropensities.Losselasticities

: Quantification of the potential revenue loss due to unit changesamong

the risk factors.Prioritized Market Test

pilots: Recommended list of potential pilots to test in the

market.The CVM approach expands the scope of information by supplementing it with

externalrelationship-based customer data. This relationship view of customer lifetime valueiswhat we call the next evolution in management. It helps insurance companies realizethemany benefits from positioning their products and services to meet customersevolvingsecurity and financial needs. CVM enables insurance companies to achievesignificantimprovements in its profitability and increase the effectiveness of theircustomermanagement, product design and sales management strategies.Source : Edgar Ortiz and Jay Norman Nov 2003

3. The Second Deadly Sin of CVM - Ignoring the Customer Life

CycleCustomers rarely stand still their preferences, behavior, lifestyle and buyinghabitsinvariably change ove r time. And while marketing executives recognize thedynamicnature of customer behavior and customer relationships, many miss the opportunitytocreate new value because of organizational inertia that prevents many enterprisesfromkeeping pace with customers changing needs. Companies arent clear about what,when

and how of meeting customers evolving needs and preferences. This uncertainty andlackof knowledge translates into lost revenues and missed opportunities to cement

profitable,


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long-term customer relationships. A customer-centric life insurance companyshoulddeeply understand the needs of its highly focused segments and servicesthemaccordingly. It doesnt take a major effort to a chieve impressive results addingtwocolumns to a customer file the first identifies the value of a customer, secondidentifiesthe appropriate offer to present to that customer. This simple redesign makes it

possibleto provide customer service reps with important details about a customers valueand

preferences. Companies can garner 20 to 30 percent increases in terms of thepercentageof customers adding at least one additional product to their portfolios. They canincreasesales yield 10 to 20 percent by improving their ability to match

productrecommendations to customers profiles. And by carefully targeting

productrecommendations in response to incoming customer ca lls, sales rate improvements of10to 25 percent are not uncommon. The net profits from CVM can be reinvested

intoadditional incremental improvements, creating a cascade of successful results thatripplethroughout theorganization.

Source : Kevin Grieve & Edgar Ortiz, DM Direct Newsletter, Sep

2003

4. Customer Value Management: Turning Customer Insight into MoreProfitableRelationship

sCVM helps to understand how line of business, marketing, sales managersandexecutives in the insurance businesscan:

Improve customer retention

Increaserevenue

Drive down cost in their businesses

Customer Value Management approach can be used for more accurate costprojection,and to better measure actual value contribution bycustomers.Customer Service - Products and prices in an Insurance industry can be easilyduplicated.Thus service becomes the only differentiator which will provide thecompetitiveadvantage in the long run. Insurance companies should have a cell forcustomermanagement, which caters to the customer needs and complaints. The Insura nceagentsare the interface between the customer and the Insurance company. The agents should

beable to accomplish the following to improve

service.

13

Assessing and analyzing the clients riskprofile


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Finding the best product or products available in themarket

Negotiating the best dealavailable

Continuity of service throughout the period ofInsurance

Claims advisoryservice

Source : Sherwin Loudermilk, Kenking IBM, SAS, Nov. 2003

5. CRM: Moving Toward Customer Value

ManagementChanges in technologies, business processes, organization models andcustomersthemselves have fundamentally affected the marketing, sales and servicecontinuum.CRMs evolution is temporarily slowed, but a new round of more dramatic change isonits way and new customer strategies will be built on a platform of new

technologycapabilities.Looking into the future, CRM will be more about consistently managing andexceedingcustomer expectations. Improved measurement and greater financial rigor willmovecustomer manage ment from CRMs relationship -focused approach to a morefinanciallydriven value-based approach, which we call customer value management. The focusonthe customer will rema in, but businesses will simultaneously step up their efforts togainvalue for themselves.

Companies that aspire to serve their customers both well and profitably need to beawareof five major trends that will play a role in the evolution of CRM into CVM -risingcustomer expectations, vie wing customers as assets, improving customer intelligencequotients, de veloping new organization models and increasing financial rigor. Itisimportant to have a customer value measurement system, which often succeedsthecustomer satisfac tion measure ment system. The customer value measurementsystemsneed to cater to many dimensions of the relationship including those of

competitoranalysis. Sharing the customer value measures with the customer forms an integral partof a me trics based customer rela tionship managementsystem.

Source : Michael

Gorsage

& Robert Haas

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CONCLUSIONS

All the above articles are related to Customer Value Management and alsoimplicationsof adopting CVM in the Life Insurance industry. It therefore, becomes important forusto understand as to how a Life Insurance company can increase value for its

customers,protect the existing customers, avoid migration of customers and also to add newvalueto customers by way of modifying the businessdesign.

A research on Customer Value Mana gement in a Life Insurance company would helpusto bring out the followingconcepts :

It will help to understand the intricate details of CVM in a Life Insuranc eindustry

The role and importance of CVM in the services sector can also be

understoodThe implications of adopting CVM on the business, the expected value of customersandthe capability of the company to deliver the same can beexamined

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METHODOLOGY OF THE REVIEW OF

LITERATURE

Review of the literature has been done with the help of the following

sources :CompanyLiteratureBrochuresTheInternetICICI Prudential QuarterlyReportPublicationsArticles onCVMA text book on Customer Value

Management

BENEFITS OF REVIEW OF LITERATURE

The review of literature has been very informative, as it has thrown light on theresearchand articles that have been written on Customer ValueManagement.Moreover it has helped in identifying the degree of research that has been done

alreadyon this topic. It has helped our study, as it constituted the basis of secondary data forourstudy.

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RESEARCHMETHODOLOGY

Scope of the study

Type of research

Data

Collection

Sampling

Technique


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METHODOLOGY

Scope of the Study

This study is restricted to the Personal Life Insurance sector. Research is conducted

atBangalore Metropolitan Areaonly.

Type of

ResearchOur research is a formal study with some elements of exploration involved. Thisresearchis also aimed at recognising the areas of improvement for ICICI PrudentialLifeInsurance Company Ltd. in terms of their relationship withcustomers.

Data

CollectionData sources consisted of primary and secondary. Sources of primary data includedthe

policyholders of ICICI Prudential Life Insurance Company Ltd. and also itsemployees.Sources of secondary data included the information provided by the organisationandvarious text books, magazines, internet and company

broucheres.A structured questionnaire was developed and administered to generate the primarydata.

Sampling Technique

Random Sampling

It is also called probability sampling or chance sampling. Under this samplingdesignevery item of the universe has an equal c hance of inclusion in the sample. All choicesareindependent of one another. It gives each possible sample combination anequal

probability of being chosen. We, therefore, adopted this technique in ourstudy.

SampleSizeThe composition of our sample consisted of policyholders of ICICI PrudentialLifeInsurance Company Ltd., the employees and insurance advisors. The respondentswhomwe have approached are 50 innumber.

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Sample


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p

DescriptionAge 20 30 30 - 40 40 - 50 50 - 60 Total

No. 25 9 3 13 50

The respondents are concentrated in the age groups between 20 30 years. Therearealso respondents in the age groups of 50 60years.

Gender Male Female Total

No. 35 15 50

Majority of the respondents are male (70%) and the remaining 30% of them arefemales.

Instrumentation

TechniquesStructured Questionnaire : The primary data has been collected throughstructuredquestionnaires, which were administered to therespondents.

Tools used for testing

HypothesesThe Chi-Square and z-test were used for testing the Hypotheses. Three hypotheseswerestated and the sta tistica l testing of hypotheses was conducted by these tests.Thesestatistical tools were used keeping in mind the distribution of the

population.

Limitations of the

StudyResearch investigation is beset with time and resource constraints. Research islimited toBangalore Metropolitan Area and hence the limitation of generalisation

becomesobvious.

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COMPANY PROFILE

THE ICICI

GROUP


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GROUP

incorporated at the initiative of the World Bank in 1955, the Government of Indiaand

institution for providing project and corporate finance to Indian industry. It started off

its

housing finance, consumer finance, mutual funds and its latest venture LifeInsurance.

from its traditional role into a new era of liberalized regulation and intense competition.

financial service sector, and access to international capita l markets was crucial tothe

to a financial conglomerate and has become one of the largest publicfinancial

GROUP COMPANIES OF ICIC

I

ICICI Prudential Life Insurance was established in the year 2000 with a commitmentto

first private sector insurance companies to begin operations after receiving approvalfrom

several steps towards its realizing its goal. ICICI Prudential understands thatdifferent

people have their own sets of needs at various stages of their lives. That's why theyoffer


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offera choice of solutions depending on whether you are a young individual planning fortheyears ahead or a n established professional planning for your retire ment. The Companyisnow operational in ten cities throughout thecountry.ABOUT ICICI PRUDENTIAL LIFE INSURANCE COMPANY

LTD.ICICI Prudential Life Insurance company is a joint venture between ICICI, a

premierfinancial powerhouse and Prudential, a leading international financial servicesgroupheadquartered in the United Kingdom. ICICI and Prudential came together in 1993toform Prudential ICICI Asset Management Company, which has today emerged as oneofthe largest private sector mutual fund company in India. The two companies

bringtogether the strongest financ ial service brands in Asia, known for the ir

professionalism,

excellent quality of service and long - term commitment to consumers. Riding onthesuccess of this relationship, the two companies joined hands once more in 2000, toformICICI Prudential Life Insurance Company, with a commitment to provide leading-edgelife insurance solutions. This venture plans to take care of the insurance needs atvariousstages of life. ICICI Prudential has beenadjudged

theBest Life Insurer byOutlook

Money. This is theonly

award thatrecognises

the value delivered to customers

inaddition to business

performance.

ICICI Prudential's equity base stands at Rs. 6.75 billion with ICICI Bank having74%stake in the company and Prudential having 26%. The Company was grantedCertificateof Registration for carrying out Life Insurance business, by the IRDA on November24,2000. It commenced commerc ial operations on December 19, 2000, becoming one ofthefirst few private sector players to enter the liberalized arena. ICICI Prudentialwas

positioned as an enabler of protection relevant to the needs of the life stage.TheCompany issued its first policy on December 12, 2000. In the year ended March31,2004, the company had issued over 430,000 policies. ICICI Prudential was amongstthefirst to identify the emerging opportunity in the Pension segment and launchedtwolinked pension products- LifeTime Pe nsion and LifeLink Pension, which have beenwellreceived in the market. The company has a network of about 30,000 advisors as wellas12 bancassurance tie-ups. ICICI Prudential has one of the largest distributionnetworksamongst private life insurers in India. Today the company is the #1 leading privatelifeinsurer in the country. The company has a commitment to increase consumerknowledge

about LifeInsurance

. 20

HISTORY

ICICI P d ti l t bli h d i D 2000 Si th b d ICICI i ll k i


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ICICI Prudential was established in Dec 2000. Sine the brand ICICI is well known inthecountry, they did not have to face that particular challenge. They wanted to buildanorganisation with culture different from that of LIC. Life Insurance was positionedas ahigh excitement and emotive product. The task at the time of set up was to establish

theICICI brand, build awareness and give the brand a larger than life image byaddressingthe issue of credibility and trust to invest funds with. Another big initiative thatICICIPrudential launched was a quality initiative Six Sigma. For promoting thecompany,the the me was cover every Indian with joy, hope, freedom, life. Further, theychosechildren from municipal schools who received endowment policies. These

programswere to deliver the brand promise. Today the company has set themselves metrics thatis

best in class for various categories of players. In terms of service the

companysbenchmarks are the best retail financial services player in the world. The companyishopeful of playing a major role in the expanding the life insurance market inthiscountry.

MILESTONES OF THE COMPANY

Dec 12 2000 : ICICI Prudential issues its first policies to underprivilege dchildren

th

Dec 20th

2001 : Launched Market-linked insuranceschemes.Feb 19 2002 : Launched innovative child

product

th

Feb 25th 2003 : Company grabs 73% of private sector pensionsmarket.

April 7 2003 : ICICI Prudential crosses Rs. 500 crore premiummilestone.

th

July 15th 2003 : ICICI Prudential became the first Life Insurance company to crossRs.

500 crore capitalbase.Sept 25th 2003 : ICICI Prudential launched Smartkid unit linked child

plansApril 2004 : ICICI Prudential tops the premium income chart among private playe rsforthe third time in arow.ICICI Prude ntial Life Insurance has increased its market share among privatelifeinsurers to nearly40%Best Life Insurer award by OutlookMoney

ABOUT THE PARTNERS ICICI BANK

ICICI Bank is Indias second largest bank. ICICI Bank provides a broad spectrumof

financial solutions for corporate and retail customers. It has about 450 branchesand

extension counters, 1675 ATMs, call centers and Internet banking. ICICI Bank isthe

l I di t b t d b th i ti b th i t ti l


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only Indian company to be rated above the sovereign rating by the interna tionalratingagency Moodys and the only Indian company to be awarded an investmentgradeinternational credit rating. The Bank enjoys the highest AAA (or equivalent) ratingfromall leading Indian rating agencies. This is one of the largest financial institutions in

Indiaand trusted by millions of Indians over theyears.

FOREIGN PARTNER PRUDENTIAL PLC.

Prudential is a leading internationa l financial services company in the UK. Prudentialhas

brought to market an integrated range of financial services products that nowincludeslife assurance, pensions, mutual funds, persona l banking, investment managementandgeneral insurance. Prudential is one of the largest life insurance companies in the

world.It also has its presence throughout Asia. Since 1923, Prudential haschampionedcustomer centric products and services. Solid reputation built over 150 years.Alreadyestablished as one of the biggest mutual fund companies in India (PrudentialICICIAMC). It is truly a global

brand.

PRUDENTIAL ASIA

Prudential is the largest life insuranc e company in the United Kingdom. Asia hasalways

been an important region for Prudential and it has had a presence in Asia for over75years. It has over 45,000 staff agents and over 1 million customers. It has itsoperationsin 12 countries throughoutAsia.

SERVICE

ICICI Prudential has recruited and trained over 18,000 insurance advisors tointerfacewith and advise customers and has the highest number amongst private life insurersonthe renowned Million-Dollar Round Table (MDRT). Further, it leverages its state-of-the-art IT infrastructure to provide superior quality of service to customers. Ithas aCustomer First

philosophy.

COMPETITORS

ICICI Prudential faces tough competition from Life Insurance Corporation ofIndia

which is one of the oldest insurance company and also from other private insurerslikeBirla Sunlife, Tata AIG, MetLife etc, HDFC Standard Life Insurance, ING Vysya

etc. 22

LIFE INSURANCE SCORE CARD - (First year & single premium in 2003 04)

I I (i % G th


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Insuranc

e

Income (in

Rs.

% Grow th

(overCompany Crore

)

the previous

year)Allianz Bajaj 179.70 183.50

ING Vysya 72.60 311.15

AMP Sanmar 27.88 341.50

SBI Life 195.90 172.54

Tata AIG 180.15 245.07

HDFC Standard 209.33 61.88

ICICI Prudential 750.91 106.23

Birla Sunlife 449.86 247.20

Aviva 77.13 472.83

OM Kotak 127.10 260.99

Max Newyork 131.48 95.34

MetLife 23.38 203.70

Private Total 2425.46 153.15

LIC 16284.68 1.93

Source : IRDA

Website

VARIOUS DEPARTMENTS

Sales & Distribution Department OperationsDepartmentBancassurance Risk Management

Group Assurance Department Front Desk

HR & Administration Department Training

DepartmentThe organisation structure is given on Page26.

23

YEAR OF REVIEW 2003 2004

Life Market Market share Market share as


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Life

Insurance

Market

share

Market share

as

Market share as

%company as % of % of no. of of lives under

grouppremiu

m

policies/scheme

s

schem

e

Allianz Bajaj 0.96 0.65 1.63

ING Vysya 0.39 0.32 0.11

AMP Sanmar 0.15 0.16 0.97

SBI Life 1.05 0.30 12.38

Tata AIG 0.96 0.57 3.04

HDFC Standard 1.12 0.71 0.93

ICICI

4.01 1.52 0.74Prudentia

lBirla Sunlife 2.40 0.54 3.18

Aviva 0.41 0.25 1.42

Om Kotak 0.68 0.18 0.85

Max New York 0.70 0.51 1.89

Met Life 0.12 0.09 0.66

Private Total 12.96 5.79 27.78

LIC 87.04 94.21 72.22

Grand Total 100.00 100.00 100.00

Source : IRDA

Website

No. of Policies Issued by Pvt. Life

Insurance Companies No. of Policies

Issued500000450000400000350000300000250000200000150000100000

500000

P vt . Life Insurance Companies

Premium collection of all Pvt. Life Insurance

Companies Allianz Bajaj


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p j j

ING Vysya

AMP Sanmar

SBI Life

Tata AIG

HDFC Standard

ICICI Prudential

Birla

SunlifeAviva

OM Kotak

Max Newyork

MetLife

Source : IRDA

Journal

PRODUCTS

ICICI Prudential Life Insurance offers a range of innovative, customer-centricproductsthat meet the needs of customers at every life stage. There a re 13 policies to catertoindividuals, which can be enhanced with six riders so as to create a numberofcombinations. Given the demographic and social conditions of India - like anaging

population, absence of a social sec urity system and inflation - ICICI Prudential Lifeseesimmense potentia l in the growth of retirement

products.Solutions forindividuals

Savings Solutions : SecurePlus, CashPlus, Save n Protect,CashBakProtection Solutions :LifeGuardChild Solutions : SmartKid Child Plans,SmartKidMarket-Linked Solutions : LifeLink,LifeTimeRetirement Solutions : ForeverLife, SecurePlusPensionMarket-linked Retirement Products : LifeTime Pension, LifelinkPension

Group SolutionsICICI Prudential also offers group insurance solutions for companies seeking toenhance

benefits to their employees. The group plans are : Group Gratuity Plan,GroupSuperannuation Plan, Group TermPlan

Products for the rural

marketA basket of policies have been designed specifically for the rural market likeMitr,Suraksha & SalaamZindagi

Flexible Rider Options Six different rider options to choosefrom 25


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CEO & MD

Page 26

Chief S&D Chief O&U Chief HR Chief Mktg Chief

Mgr. Mgr. Mgr. Mgr. Finance

Regional Regional Regional Regional ActuarialSales

Mgr.OperationMgr.

HR Mgr. Mktg M gr.

Chief

IT

Zonal Mgr.

ZonalOperation Zonal HR ZonalMgr. Mgr. Mktg M gr.

Branch/TerritoryMgr.

Branch HR BranchBranch O&U

Mgr. Mktg M gr.Mgr.

SM/AssistantSM HR Marketin

gTeam

Executives

Executive

Leade

r

Unit Mgr.FSC(Banca)

Underwriter

Advisors


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DATA ANALYSIS AND INTERPRETATION

Statement of

Hypotheses

Testing of Hypotheses

Inferences from the analysis


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STATEMENT OF HYPOTHESES

The following three hypotheses which are appropriate to our study have been

tested1. Ho = There is not more than one route to provide superior delivered valueto

customersH1 = There is more than one route to provide superior delivered value tocustomers

2. Ho = There is no direct link between Customer Value and MarketShare

H1 = There is a direct link between Customer Value and MarketShare

3. Ho = Customer Value Mapping ca nnot assess where the companys servicesstandagainst compe titors on the relative quality versus price

matrixH1 = Custome r Value Mapping can assess where the companys servicesstandagainst compe titors on the relative quality versus pricematrix

27

I (a) Ideas/Meanings associated with the Life Insurance Policy of ICICI

Prudential

Meanings No.P t


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PercentageMax Risk Cover 21 42%

Profitable Mode of Investment 2652% Tax Rebate 21 42%

Multiple Benefits 2142%Premium 4 8%

Pre/During/After Sales Service 1224% Total 105 -

Note : The respondents have more than one meaning associated with ICICIPrudential

Source: FieldInvestigation

Meanings/Ideas associated with Life

Insurance policy of ICICI

Prudential120

10080

No.60

Percentage4020

0

Meanings/Ideas


Interpretation : The most important association of idea with Life Insurance policyofICICI Prudential is as a profitable mode of investment (52%). The otherassociationswith the company are in terms of the maximum risk cover, tax rebate andmultiple

benefits provided by the policies. Presales, during-sales and after-sales service isalsoanother idea association given by therespondents.

I (b) Ranking the above manifestations of value as associated with the

LifeInsurance policy of ICICI

Prudential

Manifestations of Value Rank (No. ofrespondents)Max Risk Cover 38

Profitable Mode of Investment34 Tax Rebate 29

Multiple Benefits28 Premium 5

Pre/During/After Sa les Service

7 : FieldInvestigation

Source

(Ib)

28

Rank (No. of respondents)

40


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403530

Weighted25

Average 2015Rank10

50

Rank (No. of

respondents)

Manifestations

of Value


Interpretation : We need to identify the most important value associated withLife

Insurance policy of ICICI Prudential. The most important values according tothecustomers are providing maximum risk cover, profitable mode of investment, taxrebateenjoyed by them, multiple benefits provided, pre-sales:during-sales:after-salesservice

provided. Premium comes last in the order ofranking.

29

Hypothesis Testing

I

Ho = There is not more than one route to provide superior delivered value to


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customersH1 = There is more than one route to provide superior delivered value tocustomersThe statistical tool used to test this hypothesis is Chi-square test. This non-

parametrictest is used keeping in mind the sample size. Chi-square = (Oij-Eij)/Eij

Meanings associated with ICICIPrudentialMaximum Profitable Tax Multiple Premiu

m

Pre/During/ Total

Risk Cover Investment Rebate Benefits After Sales

Service

No. (O) 21 26 21 21 4 12 105

Rank 38 34 29 28 7 5 141

Total 59 60 50 49 11 17 246

Chi- -Eij)/Eij where Oij is the observed frequency in the i,jth cell andEij

"

!#is the expected frequency in the i,jthcell.We calculate chi-square as : Expected (E) is calculated as

(21+26+21+21+4+12)/6E = 17.5

Degrees of freedom is (c-1)(r-1) = (2-1)(6-1) =5

E O (O-E)2/E

17.5 21 0.70

17.5 26 4.12

17.5 21 0.70

17.5 21 0.70

17.5 4 10.41

17.5 12 1.72Chi-Square 18.37

Inference : At 5% leve l of significance and 5 degrees of freedom the table value ofchi-square is 11.07 and calculated value is 18.37 which is higher than the table value.Hencewe re ject the null hypothesis and conclude that there is more than one route todeliversuperior delivere d value to customers, the most important route being to

providemaximum risk cover tocustomers.

30

II (a) Preference of companies to buy a Life Insurance

Policy

Preference No.PercentageICICI Prudential 45


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g

90%Other Pvt. Companies 5 10%

Total 50 100%

Source

:

Field

InvestigationPreference of companies to buy a Life

Insurance policy

50

45

40

35

30

25Percentage

20

15

105

0

ICICI Other Pvt. TotalSeries1Prudent ia l Companies

Series2Life Insurance companies


Interpretation : We need to identify the preference of customers towards aparticularcompany to buy a Life Insurance policy. It is inferred from the table and graph that90%

of the respondents prefer policies of ICICI Prudential and only 10% of them preferbuying it from other Pvt. Life Insurance companies. Hence it is inferred thatICICIPrudential forms the most preferred Life Insurance company among the private

playersand hence can gain a large marketshare.

II (b) Reasons for preferring ICICI

Prudential Reasons No.PercentageWide varieties of policies 8

18%Satisfaction with policy features 3

7% Most popular brand 24 53%Customer Loyalty 4 9%

Returns- Good & Consistent 49%Good servicing of policies 715%Highly Professional 2

4%Products of this company are better known to me 49% Policies are affordable & highly flexible 1

2%Simple process to obtain a policy 12% Total 58 -

31

Note : The respondents have more than one reason for preferring a policy fromICICI

Prudential. Hence the total is notadditive.


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Reasons for preferring ICICI Prudential

25

20

15

P er ce nt ag e10

5

0

Series1

Series2Reasons for preference

Source: Field

InvestigationInterpretation : This helps to know the reasons for preferring policies ofICICIPrudential. The most important reasons are the companys well known brand name,widevarieties of policies to choose from, good service provided to customers, goodreturnsand also highly affordable and flexible policies. Hence it can be inferred thatthiscompanys polici es are preferred due to its bra nd name and other valueadditions

provided by the company.

II (c) Reasons for preferring other Private

Players

Reasons No.PercentageDepends on whether a suitable LI policy product is

on5 100%

offerTotal 5 100%

Source

:

FieldInvestigation

Note : The tota l represents only those respondents preferring policies from otherprivate

Life Insurance Compa

nies.

Interpretation : The respondents who prefer a Life Insurance policy from otherprivateLife Insurance companies do so depending on whether a suitable Life Insurance

policy product is offered by them and not because of the value provide by thosecompanies.

32

Hypothesis Testing

II

Ho = There is no direct link between Customer Va lue and MarketShareH1 = There is a direct link between Customer Value and Market


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ShareThe statistical tool used to test this hypothesis is z -test.The formula is given

asZ = p1 p2

$&%('0)2143657198@14365BDCFE"GDHI H

P = n1p1 +n2p2 and Q = 1 - P

n1 +n2

(a) Market share of ICICI Prudential =90%(b) Reasons for preferring ICICIPrudential

Reasons No.

PercentageWide varieties of policies 818%Satisfaction with policy features 3

7% Most popular brand 24 53%

Customer Loyalty 4 9%

Returns- Good & Consistent 49%Good servicing of policie s 715%Highly Professional 2

4%Better known products 4 9%

Policies are affordable 12%Simple process to obtain a policy 1

2% Total 58 -

Considering the first two reasons with the highest percentage , we use the z-testasfollows:

p1 = 0.53 and p2 = 0.18 (sample proportions)

n1 = 58 and n2 = 58 (samplesize)P = n1p1 +n2p2 = 58 (0.53) +58 (0.18) = 0.355

n1 +n2 58 + 58

Q = 1 P = 1-0.355 = 0.645

Z = 0.53 0.18 = 3.93

PRQTS&UDXY`QTSa

UdcdYeQ24

gXDi@q

gXD

Y

Inference : Critical value of Z at 5% level of significance is 1.96. As the calculatedvalueof Z is greater than the critical value, we reject the null hypothesis and concludethatthere is a direct link between customer value and marketshare.

33

III (a) Quality of ICICI Prudential in terms of its

value

Quality No.PercentHigh 35 70%

M di 15 30%


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Medium 15 30%

Low 0 0%

Total 50 100%

Source : FieldInvestigation

Quality of ICICI Prudential in terms

of its value

Total

Low Series2

Series1Medium

High

0 20 40 60No. of responses


Interpretation: This is to find out the quality of ICICI Prudential in terms of itsvalue.The quality of the company is found to be high with majority of the respondents i.e.70%and only 30% of them feel that the quality of the company in terms of its valueismedium. This shows that the quality of ICICI Prudential in terms of the value

providedto customers is high. This is also evident from thegraph.

III (b) Price of premium policy of ICICI

Prudential

Price No.PercentHigh 5 13%

Low 1 3%

Affordable 31 84%

Total 37 100%


34

Price of policy of ICICI Pru

40

35


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35

30

25

Series120

15 Series2

10

5

0

Price of policy


Interpretation : We need to identify the customers opinion about the price of

premiumpolicies of ICICI Prudential. It is evident from the graph and the table that 84% oftherespondents stated that the policy is affordable while only a small percentage ofthem 13% stated that the price is high. The price of the policy of ICICI Prudential seems to

beaffordable.

35

Hypothesis Testing

III

Ho = Customer Value Mapping cannot assess where the companys servicesstandagainst compe titors on the relative quality versus price


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g p q y pmatrixH1 = Customer Value Mapping can assess where the companys services standagainst

competitors on the relative quality versus pricematrixCustomer Value

Map

Higher 1.25

25

Fair ValueLine

1.0

0

0.84Lower

0.75

0.40 0.60 0.70 0.80

Lower Higher

X axis : Relative Quality (in

%)Y axis : Relative Price (in

%)Inference : This map helps us to assess where the companys service standsagainstcompetitors. The position of the ICICI Prudential is to the right and below the fairvalueline. This is indicated by the black dot as shown above. Hence ICICI Prudential is inagain sharing position. Hence we reject the null hypothesis and conclude that

CustomerValue Mapping can assess where the companys services stands against competitorsonthe relative quality versus pricematrix.

36

INFERENCES

Table-1

GenderGender No.PercentageMale 35 70%


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Female 15 30%

Total 50 100%

It is inferred from the table that 70% of the respondents are male and 30% of themarefemales.

Table-2 Age

Age No.PercentageFrom 20 to 30 25 50%

From 30 to 40 9 18%

From 40 to 50 3 6%From 50 to 60 13 26%

Total 50 100%

It is seen from the table that majority of the respondents 56% are from potentialinsurableage bracket of 20 to 30years.

Table 3 Do you have a Life Insurance Policy?

Policy NoPercentageYes 46 92%

No 4 8%

Total 50 100%

This project is based on certain objectives and seeks to find out as to howmanyrespondents have a Life Insurance Policy at pre sent. It is noted that 92% of them havea

policy and the rest of them indicate potential customers for thecompany.

Table-4 Name of Life Insurance company from which the policy is

boughtLife Insurance Company NoPercentageICICI Prudential 37

80% LIC 9 20%

Total 46 100%

The data indicates that majority of the respondents who have a life insurance policyhave

purchased it from ICICI Prudential 80%. A small percentage of them have

purchased

the policy from Life Insurance Corporation ofIndia.

Table-4a Specify the policy

typePolicy Type No.


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Policy Type No.PercentageICICI LifeTime 18

39%ICICI Retirement Solutions 14

30% LIC Endowment 4 8%LIC Jeevan Shree 37%ICICI Smart Kid 37%ICICI Save n'

Protect1 2%

ICICI Secure Plus 12%LIC Jeevan Chaya 12%LIC Jeevan Surabhi 1

2% Total 46 100%

The table indicates that ICICI Prudentials LifeTime and Retirement Solutions

aremost preferred among all types of policies followed by SmartKid polic y.Among

policies of Life Insurance Corporation of India Endowment see ms to be themost

preferredpolicy.

Table-4b Level of satisfaction for the policy

serviceLevel of satisfaction NoPercentageHigh 29 63%

Medium 17 37%

Low NilTotal 46 100%

This indicates the satisfaction level of policyholders in terms of service provided bythecompany. It is inferred that a high percentage of respondents 63% have a high levelofsatisfaction and 37% of them stated that the level of satisfaction for policyservice ismedium.

Table-5 If you dont have a Life Insurance policy, give

reasonsReasons No.PercentageDo not feel the need for it 2

50%Can't afford to buy one a tthis

2 50%

stageTotal 4 100%

Note : This total includes only those respondents without a

policyThe data potrayed in this table helps us to know the reasons for not having alife

insurance policy. From the table it is seen that an equal percenta ge of respondents(50%)

felt no need for a life insurance policy a t present and another 50% of them cannotaffordto buy a life insurance policy at thisstage.

Table-6 Satisfaction with the existing features of life insurance


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g

policySatisfied No.

PercentageYes 46 100% No Nil

Total 46 100%

Note : This total includes only those respondents having a life insurance

policyThe data indicates that all respondents who have a life insurance policy are satisfiedwiththeir policy feature s. This infers that existing policies are properlydesigned.

Table-7 Benefits expected from the life insurance

policyBenefits Expected No.PercentageIncome Tax rebate 3774%Mainly Life risk cover 35

76%Loan Facility against the policy 714%Appreciation of capital invested 3264%

Note : The respondents expect more than one

benefitThe table shows life risk cover is the main criterion with the majority ofrespondents-76%. At the same time the same respondents look for additiona l financial benefits

byway of income tax rebates. Also 64% of them buy a life insurance policy toappreciatethe capital invested. A very small percentage of the respondents think ofavailingthemselves of loans against their policies.

Table-8 Are private life insurance companies more

trustworthy?Particulars No.PercentageYes 38 76%

No 12 24%

Total 50 100%

The data shows that majority of the respondents 76% stated that private lifeinsurancecompanies are more trustworthy. A small percentage of them did not agree withthis.This infers that a majority of the respondents have faith in private lifeinsurancecompanies and hence have purchased policies fromthem.

39

Table-9 Why private life insurance companies are not

trustworthy?Reasons No.PercentageRelatively new in India compared to LIC 5

42%Liable for a shakeup 325%Risk involved - Govt. policies 1 8%


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pcouldchange

Fear of closure 1

8%Exit norms are notwidely

1 8%

known

Very complicated procedures 18% Total 12 100%

This table indicates the reasons for the customers not having faith in privatelifeinsurance companies. 42% of the respondents stated that private lifeinsurancecompanies are relatively new in India compared to Life Insurance Corporation ofIndiaand 25% of them felt that private companies do not have a strong financ ialfoundation.The other reasons are fear of closure, risk involved and complicated proceduresfollowed

by the m.

Table-10 Prices of policies of private life insurance

companiesPrice No.PercentageHigh 4 8%

Low 1 2%

Affordable 45 90%Total 50 100%

This table shows the customers view about the prices of policies of privatelifeinsurance companies. 90% of the respondents stated that the price is affordable.Only asmall percentage of them felt that the price ishigh.

Table-11 Guidance/Service expected from a life insurance

advisor Guidance No.PercentagePolicy features to be explained properly 18

36%Guidance regarding the best policy to suit my needs 1632%Policy features to be put forth honestly without supressing the facts 1224%Reminders regarding premium payment falling due to beconveyed

8 16%

on time

Whether switch over facility between policies is available 24%Tax planning to obtain max IT benefits under sec 88 & 80ccc(1) 12%Help & guidance needed to file the proposal form 12%Regarding policy which will give me highest returns 1

2%Note : The respondents expect more than one kind of guidance/service40

Most of the respondents desire an insurance advisor to thoroughly explainpolicyfeatures. 32% of them need advisors guidance regarding the policy best suited fortheirneeds. The other services expected are honest explanation of policy withoutsupressingfacts and also to remind about the payment of premium when it isd


56/66

due.

Table-12 Are you aware of ICICIPrudential?

Awareness No.PercentageYes 50 100%

No Nil -

Total 50 100%

This table shows the awareness level of ICICI Prudential among respondents.Datashows that all respondents 100% are aware of ICICIPrudential.

Table-13 Source of awareness of ICICI

PrudentialSource of awareness No.PercentageAdvertisement 27

54%Life Insurance Agent 2448% Friends 10 20%

Other- Employee 9 18%

Colleagues 48%Other - Advisor 2 4%

Neighbor 1 2%Other - Internet 12% Total 78 -

Note : The respondents have more than one source of

awarenessThe table indicates that advertise ments followed by life insurance agents form themainsource of awareness for ICICI Prudential. 20% of the respondents came to knowaboutICICI Prudential through their friends, 18% of them are aware of ICICI Prudentialasthey are employed there. A small number of respondents stated the personal internetastheir source of

awareness.

Table-14 If you are aware of the polic ies of ICICI Prudential and other

privatecompanies, your prefe rence would

be :Preference No.PercentageICICI Prudential 45

90%Other Private Companies 510% Total 50 100%

This table shows the preference of customers to buy a life insurance policy of aparticularcompany. It is inferred that 90% of the respondents prefer policies of ICICIPrudentialand only 10% of them prefer other private companies. This shows that ICICIPrudentialforms the most preferred company among the privateplayers


57/66

players.

Table-15(a) Reasons for preferring ICICIPrudentialReasons No.PercentageWide varieties of policies tochoose

8 18%

from

Satisfied with the existing feature s of the policy 37%Customer loyalty 4 9%

The returns provided are consistent and good 49%Good servicing of policies 715%Professionalism is exhibited in all their working&

2 4%

operation

sProducts of this company are known better than the others 49%Policies are affordable and are highly flexible 12%Process to obtain the policy is very simple 12%Total 58

Note : The respondents have more than one reason for preferring ICICI

PrudentialThis shows the reasons for preferring policies of ICICI Prudential. The mostimportantreasons for this seem to be well-known brand and most popular company among

privateplayers, wide varieties of policies to choose from and also good service providedalong

with a host of otherreasons.

Table-15 (b) Reasons for preferring other private

companiesReasons NoPercentageDepends on whether a suitable insurance

policy5 100%

product is onofferTotal 5 100%Note : This total represents only those respondents who prefer policies from

otherprivate

playersAll the respondents who prefer policies from other private life insurance companiesdoso as their choice depends on whether a suitable insurance policy isoffered.

42

Table-16 Extra value added features in ICICI Prudentials

policiesExtra Features No.PercentageWide range of options within the same policy 14

28%Multiple benefits packed in a single policy 1326%Don't Know 12 24%

Good returns provided 10 20%


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Good returns provided 10 20%

Flexibility 10 20%

Liquidity 4 8%Different riders/top ups are provided 36%Low lock in period 2 4%

Switching between options allowed freeonce

2 4%

everyyearPolicy details - easy to understand in the brochure 12%Total 71 -

Note : Each respondent finds more than one value added feature in the

policyThis shows the value-added features in policies of ICICI Prudential. Wide rangeof

options 28%, multiple benefits-26% and flexibility and good returns (20% each)seemto be the most important value-added features. About 24% of the respondents areunableto identify extra value-added features provided by ICICIPrudential.

Table-17 Ideas associated with the Life Insurance policy of ICICI

PrudentialMeanings No.PercentageProfitable mode of investment 26

52%Max risk cover 21 42%

Multiple benefits 2142%Tax rebate 21 42%Pre/during/after sale services 1224%Premium 4 8%

Total 105 -

Note : Respondents have more than one meaning associated with ICICI

PrudentialThe most important idea associated with insurance policy of ICICI Prudentialis

profitable mode of investment (52%). Maximum risk cover and tax rebate are theothermeanings associated. 24% of the respondents have the sales service as a

meaningassociated with ICICIPrudential.

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Table-18 Rank the above manifestations of value in the order of

meritManifestations of Value Rank (No. ofrespondents)Max Risk Cover 38

Profitable Mode of Investment34 Tax Rebate 29

Multiple Benefits


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Multiple Benefits28 Premium 5

Pre/During/After Sa les Service7The table shows that the most important value associated with the life insurance

policyof ICICI Prudential is maximum risk cover. The other values in the order of meritare

profitable mode of investment, tax rebate, multiple bene fits, pre/during/after salesserviceand premium.

Note : The total is not additive a s the respondents have more than one value associatedwith ICICIPrudential

Table-19 What do you feel about the premium policy of ICICI

Prudential?Particulars No.PercentageHigh 5 13%

Low 1 3%

Affordable 31 84%

Total 37 100%

Note : The total represents respondents who have an ICICI Prudential

policyThis shows the customers opinion about the premium polic y of ICICI Prudential.

Itindicates that 84% of the respondents felt that the policy is affordable. Only 13% ofthemfelt that the premium rate of policy ishigh.

Table-20 Quality of ICICI Prudential in terms of its

valueParticulars No.PercentageHigh 35 70%

Medium 15 30%

Low Nil -

Total 50 100%

The table indicates the quality of ICICI Prudential in terms of its value. 70% oftherespondents have rated the quality of ICICI Prudential as High in terms of itsvalue.30% of them have rated the companys quality as Medium. However no respondentfeltthat the quality of the company isLow.

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Table-21 Satisfaction with ICICI Pr udential in policy

servicingSatisfaction No.PercentageYes 37 100%

No Nil -Total 37 100%

Note :The total represents respondents who have a policy from ICICI Prude


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Note :The total represents respondents who have a policy from ICICI Prude

ntial

This table shows the satisfaction of customers with ICICI Prudential in servicingofpolicies. All respondents (100%) who have policies from ICICI Prudentialhaveexpressed satisfaction with respect to servicing of their

policies.

Table-22 Comment on the promotional policy of ICICI

PrudentialComment No.PercentageQuite good in all aspects 3978%Frequency of ads could be increased 9

18%Contents of the ads can bemade 6 12%simplerReach is to a limited sector/audience 24%Should reach rural areas also 24%Quite impressive 12%Excellent 1 2%

Change of logo to reflect objectivesof

1 2%company

Total 61 -

Note : The respondents have more than one

opinion

Data indicates that 78% of the respondents felt that the promotional policy ofICICIPrudential is quite good in terms of its theme, logo and frequency. 18% of themstatedthat advertisement frequency could be increased. 12% of them are of the view thatthecontents of advertisement could be made simpler. A very small percenta geofrespondents felt that the reach is to a limitedaudience.

Table-23 Is ICICI Prudential becoming popular day by

day?

Popular No.PercentageYes 49 98%

No 1 2%

Total 50 100%

This shows the popularity of ICICI Prudential growing day after day. 98% oftherespondents agreed about the growing popularity of ICICI Prudential while only 2%ofthemdisagreed.

45

Table-24 Reasons for its

popularityReasons No.PercentageMarketing strategy/Sales tactics

14 28%

adopted

Aggressive promotion 11 22%

Wide ne twork of agents 10


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20%Established brand name 10

20%Service level is good 612%Superior product features 510%Policies provides various benefits 48%Good returns on policie s 24%Understand customers better 12%Total 63 -

Note : The respondents have more than one reason for its

popularityThe reasons that a re most important for the popularity of ICICI Prudential are themarketing strategies adopted, aggressive promotion, its wide network of

advisors,established brand name in the order of merit. The other reasons are quality ofservice,superior product features and various other benefits provided by

policies.

Table-25 Do you recommend heavy dose of personnel selling for ICICI

Prudential?Recommend No.PercentageYes 20 40%

No 30 60%

Total 50 100%

It is seen from the table that 60% of the respondents do not recommend a heavy doseof

personnel selling for ICICI Prudential while only 40% of them seem to be in favor ofaheavy dose of personnelselling.

Table-26 Reasons for recommending personnel se lling for ICICI

PrudentialReasons No.PercentageFor max sales and profitability 10

50%Penetrate deeper in the privatelife

3 15%

insurancemarketTo give customers a more personal touch 315%To stay ahead of competition 210%To increase awareness aboutcompany's

1 5%

products

Develop need for insuranceamong

1 5%

customers Total 20 -

Note : The respondents have more than one reason for its popularity

46

A majority of the respondents (50%) recommend personnel selling for ICICIPrudentialso as to increase its sales and profitability. 10% of them stated that personnel sellinghelps to stay ahead of competition. 15% of them e ach recommend personnel sellingtogive customers a more personal touch and to penetrate deeper into the lifeinsurancemarket


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.

Table-27 Have you visited ICICI Prudential anytime for

transactions?Visited No.PercentageYes 12 40%

No 25 60%

Total 37 100%

Note : The total represents respondents who have a policy from ICICI

PrudentialThe data indicates that a majority of the respondents-68% who have a policy fromICICIPrudential have not approached the company anytime for transactions. Only 32%ofthem have approached the company fortransactions.

Table-28 If you have visited ICICI Prudential, comment on the behaviour

offrontline e

mployeesComment No.PercentageGood 8 67%

Helpful 4 33%

Friendly & co-operative 217% Very patient 1

8%Customer focussed 18% Total 16 -

Note : The respondents have more than one view about the

behaviourThis exhibits the behaviour of frontline employe es of ICICI Prudential. The

behaviourpattern according to 67% of the respondents is good, 33% of them stated thatthefrontline employees are very helpful, 17% of them felt that key personnel areveryfriendly and co

-operative.

Table-29 Do you have any complaints against ICICI

PrudentialComplaint No.PercentageYes 1 3%

No 36 97%

Total 37 100%

Note : The total represents respondents who have a policy from ICICI

PrudentialThis shows the number of respondents having complaints against ICICI Prudential.Avast majority (97%) of the respondents have no complaints and only onerespondent

(3%) among the total number of respondents have a complaint against the company.Thisinfers that a majority of the policyholders are happy and satisfied with ICICIPrudential.

Table-30 Please specify the complaint, if

any- The settlement of the policy amount was


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delayed

Table-31 Please suggest remedial

measures- ICICI Prudential should speed up the process regarding the settle mentamount

Table-32 Image of ICICI

PrudentialImage No.PercentageGood 50 100%

Bad Nil -

Ugly Nil -Total 50 100%

The opinion of all the respondents (100%) about the image of ICICI Prudentialis

positive. None of the respondents felt that the companys image isnegative.

Table-33 Do you recommend a Policy Holders Club for ICICI

Prudential?Recommend No.

PercentageYes 12 32% No 25 68%

Total 37 100%

A majority of the policyholders (68%) do not recommend a policyholders club forICICIPrudential. Only 32% of them feel the need for it. The current policyholders may favoraclub in thefuture.

Table-34 Role prescriptions for theclubRoles No.PercentageStatus of policy to be provided to customers 433%Left to the company to decide 325%Function as grievance redressal cell 325%Listen to suggestions/feedback fromcustomers

2 17%

Address changing needs of customers 18%Regular follow up of policies 18%Regular information about company's

performance1 8%

New customers can be obtained through the

club

1 8%

members

membersTotal 16 -

Note : The respondents have more than one role

prescriptionThe table shows the role prescriptions for policy holders club. 33% of therespondentsfelt that the status of their policy could be provided to them through the club. Theotherroles prescribed are the club should function as a grievance redressal cell so as to


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roles prescribed are the club should function as a grievance redressal cell so as to

makesuggestions for the company, to address the changing needs of customers,regularfollow-up of policies and to provide regular information about thecompanys

performance.

Table-35 Recommendations to enhance the value of ICICI

PrudentialRecommendations No.PercentageBe customer centric 10

27%Introduce new policies according to changingneeds

5 14%

ofcustomerSwitch between various options more than once a yearto

5 14%beallowedGive guaranteed returns 49%Reduce the pre mium amount of certain policies 49%Increase awareness among customers 38%Handle complaints effectively 25%Facts related to policy can be put across to customerin

2 5%

simplerwayIntroduce an exclusive health policy 1

3%Provide ECS facility 13%Introduce a policy that covers the whole family 13%Reduce the price of policies 13%Policies to be made more common man oriented 13%Maintain good service throughout the term of policy 13%Total 41 -

Note : The respondents have more than one

recommendationThis shows the ways and means of enhancing the value of life insuranc e policy ofICICIPrudential. It is seen from the table that 27% of the respondents want the company to

becustomer centric, 14% of them each felt that the company should introduce newpoliciesin accordance with the changing needs of customers and also allow to switch

betweenvarious options more than once a year. Other recommendations are to giveguaranteedreturns to the customers and to reduce the premium amount of certain

policies.

49

Table-36 Future outlook visualised for ICICI

PrudentialFuture Outlook No.PercentageIncrease in growth & profitability 50

4%Good future ahead 20 40%Quite bright 16 32%

Will remain as the No. 1 Pvt.Life

6 12%

Insurance


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LifeInsurance

companyFabulous 4 8%Will e merge as a powerful brand 12%Future is challenging 12% Total 98 -

Note : The respondents have more than one opinion about the future

outlook40% of the respondents state that ICICI Prudential has a good future ahead. 32% ofthemstated that the future of the company is quite bright, 12% of them hope thatICICIPrudential will re main as the leading private life insurance company. Theremaining

respondents opined that ICICI Prudential would emerge as a powerful brand. 2% ofthemstated that the future ischallenging.

50


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divya ramesh1-icici prudential

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