STUDY OF CUSTOMER RETENTION IN IDBI

FEDERAL LIFE INSURANCE CORPORATION

LIMITED

A Project Report
submitted in partial fulfillment of the requirements for the award of the
degree of Bachelor of Business Administration
Banking & Insurance

by
SIDDHARTH CHAURASIA

AFFILIATED TO
GURU GOBIND SINGH INDERPRASTHA UNIVERSITY
Recognised by UGC U/S 2(F)
C-4 janakpuri, new delhi-110058
 CERTIFICATE

This is to certify that Institutional Training Report submitted by Ms.Rakesh kumar, Reg. No.

05614901813 to Maharaja Surajmal Institute, GGS inderprastha University, Dwarka in partial

fulfillment of the requirements for the degree of Bachelor of Business Administration is a

bonafide record of work carried out by her under my supervision. The contents of this report, in

full or in parts have not been submitted in any form to any other institute or university for the

award of any degree or diploma

Faculty Guide Programme Manager

Internal Examiner External Examiner

2
 DECLARATION

I, Rakesh Kumar (05614901813), a Bonafide student of the Maharaja Surajmal Institute, GGS

inderprastha University, Dwarka, hereby declare that the Institutional Training Report

submitted in partial fulfillment of the requirements of the Degree of Bachelor of Business

Administration of the GGS Inderprastha University, is my original work.

Date:

Place:

Rakesh Kumar

3
 ACKNOWLEDGEMENT

I express my sincere thanks to the Chancellor, Dr. G. Vishwanathan for providing me with
adequate infrastructure and a congenial academic environment.

I wish to express my thanks to the Vice Chancellor, Dr. V. Raju, for his patronage.

I am grateful to the Programme Manager of Maharaja Surajmal Institute, Dr. Suhasni, for
encouraging and providing me with the necessary assistance in accomplishing the project.

I am also thankful to my guides, Dr. Suhasni, Maharaja Surajmal Institute and Mrs.Shanthi
Yagyanath , IDBI Federal Life Insurance Corporation Limited, whose timely guidance and
persistent encouragement helped me in completing the project successfully and making it a
wonderful learning experience.

I convey my sincere thanks to all the teaching and non-teaching staff of the business school for
their support and co-operation during the project.
Finally I thank my parents and colleagues who have helped me in the successful completion of
the project.

(SINDHU.U)

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 CONTENTS

S.NO TITLE PAGE NO

List of Titles and Charts 2

1 Introduction 4

2 Review of Literature 8

3 Company Profile 17

4 Research Methodology 27

5 Analysis and Interpretation 29

6 Findings 51

7 Recommendations 53

8 Conclusion 55

9 Appendix 57

10 Bibliography 62

5
 LIST OF TABLES AND CHARTS

S.NO TITLE PAGE NO

1 Decision criteria for univariate analysis 30

2 Age distribution 31

3 Gender 32

4 Marital status 33

5 Education qualification 34

6 Occupation 35

7 Income 36

8 Service satisfaction 37

9 Concern salvation 38

10 Benefit satisfaction 39

11 Courteous service 40

12 Quick call 41

13 Knowledge representative 42

14 Higher benefits 43

15 Policy & procedure understanding 44

16 Easy payment mode 45

17 Long relationship 46

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18 Recommend IDBI 47

19 Friends insisted 48

20 Another policy in IDBI 49

21 Overall mean & standard deviation value 50

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1. INTRODUCTION

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IMPORTANCE OF THE STUDY

Customer satisfaction and customer retention are two of the most important factors regarding
the long term success of a company. These factors are known to be a huge influencing factor in
relation to the economic success of a company.

Customer retention is one of the most important factors of profit growth. It's so important
because it costs so much to influence customers to buy and so little to induce a repurchase. These are
the benefits of customer retention:

i. New customers cost more than keeping existing ones. Help executives make the most of
existing relationships by helping their customers make repeat purchases. Existing customers
have made an emotional commitment that required a large investment of time to earn.

ii. Company already knows how to do business with existing customer. An executive
doesn't have to invest additional resources training to do business with the existing customer.
This saves time and allows them to serve existing customers faster.

iii. Satisfied customers are already convinced of value. They have already proven they can
serve the customer, and have provided proof. Executives don't have to invest the resources
necessary to start from scratch again.

iv. Strengthening of the unique selling proposition

STATEMENT OF PROBLEM

IDBI Federal life insurance co ltd is a joint venture company between three financial
companies IDBI Bank, federal Bank and European Insurer Ageas. With effective utilization of digital
marketing tools IDBI federal life insurance are able to reach potential customers. IDBI in-house
technology for customer inquiries and query resolution are deeply entrenched in terms of processes
and call to action with respective customer.

Though such technologies for the customer retention are prevailed there are some drawbacks
in it. Premium collection of the insurance company fell down by 34% during April -December
2011.1 wanted to know the relinquishment level of IDBI federal life insurance corporation limited
and the ways that could make the customer retain.

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OBJECTIVES OF THE PROJECT

1. To identify the present situation of IDBI Federal Life Insurance

2. To identify the ways to retain the customer

SCOPE OF THE PROJECT

Successful companies are constantly working in the field of customer retention, because
without customer retention it isn't and wasn't possible to be successful in the long term. Currently
many companies are facing an aggressive battle regarding customer retention. This study will help
IDBI to know the relinquishment level and how to retain the customers.

PERIOD OF THE STUDY

The Period of Study is 6 weeks.

COLLECTION OF DATA

Two types of data are collected: Primary and secondary

data Primary data

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

Interview: Telephonic Interview

Secondary data

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

SAMPLE DESIGN

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

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LIMITATIONS OF THE STUDY

Although there were very few limitations to enlist but every research work carried out
has to face some limitations.

i. It is planned to collect 200 responses from the company .Due to some restrictions only
100 responses are collected,
ii. The survey conducted was more objective and completely based on the views of the
respondent,
iii. Survey was conducted among customers of Gurgaonbranch only so the result may not
be accurate.

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INTRODUCTION

A literature review discusses published information in a particular subject area, and

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

CUSTOMER RETENTION

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

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 High retention is equivalent to low defection. In an industry where there are a multiple
purchases over the years, organization's entire team should be very focused on retaining those
customers:

i. Delivering service that's consistent with your value proposition and brand
ii. Cross-selling, up-selling and asking for referrals from existing customers
iii. Developing programs to increase customer loyalty and decrease turnover
iv. Prioritizing retention as a major focus in your annual marketing plan,
v. Knowing the lifetime value for different segments and using that data to improve the
marketing.

Studies say it costs ten times more to generate a new customer than to maintain an
existing one. If organization has a small number of customers, losing a few could cripple
company. Even if there are a large number of customers, a small increase in the rate should
dramatically increase profits.

The maintenance of the patronage of people who have purchased a company's goods or
services once and the gaining of repeat purchases. Customer retention occurs when a customer is
loyal to a company, brand, or to a specific product or service, expressing long-term commitment
and refusing to purchase from competitors. Of critical importance to such strategies are the wider
concepts of customer service, customer relations, and relationship marketing. Companies can
build loyalty and retention through the use of a number of techniques, including database
marketing, the issue of loyalty cards, redeemable against a variety of goods or service,
preferential discounts, free gifts, special promotions, newsletters or magazines, members' clubs
or customized products in limited editions. It has been argued that customer retention is linked to
employee loyalty, since loyal employees build up long-term relationships with customers.
Customer retention has always been an important topic for the marketing. For sure, the
advantages of loyal clients are obvious. Often CRM is only implementing new systems for data
mining and client segmentation or operational system like a complaint management. But the
thing is: data mining system or client clubs are not the basis. They are the cherry of the cake
called client retention. A key principle of relationship marketing is the retention of customers
through varying means and practices to ensure repeated trade from preexisting customers by

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satisfying requirements above those of competing companies through a mutually beneficial
relationship.

This techniques is now used as a means of counter balancing new customer and
opportunities with current and existing customers as a means of maximizing profit and
counteracting the "leaky bucket theory of business" in which new customer gained in order
direct marketing oriented businesses were at the expense of or coincided with the loss of older
customers. This process of "churning" is less economically viable than retaining all or the
majority of customers using both direct and relationship management as lead generation via new
customers requires more investment.

Many companies in competing markets will redirect or allocate large amounts of resources
or attention towards customer retention as in markets with increasing competition it may cost 5
times more to attract new customers than it would to retain current customers, as direct or
"offensive" marketing requires much more extensive resources to cause defection from
competitors. However, it is suggested that because of the extensive classic marketing theories
center on means of attracting customer and creating transactions rather than maintaining them,
the majority usage of direct marketing used in the past is now gradually being used more
alongside relationship marketing as its importance becomes more recognizable. According to
Buchanan and Gilles the increased profitability associated with customer retention efforts occurs
because of several factors that occur once a relationship has been established with a customer.

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

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 vi. Customer that stay with company tend to be satisfied with the relationship and are less
likely to switch to competitors, making it difficult for competitors to enter the market
or gain market share.

IMPORTANCE OF CUSTOMER RETENTION

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

ADVANTAGES OF CUSTOMER RETENTION

POSSIBILITY OF REPEAT BUSINESS

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

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REDUCED COSTS FOR CUSTOMER ACQUISITION

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

FOSTERING GREATER INTERACTION BETWEEN BUSINESS AND

CUSTOMER

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

HAVING MORE DELIGHTED CUSTOMERS

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

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CUSTOMER RETENTION: STATISTICS

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

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

iii. The average company losses 10% of its customer each

year.(Source: http:/www.dbmarketing.com/index.html)

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

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

vi. Companies can boost profits anywhere from 25 to 125% by retaining merely5% more
existing customers. (Source: http://www.parature.com/tag/customer-service-statistics-
2012)

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

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

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

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MEASURING CUSTOMER RETENTION

Retention rate is normally calculated as the number of customers who have been lost
over a period of time, usually calculated over a quarterly or annual period. The key is to
calculate the percentage versus existing customers, and not underestimate the loss rate by
tallying new customer acquisitions into the mix. The customer retention rate refers to the number
of customer lost over a period of time. It is normally calculated by the percentage of lost
customer versus existing customers over a quarterly or annual period, without tallying new
customer acquisitions. While there are obvious benefits to keeping customers loyal and
maintaining retention rates, it can be extremely challenging for management to keep retention
rates up.

Some companies can measure retention rate using their CRM system, since any of the
vendors with solid sales modules should offer this capability. Customer service expert Lori
Bocklund recommends that companies look for this functionality when evaluating CRM
solutions, even though it is unlikely to be the differentiating factor. Companies like witness,
Performix, AIM, and Merced offer these types of tools. To measure this, some companies
combines data from the CRM system and data from other systems, such as your systems, such as
your quality monitoring system, ACD or CTI solution handling contact routing and reporting.
There are no hard and fast rules on calculating customer defection and customer retention,
according to Lowenstein. It can depend on the industries or the type of business, since
companies have long-term arrangements with customers.

However, several consulting and database management companies have succeeded in

creating them. However, the appropriate interval over which retention rate should be measured is
not always one year. Rather, it depends on the customer repurchase cycle. Car insurance and
magazine subscriptions are bought on an annual basis. Carpet tiles and hi-fis are not. If the
normal hi-fi replacement cycle is four years, then retention rate is more meaningful if it is
measured over four years instead of twelve months. Additional complexity is added when
companies a sell a range of products and services, each with different repurchase cycles.
Automobile dealers might sell cars, parts, fuel and service to a single customer. These products
have different repurchase cycles which make it very difficult for the dealer to have a whole of
customer perspective on retention. Sometimes companies are not clear about whether an

18
individual customer has defected. This is because of the location of customer related data, which
might be retained in product silos, channel silos or functional silos.

TYPE OF CUSTOMER RETENTION RATE

RAW CUSTOMER RETENTION RATE

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

SALES-ADJUSTED RETENTION RATE:

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

PROFIT-ADJUSTED RETENTION RATE:

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

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2. COMPANY PROFILE

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THE INSURANCE INDUSTRY:

The insurance sector has gone through a number of phases and changes. Insurance in
India used to be tightly regulated and monopolized by state-run insurers. Following the move
towards economic reform in the early 1990s, various plans to revamp the sector finally resulted
in the passage of the Insurance Regulatory and Development Authority (IRDA) Act of 1999.
Significantly, the insurance business was opened on two fronts. Firstly, domestic private-sector
companies were permitted to enter both life and non-life insurance business. Secondly, foreign
companies were allowed to participate, albeit with a cap on shareholding at 26%. With the
introduction of the 1999 IRDA Act, the insurance sector joined a set of other economic sectors
on the growth march.

During the 2003 financial year, life insurance premiums increased by an estimated 12.3%
in real terms to INR 650 billion (USD 14 billion) while non-life insurance premiums rose 12.2%
to INR 178 billion (USD 3.8 billion). Growth in insurance premiums has been averaging at
11.3% in real terms over the last decade. There are strong arguments in favor of sustained rapid
insurance business growth in the coming years, including India's robust economic growth
prospects and the nation's high savings rates.

COMPANY PROFILE

IDBI FEDERAL LIFE INSURANCE CO. LTD.:

IDBI Fortis Life Insurance Co. Ltd., is a joint venture between three financial companies-
Development and Commercial Bank, IDBI Bank, India's private sector Bank, Federal Bank and
European insurer Ageas (formerly Fortis).

IDBI Fortis Life Insurance Co. Ltd. was formed on March 2008. In this venture, IDBI
Bank owns 48% equity while Federal Bank and Ageas own 26% equity each. The Headquarters
is located in Mumbai, India.

IDBI Bank Ltd. continues to be, since its inception, India's premier industrial
development bank. Created in 1956 to support India's industrial backbone, IDBI Bank has since
evolved into a powerhouse of industrial and retail finance.

21
 Today, it is amongst India's foremost commercial banks, with a wide range of innovative
products and services, serving retail and corporate customers in all corners of the country from
720 branches and 1228 ATMs.

The Bank offers its customers an extensive range of diversified services including project
financing, term lending, working capital facilities, lease finance, venture capital, loan
syndication, corporate advisory services and legal and technical advisory services to its corporate
clients as well as mortgages and personal loans to its retail clients.

As part of its development activities, IDBI Bank has been instrumental in sponsoring the
development of key institutions involved in India's financial sector - such as the Securities and
Exchange Board of India (SEBI), National Stock Exchange of India Limited (NSE) and National
Securities Depository Ltd.

Federal Bank is one of India's leading private sector banks, with a dominant presence in
the state of Kerala. It has a strong network of 708 branches and 749 ATMs spread across India.
The bank provides over four million retail customers with a wide variety of financial products.
Federal Bank is one of the first large Indian banks to have an entirely automated and
interconnected branch network.

In addition to interconnected branches and ATMs, the Bank has a wide range of services
like Internet Banking, Mobile Banking, Tele Banking, and Any Where Banking, debit cards,
online bill payment and call center facilities to offer round the clock banking convenience to its
customers. The Bank has been a pioneer in providing innovative technological solutions to its
customers and the Bank has won several awards and recommendations.

Fortis is an international insurance group composed of AG Insurance, the overall market

leader in life and non-life insurance in Belgium, distributing its insurance products through the
network of BNP Paribas Fortis Bank and independent insurance brokers, and Fortis Insurance
International with subsidiaries in the UK, France, Hong Kong, Luxembourg (Non-life),
Germany, Turkey, Russia and Ukraine, and joint ventures in Luxembourg (Life), Portugal,
China, Malaysia, Thailand and India.

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VISION AND VALUES
VISION

To be the leading provider of wealth management, protection and retirement solutions

that meets the needs of our customers and adds value to their lives.

MISSION

To continually strive to enhance customer experience through innovative product

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

VALUES

Transparency: Crystal Clear communication to our partners and Stakeholders.

Value to Customers: A product and service offering in which customers perceive value.

Rock Solid and Delivery on Promise: This translates into being financially
strong, operationally robust and having clarity in claims.

Customer-friendly: Advice and support in working with customers and partners.

Profit to Stakeholders: Balance the interests of customers, partners, employees, shareholders

and the community at large.

EXCELLENCE

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

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HONESTY

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

KNOWLEDGE

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

CARING

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

CULTURE

Our "in house culture recipe" has some of the finest ingredients going into its making.
Some of the more prominent aspects of our culture are stated below:

i. Customer comes first

ii. Do it right the first time

iii. Bias for result oriented action

iv. Financial strength and discipline

v. Clarity of purpose

vi. International quality standards

vii. Inclusive Meritocracy

viii. learning opportunities

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 ix. Fun at work

x. Commitment to published value system

TECHNOLOGY

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

PRODUCTS

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

SPONSORSHIPS, AWARDS

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

25
ORGANIZATIONAL STRUCTURE

SALES ORGANIZATIONAL STRUCTURE

26
HUMAN RESOURCE ORGANIZATIONAL STRUCTURE

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

27
OPERATIONS ORGANIZATIONAL STRUCTURE

The Zonal Managers are supported by Branch Support Executives and the Operations

department is present only in the Head Office which is in MUMBAI.

28
PRODUCT PROFILE:

WEALTHSURANCE: The Wealthsurance Milestone Plan enables the policyholder to save and
build wealth to meet their financial goals. This Plan comes with a wide range of 13 investment
options and 7 insurance benefits - all packaged with a low charge structure and unmatched
flexibility.

HOME SURANCE: IDBI Federal Homesurance Protection Plan provides full insurance cover
for properties even under construction, thus ensuring that the beneficiary gets the full sanctioned
amount in case of any unfortunate event. It also has an innovative fixed period cover for those
who would aim to prepay their loans early.

BONDSURANCE: Bondsurance is designed for customers looking for guaranteed returns

which will not get affected by financial market conditions. It offers guaranteed return on
investment along with life insurance cover.

MICROSURANCE: IDBI Federal Microsurance Plan is a one of its kind insurance plan which
can be very useful for various Micro Financial Institutions and NGOs, wherein not only the
members but even the member's family gets an insurance cover.

TERMSURANCE: IDBI Federal Termsurance Protection Plan offers the unique Increasing
Cover option that automatically increases the cover every year without increasing the premium.

INCOMESURANCE: Knowing the customer helped us to combine the Endowment & Money

Back plans into a single plan. It linked the returns to the G-Sec rates, transparently declared by

the government. Also, the Guaranteed Annual Payout and other benefits upon death are tax-free

under Sec 10(10D).

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3. RESEARCH METHODOLOGY &
ANALYSIS

30
INTRODUCTION

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

METHOD OF DATA PRESENTATION

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

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

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 METHOD OF DATA EVALUATION

After the data analysis, it must be evaluate to get the decision. Here the decision rule
will be applied that is univariate measure calculated to the decision. The liker's scale is given
1-3 to each statement in the questionnaires.

Based on the value indicated in the questionnaire, the average value for each factor is
considered. The mean value lies between 1-3 which follows.

1) Agree
2) Neutral
3) Disagree

1 2 3

Further three types of degree of consideration that can be derived regarding differentiation

variables are show in the following table

Decision Criteria for Univariate Analysis

Range Decision Attribute

1<X=2.5 Low Level Relinquishment

2.5<X=3.5 Moderate Level Relinquishment

3.5<X<=5.0 High Level Relinquishment

PERSONAL INFORMATION

The research is to identify the customer retention in IDBI federal insurance Co limited in

Gurgaonbranch. Retaining the customer is based on the customer satisfaction. Age, sex, civil

status, education level, occupation, income also decide the satisfaction.

32
 AGE DISTRIBUTION

Age distribution pattern of the customer in Gurgaonbranch it's represented by the sample

100. Age distribution class was categories in to three classes.63% of customer represented the

age categories of 18-35 years. 5% of customer represented the age categories of 36-50 years.

32% of customer represented the age categories of over 50 years.

Age Distribution Frequency Percentage

18-35 Years 63 63%

36-50years 5 5%

Over 50 Years 32 32%

Total 100 100%

33
GENDER

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

Gender Frequency Percentage

Male 76 76%

Female 27 24%

Total 100 100%

34
MARITAL STATUS

Out of 100 samples, 77% samples were unmarried and 23% of samples were married.

Marital status Frequency Percentage

Unmarried 77 77%

Married 23 23%

Total 100 100%

35
EDUCATION QUALIFICATION

33% of samples were found in the category of UG degree holder. 58% of samples were found in

the category of PG degree holder. 19% of samples were found in the category of other or none.

Education Qualification Frequency Percentage

UG degree holder 33 33%

PG degree holder 58 58%

Other or none 19 19%

Total 100 100%

36
OCCUPATION

64% of samples were found in the category of professional. 10% of samples were found in the

category of clerical. 26% of samples were found in the category of unskilled workers.

Occupation Frequency Percentage

Professional 64 64%

Teacher 0 0%

Clerical 10 10%

Unskilled workers 26 26%

Total 100 100%

37
 INCOME

Income was categories in to four classes. 5% customer represents the income Rs 10000-

20000.12% customer represents the income Rs 20000-30000. 83% customer represents the

income above Rs 300000.

Income range (per month) Frequency Percentage

Rs 10000-20000 5 5%

Rs 20001-30000 12 12%

Above Rs 300000 83 83%

Total 100 100%

38
 RESEARCH INFORMATION

The data collected from 100 customers who were statement in order to evaluate. The mean and

standard deviation are calculated to evaluate the research details.

Mean = fx / f
Standard deviation = (fx2 / f)-( fx / f)2
EVALUATED RESEARCH DATA

7. In thinking about the recent experience with IDBI Federal life insurance, rate the satisfaction

with the customer service received by you?

Frequency Percentage
Agree 78 78%
Neutral 0 0%
Disagree 22 22%
Total 100 100%

X f fx xA2 fxA2
Agree 1 78 78 1 78
Neutral 2 0 0 4 0
Disagree 3 22 66 9 198
100 144 276
Mean= 1.44
Standard deviation = 0.69

39
8. The process for getting your concerns resolved is fast?

Frequency Percentage

Agree 83 83%

Neutral 0 0%

Disagree 17 17%

Total 100 100%

X f fx xA2 fxA2

Agree 1 83 83 1 83

Neutral 2 0 0 4 0

Disagree 3 17 51 9 153

100 134 236

Mean= 1.34

Standard deviation = 0.56

40
9. Please think about the features and the benefits of the insurance you took. Are you satisfied

with the insurance?

Frequency Percentage

Agree 32 32%

Neutral 45 45%

Disagree 23 23%

Total 100 100%

X f fx xA2 fxA2

Agree 1 32 32 1 32

Neutral 2 45 90 4 180

Disagree 3 23 69 9 207

100 191 419

Mean= 1.91

Standard deviation = 0.54

41
10. a. The customer service representative was very courteous

Frequency Percentage

Agree 53 53%

Neutral 17 17%

Disagree 30 30%

Total 100 100%

X f fx xA2 fxA2

Agree 1 53 53 1 53

Neutral 2 17 34 4 68

Disagree 3 30 90 9 270

100 177 391

Mean= 1.77

Standard deviation = 0.78

42
b. The customer service representative handled your call quickly

Frequency Percentage

Agree 56 56%

Neutral 5 5%

Disagree 39 39%

Total 100 100%

X f fx xA2 fxA2

Agree 1 56 56 1 56

Neutral 2 5 10 4 20

Disagree 3 39 117 9 315

100 183 391

Mean= 1.83

Standard deviation = 0.56

43
c. The customer service representative was knowledgeable

Frequency Percentage

Agree 68 68%

Neutral 12 12%

Disagree 20 20%

Total 100 100%

X f fx xA2 fxA2

Agree 1 68 68 1 68

Neutral 2 12 24 4 48

Disagree 3 20 60 9 180

100 152 296

Mean= 1.52

Standard deviation = 0.65

44
11. The policy plans of IDBI Federal Company provide highest benefits for you?

Frequency Percentage

Agree 80 80%

Neutral 15 15%

Disagree 5 5%

Total 100 100%

X f fx xA2 fxA2

Agree 1 80 80 1 80

Neutral 2 15 30 4 60

Disagree 3 5 15 9 45

100 125 185

Mean= 1.25

Standard deviation = 0.25

45
12. The insurance plans policy and procedure of IDBI insurance company are understandable

easily?

Frequency Percentage

Agree 100 100%

Neutral 0 0%

Disagree 0 0%

Total 100 100%

X f fx xA2 fxA2

Agree 1 100 100 1 100

Neutral 2 0 0 4 0

Disagree 3 0 0 9 0

100 100 100

Mean= 1

Standard deviation = 0

46
13. Is the premium payment mode of IDBI federal insurance is easy?

Frequency Percentage

Agree 100 100%

Neutral 0 0%

Disagree 0 0%

Total 100 100%

X f fx xA2 fxA2

Agree 1 100 100 1 100

Neutral 2 0 0 4 0

Disagree 3 0 0 9 0

100 100 100

Mean= 1

Standard deviation = 0

47
14. Do you like to have a long term relation with IDBI insurance company?

Frequency Percentage

Agree 34 34%

Neutral 24 24%

Disagree 42 42%

Total 100 100%

X f fx xA2 fxA2

Agree 1 34 34 1 34

Neutral 2 24 48 4 96

Disagree 3 42 126 9 378

100 208 508

Mean = 2.08

Standard deviation = 0.73

48
15. Do you recommend IDBI Insurance Company to your friends?

Frequency Percentage

Agree 43 43%

Neutral 52 52%

Disagree 31 31%

Total 100 100%

X f fx xA2 fxA2

Agree 1 43 43 1 43

Neutral 2 26 52 4 104

Disagree 3 31 93 9 279

100 188 426

Mean= 1.88

Standard deviation = 0.73

49
16. You insure in IDBI because friends insisted?

Frequency Percentage

Agree 68 68%

Neutral 10 10%

Disagree 22 22%

Total 100 100%

X f fx xA2 fxA2

Agree 1 68 68 1 68

Neutral 2 10 20 4 40

Disagree 3 22 66 9 198

100 154 306

Mean= 1.54

Standard deviation = 0.69

50
17. Would you like to have another insurance policy in IDBI in future?

Frequency Percentage

Agree 32 32%

Neutral 23 23%

Disagree 45 45%

Total 100 100%

X f fx xA2 fxA2

Agree 1 32 32 1 32

Neutral 2 23 46 4 92

Disagree 3 45 135 9 405

100 213 529

Mean = 2.13

Standard deviation = 0.75

51
 OVERALL MEANS & STANDARD DEVIATION VALUE

Statement Agree Neutral Disagree Mean Std.Dev

In thinking about the recent experience with 78 0 22 1.44 0.69
IDBI Federal life insurance, rate the
satisfaction with the customer service
received by you?
The process for getting your concerns 83 0 17 1.34 0.56
resolved is fast?
Please think about the features and the 32 45 23 1.91 0.54
benefits of the insurance you took. Are you
satisfied with the insurance
The customer service representative was very 53 17 30 1.77 0.78
courteous
The customer service representative 56 5 39 1.83 0.56
handled your call quickly
The customer service representative was 68 12 20 1.52 0.65
knowledgeable
The policy plans of IDBI Federal 80 15 5 1.25 0.25
company provide highest benefits for you?
The insurance plans policy and procedure 100 0 0 1 0
of IDBI insurance company are
understandable easily?
Is the premium payment mode of IDBI 100 0 0 1 0
federal insurance is easy?
Do you like to have a long term relation with 34 24 42 2.08 0.75
IDBI insurance company?
Do you recommend IDBI Insurance 43 26 31 1.88 0.73
company to your friends?
You insure in IDBI because friends 68 10 22 1.54 0.69
insisted?
Would you like to have another insure 32 23 45 2.13 0.75
policy in IDBI in future?

No of Response Mean Std deviation

100 20.69 6.95

The above table shows that IDBI federal insurance is having a high level of customer

relinquishment.

52
4. FINDINGS & RECOMMENDATIONS

53
CUSTOMER RELINQUISHMENT

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

WAYS TO RETAIN THE CUSTOMER

The IDBI federal insurance company in Gurgaonbranch has to take some action to have
customers for longtime.

i. Free some amount of premium on continuous purchase,

ii. Give some gifts which must satisfy the needs of the customers,
iii. Establish membership cards and membership programs
iv. Frequent buyer programs which permit customers to build up fair play
v. Databases that keep track of customer's purchases, preferences, complements and
complaints, which are used to carry out loyalty building services and dialogs, vi.
Integrated marketing programs where the advertising, direct communications,
customer service, database marketing and sales programs are all orchestrated together
and designed to build loyalty.

54
RECOMMENDATIONS

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

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

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

IDBI have to increase their promotional activities in such a way that even unskilled persons

understand the importance of their Insurance add value to their customer.

55
CONCLUSIONS
The data were collected from the customer's response of the IDBI Federal Life Insurance
Corporation Limited Gurgaonbranch. Based on the percentage of the customers 100 sample size
was collected. The age, gender, marital statuses, educational qualification, occupation, monthly
income, were analyzed as personal information in the questionnaire. According to the collected
personal information, most of the sample customers were young age, single, educated, higher
income customers who got insurance. According to the research the IDBI Federal Life Insurance
Corporation Limited Gurgaonhave high customer relinquishment because most of the customers
did not insure out of their own interest. Parents, Friends who are working or doing their project
or internship in IDBI Federal Life Insurance wanted them to have a policy. This is the reason
why customers move out of IDBI Federal.

56
QUESTIONNAIRE
Good morning is this Mr./Ms ...............

I am Deepesh from IDBI federal one of the leading wealthsurance solution provider in India.

Do you have a moment to talk?

I work extensively in the area of proving future financial planning solution to people. My
expertise includes planning for your family's financial security, your children's education,
marriage or your personal retirement.

The reason why I called you today is to get your idea and feedback about IDBI federal can I
continue?

PART A: PERSONAL DETAILS

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

2. Gender
a) Male
b) Female

3. Marital status
a) Single
b) Married

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

57
5. Occupation
a) Professional
b) Teacher
c) Clerical
d) Unskilled workers

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

PART B: RESEARCH DETAILS

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

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

1 2 3

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

1 2 3

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

1 2 3

58
10. Customer service Representative
Pertain to the customer service representative you spoke with most recently please indicate
whether you agree or disagree or none to the following statements

1 2 3
The customer service
Representative was O O O
very courteous

The customer service

representative handled O O O
your call quickly

The customer service O

representative was
knowledge

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

1 2 3

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

1 2 3

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

1 2 3

59
14. Do you like work or held the relationship between you and IDBI insurance company at lonj
time?

1 2 3

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

1 2 3

16. You insure in IDBI because friends insisted?

1 2 3

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

1 2 3

Thanks a lot for your response

Have a nice day

60
 BIBLIOGRAPHY
Books

1. Research Method for Business Students-Pearson Education-Mark Saunders, Philip Lewis,

and Adrian Thorn hill.

2. Questioner design-Ian Brace

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

4. Questionnaire Design by A.N. Oppenheim

5. Analysis of Questionnaire Data with R by Bruno Falissard

6. Kothari C.R. (1990) Research Methodology: Method and Techniques, WishvaParkashan,

New Delhi. PP115-117

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

Websites

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

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

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

4. Student Insurance: www.ingletravel.com

5. Vehicle Insurance OffersApnaPaisa.com/Vehicle-Insurance

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