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CHAPTER 1

INTRODUCTION

Life insurance Corporation of India was established with the nationalization of life
insurance business in1956. At the time of nationalization there were 245 private
insurance companies and societies functioning in India. From the day it was created in
1956 till the year 1999. LIC had monopoly over the life insurance in India the year 1999
saw a revolution in the Indian insurance sector, as major structural changes took place
with the ending of government monopoly and the passage of the Insurance Regulatory
and Development Authority (IRDA). The IRDA since its incorporation as a statutory
body in April 2000 has fastidiously stuck to its schedule of farming regulations and
registering the private sector insurance companies.
Grievance is a wrong or hardship suffered which is ground for a complaint. It is an
expression of dissatisfaction by a customer or product or service offered by service
provider. Grievance is the last word which a successful businessman wants to hear. The
insurance industry essentially being a service industry can exist and survive only if there
is a customer in this people centric business where the customer expectation are ever
rising grievances are bound to arise and if customer has a grievance and that grievance is
not satisfied it may lead to fall in the reputation of the insurance company and resultant
loss of customer. There, handling grievance is very important in insurance.
To redress these grievances and to lubricate the insurance machinery grievance redress
mechanism has been provided for insurance disputes. The grievance settlement
mechanism for insurance related dispute has been gathered. Grievance handling in
insurance is such a function that requires an integrated approach covering the entire life
cycle of grievance starting from reasons of grievance generation. Grievance can happen
due to any reason so have to find out and have to solve it.

STATEMENT OF PROBLEM
In many cases Grievance settlement mechanism in LIC India show signs of Identifying
the grievances and to solve it.
This study explores the problems that faced by in LIC of India.Here the primary
objective is finding out the grievances and try to solve it. Then only customers have a
belief about the LIC cooperation and then only they will be continue with the LIC
policies.
SCOPE OF STUDY
This policy document lays down various provisions systems and procedures to ensure
prompt redressal of customer grievances received through a well-defined structure in
LIC of India.
Grievances received through consumer forums courts ombudsman’s office, any judicial
forum and legal notices shall be separately handled by our legal relevant department

 Classification of complaint / Grievance, Request, Escalated request and Query.


 Avenues available to the customer to lodge the complaint.
 Process and time frame for response
 Escalation
 Complaint re opening process
 Grievance review mechanism
It aims at making an in depth study of Grievance settlement mechanism of India, both in
the public sector and private sector.

OBJECTIVES OF STUDY
1) To examine the nature and structure of grievance mechanism of LIC India.
2) To examine the trend and status of grievance reported on LIC India.
3) To examine the trend and status of grievance resolved by LIC India.

METHODOLOGY
1) This study is based on secondary data. Data required for the survey was collected
from various publications, articles, Journals, related texts and the IRDA websites.
2) The performance analysis of private sector and public sector of LIC organization
in India and the problems faced by it and the solution for that Grievances
obtained through secondary data collected from various books, journals, IRDA
website and reports.

TOOLS FOR ANALYSIS


Appropriate mathematical and statistical tool will be applied for analysis of the data and
establishing certain vital relationship among important variables relating to grievances in
life insurance Corporation of India. The data will be classified cross-tabulated, analyzed
and interpreted with the help of SPSS, MS Excel and the important tool used is TWO
WAY ANOVA.
PERIOD OF STUDY
Up to 21 days
CHAPTER 2
REVIEW OF LITERATURE

Review of literature provides a critical summary of research already done on the relevant
topic. It is conducted to generate a theoretical and scientific knowledge a particular
phenomenon. The primary purpose of literature is to gain a broad background available
related to problems in conducting research. Thus it facilitates selecting a problem and its
purpose, developing a framework and formulating a lesson plan. In brief, review of
relevant literature is an analysis and synthesis of research sources to generate a picture of
what is known about a particular situation and to expose the knowledge gaps that exist in
the situation.
This chapter presents a review of available literature relating to Grievances in life
insurance and how to solve the Grievances of the life insurance Corporation of India,
Insurance concept in the past existed as a tool to re-distributes vital resources in times of
natural calamities. But as time evolved and modified by human race from time to time as
a tool to counter the various risk faced in LIC and have to solve that problem Grievance
settlement Mechanism were used. This research tries to collect and review few important
research articles on Grievance settlement Mechanism of LIC in India. This study is
based on the facts and findings of various articles which were selected for review for the
purpose of bring out the important facts about Grievance Settlement Mechanism in LIC.

Harold D. skipper ( 2005), Addresses the major issues and concerns relating to the
liberalization of the insurance markets from several perspectives. He sets out the role
and importance of government policy in insurance and points out that the government
intervention in the insurance market is essentially but should be carefully targeted to
minimize undue interference. He also discuss the role of foreign insurers with particular
emphasis on the concerns that have historically been expressed about their roles in
national insurance markets of emerging economies and points out that such insurers
should be expected to play an important role in market evolution and development

MATHUR (2003), He Has the opinion that joint efforts need to be made by all
insurance operators to extend coverage to millions of insurable people who need
insurance and points out the need for promoting different distribution channels for
promoting different distribution channels for expanding rural insurance market. LIC has
contributed immensely to the process of economic development through its multi-
dimensional activities and services over twelve crore policies which is a record for any
life insurance company in world.

GUPTA AND CHUGANEE (2001), in their article specify the major steps to be taken
by the LIC in order to compete with the new players nationalized players will continue
to hold strong market share positions but there will enough business of new entrants to
be profitable

SEN (2006), Analyzed the Indian LIC after the privatization of the insurance market the
entry of private firms will raise both price competition and service competition. The
study concludes that there is a hint of movement towards a more competitive regime but
there is a good level of competition among the private companies to capture market
share.

S. KRISHNAMURTHY (2005), Points out that the life insurance industry has shown
extremely satisfactory results in term of premium income and new policies sold but a
huge potential still remains unexploited experience suggested that consumers still favor
insurance as a saving tool. There is a need to change the perception of Indian consumers
towards insurance it is the responsibility of the distribution channel to advise and
educate consumers.

DAVID DROR (2007), In his article and takes a deep look at the Indian micro
insurance scenario and observes that there is a vast potential in the area of micro health
insurance in India he points out that the Indian health insurance is the vicious circle of
poor products, low demand, low willingness to pay, lowering of premium and further
worsening of insurance product or service.

T.VENKATESWARA RAO (2004), He points out that a distribution channel means a


set of interdependent organizational involved in the process of making a product or
service available for use or consumption by the consumer by creating place utility and
the value of having the products where the customers wants them the current insurance
market depends heavily on the individual agency channel.

RAJNI M. SHAH (2007), He points out about “creating consumer awareness in life
insurance” has analyzed as how to harness huge untapped market potential for life
insurance to the benefit of vast rural and semi urban populace this emphasizes that
consumer awareness will provide a new frame of reference for value creation as also an
opportunity for innovation and also have emphasized on campaigns to educate rural and
semi urban masses on the need for security.

MANJIT SINGH AND ROHITH KUMAR (2008), the paper “Indian insurance
industry outlook in the post reform period” highlight that insurance penetration and
density has witnessed an increasing trend in the post reform period but has a long way to
go to even come close to the developed nations. The study also indicates huge
unexplored and untapped market in India and shows huge opportunities for insurance
companies to capture the business from competitive market. The survival of companies
will depend on their strategies and efforts to increase their penetration levels and tap the
new business position especially in rural India.

NAGARAJA RAO (2010), In his article , analyses the challenges faced by the insurers
in designing need based products in insurance for inclusive growth, and concludes that
the policies of life insurance companies are still not rural centric, catering to the specific
needs of the people

SONAL NENA (2013), in her study “Performance evaluation of life insurance


Corporation of India” has tried to analyze growth and performance of LIC. She analyzed
the major source of income of the LIC, as well as the significant heads of expenses of
LIC to measure the performance. This study has proved that LIC has been success in
terms of creating value for its policy holder.

SYED IBRAHIM (2012), He points out that the consumers Grievance Redressal system
in the Indian life insurance industry. An analysis attempts to review on consumer
protection and the awareness with reference to the grievances settlement operations of
the life insurance industry in India. The study was based on relevant secondary data
which was been collected mainly through the data bases of IRDA of India RBI, various
reports and other studies for a period of 5 years. The research based on various statistical
analyses revealed that LIC has succeeded in resolving consumer grievances when
compared to the private players were active in resolving the grievances only in
performance year ends.

DR. SUNAYNA KHURANA (2013), her article Analysis of service quality gap in
Indian life insurance industry. Says that life insurance companies in India offer similar
kinds of plans and services, but they could provide differences in terms of service
quality. In this context this research tried to find out the gap between customer
expectation and customer perception in the LIC.

SAVITA JINDAL (2014), in her study on “ Ethical issue in insurance companies. A


challenge for Indian insurance sector has attempted to find out various ethical issue of
insurance companies in India by examining a sample of 50 people from insuring public
were interviewed with insurance policies of life insurance to find out the ethical ways in
settlement of claims. The study revealed that insurance companies in India are failing in
identifying the customers’ needs and recommend products and services.

C. BALAJI (2015), In his paper, customer awareness and satisfaction of life insurance
policy holders with reference to mayiladuthurai town tries to measure awareness among
the urban and rural consumer about the insurance sector and also the various policies
involving various premium rates.
CHAPTER 3

THEORITICAL FRAME WORK

3.1 Life insurance – A Brief History

The story of insurance is probably as old as the story of mankind. The same instinct
that prompts modern businessmen today to secure themselves against loss and disaster
existed in primitive men also. They too sought to avert the evil consequences of fire and
flood loss of life and were willing to make some sort of sacrifice in order to achieve
security. Though the concept of insurance is largely development of the recent past,
particularly after industrial era – past few centuries – yet its beginnings back almost
6000years.

Life insurance in its modern form came to India from England in the year 1818. Oriental
life insurance Company started by Europeans in Calcutta was the first life insurance
company in the Indian soil. Mutual life Assurance society heralded the birth of Indian
Life Insurance Company in the year 1870 and covered Indian lives at normal rates.

The first two decades of the twentieth century saw lot of growth in insurance business.
From 44 companies with total business-in-force as Rs.22.44 crore, it to 176 companies
with total business-in-force as rs.298 crore in 1938. During the mushrooming of
insurance companies many financially unsound concerns were also floated which failed
miserably. The insurance Act 1938 was the first legislation governing not only life
insurance but also non-life insurance to protect strict state control over insurance
business.

The earliest available record of a life insurance policy is on the life of one William
Gybbons, a citizen and Salter of London, affected on 18 June 1583. The policy was
procured by Richard Martin, a citizen and alderman of London and it was underwritten
by 16 individuals. This policy is popularly believed to be the first life policy ever issued.
It can be said with certainty that it is the first known case taken to the court of law for
settlement. Life insurance in its modern form came into practice in 1762 A.D. with the
establishment of the revised form of “Tonies’ (named after Lorenzo Tonti who coined
the basic structure of life insurance and also known as the father of Modern Life
Insurance)- the society for equitable Assurance on Lives and Survivorships in London.

3.2 Life Insurance Business in India

The History of life insurance in India spreads over 138 years from the time of the
establishment of the first insurance company (1818) to the time of nationalization of
insurance business (1956). During this period, 377 life insurance companies were
established of which 323 were of Indian origin and 54 were of foreign origin. Life
insurance in its modern form came in to India from England as far back as in 1818. The
first insurance company on Indian soil, namely Oriental Life Insurance Company, was
started in Calcutta mainly by Europeans, to help the widows of their community.

The Government of India started publishing returns of insurance companies in


India since 1914 the Indian Life assurance Companies ACT, 1912, was the first statutory
measure to regulate life assurance business. The Indian insurance companies ACT 1928
was enacted to enable the Government to collect statistical information about both life
and non-life business transacted in India by Indian and foreign insurers including
provident insurance societies. With a view to protecting the interest of public insurance,
the earlier legislation was consolidated and amended by the insurance Act, 1938, with
comprehensive provisions for effective control over the activities of insurers.

The insurance Amendment Act of 1950 abolished principal Agencies. However,


there was a large number of insurance companies and the level of competition was high.
There was a large number of insurance companies and the level of competition was high.
There were also allegations of unfair trade practices from England as far back as in
1818. The first insurance company on Indian soil, namely, Oriental Life Insurance
Company, was started in Calcutta mainly by Europeans, to help the widows of their
community. It was the efforts of people like Babu Muttylal Seal, Raja Ram Mohan Roy,
prince Dwarakanadh Tagore, Ramtanu Lahiri and Rustomji cowasji that insurance
cover was extended to Indian people as well.
Objectives of LIC

 Spread life insurance widely and in particular to the rural areas and to socially
and economically backward classes with a view to reaching all insurable persons
in the country and providing them advocate financial cover against death at a
reasonable cost.
 Maximize mobilization of peoples savings by making insurance linked savings
advocately attractive.
 Bear in mind, in the investments of funds, the primary obligation to its policy
holders, whose money it holds in trust, without losing site of the interest of the
community as a whole, the funds to be deployed to the best advantage of the
investors as wells as the community as a whole, keeping in view national
priorities and obligations of attractive return.
 Conduct business with almost economy and with the full realization that the
money belong to the policy holders.
 Act as trusties of the insured public in their individual and their collective
capacities.
 Meet the various life insurance needs of the community that would arise in the
changing social and economic environment.
 Involve all people working in the corporation to the best of their capabilities in
furthering their interest of the insured public by providing efficient service with
courtesy.
 Promote amongst all agents and employees of the corporations a sense of
participation, pride and job satisfaction through discharge of their duties with
dedication towards achievements of corporate objectives.

3.3 Grievance Handling in Insurance Industry

In Good old days, Kings in monarchy of governance used to hold open Durbar court to
listen to grievance of their subjects which was marked by instant decisions. In fact they
were looked upon as dispenses of justice. These indirect informal ways of handling
complaints gave way to rules and regulations at center stage, Grievance Handling took
also a definite shape with an objective for prompt redressal of complaints by service
provided in Insurance Industry in general has been continuously updating Grievance
Handling from time to time.

Settlement of various complaints of policy holders use of information technology and


latest mobile technology have ensured qualitative and quantitative changes as far
complaints handling with insurers and regulator is concerned. However no amount of
technology can replace the personal attention to the policy holders, grievance handling.
This also requires at all levels of the organization towards customer not just front line
staff with growing volume of business and increasing penetration of insurance in our
country. IRDAI has been playing a significant role in grievance handling by insurers and
other stake holders in the industry. It is hoped that all these will evolve to “citizen’s
charter” on the part of insurers towards good governance in time to come.

A conceptual framework for integrated approach towards grievance handling in


insurance service is such a function that requires an integrated approach covering the
entire life cycle of grievance ; starting from reasons of grievance generation to
satisfactory closure of them and also recycling back the experience to various functions
to minimize the reasons of grievance generation. Grievance can happen due to any
reason. It may be due to lack of awareness at the customer level may be due to wrong
information at any stage of service to the customer or may be some genuine issue related
to service process or may be anything else. The Grievance handling system works on
when it gets generated and closed the matter when that the grievance gets closed, then
such system is badly incomplete.

That from this we can convey that the grievance lifecycle and various functions related
to insurance service and prepare a conceptual frame work that can be helpful in meeting
aspiration of the customers from insurance industry. Thus leading to minimized
grievance and an effective grievance handling.

3.4 Grievance Settlement Mechanism

Issue focus insurance is a contract of utmost good faith. All the contracting parties have
observed good faith throughout the period of contract. But most of the time there is bad
faith insurance means that an increased. Company has illegally denied or delayed paying
a valid claim doing so can have consequences for policy holder and his property.
Insurers have a duty to act in good faith towards their policy holder failure to do so can
be considered and faith insurance. The policy holder may file a law suit against the
insurance company in cases where the insurance company’s conduct is beyond
unreasonable, punitive damages may be awarded complaint redress by insurance
companies is set to get a lot speedier. In a bid to strengthen the consumer grievance
mechanism, The IRDAI has set up an automated complaint tracking system with
insurance company’s life and non-life. The IRDAI is responsible for addressing
complaint filed by policy holder.
Complaints against with the respective insurers, insurance regulations stipulate the
turnaround time (TAT) for various services that an insurance company has to render the
consumer. These are part of them. Insurance companies are also required to have an
effective grievance redress mechanism and the regulator has created the guidelines for
that tool the redress of consumer grievance is a perquisite for ensuring long term
customer loyalty and profitability for any business concern. In service companies
handling of customer complaints is all the more necessary in fact grievance redress by
companies is an effective way of self – regulation which is beneficial for not only the
consumer but also the company and the Government policy holders who have
complaints against insurers first approach the Grievance customer complaints cell of the
concerned insures. If they not receive a response from insurer within a reasonable period
of time or are dissatisfied with the response of the company, they use to approach the
grievance cell of the IRDAI.

3.4.1The Redressal Procedure

Managing grievances or complaints is one of the top priorities among all private and
public sector companies these days; in fact it is the key to the growth of insurance
business in today fast moving and competitive market. Today the regulatory bodies
concerned customer rights and fare trade. Customer centric organizations today look for
a robust complaint tracking system to ensure superior customer care support and service
to their esteemed customers inside the organization, internal employee force, complaint
redressal process IRDAI journal December 2015 ensure-handling of grievances and
policies and automation tool together are responsible for successful functioning of the
resources and months to develop. Some go for CRM tools, but such systems are rigid
enough to meet organizational needs, adherence to compliances, process flow specific
requirements and flexibility. Custom change are again time and resource consuming add
more rigidity to future change management. Also overheads and maintenance cost on
such systems increases over a period. IRDAI regulations stipulate the turnaround times
(TAT) for various services that in insurance company has to render to you the consumer.
These are part of the IRDAI protection of policy holders and interest regulations.
Insurance companies are also required to have an effective grievance redressal
mechanism and IRDAI has created the guidelines for that too. Here are the TATs for an
insurance company to deal with various types of complaints.

Mechanism LIC of India, the market leader has an excellent grievance redressal
mechanism in place since a majority of the grievances pertain to LIC in view of its huge
size as well as a humungous number of policies procured by it every year, it is only
pertinent that its grievance redressal mechanism is discussed here so as to be of benefit
to a vast majority of the policy holders and the general public. Every Monday is declared
as the Grievance redressal day in the sense between 2.30 to 4.30 pm and a customer can
simply walk in to any LIC office and meet the designated offices without any prior
appointments and present his Grievance.

3.2 The role of the Regulator

 IRDAI has to make more efforts to bring a lot of awareness among the insurance
customers as well as the general public regarding the customer’s grievance
redressal procedure now available.
 A few figures of the policy holders complaints during 2014-2015 pertaining to
few leading life insurance companies

3.3 The role of the Customers

Now the time has come for the public to take up their issues themselves, instead of
depending upon the government or the regulator. The IRDAI has done its part in setting
up the grievance redressal mechanism in place and it is for the customer to utilize them.
The customers have to utilize them. The customer has to alert and must see that. A
satisfied customer is six times more likely to repurchase a product and share his
experience with five or six other people. The insurers should have the following
maximum to all their customers in their offices.

The insurer must cultivate the habit of listening to the customers regularly this can be
done by having customer meets and special meetings with important policy holders and
opinion makers.

3.5 Why You Need To Insurance Customer Complaints

There are various reasons why you should listen to, and respond to your insurance
customers complaints; the following are some of the most important one:

3.5.1 Development

The important reason why you should listen to insurance customer complaint is very
simple. If someone is complaining to you, that means the chances are there is a problem
in your existing insurance products or insurance services that is really causing it.
Patiently listening to complaints allows you to find out what the problems issues are
with your insurance business, and how to solve them. Customers satisfied may cost
money; you may need to spend extra money on that, but you will normally regain much
more than this over time by retaining the customer who is the brand ambassador of your
insurance product. Fixing a problem once will help you keep the insurance customer
who made the insurance complaint, but fixing it permanently will help keep all
insurance customers satisfied, and may be even help to bring in some new insurance
customers.

3.5.2 Loyalty

Research shows that customers who really complain, and have a problem solved are
generally much more loyal than those who are simply happy with the insurance
business. If you can fix insurance complaint quickly, it shows not only that your
insurance complaint quickly, it shows not only that your insurance business respect the
insurance customer and wishes to provide a good reasonable service; but also that you
can be relied upon, even when things go wrong. It can provide an insurance customer
with a sense of security in your insurance business, making them much less likely to go
to your insurance competitors.

3.5.3 Lost customers

There is a choice left with the dissatisfied customers; Let them complain, and try to
solve their problems by them; or watch them go to your insurance competitors domain.
Although there are few proven figures, most experts believe that you are up to 10 times
more likely to keep a complaining insurance customer than you are who says nothing to
them. Always remember that it costs up to five times as much to win a new insurance
customer than to keep and old one, even if keeping a dissatisfied customer costs you
now, in the long run, it will almost certainly save you money. If insurance customer
complains, it gives you a chance to make them satisfied with your insurance business
again, and for this reason, you should encourage dissatisfied insurance customers to
complain. IRDAI journal December 2015 Ensure- Handling of Grievance 19

3.5.4 Employees

If a complaint is the result of a mistake by an insurance employee, a complaint will


always help you to know where problems lie and rectify it effectively. Minor insurance
problems can be fixed by reminding insurance employees of certain information or
process, major problems can be looked at over a period of time. with the aim of long
term improvements. In repeated cases of employee fault, you should consider using
verbal warnings. Front line insurance customers often face the insurance complaints
caused by other insurance employee’s mistakes, but attempting to solve all problems
revealed by complaints will keep your insurance customers happy. Matters can also be
helped if you give employees enough training and improvement to deal with insurance
complaints and problems quickly.

3.6 HOW TO HANDLE INSURANCE CUSTOMER COMPLAINTS

Handling insurance customer complaint is a big challenge. Effective handling is the


secret of success in the progress of the company. The truth is that how hard you try;
things are bound to go wrong ones in a while automatically. No matter the reason for the
complaint, the important thing is to try and please the insurance customer and send them
home knowing that, yes there was a problem and we are really worried about that, but it
is not typical about your establishment. Let them realize that you, the owner, value their
comments and their business. How you handle insurance customer complaints will
determine if the customer comes back to your office again or not. Here are some tips to
help you field your next complaints and send your insurance customer home with a big
smile.

3.6.1 LISTEN TO INSURANCE CUSTOMER

Listen to what the insurance customer has to say to you. Even if you can’t solve the
insurance problem, you still need to listen them effectively. For example, perhaps an
insurance customer is displeased because there is waiting line of complainant. Well,
there isn’t much you can you about it, except let them went.

3.6.2 EFFECTIVE BODY LANGUAGE

Effective body language is the secret of success. The way you stand in front of insurance
customer and look at an insurance customer can speak more than words. Maintain
perfect eye contact balance and don’t cross your arms over your chest anyway, if you are
feeling defensive avoid your urge to roll your eyes anyway, if you are feeling somewhat
exasperated instead, nod and smile a little, no matter how irritated you may feel. This
shows how you value their opinion and their business.

3.6.3 APOLOGIZE
Remember always that insurance customer who was so upset over the long waiting line?
Offer a pleasant apology to them “I understand that you are not happy about the weight,
sir, but we are working as fast as possible we will solve your problem at the earliest. We
really appreciate your patience and willingness to wait for us.” You demonstrate that
you completely understand insurance customer’s frustration and are working diligently
on a solution.

3.6.4 FREE BIS

If an insurance customer has a problem that could have been prevented. Like in
insurance, delay in clients settlement process, lack of proper response from insurance
man after selling the policy. and many many other such issues may comes as a
complaint in insurance. This type of problem could be anticipated well in advance and
can be solved well in advance by proper planning and management an d in fact
anticipation. Occasionally you will have an angry insurance customer who declares “I
am never coming back!” well, if that is the case there probably isn’t any free bis you can
offer to change the mind of insurance customer. Calmly assure the insurance customer
that you understand their frustration, and offer an pleasant apology out rightly and let
them know if they change their mind you would love to see them again. IRDAI journal
December 2015 ensure handling of grievances 20 by sending them of on a courts note,
there is a very good chance, ones their anger has cooled, they will come to your business
premises again and again.

3.7 THE KEY TO HANDLING CUSTOMER COMPLAINTS

Handling insurance customer complaints is an art which has to IRDAI journal December
2015 ensure handling of grievances 21 B mastered thoroughly, it may have more to do
with establishing your good reputation for excellent insurance satisfaction than all the
designer frames you can find and all the technology you can install. Even if you satisfy
99% of your insurance clients that means that two or three patients leave unsatisfied
every week from average sized practice. Can you live with 150 people in your
community talking negatively about your insurance business? I don’t think so in this
hyper- competitive insurance industry, we cannot let even one slip out the door with less
than a big stellar experience. Any reputed insurance company would say, “Our strongest
competition is our own reputation build over the year.”

3.7.1 DELIVER UNFORGETTABLE CUSTOMER SERVICE


Insurance companies must recruit many dynamic positive and go together sales people,
whom one interaction with the customer reminds in their minds most pleasant and
unforgettable for the entire lifetime. This kind of service is only possible, when HR
people in our insurance companies are themselves highly cautious and dynamic and
loyal to their company to which they belong. They must recruit such people who are an
asset for the company not a liability.

3.7.2 EMPOWER YOUR EMPLOYEES

Accept that you do have daily and recurring insurance customer challenges and create a
protocol for how to handle them immediately and effectively. Follows it even if the
insurance customer is 30 minutes late for a confirmed appointment. No one leaves
disgruntled at any cost. Empower and train your insurance complaints soon as it
arises…or even before. You want every team member to look for opportunities to be a
hero. The best way to regain lost patients is to never lose them in the first place at all.
Psychologically insurance employees must be trained so that they can face any kind of
unpleasant situation unexpectedly with easy tact and emerge winner at the end.
Insurance industry needs employees who are winner always, means who think winning
only. Positively tuned people are an asset for the insurance industry Role-playing is the
best training to prepare for worst-case scenarios and frequently cited objections. Role-
playing also corrects the false impression that most people believe they have great
insurance customer service skills and are able to handle almost any situation easily. Of
course, it is unpleasant at times to do what seems uncomfortable and let the customers
are an investment for the company in the future of your business, and that is something
you just can’t buy. You have to work very seriously for handling the customer
grievances.

3.7.3 FINDING OUT CUSTOMER EXPECTATION

Finding out what customers expect from insurance business is essential to providing
service quality. The following are present some useful methods to find out what
customers really expect from our service.

 Using complaints strategically.


 Researching what customers want in similar industries conducting key- client
studies.
 Creating customer panels.
 Tracking satisfaction with individual transactions is an asset.
 Engaging in comprehensive customer-expectation studies.
3.8 IRDAI’S Benchmarks

IRDAI has given the following benchmarks for resolving the queries and complaints of
policy holders as per the nature of the complaint in the life insurance sector.

10 days:

 Policy bond not received


 Wrong policy bond issued
 Surrender value not paid
 Product differs from what was disclosed or requested
 Malpractices or unfair business practices
 Hidden charges not explained
 Free look refund not paid

15 days:

 Maturity claim not paid


 Pension installments not paid
 Requirement in respect of death
 Claim not raised by insurer

30 days:

 Death claim not paid


 Policy holder protection guidelines,2002,IRDAI

3.9 BACKGROUND OF STUDY

The study is designed such a way that the grievance settlement mechanism in LIC of
India is examined and knows how to solve the problems in LIC. Its main aim is to
reduce the complaints from the customers.
CHAPTER 4

PERCEPTIONS OF GRIEVANCE SETTLEMENT MECHANISM


IN LIC OF INDIA
Analyses of perception on Grievance settlement Mechanism in LIC of India show signs
of identifying the Grievances in insurance industry both in the public and private sector
of insurance and to solve it. Satisfaction of the policy holder or insurer or customers are
very important to the insurance companies so they have to analysis properly at the time
and have to find out the complaints or problems that have to face by the customers. Then
only the life insurance companies can exist for long run in the insurance industry. Here
the analysis is done between the private and public companies.

That the insurance industry essentially being a service industry can exist and survive
only if there is customers so the customer satisfaction is relevant. Here through the
analysis primary objective is finding out the Grievance in LIC using proper Grievance
settlement mechanism and try to solve the grievances, Then only customers have a belief
about the LIC cooperation and then only they will be continue with the LIC policies.

This chapter analyses the perception of grievance settlement in LIC of India, especially
in LIC premium comparison between public and private companies in life insurance
industry of India.

The analysis is present in 2 parts

1. Sample profile of LIC premium in both private and LIC companies.


2. Problems or Grievances in LIC of India.
2.1 Grievance Reporting During the year
2.2 Grievance Resolving During the year
2.3 Grievance outstanding During the Year

4.1 Sample profile of LIC premium in both private and LIC companies

Profile of LIC premium in both Private and LIC companies. There is taken 23 private
insurance companies and only one public company LIC. Here Analysis will give a clear
image on the comparison and performance in the both sector. There will comparing the
premium for targeting to know their performance and grievances in both sector then
have to understand the complaints of the insurers and have to solve it. Here there is
taking 9 years data 2008 to 2017 because 20 18 data is not available. That the mainly in
heads Reporting during the year, Resolving during the year, Outstanding during the year.

4.2 Problems and measures in both private life insurance companies and the
public LIC related to Grievance settlement Mechanism

LIC insurers face multiple problems while taking the life insurance policy and
while on services it may relate to policy holders perception attitude and the
performance of both the public and private sector of LIC. To find out that which
companies or sector had more complaints in Life insurance Corporation in India
and have to solve it. Then only the Insures take policy and the trust the life
insurance companies.
Have to solve the complaints first have to know the comparison between both two
sectors in LIC of India. So by using table 4.1 the Analysis where doing with the
SPSS by using the tool to solve and know the problem is TWO WAY ANOVA.

4.2.1 Analysis on the Grievance Reported, Resolved and Outstanding with


respect to LIC and Private Life insurers.

The problems are looked in to 3 dimensions across insurer and number of years in
private and LIC in life insurance Corporation of India. Its position is Analyze
with TWO WAY ANOVA MODEL. The 9 years data of LIC and Private
insurance companies is taken for analysis. The independent variable is insurer and
year and the depended variable are GOS, RPD, RPS .So the Two Way ANOVA
tool is used to measure and to know the status of Grievances in the both sector
AND TO compare between these two sectors sector.
Two Way ANOVA is used here to the following Hypothesis;

H0: There is no variation the mean score obtained for between insurers and
years.

H1: There is variation the mean score obtained for the identified LIC problems
between insurer and years.
4.2.1.1 TWO Way ANOVA of Grievance perception by insurer and number
of years in position.

GRIEVANCES OUTSTANDING

The variation on Grievances Outstanding is analyzed with two way anova by the
categories insurers and number of years (both public and private sector and the
output is presented in table 4.2, 4.3, 4.4

Table 4.1 Insurer-Wise Estimated Marginal Mean-GOS


Dependent Variable: GOS
95% Confidence Interval
INSURER Mean Std. Error Lower Bound Upper Bound
PRIVATE 1208.444 465.015 136.117 2280.772
LIC 181.222 465.015 -891.105 1253.550

Source: Secondary Data

Table 4.2 Years-Wise Estimated Marginal Means-GOS

Dependent Variable: GOS


95% Confidence Interval
YEAR Mean Std. Error Lower Bound Upper Bound
2008-2009 508.500 986.447 -1766.250 2783.250
2009-2010 229.000 986.447 -2045.750 2503.750
2010-2011 197.500 986.447 -2077.250 2472.250
2011-2012 127.000 986.447 -2147.750 2401.750
2012-2013 612.000 986.447 -1662.750 2886.750
2013--2014 590.000 986.447 -1684.750 2864.750
2014-2015 3054.500 986.447 779.750 5329.250
2015-2016 467.500 986.447 -1807.250 2742.250
2016-2017 467.500 986.447 -1807.250 2742.250
Source: Secondary Data
Table 4.3 TWO –WAY ANOVA GOS
Dependent Variable: GOS
Source Type I Sum of Squares df Mean Square F Sig.
INSURER 13438615.222 2 6719307.611 3.453 .083
YEAR 13021470.000 8 1627683.750 .836 .597
Error 15569235.778 8 1946154.472
Total 42029321.000 18

Source: Secondary Data

The Mean variation of the Grievances among the Private life insurance companies and
LIC related to the Insurer and Year different experience is tested by Two Way ANOVA,
which shows that the Insurer-Wise variation of Mean is statistically significant in the
data that given but after working analysis in SPSS the output in GOS is not significant.

4.2.1.2 TWO WAY ANOVA of REPORTED DURING THE YEAR

The variation of Grievance approach are analyzed with Two way ANOVA by the
categories Insurer and Number of the year in position of the lic and private
insurance companies and the output is presented in table 4.5, 4.6, 4.7

Table 4.4 Insurer-Wise Estimated Marginal Means-GRP

Dependent Variable: GRIEAVANCES REPORTED DURING THE YEAR


95% Confidence Interval
INSURER Mean Std. Error Lower Bound Upper Bound
PRIVATE 139212.556 22211.057 87993.766 190431.345
LIC 52349.000 22211.057 1130.211 103567.789

Source: Secondary Data

Table 4.5 Year-Wise Estimated Marginal Means-GRP


Dependent Variable: GRIEAVANCES REPORTED DURING THE YEAR
95% Confidence Interval
YEAR Mean Std. Error Lower Bound Upper Bound
2008-2009 897.000 47116.767 -107754.459 109548.459
2009-2010 1224.500 47116.767 -107426.959 109875.959
2010-2011 4825.500 47116.767 -103825.959 113476.959
2011-2012 154806.500 47116.767 46155.041 263457.959
2012-2013 170506.000 47116.767 61854.541 279157.459
2013-2014 187310.000 47116.767 78658.541 295961.459
2014-2015 139496.000 47116.767 30844.541 248147.459
2015-2016 142538.000 47116.767 33886.541 251189.459
2016-2017 60423.500 47116.767 -48227.959 169074.959

Source: Secondary Data


Table 4.6 TWO WAY ANOVA -GRP
Dependent Variable: GRIEAVANCES REPORTED DURING THE YEAR
Source Type I Sum of Squares df Mean Square F Sig.
INSURER 199084980827.778 2 99542490413.889 22.420 .001**
YEAR 98019144649.111 8 12252393081.139 2.760 .086
Error 35519835503.111 8 4439979437.889
Total 332623960980.000 18

Source: Secondary Data


**significant at 1 per cent level of significance
The Mean variation of the Grievance among Private and LIC and different experience is
tested by Two Way ANOVA, which shows that the insurer-wise variation of the mean
score is statistically at 1 per cent level of significance (Value of F 2549.495 Df 2 with
p=0.00<0.01). As per Table 4.4,4.5,4.6 problems does not have significant difference in
years while in case of insurer the difference is significant. Therefore, it may be
conducted that the level of problem is high in private companies.

4.2.1.3 TWO WAY ANOVA OF RESOLVED DURING THE YEAR

The variation of Grievance approach are analyzed with two way ANOVA by the
categories Insurer and Number of the year in position of the LIC and the output is
presented in table 4.8, 4.9, 4.10

Table 4.7 Insurer-Wise Estimated Marginal Means-GRD


Dependent Variable: GRIEVANCES RESOLVED DURING THE YEAR
95% Confidence Interval
INSURER Mean Std. Error Lower Bound Upper Bound
PRIVATE 110201.333 21399.494 60854.011 159548.655
LIC 43390.333 21399.494 -5956.989 92737.655
Source: Secondary Data

Table 4.8 Year-Wise Estimated Marginal Means-GRD


Dependent Variable: GRIEVANCES RESOLVED DURING THE YEAR
95% Confidence Interval
YEAR Mean Std. Error Lower Bound Upper Bound
2008-2009 966.500 45395.182 -103714.978 105647.978
2009-2010 229.000 45395.182 -104452.478 104910.478
2010-2011 4898.500 45395.182 -99782.978 109579.978
2011-2012 154465.000 45395.182 49783.522 259146.478
2012-2013 170535.000 45395.182 65853.522 275216.478
2013-2014 57332.000 45395.182 -47349.478 162013.478
2014-2015 137031.500 45395.182 32350.022 241712.978
2015-2016 104937.500 45395.182 256.022 209618.978
2016-2017 60767.500 45395.182 -43913.978 165448.978

Source: Secondary Data

Table 4.9 TWO WAY ANOVA-GRD


Dependent Variable: GRIEVANCES RESOLVED DURING THE YEAR

Source Type I Sum of Squares Df Mean Square F Sig.


INSURER 126243494057.000 2 63121747028.500 15.315 .002*
YEAR 73314724676.000 8 9164340584.500 2.224 .140
Error 32971561166.000 8 4121445145.750
Total 232529779899.000 18

Source: Secondary Data


*significant at 5 per cent level of significance

The mean variation of the problems among private and LIC and different
experience is tested by Two Way ANOVA, which shows that the insurer-wise
variation of the mean score is statistically significant at 5 per cent level of
significance (Value of F 2553.14 DF 2 with p=0.00<0.05).. In the year high mean
score is 155465 in 2011-2012 and the low mean score is 226 in 2009-2010.
CHAPTER 5
SUMMARY OF FINDINGS, CONCLUSION

5.1 INTRODUCTION

Grievance Redressal Mechanism in LIC of India focuses on that to find


out the complaints or problems in Private life insurance companies and in Public life
insurance company like LIC and have to solve that complaints and problems through a
proper Grievance Settlement process. The companies or the field of LIC can grow high
and the insurer will have a good image on the LIC. LIC is a wide topic its process is also
wide so it is difficult to handle so for to handle it in easy way have to adopt a good
Grievance settlement system to find out the problems and solve and increasing the
goodwill of the LIC companies or LIC. Through this we can also find out the
comparison between the private and LIC insurance companies based on Grievance.

The present study is descriptive and analytical one that attempts to identify the
perception of Grievance settlement mechanism in LIC of India. Then have to find out
the problems and have to solve it also have to compare between the private and public
LIC companies which have more and less Grievances. Then have to know handle the
problems and solve. The grievance settlement are analyzed using statistical tools, here
the tool is used TWO WAY ANOVA.

5.2 SUMMARY OR FINDINGS

5.2.1 Perception of GRIEVANCE OUTSTANDING (GOS) during the year.

Test has been conducted to identify the perception on Grievance Settlement


Mechanism adopted by LIC to know the outstanding performance in the LIC that
to know the problems and solving it using the tool TWO WAY ANOVA. Here is
not significant because the data before analysis done in SPSS the data is
significant but after the GOS data is not significant it is above the 0.05.

5.2.2 Perception of GRIEVANCE REPORTED (GRP) during the year.

Test has been conducted to identify the perception on Grievance Settlement Mechanism
adopted to know the grievances reported in the different years in both private life
insurance companies and in LIC and by LIC using the tool TWO WAY ANOVA. It is
statistically significant by 1 per cent. Mainly in the insurer in the year it is not significant
there the output is more than 0.05 %.

5.2.3 Perception of GRIEVANCE RESOLVED (GRS) during the year.

Test has been conducted to identify the perception on Grievance Settlement Mechanism
adopted to know the grievance solved in the different years in the both private life
insurance companies and in LIC and by LIC using the tool TWO WAY ANOVA. It is
statistically significant by 5 per cent.
5.2.4 The measures have to take for solving problems based on GOS, GRP, GRS by
using Two Way ANOVA.

There will be a lot of problems and complaints in life insurance industry both in the
public and private life insurance companies so the analysis is based to find out GOS,
GRP, and GRS. Here the grievance outstanding is not significant that there is not
difference. Then the Grievance Reported is 1 per cent significant so there is slight
difference. Then the grievance resolved it is 5 per cent significant so there is completely
difference in changing data or output as at the same time or year. That there is problems
but in each one it is different that is clear through the analysis and have to solve that
problems quickly and make a perfect Grievance Settlement Mechanism in LIC of India.

CONCLUSION

Grievance Settlement Mechanism have very important role in the success of the
organization. Grievance settlement mechanism in the Life insurance companies will
help to find out the problems or complaints in LIC and solve it smoothly through that
there is good will for the LIC. The policy holders or insurers will trust the companies
when there is no problem or their problems will solved easily. From the finding above, it
is found that the Grievance is taken up to 9 years and in each one there is different
output there is higher and lower perception regarding overall output based on policies
adopted by LIC of India. So they are satisfied with Grievance Settlement Mechanism in
LIC OF India.

BIBLIOGRAPHY

1. http://www.shodhganga.inflibnet.ac.in
2. IRDAI- journal
3. www.licindia.in
4. http://ww.academia.edu
5. Annual report from IRDA hand books

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