CRM IN INSURANCE

INTRODUCTION TO INSURANCE:-

Insurance is a form of risk management in which the insured transfers the cost of potential loss to
another entity in exchange for monetary compensation known as the premium.
Insurance allows individuals, businesses and other entities to protect themselves against
significant potential losses and financial hardship at a reasonably affordable rate. We say
"significant" because if the potential loss is small, then it doesn't make sense to pay a premium to
protect against the loss.
Insurance is appropriate when you want to protect against a significant monetary loss. Take life
insurance as an example. If you are the primary breadwinner in your home, the loss of income
that your family would experience as a result of our premature death is considered a significant
loss and hardship that you should protect them against. It would be very difficult for your family
to replace your income, so the monthly premiums ensure that if you die, your income will be
replaced by the insured amount. The same principle applies to many other forms of insurance. If
the potential loss will have a detrimental effect on the person or entity, insurance makes sense.
Insurance is a financial topic of paramount importance for every individual. Insurance is
designed to protect the financial well-being of you and your dependents in the case of
unexpected loss. Some forms of insurance are required by law, while others are optional.
Agreeing to the terms of an insurance policy creates a contract between you and the insurance
company. In exchange for payments from you (called premiums), the insurance company agrees
to pay you a sum of money upon the occurrence of a specific event. That event may be as
mundane as a visit to the doctor or as serious as a car crash, depending on the type of insurance.
After contacting an insurance company about entering into a policy, you will receive a quote,
which is the total amount of money you will need to pay over the term of the insurance policy in
exchange for coverage. When you have agreed to pay this amount and the insurance company
has agreed to insure you, you will receive a copy of the policy detailing the terms and conditions
of your policy.
If an insured incident occurs, you will make a claim for payment from the insurance company.
You will receive the amount you are insured for in the case of the specific incident minus a
deductible that you must pay for each claim. Higher deductibles are associated with lower
premiums and vice versa. Therefore, for claims that are likely to be made, it may be in your best
interest to pay a higher premium in exchange for a lower deductible.
Given the importance of insurance, it is essential to make sure that your coverage is sufficient.
However, paying for too much insurance or insurance that you don't need can be a significant
drain on your finances. Investigate all potential insurance policies carefully in terms of your own
needs at the time of purchase and throughout the term of the policy.

Everyone that wants to protect themselves or someone else against financial hardship should
consider insurance. This may include:

 Protecting family after one's death from loss of income

 Ensuring debt repayment after death
 Covering contingent liabilities
 Protecting against the death of a key employee or person in your business
 Buying out a partner or co-shareholder after his or her death
 Protecting your business from business interruption and loss of income
 Protecting yourself against unforeseeable health expenses
 Protecting your home against theft, fire, flood and other hazards
 Protecting yourself against lawsuits
 Protecting yourself in the event of disability
 Protecting your car against theft or losses incurred because of accidents
 And many more
Today’s Seneiro/Introduction to CRM:

Today, in the business world, management recognizes that customers are the core business and
Success of companies depends effectively on customer relationship management. Customer
relationship management can be implemented as a process of digitization of personnel
information about their customers. When management of an organization, introduces it as a
customer-centric organization, it is necessary to develop capacities and capabilities to achieve
the necessary resources, information and tools for facing the demands of customers and offer
appropriate products and services.

With the acceleration of global economic integration process, the markets today have changed
from the production and sales-oriented marketing to customer-oriented marketing. In this
situation, the vital factor to enhance the corporation‟s competitive powers is customer
relationship, like Peter Drucker said: “The business of business is getting and keeping
customers”. High quality customer service and satisfaction will relate to corporation‟s revenues,
profits and market share closely. Thus, facing a highly competitive environment, more and more
corporations are realizing the importance of Customer Relationship Management (CRM).

Insurance companies are considered as one of the most dynamic institutions in many countries of
the world. These companies are very important with respect to the features and benefits for
communities. Insurance companies cause to create the peace and welfare in the society, by
transferring the risk from people of society to themselves. Insurance companies invest premiums
which are taken from the people in investment companies or stock market and so cause to
economic growth of their countries.

Insurance companies in order to provide services to insured should have a closely related with
insurance purchasers, especially non-Mandatory2 insurance purchasers so that they can be aware
of their need sand for satisfying them offer the appropriate insurances. One of the new methods
that is used by most companies in the world to recruit, retain and keep customers and gain
competitive advantage against other competitors, is using the customer relationship management
system.
At the beginning of this study, we have an overview on the concept of customer satisfaction and
customer relationship management and then consider the role of customer relationship
management system in customer satisfaction of insurance companies and finally, discuss
strategies to attract customer satisfaction in insurance industry.
INTRODUCTION OF CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

What is CRM?

People make buying decisions. People have loyalties. Relationship only can be developed
between people. Your Customer Relationship Management program must be structured
around this well-known fact. CRM is about people. CRM is an approach to organizing yours
company’s interaction with customer that starts with customer- centered point of view. It’s an
entire discipline, not a single activity.

Customer relationship management (CRM) is no longer a buzzword, but a necessity for business
in the knowledge age we live in.

Customer relationship management (CRM) solutions provide customer-oriented services for

planning, developing, maintaining, and expanding customer relationships, with special
attention paid to the new possibilities offered by the Internet, mobile devices, and multi-
channel interaction. CRM enables a company to capture a consolidated customer view through
multi-channel interactions in a data warehouse solution.

Sophisticated analytical techniques are then applied to this customer information to better
understand and predict customer behavior. CRM can then be used to strategically implement
acquired customer knowledge in every area of the company, from the highest management
level to all employees who come into direct contact with customers. CRM thus enables an
organization to address its customer’s preferences and priorities much more effectively and
efficiently. CRM is a tool that can help organizations to profitably meet the lifetime needs of
customers better than their competitors.

Creating a definition for CRM is both critical & dangerous. It is critical because your organization
need to have a common understanding of what you are doing. It is dangerous because so many
definitions & misconceptions are already lodged in people’s minds. One of the first things that
any company should do when launching a CRM initiative is to the rest what the organizations
current understanding of CRM is.
In Simple Words:

• Customer satisfaction in any sector is a multi-faceted dimension which encompasses

quality product and value addition through value evidence
• CRM, or Customer Relationship Management, is a company-wide business strategy
designed to reduce costs and increase profitability by solidifying customer loyalty
• There are three key elements to a successful CRM initiative: people, process, and
technology.
• CRM is perceived as an
• Information technology solution for ensuring a better customer services by
increasing business in competitive environment
• Meeting the demands of the market
• The needs of customers
• Evolved as Customer- Centric Philosophy for whole organization
EVOLUTION OF CUSTOMER RELATIONSHIP MARKETING:
One of the important marketing tools in the developed countries is relationship
marketing. The Customer Relationship Marketing (CRM) is a comprehensive approach for
creating, maintaining and expanding beneficial relationship with the customers. It has
emerged as one of the most widely prescribed solutions for diminishing market share and
sluggish growth of many industries in general and banking and financial sector in particular. The
customer relationship management is a simple philosophy, which places the customer at the heart
of the business processes, activities and cultures for improving customer satisfaction and
maximizing profits. In one of the encompassing definitions, customer relationship management
is described as “the establishment, development, maintenance and optimization of long term,
mutually - valuable relationship between the customers and the organization”.
The concept of CRM is vital to the insurance sector. Good customer service is the best brand
ambassador for any mode of insurance. The entire business process consists of highly integrated
efforts to discover, create, arouse and satisfy customer‟s needs. The modern business has
realized it and is making all out efforts to become „customer-centric‟ across the globe. Hence,
the customer relationship management is not a once-for-all affair but a continuous process. It is
the integral approach of dealing with customers by deploying the advanced information
technology.
The customer relationship management is the information technology face of the business
process that aims to establish on a strong footing the mutually – beneficial relationship with
customers in order to drive customer retention, value and profitability. It is meant for the
common and equal good of the two stakeholders, businesses and their customers. It calls for
capturing pertinent data about the prospective and current customers in respect of their buying
pattern, shopping behavior and usage habits. Using these data designing and providing services
as per the needs of the customer has become
the focal point of customer relationship management. So, the customer relationship management
is a tool for realising a variety of marketing dreams such as:
1. It targets and serves customers on an individual basis.

2. It permits one to one marketing as opposed to mass marketing.

3. It helps in establishing durable relationship with customers and

4. It helps in reducing marketing cost progressively.

In to-day‟s increasing competitive environment, customer relationship management is critical for the
success of any business unit. Delivering high quality service and achieving high customer satisfaction has
been closely linked to profit, cost savings and market share. Hence, keeping the customer as the focal
point, insurance sectors are giving up their traditional practices and making way for new matrices that
include customers‟ perception and expectations.
Definitions:
This definition of CRM covers many but not all activities of the company. CRM is limited to
activities that take place in the customer-facing functions, including marketing, sales, customer
services, & product support.

Customer relationship management (CRM) refers to the principles, practices and guidelines
that an organization follows when interacting with its customers. From the organization's
point of view, this entire relationship encompasses direct interactions with customers, such
as sales and service-related processes, and forecasting and analysis of customer trends
and behaviors. Ultimately, CRM serves to enhance the customer's overall experience.
Background of CRM In Insurance:-
 Insurance products are becoming more commoditizied.
 Customers are being influenced by multiple channels to make their buying decisions.
 Advertising efforts are being countered by comparsion portals, insurance advisors and
coporate aligments.
 A large share business is driven through intermediaries where information challenges
exist for effective management without implementation of CRM for insurance.
 Companies continue to face stiff revenue targets spread across too many stakeholders.
 Stakeholders struggle to deal with too many processes, systems and geographies.
 CRM IN INSURANCE – NEW MANTRA:

With the increasing in the number of insurance players in the market & consumers becoming
more & more aware of different product, insures have realized the importance of CRM
(Customer Relationship Management). CRM has been practice for decades now, the grocery
shopkeeper near our home, the paanwala, etc.; all of them have been practicing it. In today‟s
competitive era, where customer is the king, it is a must for the insurers to not only make new
clients but also maintain the existing customer and encourage repeat purchase. It is estimated that
the cost of attracting a new customer is five times more than that incurred to make an existing
customer happy. Life Insurance Corporation (LIC) of India has been the sole player in the market
before the appearance of private players. It exploited its monopoly powers are didn‟t care much
about either attracting new customers or retaining the existing ones. If anyone needed an
insurance policy they had to purchase from LIC. It was mostly a tax- saving schemes which
encourage the purchase of insurance policy. Customers were not educated regarding insurance
matter & a source of knowledge to them was only the insurance agent & he was the person who
suggests the policy to the customer instead of the customer making his own choice. The
customers could not even choose some other policy from some other insurer because it was
Hobson‟s choice, i.e., LIC. But when private players entered in the market, the competition
forced LIC & the other new entrants to become customer centric.

Customer service is getting more & more as most of the time buying an insurance policy is a one
– time purchase & customers are unaware of the variation available in the market. In the
insurance sector, there is an agent-client relationship & satisfied client can be the biggest brand
ambassador for the company (word of mouth advertisement). It is in the interest of the company
to build up good relationship with the client. The insurance agents of the company play an
important role in building this relationship because they are the people who interact with
prospective & existing clients. Therefore, every organization should build a foundation of
relationship marketing because it acts as a new mantra to all organizations & its help to the
agents to talk about the company‟s product & convince the customer.

The best effort is to go for CRM in an integrated approach. To be more friendly & the customer-
centric, organization need to be implement a CRM strategy which helps them to interacts with
there customers in a more informed manner because CRM helps the manager, the agent & the
other officials (present or past employees) to understand the status of present client. So, CRM
should be implemented in such a way tat it does not become a hurdle for the organization but is
its assets, which facilitated the smooth flow of information & better care of the customer. CRM
has been estimated to be of use of all organizations, be it of service sector or any other sector
still, the experience in the implementation part has not be successful. In most of the cases, it has
been practically observed that CRM implementation in an unstructured manner has led it to
become a hurdle for the organization instead of becoming valuable assets & an integrated part of
the company.

LIC, the biggest player in the insurance sector has also gone for implementing CRM in its
organization to „facilitated better care of the customer‟. Now the customer can deposit there
premium in any computerize branch all over India. But it has not be implemented at bottom level
i.e. agents & managers who are the person interacting directly with the clients. It is the task of
the top-level & middle level manager to train their agents to practice relationship management &
build relationship with their clients.

1. The agents should be trained to analysis their environment (society, friends, peer groups,
etc.) & build good relationship with their environment because a good marketer first forms
relationship & then sells his goods.
2. An agent should make a profit of the prospective targets (or potential clients).
3. He should be trained to interact with them.
4. He should trained to build the customer database classify them into potential existing
customer into dissatisfied, satisfied highly satisfied customers.
5. The agents should be trained to get the feedback of the customer because insurance selling is
a confidence building measure were relationship is build between the agent, which lasts for a
long duration.
To survive & have an upper hand over the competitors, in today‟s scenario insurance companies
need to implement CRM in there organization not only technically (computer, network, database
system, CRM software trained personnel) but also as part of the culture. Relationship marketing
is a key to success in the present era & only those organizations can succeed who and been able
to build a base of their loyal customers, because a loyal customer advocates the companies
products much better than the organization itself. The basic existence of the organization lies on
the hands of its customers. It can be easily conclude that for success, it is necessary to implement
CRM in the right manner.
Some of the important milestones in the life insurance business in India are:

1818 Oriental Life Insurance Company, the first life insurance company
on Indian soil started functioning.

1870 Bombay Mutual Life Assurance Society, the first Indian life
insurance company started its business.

1912 The Indian Life Assurance Companies Act enacted as the first
statute to regulate the life insurance business.

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 are 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.
Features of CRM at a glance:
 Address management
Automated processes for address maintenance make work easier for everyone in your
company. Using the drag-and-drop feature you can create an address and then, with a click
of your mouse, check whether the data is correct or has been duplicated. You can also
customize the content and look of input screens and fields to meet your requirements.
Furthermore, you can filter addresses according to the content of specific fields, which
allows you to target specific groups of customers.
 Managing documents
The CRM solution lets you create and manage different types of documents (Microsoft
Word, Microsoft Excel, PDF, e-mails, graphic files, etc.) and create templates. Documents
such as sales meeting minutes are no longer saved locally on different computers. This
means employees always have access to current documents, which are centrally
maintained. The search and filter functions can be used to filter and find keywords in
documents; for example, subject or the date a document was created.
 Assigning rights
Whether you want maximum transparency or clearly defined access rights, the choice is
yours. Using the professional user and group administration features, you can assign rights
to data records and to individual fields. Employees only see the data to which they have
access rights. Rights are easy to manage using an intuitive user interface.
 Opportunities
The smart "Opportunities" feature lets you keep a constant eye on potential customers and
manage your leads: from initial contact to the closure of sale. The automatic notification
and action service, for example, reminds you about upcoming birthdays and notifies when
an appointment is rescheduled. You can also generate forecasts and reports.
 Mobile data
Your field sales force needs to be able to access information when away from the office:
from PCs at home or from smartphones or laptops when on the move. To cater for
individual needs, the Mobility module enables your sales force to synchronize data between
their home PCs, laptops or smartphones and the main system at your head office. Your
sales force can access the central database directly via the Internet browser on their
smartphones or laptops - which means they are fully involved in all your work processes.
 Managing tasks
The CRM solution lets you effortlessly manage your tasks. You can delegate and monitor
tasks and once they have been completed, you can then create follow-ups. The
sophisticated filter allows you to sort and display tasks by due date, person responsible, and
so on. And the reminder feature notifies you when a deadline is coming up.
Objectives of CRM:

• CRM is an organizational strategy to develop mutually profitable lifelong relationship

with the customer
• The primary objectives of CRM are to build and maintain a base of committed customers
who are profitable for the organization
• Use technology and human resources to understand the needs and behavior of present and
potential customers.
• Acquire, retain and establish mutually rewarding, one to one, relationships with
customers.
• Provide better customer service to customers.
• Identify high value customers so that the organization can serve them better with
differential service.
• Increase customer revenues by cross selling and up selling.
• Simplify marketing and sales processes
• Collect customer information at all possible points and making this information available
to the entire organization.
NEED FOR CUSTOMER RELATIONSHIP MANAGEMENT IN THE INSURANCE
INDUSTRY
The important factors that establish the need for the customer relationship management in the
insurance industry are detailed below:
i. Cut-throat Competition
There is intense competition among the private sector insurance, public sector insurance and
foreign insurance companies and they are all striving their best to attract and retain the
customers. New technologies, research facilities, globalization of services, the flood of new
products and the concept of providing all the facilities under one roof to provide better customer
service leading to customer delight do matter today.
ii. Well -informed Customers :
The customers in the insurance industry today are well -informed. New technology has
transcended and diversified all geographical limits. Thus, if an insurance company wants to have
more customers, it should develop a good relationship with its present customers, whose
recommendations may act as an incentive for the entry of future customers.
iii. Decline in Brand Loyalty :
In the present scenario, brand loyalty is on the decline. The customers are switching over
frequently to avail themselves of better facilities from other insurance companies. Newer and
superior products and services are being introduced continuously in the market. Thus, the
insurance companies have to upgrade their products, improve customer service and create bonds
of trusts through proper care of customer needs and regular communications. With the help of
the customer relationship management, strong customer loyalty and a good image for the
organization can be developed.
iv. Improved Customer Retention:
In the intensely competitive insurance industry, retention of existing customer is vital,
which can be achieved through the process of the customer relationship management.
 Insurance products are becoming more commoditized.
 Presence of numerous players.
 Advertising efforts are being countered by comparison portals, insurance advisors and
corporate alignments.
 A large share of business is driven through intermediaries where information challenges
exist for effective management.
 Companies continue to face stiff revenue targets spread across too many stakeholders.
 Stakeholders struggle to deal with too many processes, systems and geographies
 Speedy documentation and processes at the time of issue of policies
 Prompt redressal of customer grievances
Steps in implementation of CRM in insurance Companies:-

1.Turning Data into knowledge:-

Insurance companies has huge data warehouse as it comprises of high quality data like hgealth
histories of customers etc. insurance companies need to convert this data into useful information
which when abstracted will led to knowledge, with the help of data minning tools this data is
converted into knowlwdge.

2.Developing a profit:-
Profile is an important step after abstracting knowledge from information. Key to have an easy to
use knowledge profile at every detail of customer relationship with the company, Company
social responsibility can be used to begin relationship building process.

To Develop a customer profile requires a lot of planning. There are various elements
required in a customer profile:-

 Relationship of customer with product

 Customer buying habits, behavior pattern.
 Demographics like age, gender, income, occupation and other related attributes
 Relation of individual with other family members
 Creditworthiness of customer
 Channel of distribution preferred by customer whether it is traditional or web-based
 Propensity to buy (product which customer can buy in future)
 Life time value of customer which indicates profitability
 Level of satisfication.

3. Building a strategy:-
After binding customer profile, overall company strategy is being designed. CRM enables
companies to take a customer profile and use it as building block to develop stratregies based on
four important areas like:-

 Value proposition
 Customer segementation
 Service Delivery models
 Marketing

A CRM strategy focuses on servicing customers what they need.

4. End where all the strategies comes into fruition:-
As customer in today‟s market place demands for its product access at anytime,anywhere
thus a need arise to design wide variety of access points . CRM works well in co-ordinating
these efforts across many kinds of customers in form of agencies, branch offices, call centers,
websites, ATM machines, online payments ,etc.
Process of CRM:

• Redesign Functional Activities

• Redesign the functional activities on implementing CRM while working at cross-
purposes functional Departments
• Customer-centric Business Strategy
• Plan around customer wants but not company goals,
• focus on listening to customers but not forcing them to listen to you
• Promote communication of marketing including database marketing (e-database
marketing, e-database, e-marketing, etc)

• CRM Initiative
• Introduce new technologies in System
• Communicate & Educate employees
• Identifying Customers
• Primary Customers : policyholders, beneficiaries, insured, agents or brokers
• clear understanding of each of the customer segments
• build an infrastructure and strategy to provide customers with products and
services
• Collecting and owning customer data
• Capture and combine customer information from various offices &
sources
 Six Steps to CRM Strategy:
 Cost to acquire customers
 Cost to sell
 Cost to serve
 Time to serve Customer satisfaction
 Return on relationship
 Competitive advantages
 Numberof customers
 Retention rate
 Assessment in the collection of analytics customer‟sValue
 Revenue per customer
 Impact of order fulfillment returns and call center
 actively or actual sales performance
Types of CRM:-
1 Operational CRM:-

Operational CRM provides support to “front office” business processes. Customers contacts
histories and staff can retertive customer information as necessary. The contact history provides
members with the immediate access information on the customer owned prior support calls ,etc
eliminating the need to individually obtain hisinformation directly to the customer.

2 Analytical CRM:-

Analytical CRM analyses customer data for a variety of purposes. It is applicable on marketing
level and aim to propose an in-debt market analysis.Analytical CRM generally use data minning
techniques searching for common patterns with large customer databases. Some of the analytical
CRM includes:-

Designining and executing target marketing campaigns

Eg :- Customer acquisition , cross-selling, up-selling, analyzing customer behavior in order to

make decisions relating to the product development management information system

3 Analytical CRM in insurance:-

Analytical CRM can be deployed to understanding processing of claims in insurance sector.

Deregulation of insurance industry in the global has resulted in increased in no.of players in the
market hence competition

Analytical CRM can be used in the insurance industry for following applications:-

 Acquring new customers

 Identifying cross-selling /upselling oppournities
 Etablishing the premium rates
 Assisting the regulators to understand from rates and models.

4.Sales intelligence CRM :-

Sales intelligience CRM is similar to analytical CRM but it is intended to more direct sales tool .
it is oriented to sales staff its features include alerts sent to staff regarding :- cross –selling , up-
selling ,switch selling oppournities, customer drift, sales performance, consumer trends,
consumer margins.

5 Campaign Management:-

Campaign management combines elements of operational and analytical CRM. Campaign

management function support of development of efficient marketing campaigns.

6. Collaborative CRM:-
Collaborative CRM covers aspects of company‟s dealings with customer that are handled by
various departments within the company , such as sales technical support and marketing . staff
members from different departments can information collected when intereacting with customers

7 .Geographic CRM:-

Geographic CRM (CGRM) combines geographic information system and traditional CRM.
Geographic data can be analyzed to provide a snapshot of potential customers in a region or to
plan route for customer visits.
 Use of Technology in Insurance Companies:-
Technology in insurance companies has also made the insurance industry go green. It has
drastically cut down the amount of precious paper that would be otherwise to manage all the
data. With the insurance systems and their multifarious applications ,minimal documentation
is now in hard copies making them environment solutions.

1. Actuarial Modelling:-
Insurance companies have always based their premiums on the likelihood that the
customer would suffer a loss. Originally actuaries looked at a broad trends and claims
history to establish rates. For Eg:- Homes not located near a hydrant firehall were more
likely to duffer a catasastrophic fire damage than than those protection, Technology has
enabled actuaries to create much precious models, tracking records such as water
pressure found in various neihbourhoods ,the quality of fire department maintains , and
the addition of fire alarm to home. The result is much more granular understanding of
these risks implent in an account and the implent in an account and the ability to charge
appropriate premium for that policy.

2. Database Unfiormity:-
Until very recently , most insurance companies were unable to access customer data
efficiently. Companies were plagued with paper files, dozens of proprietary computer
system within each company and silos information. The client account used to issue a
policy was often unconnected to file a claims department would use to settle a loss. In
many cases, the insurer unaware if a customer maintained five policies with them or one,
as each was stored in separate files. As database standards become more open, insuers are
able amalgamate this information, gaining a much understanding of their client. Valued
customers receive better service, personailized materials, multi-policy discounts and
faster claim response.

3. Remote Claims Adjustments:-

Traditionally when a claim occurred, the insurer would need to find the paper files for each of
the customer policies and them over to the adjuster. The adjuster would use the information to
settle the claim . In some companies , this could even took days,weeks,depending on the location
of loss. Mobile computing opened with databases allows insuers and claim adjusters to access
policy information immedatiely. Adjusters are able to inform coverage, view policy limits and
print claims checks without ever visting company‟s office.
4 Key Reasons for Implementing CRM in
Insurance:

Insurance is a volatile sector. Reputations can be

damaged and restored within a span of months and
government imposed regulations can make margins
appear and disappear almost magically. The sector
however is one of the most dynamic in the Indian business landscape and the keenness of
international players to invest in it bears testimony to the massive potential it holds. In the
domestic space too, there have been some massive transformations, LIC faced competition for
the first time in decades in the life insurance segment with the pie in the non-life and health
insurance segments being shared equally. These developments in the sector have made it even
more important for companies to be abreast of the latest tools and solutions so that they can be a
part of the race where some of the best names in the international market have already made their
presence felt. With the lobbying for removal of the FDI cap of 26% in insurance getting more
intense by the day, it is clear that the sector is on an upward incline for a major boom.
Streamlining business operations and managing customer data therefore have assumed more
importance than ever - the role of CRM in insurance sector is now crucial.

The winning factor:

While the banking sector‟s business does not completely depend on the customer database, the
insurance sector cannot exist without a solid set of databases that include existing customers as
well as prospective ones. Procuring these databases is also a major challenge in this sector and
therefore optimum utilization and proper management of the data could well be the winning or
losing factor for a player. In an industry where the competition is so intense, making customer
related data accessible to the sales, management and customer service team in the most efficient,
cost-effective and timely manner is a challenge for any CRM solution provider.

While there are several players in the market, only a few have made a solid market presence that
looks sustainable for the next decade. It is also important to note in this case that the total market
share of the private players doubled as recently as the last six years. Though most of these
players boast of state-of-the-art CRM software, the solutions have evolved with the market.
Today, cold calling is no more quintessential for cross-selling and up-selling, customer relations
is no longer about the person that walks into the office but about long term relations built
through wealth advice and high quality service. Ensuring that the firm is in line with the IRDA
regulations and there is ample scope for the launch of a new marketing strategy is no longer a
decision made randomly by the board, but a logical deduction from the CRM data that is on the
table today.

Integration and segregation:

Two of the biggest functions of CRM in the present market scenario are therefore integration and
segregation. Integration of the data from across the various departments and technical,
meticulous and efficient segregation of this data related to claims, policy holders, expired/ new
policies, corporate clients, prospective clients, third party policy sellers and agents among others
is thus essential. A company choosing to upgrade their existing CRM or implementing a new one
to keep up with competition should therefore look for high levels of customization when it
comes to these two processes.

Customer grievances:
No matter how good an enterprise‟s CRM solution, sales, marketing and customer service
department, grievances will remain. While 100% customer satisfaction and claim settlement is an
illusion, companies have no choice but to strive for it.

Some of the common complaints against insurance companies remain delays in claim
settlements, inefficient customer care officers, cumbersome paperwork and opaque claims
processing routines. Insurance players in the health and life insurance space have to be doubly
careful when it comes to handling customers, sentiments can run high and the media can be
quick to spread disrepute. Single point of contact for most departments related to customers,
easier navigation, interactive online and telephonic presence with friendlier call center executives
are some of the solutions that can be implemented apart from high-end CRM solutions.

Changing landscape:
The customer today has more money and knowledge than ever before. Impressing them with
typical CRM tools like seasonal and birthday greetings is no longer effective. The need of the
hour is comprehensive KYC packages where personalized and customized services are provided.
With the rapid expansion of the customer base, risk management has also emerged as a major
challenge and CRM solutions can go a long way in helping companies implement effective
measures to manage risks. Solid portfolio management used to be a manual process even a few
years ago as there was a great deal of analysis and inference involved. Today, however, CRM
solutions have the power to replace the analyst and come up with inferences that can help the
sales team make clear decisions.

New changes such as health insurance portability and the emergence of social media and RTI
have made the insurance sector a large yet competitive terrain. Foreign investors know that a
majority of the 121 crore population in India is yet to be insured and it is one of the biggest in the
world. Solution providers for CRM in insurance sector are likely to look at the potential of this
market and therefore come up with better-customized, efficient, real-time and cost-effective
solutions for the insurance sector with special features for Big Data, social CRM, email
syndication, two-way SMS and more.
CRM ADOPTED BY VARIOUS LIFE INSURANCE COMPANIES:
Birth of Life Insurance Corporation of India:

On 19th of January, 1956, that life insurance in India was nationalized. About 154 Indian
insurance companies, 16 non-Indian companies and 75 provident were operating in India at the
time of nationalization. Nationalization was accomplished in two stages; initially the
management of the companies was taken over by means of an Ordinance, and later, the
ownership too by means of a comprehensive bill. The Parliament of India passed the Life
Insurance Corporation Act on June 1956, and the Life Insurance Corporation of India was
created on September 1956, with the objective of spreading life insurance much more widely and
in particular to the rural areas with a view to reach all insurable persons in the country, providing
them adequate financial cover at a reasonable cost.

The LIC had monopoly till the late 90s when the Insurance sector was reopened to the private
sector. Life Insurance Corporation of India (LIC) was formed in September 1956 by an Act of
Parliament, LIC Act 1956 with a contribution of Rs. 50 million.

The then Finance Minister Mr. C. D. Deshmukh while piloting the bill for nationalization
outlined the objectives of LIC thus: “To conduct the business with utmost economy with the
spirit of trusteeship; to charge premium no higher than warranted by strict actuarial
considerations; to invest the funds for obtaining maximum yield for the policy holders consistent
with safety of capital; to render prompt and efficient service to policy holders thereby making
Insurance widely popular”.

Presently the LIC has a network of seven zones; 100 divisions and 2,048 branches, personnel
exceed seven lakhs employees and over six lakhs agents.
Vision: A trans-nationally competitive financial conglomerate of significance to societies and
Pride of India.

Mission: To explore and enhance the quality of the life of people through financial security by
providing products and services of aspired attributes with competitive returns and by rendering
resources for economic development.

Values: Caring and Courtesy, Initiatives and Innovation, Integrity and Transparency, Quality
and Returns, Participation and Relationship, and Trustworthiness and Reliability

Culture: Agility (quickness), Adaptability, Collaboration, Commitment, Discipline,

Empowerment, Sensitivity, and Excellence
CRM IN LIFE INSURANCE CORPORATION OF INDIA

LIC had issued credit cards to the policyholders. The policyholders can make
payment of premium to the Corporation with the help of the credit card. This practice
was also taken up by some private insurers. Many insurance companies are also
making payments to policyholders through National Electronic Fund Transfer (NEFT)
and Electronic Clearing Service (ECS) to ensure speed and safety of funds. Through
the Key Performance Indicator (KPI), an insurer can give necessary information to
the insured immediately. Automated modes like ECS or standing instructions through
a credit card ensure that the customer undertakes limited effort and decreases the
risk of lapsation for both the customer and the insurer. Use of mobile phones for
remittance of insurance premium is likely to be a reality soon.
LIC opened satellite offices across the country to link up the branch network
with the Head Office. As a result, the Corporation took up the expansion of improved
customer service even to rural areas. Now all customers can transfer insurance
payments through any ATM terminal anywhere in the country. The private players
are also providing services beyond their boundaries. Through call centres‟ and touch
points, the insurers are serving the customers better. With the advent of the
information technology, e-mail and mobiles have also resulted in faster and safer
customer services at a touch of the button.
The Government of India is taking a step enormously for giving unique
identification number to Indian citizens. LIC has agreed with the authority to provide
verification services wherever necessary for a certain fee of the policyholders. It
helps prevent insurance fraud by colluding with hospitals and diagnostic centres‟.
The IRDA is also planning to establish insurance fraud prevention authority for
reducing the problem of insurance fraud. Another facility by the insurer to the
policyholder is the establishment of cheque boxes at various counters like malls,
ATM centres‟, etc. The cheques of the policyholders are collected through these
centres‟ and the same will be deposited in the insurers‟ accounts. The philosophy
behind all these initiatives is to ensure total satisfaction of the consumer.
Treating the Customer Fairly (TCF) is a new management initiative that looks
beyond mere customer satisfaction. It is a technique in which the gap between the
customer‟s desire and what he gets from the insurer actually is reduced. It helps to
gain the confidence of the customer. Every customer will be treated fairly by the
insurer. It helps improved customer loyalty, increased customer satisfaction and
improved goodwill. TCF ensures maintenance of satiated customers and results in
the long-term sustainable growth of the Indian life insurance industry.
The technology has also used for providing customer services right from the
proposal to the settling of a claim. The technology includes mobile, internet and
electronic transfer. This increased the geographical spread of the business across
the globe. Renewal follow-up services like timely reminders, renewal notices and
facility to renew policies are also initiated by the insurers to build-up strong renewal
mechanism.
Customer Due Diligence (CDD) is another management technique which helps the
insurer to identify customer identity and verifying the beneficial owner. The insurers
should apply CDD measures for determining the risk apatite depending upon the
type of customer, business relationship or transaction.
LIC which was once upon a time put customers through a lot of hardships
now with the advent of private life insurance companies has reinvented itself in terms
of Customer Relationship Management. Customization of life insurance products
have enabled customers to choose among variety of life insurance products that are
need based and customer centric. This culture was not prevalent in LIC when it was
the sole Life Insurance provider in the country till year 2000. The company now
provides online services for Customer education regarding Policy Status, Insurance
selector, NRI Centre, Phone help line, Policy guidelines, tax benefits, Bonus
information and Sms enquiry. It also provides premium calculator and multiple
premium payment options. It was found that LIC had the most number of channels
for customers to pay their premiums both online and offline when compared to
private life insurance companies. The Offline premium payment options were –
ECS, Bill Pay and ATM.
Online premium payment options include LIC Website – Net Banking, Debit and
Credit card
Authorized Banks – Through Axis Bank and Corporation Bank
Franchises – AP Online, MP Online, Suvidha Infoserve and Easy Bill Pay.
Merchants – Premium Point Empowered agents, Life Plus (SBA) & Retired LIC
Employee collection.

CRM in HDFC LIFE

HDFC Life are committed to maintaining the highest level of customer service.
Hence they have tried to provide customers with all the information they may want to
seek regarding procedures such as paying their premium, various policy servicing
options, processing a claim and so on. Customers can manage their account online
and access and manage life policies online, avail 17 premium payment options,
know about tax benefits and tax laws applicable to their policy, able to contact the
company, download policy servicing forms for permissible policy alterations, make
claims for benefits, and enquire about lapsation and revival of policies. The
Company also provides a key feature document, a notice corner, an information
centre and a grievance Redressal centre.

CRM in ICICI Prudential

The company sells most of its products online through phone or internet. For
existing customers constant support is provided through a toll free number, sms,
Turnaround time, downloading of forms, filing of claims, Payment of premium online
and buy insurance online. Existing customers can set standing instructions, view
fund progress, get E-statements and perform E- switch, do an online top up, file
complaints, go through Pre issuance payments and protect their policy. They also
have all the instructions regarding the procedure to file claims, make online claim
intimation and avail networking of hospital facilities.

CRM in SBI Life

SBI Life Insurance is a joint venture between State Bank of India and BNP Paribas
Cardif. To its existing policy holders, the company offers various services to pay
premium online, detailed premium payment procedure, ECS facility, NRI services,
claim settlement process, Answers to FAQs, SMS based services and Revival of
lapsed policies. New customers can avail of services of Premium calculator, Need
analysis calculator, Retirement calculator, Human Life Value (HLV) calculator, Buy
Policy Online Tools, Financial Planner tools, Proposal tracker, Order a form, Meet an
Advisor, Child education Planner, Tax calculator and Easy Plan Finder.

New CRM initiative in SBI life

One of the biggest challenges was to integrate the data from the existing systems
with the new solution. This was made relatively easy by SBI life by adopting the new
CRM solution‟s plug and play modules. The same module also allows integration
with the IRDA portal such that the regulator can query the system to track complains.
With the new solution, SBI Life can efficiently service any query/compliant because
they have a consolidated view of all the past payments and history of customer
interaction at their fingertips allowing for faster resolution and immediate escalation
for problem that require deeper investigation. For every complaint they receive, they
have a corresponding token from the regulator which tracks the resolution and
defines the turnaround time. For example, the regulator allows for three days from
the complaints being generated to the acknowledgement received by the customer
from the bank. This is available for both the regulator and SBI life to see online.
Similarly, IRDA has defined the complaint lifecycle of different types of complaint.
With the new system, the company can record not just the queries of existing
customer but also the initial interactions with potential customers. This helps the
company understand customer behavior; what people are looking for, why they
chose the solutions they do.
CRM in RELIANCE Life

The company provides online services for IVR (Interactive voice response) ECS and
direct debit premium payment options, Fund performance information, claim filing
procedure, download of forms, help desk and toll free contact numbers for queries
and complaints.

CRM in BAJAJALLIANZ

Bajaj Allianz provides Online Calculators – Return calculator, Right insure calculator,
Right invest calculator and Retire rich calculator. Life tools such as Manage your
Policy, Claim Process and Get Claim status are provided to policy holders.
Additional services include Premium Renewal options, Benefit illustrations, Retrieve
saved quotes and Life FAQs.

CRM in M AX LIFE-

CRM initiatives:
• First organization to have provided a free look period of 15 days for the
customers - later on IRDA made this mandatory
• First Indian life insurer to have provided different services to the agents and
customers over phone
• First company to have started toll free lines for agent services
• First life insurer in India to have started service centers at the regional level
• First and the sole Indian life insurer to have put into practice the Lean
methodology of service excellence in service industry
• First Indian life insurer to have been awarded ISO 9001:2008 certification

Apart from the above achievements the regular CRM strategies include
customer services such as Premium payment options (More than ten options) like
Pay Online, Pay by Phone, Auto debit, Drop box or branch cheque pick up. IVR
(Interactive Voice Response) to solve queries, Escalation Matrix to report query to
higher level, Answers to frequently asked questions, SMS updates on NAV, Last
amount paid, policy status, policy due date, Unit Statement. Customers can
download premium receipts and get information about withdrawn plans.

CRM in AVIVA LIFE

The company assures customers of daily provision of information and the effective
communication with as main priorities in their work. They offer various possibilities
for access to the information about their products and services. They offer
consultations to their customers and aim to provide adequate solutions that meet
their individual needs. Existing customers are offered services for payment of
insurance premium, claim for insurance benefits, surrender of policies, investment of
insurance units, personal information update, file a complaint or give
recommendations. When they give information, they comply with the highest
standards for confidentiality and information safety, which ING applies in its activity
worldwide. Customized products for Business, Small Business, Individual, Senior
Citizens, Pregnant Women, children and for women

CRM in BIRLASUNLIFE

Customers are able to avail of the following services for ease of payment of premium
and settlement of claims. Customers are able to - Manage their Policy through on
line services for the following - Pay Premium, Change Premium Payment
Frequency, Update your Contact Details, Subscribe to e-statement.
Make Premium Payment – there is a range of premium payment options ensure
their convenience, Net Banking, ECS, Direct debit, National Electronic Fund Transfer
(NEFT).
Enquire and clarify regarding – Claims, Demat of Insurance, Investment, Login,
Policy servicing, Tax benefit.

CRM in MET LIFE

Met Life companies enables online for customers to login to their customized id and
make premium payment, know the claim procedure, download forms, provides policy
holder education warns trains customers against spurious calls and has a special
zone for NRI customers.

CRM in TATA AIA

At Tata AIA Life, it's the company‟s commitment and constant endeavor to deliver
and maintain the highest level of service for you. To ensure a convenient and hasslefree
experience for customers, the company has included all relevant information
that customers may require at different stages of their association with the company.
Customers can track their applications online, check the performance of their policy
funds, Premium payment online through NEFT, EBPP (Electronic Bill Processing
and Payment), ICICI Bank Quick Pay, Internet Mobile Payment Service, Payment
through direct debit, drop boxes, cheque pick up
CRM APPLICATION IN LIFE INSURANCE CORPORATION:
In case of life insurance, the market is more premium based and the profit margins are high.
There is a lot of scope for product innovation. These days the products are getting customized
based on the customer liking and need. The customers themselves
have become demanding. Some are exceedingly fickle in making final decisions. In order to
arrive at a standard strategy to target customers, life insurance companies have started employing
tactics of direct selling, combinational sales and remote selling using various media. However
personalized approach in case of life is still the most popular one. Also in the case of life
insurance, the premiums are generally renewed on a long-term basis and hence the customer is
likely to stay for a longer timeframe. The approach of CRM in this context is to have a more
sustainable advantage against the competition and then concentrate towards acquiring newer
customers.
Another noticeable difference is in the customer touch point. The life insurance companies have
more or stable process for arriving at the mutual benefits, policy administration, granting claims
or managing complaints. The factors for making decisions are fairly simple and chances of
variables going awry are rare. Therefore, front office applications are less complex and the data
collection is also standardized. Therefore, CRM implementation in life insurance can be
extremely effective if done in the right way.
i. Market is Huge:
CRM has a role to segment the market into various customer profiles and target the right
customer segment with the right kind of policies. This would be in mutual benefit of customer as
well as the company.
ii. Claims are few but of Large Value:
Claims management is one of the key areas, where customer dissatisfaction is high.
Customers are changing the companies just because of the long process involved in
claim settlement. CRM has a high leading role to play in terms of minimizing delays and making
effective use of acquired information for quick settlement. In turn, maintaining the customer
retention is easy.
iii. Product Innovation:
Customers have become more market savvy and already looking for newer products. So,
whenever they find a product responding to their need they are inclined to patronize it. Life
insurance corporations have to be vigilant in this regard and have to effectively address the
concerns of the customer proactively. They need to constantly innovate and provide value added
service to the customers. CRM would be providing the framework more effective.
iv. Retention of Sales Force:
This is primarily important in the case of life insurance as the personalized touch and the
customer contact is through the sales agents. These hold the key in acquiring the large customer
base on the basis of word-of-mouth. Life insurance corporations have to effectively implement
CRM to address the internal customer‟s problems which in turn satisfy them to give more
business.
EFFECTIVENESS OF CRM IN THE INSURANCE SECTOR:

Integration of policy administration system and CRM implementation would be useful for
understanding the front office process management.
i. Customer-Centric Approach:
The element of focus is the end-customer, not policies. The CRM implementations need
to associate all the relevant information, including owned policies to the customer.
ii. Strategy Enabling:
The CRM architecture would help in perpetually evolving the business functionality and
implementing digital innovation to support key strategies. Business and CRM should work in
unison to continually and incrementally provide added value without undertaking lengthy and
costly projects for every change. This capability is essential for enabling rapid time to market
new policies, for adapting to new business rules and for the spontaneous capture of additional
customer and risk data.
iii. Customer Relationship Management:
Customer-centric approach would allow a comprehensive and complete data view of all
customer information allowing for complete portfolio selling and management.
Demonetization – The Big Game, and its effect on Insurance Industry:-
While the whole world, including India, had their eyes glued to their television sets
waiting for the American presidential candidacy results, the Indian Prime Minister
Narendra Modi, had different plans entirely. When people in India were awaiting the
speeches of Donald Trump and Hillary Clinton, Narendra Modi took the microphone and
made an announcement that left the whole of India in a shock. Before people could say
“black money” the ground was swept off from beneath their feet.

On the 8th of November 2016 at around 8 PM IST, Prime Minister Narendra Modi
announced the imminent arrival of the demonetization scheme in India. The
demonetization scheme is basically an act in which the higher currency notes worth 500
Rupees and 1000 Rupees which are currently in circulation would have value no more
than an ordinary piece of paper. Once the note exchange period ends these old notes can
as well be used in order to have a samosa on as they will hold of no purpose to the holder.

The History of Demonetization

While this is a big step in the current state of Indian Economy, this is not the first time
such a step has been taken. Not many people are aware of the fact that the Indian history
is quite familiar to the demonetization scheme.

India has already undergone one major demonetization scheme in the past, before
Independence, in 1946, where the scheme was responsible in scraping off the 5000
Rupees and 10000 Rupees notes from existence. However, this spark of this feud of
demonetization did not catch much fire as it proved to be only partially successful. Also,
the notes were reintroduced not long from then in 1954.
A demonetization scheme was again run in India in the year 1978 against the 1000
Rupees, 5000 Rupees and the 10000 Rupees notes. However, this time the 5000 Rupees
and the 10000 Rupees notes were abolished for good.

The Objective behind the Demonetization scheme in India

While the normal public all over India is stressed by standing in long ATM queues
blaming the Indian Government for their troubles, the government has introduced this
scheme with some of the superior motives for the benefit of the nation as a whole. Some
of the reasons why the scheme was introduced include:
1. To tackle the problem of excessive black money that is faced by India as of now .:-
The introduction of the demonetization scheme will prove to be a nightmare for major
black money holders as the crores of rupees stored by them (mainly in the form of larger
denomination notes i: e; 500 Rupees and 1000 Rupees) will render useless.
2. For the elimination of fake currency use within India and outside India.:-
The demonetization scheme will render the old 500 Rupees and the 1000 Rupees notes
useless hence ceasing the funds of the anti-national and terrorist groups that often operate
by the means of cash with these forms of notes. This will ensure a safer future for India
and its allies.
3. A way towards Digital India.
The demonetization scheme is a simple yet highly effective way to ensure that India is on
its way towards the market of a digital India. The scheme forces the public indirectly to
shift towards other modes of payment such as internet banking, debit cards and credit
cards, as the higher value denomination notes will now be scrapped off which constituted
of the major chunk of the Indian Economy.

Effect of Demonetization on various Industrial Sectors

All the service based as well as consumer based industries in India will be affected in
their own ways by the introduction of the demonetization scheme.

Effect of Demonetization The Insurance and Banking Sector

Just like all the industrial sectors in India, the finance sectors of India will be affected by
the government‟s demonetization schemes. The effect, however, will be more short term
and targeted deeply towards the privately driven insurance funds. Similar to all the other
sectors, this scheme has several painful short term effects, however, can prove to be
sincerely beneficial in the long term.

The major insurance sector in India is covered by the government agencies such as
the

Life Insurance Corporation of India (LIC),

Oriental Insurance Co. Ltd,

New India Assurance Co. Ltd, etc.

These insurance companies have already started taking steps towards making lives easier
for the general public who seem to be distraught by the demonetization schemes. LIC for
example, extended its grace period for the customers to pay their premiums of several
policies without any penal fee for a period of 20 days after the scheme was introduced.
This allowed people to have some time in order to withdraw any necessary amount from
the bank ATMs.

The private insurance sector which mainly deals in cash is hit hard by the demonetization
drive as it is not ready to except the premiums in terms of online banking or credit in
terms of bank transfers. This will basically ensure that people are lured more towards the
national government operated insurance companies which can still freely operate by means
of internet banking.
Hence, the insurance and banking sector of India will be forced to be converted into a
digital market where the promise of cash deliverance is reduced. This will ensure a major
increase in the internet banking sector of India.
Impact Of Demonitisation in Insurance Sector:
The insurance sector will see little impact and for a short duration. In the last few years,
especially the private sector insurers have discouraged cash transactions. People who prefer
paying cash will have to pay through their bank accounts. But unbanked customers, like people
in rural areas, may find it difficult to pay up in the immediate future. However, last minute pains
can be avoided if customers are proactive. For renewals, insurers notify the customers in
advance. For insurance policies even after the due date there is a grace period of 30 days for
annual premium policies during which time the policy expires but continuity benefits are given if
the premium is paid within the grace period.

Agency-driven policies will be hit the most as agents tend to collect premiums in cash.
Bancassurance channels collect premium online or through cheques.

There are rules to prevent anti-money laundering, even as there no cap on cash transactions. For
instance, customers who pay premiums in cash in excess of Rs 50,000 have to furnish their
permanent account number (PAN).

The other checks and balances against cash transactions are through tax deduction certificates.
For instance, in health insurance, if you pay premiums in cash you don't get tax deduction benefit
of section 80D.

The hiccups faced by agency channels will be short lived. In the agency channel, a significant
number of transactions are cash based. They would be as high as 30-35% of the overall
contributing premium. Ultimately this would expedite the process of people switching from cash
to plastic and using online wallets and banking and in turn be a great boost for consumer internet
businesses.
Insurance Ombudsman scheme:-
Introduction:
The Insurance Ombudsman scheme was
created by Government of India for individual
policyholders to have their complaints settled
out of the courts system in a cost-effective,
efficient and impartial way. There are 17
Insurance Ombudsman in different locations
and you can approach the one having
jurisdiction over the location of the insurance company office that you have a complaint against.
The insurance company‟s agent and insurance companies itself make a description of insurance
ombudsman in insurance company, which many of insurance companies doesn‟t do, so the
consumers are not aware about it. The companies should make awareness by mentioning
ombudsman in advertisiments, mentioning in its policy documents,etc

Objective
To provide a forum for resolving disputes and complaints from the aggrieved insured public or
their legal heirs against Insurance Companies, the Government of India, in exercise of powers
conferred on it u/s 114(1) of Insurance Act, 1938 framed “Redressal of Public Grievances Rules,
1998”, which came into force w.e.f. 11th November, 1998. Features of Insurance Ombudsman:
A representation should be made to the Insurance Company and either an unsatisfactory reply

 should have been received or the representation should stand as un-replied for at least 1 month.
The total relief sought must be

 The complaint must be lodged within 1 year of the events.

 within an amount of Rs.20 lakhs. The subject matter of the complaint should not currently be
or have earlier been before a

 Court/Consumer Forum. No fees / charges are required to be paid.

How can consumer complaint to the Ombudsman:-

You can write complaint to the Ombudsman about:

 Any dispute about premium paid or

  Any partial or total repudiation of claims by an insurer

 payable in terms of the policy

 Any dispute on the legal construction of the policies as far as it relates to claims

 Delay in settlement of claims

 Non-issue of any insurance document to you after you pay your premium

You can approach the Ombudsman with complaint if:

 You have first approached your insurance company with the complaint and they have not

 resolved it OR not resolved it to your satisfaction OR not responded to it at all for 30 days.
Your complaint pertains to any policy you have taken in your capacity as an individual and

 The value of the claim including expenses claimed is not above Rs 20 lakh.

The settlement process Recommendation:

The Ombudsman will act as counsellor and mediator and Arrive at a fair recommendation based
on the facts of the dispute. If you accept this as a full and final settlement, the Ombudsman will
Inform the company which should comply with the terms in 15 days.

The Proposal on the Future Development of CRM in Insurance Industry:

The insurance companies will face the plenty of problems in the process of CRM‟s
improvement. For the long-term development of insurance‟s CRM, a systematic proposal which
refers to many factors is necessary tool for guidance, and the analysis for these factors also is
very important. For insurance‟s CRM, the proposal generally should be analyzed in four factors.
a ) Restructuring the Business Process and Organizational Structure: For insurance‟s
existing business process and organizational structure, the significant feature is management-
oriented but not customer-oriented. But for a company, if it want to success or stay in successful
stage, it should change its traditional concept and put the customer demands as the primary
needs.
Therefore, the business process and organizational structure of the company which attaches
importance to the customer demand generally is customer-oriented type, so the process and
structure of insurance companies really should be restructured.
Restructuring the Business Process: According to integrating the customer needs and
expectation into the key business process of the insurance companies, the sales, marketing,
customer support and service process will be adjusted as following:
Business process of customer supported service. Business process of sales
The restructuring of the insurance business process will shorten the distance between the
company and the customer to build the one-to-one communication relationship, and make the
cooperation of all departments more closely; it is benefit to customer satisfaction‟s improvement
and maximum customer value‟s achievement.
Adjusting the Organizational structure: The customer-oriented organizational structure
normally is flat organizational structure that is also called horizontal organizational structure.
Customer-oriented is what the key point in CRM, so the organization structure of insurance
companies could change their traditional structure into a flat structure. That is where the middle
managers provide support and service to the lower department respectively under the direct
leadership of CRM manager.
Flat organizational structure
In the process of the adjusting of organizational structure, a transition period to avoid the system
confusion and management conflict should be needed; in the transition period, the feasibility of
the new organizational structure should be verified by system debugging.
b) Improving the Technical Support System of CRM: In the implementation of CRM, a large
number of customer information should be recorded, updated, shared, treated and searched, so
CRM cannot without the helps from the technical supports like internet technology, data
warehouse, data mining and other modern technology. And the technical support system of CRM
generally has two types of system that are operational CRM and analytical CRM; the type of
insurance‟s CRM currently is operational CRM, it is an aspect of CRM that provides automated
support like the customer information and customer history to the “front office” business
processes which including marketing, sales and customer service by database. And another type
of CRM is analytical CRM, it is an analytical application that can help the company measuring,
predicting and optimizing the customer relationship. So, Analytical CRM can fill the lack of
operational CRM to some extent, it is a flexible tool for application that cannot be neglected.
Therefore, the combination of the operational CRM and the analytical CRM is the best choice to
improve the technical support system.
c) Establishing a Good CRM Team: As the performer, a good CRM team will affect CRM‟s
success, and to be a good CRM team, the personnel of the team should have the following
qualities:
· A wealth of business knowledge that includes marketing knowledge, product knowledge,
customer knowledge, negotiation skill, communication skill and so on.
· Strong insight and analytical ability for the quick reaction and analysis for the changing
customers, competitors and market factors.
· Good personal qualities that consist of self-discipline, professional ethics, friendliness,
enthusiasm and so on.
Therefore, the establishment of a good CRM team should start with the following three aspects:
Training: The key point of a good CRM team is that the personnel had to establish customer
centric business concepts and service sense, while having certain business skills. So, the
objective of training is to catch that key point, the insurance companies could open a periodic
training course containing value training, team spirit training, business knowledge entraining and
customer service training to improve the quality of the personnel in CRM team.
Incentive: According to the incentive theory, the incentive consists of positive incentive and
negative incentive. For the personnel in the CRM team, initiative and creativity are needed, so
negative incentive shouldn‟t be used, the insurance companies could use the positive incentive
which combines material incentive like money and presents with the spiritual incentive like
honour and promotion to motivate the personnel.
Evaluation: It is imperative for the insurance companies to institute a system of evaluation about
the personnel‟s qualities and abilities on the basis of the evaluation, the companies can evaluate
the personnel in depth and make the best possible use of them, while providing the basis to the
personnel‟s commendations and promotion. But, it is difficult to measure the personnel‟s
performance bydata, so the companies had better to use the qualitative analysis in the customer
feedback, personnel‟s business knowledge, work enthusiasm, sales report and other record
information to evaluate the personnel
Customer Segmentation:
Customer Segmentation involves dividing the customers into homogeneous customer segments
based on the customer characteristics and attributes which are based on the geographic,
demographic, psychographic, benefit, usage and loyalty factors.
· Geographic segmentation: The geographic factor of customer segmentation is based on the
customer‟s location. Normally, the customer location could be segmented by geographic units
such as nations, states, regions, counties, cities, cultures and climates. Through geographic
segmentation, the company could tailor the marketing strategy which contains product, service,
sales method and advertising to meet the needs of individual geographic areas, and thereby
achieve the company‟s localization.
· Demographic segmentation: This kind of segmentation differentiates customers by a variety
of factors that include age, gender, family size, income, occupation, education, social class,
ethnicity and religion. For the company, the objective of demographic segmentation is to get
more information about the potential market and prospective market, and then do good
preparation in order to ensure that the customer needs of the target group are fulfilled.
· Psychographic segmentation: The psychographic segmentation normally differentiates
customers by analyzing customers‟ behavioral patterns, life style characteristics, attitudes,
opinions, personalities and perceptions of the company. The company could analyze these
factors through psychographic segmentation to understand the psychology of the customers and
then determine how to approach customers easily.
· Benefit segmentation: Benefit segmentation is the kind of segmentation that classifies the
customers on the basis of the benefits which the customers are looking from a product.
According to the analysis of the benefit segmentation, the company could find the customer
needs and demands efficiently to maximize the benefits and profits of the products and avoid the
resource wasting.
· Usage segmentation: This segmentation is to divide the customers into some segments
according to the type of the customers using the products. The customers are usually divided into
four types that are heavy users, medium users, occasional users and non-users of the products or
services. For many products, it really is a very important variable factor.
· Loyalty segmentation: Loyalty segmentation is the segmentation that differentiates the
customers through identifying the customers‟ loyalty for the product, company or brand.
Generally, customer loyalty always is classified by three types that are very loyal, moderately
loyal and disloyal. According to the loyalty segmentation, the company could group the
customers on the basis of the same loyalty and then make sure that the products or services are
targeted at corresponding customers.
CASE STUDY ON ADOPTION ON CRM BY ICICI PRUDENTIAL:
Explore how Value Direct helped ICICI Prudential, one of the leading life insurance players in
India, to boost the number of interested clients through Mobile Marketing
ICICI Prudential was amongst the first private sector insurance companies to begin operations in
December 2000 after receiving approval from Insurance Regulatory Development Authority
(IRDA). For the past decade, ICICI Prudential Life Insurance has maintained its dominant
position (on new business retail weighted basis) amongst private life insurers in the country, with
a wide range of flexible products.
CHALLENGES
IPru spent valuable time searching for interested clients and creating time-consuming processes
to tap the right customer. IPru needed a more engaging way to solicit customer interest in
conjunction with their traditional insurance selling effort. The bigger challenge was to promote
retirement and wealth plans offered by IPru to increase the number of interested clients and
uncomplicate the picture of insurance for them. IPru wanted to target a very specific audience
defined in terms of demographics and geographies within the given quarter‟s time.

SOLUTION
Value Direct found numerous demographic variables that were more responsive and profitable
than others. We also created an additional layer of selection criteria that separated unresponsive
constituents from those that had a higher likelihood to respond. By targeting constituents more
likely to respond, the organization improved campaign returns by a very high percentage.

IPru collaborated with clients to quickly develop high priority business value through an iterative
development process.