The Persistency in Life Insurance Industry at MeyLife Srinagar by Ahmad Mustafa

MetLife India Insurance Co. Pvt. Ltd.
1
Factors Responsible For Lapsed Policies
LOVELY PROFESSIONAL UNIVERSITY
DEPARTMENT OF MANAGEMENT
Report on Summer Training
“The Persistency In Life Insurance Industry
With Special Thrust On Lapses And Loopholes”
Submitted to
MetLife India Insurance Co. Pvt. Ltd.
And
Lovely Professional University (LPU)
In partial fulfillment of the Requirements for the award of Degree of
Master of Business Administration (MBA)
Submitted by:
Name: Ahmad Mustafa
Reg. No. 10811688
DEPARTMENT OF MANAGEMENT (2009)
AHMAD’s
MetLife India Insurance Co. Pvt. Ltd. 2
ACKNOWLE DGEM ENT
I would like to express my sincere gratitude to Mr. Irfan Ali Zargar

(Area Sales Manager) for providing me wonderful opportunity to do a project
in an esteemed organization.
I am also highly indebted to Mr. Ifthikar Bashir (Operations Manager)

and Mr. Shabir Ahmad (Sales Manager Banca) of MetLife for providing me
proper direction, for sparing the valuable time and rendering all possible
guidance, when ever needed.
Special thanks are owed; in particular to every member of MetLife

(Sgr. Kashmir) those constitute Ms.Gousia, Ms. Misbah, Mr. Kulwant, and
Ms. Gazala.
Lastly I express my thanks to my family members particularly my

ABBA and AMMI for extending their whole hearted cooperation and support
and without whose help this project would have been incomplete. All the
entries are done on market survey bases and the suggestions and
recommendations are the result of hard work over the entire one and a half
months period.
AH MAD MUSTAFA
AHMAD’s
Contents
Executive Summary ................................................................................................................................. 4
Chapter 1................................................................................................................................................. 6
Introduction ............................................................................................................................................ 6
History of Insurance ............................................................................................................................ 7
History of insurance sector in India .................................................................................................. 11
Literature Review .............................................................................................................................. 14
Chapter 2............................................................................................................................................... 16
Introduction To MetLife India Insurance Pvt. Co. Ltd. ...................................................................... 16
Benefits of MIVRA ............................................................................................................................. 21
PRODUCTS OF MetLife ................................................................................................................. 22
BANC ASSURANCE ....................................................................................................................... 23
Financial Status of MetLife................................................................................................................ 28
Chapter 3............................................................................................................................................... 30
OBJECTIVES AND RESEARCH METHODOLOGY ...................................................................................... 30
Objectives Of Study ........................................................................................................................... 31
Research Methodology ..................................................................................................................... 31
Chapter 4. ............................................................................................................................................. 34
Data presentation and analysis......................................................................................................... 34
Chapter 5- ............................................................................................................................................. 53
Summary ........................................................................................................................................... 54
Conclusion ......................................................................................................................................... 55
Recomm endation s ....................................................................................................................... 56
Annexure ............................................................................................................................................... 57
GLOSSARY ........................................................................................................................................ 58
Bibliography .......................................................................................................................................... 64
AHMAD’s
Executive Summary
MetLife India Insurance Co. Pvt. Ltd. Is one of the largest, strongest and
most respected financial organizations in USA. It was incorporated in India
on April 11, 2001 as a joint venture between MetLife International Holdings
Inc., The Jammu & Kashmir Bank, M. Pallonji and Co. Pvt. Ltd. And other
private industries. The mission of the company is to provide 5 million
customers in India world class solutions for financial security and in the
process add significant value to its shareholders, associates and society by
2010.
Since while probing that whether the management is in dilemma or not, I

came to know that issue of lapsation of policies was striking the minds of
management. I took that issue as my problem and designed my research
questions. Since the time period for my summer training was allowing me to
go for an Exploratory Research, so did me. The s tudy was conducted in
Kashmir valley as the MetLife office is at Srinagar Kashmir. Since my
project was more based on s urvey rather than simply interviewing the
MetLife customers, so I was given the task of visiting different branches of
J&K Bank at Srinagar City and discussing the lapsed cases with the
concerned Insurance Managers and C SO’s (C hannel Sales Officer). Getting
the case details from the bank and then discussing with the Operations
section of MetLife. My study also reflects the relationship of CSO’s with
operations department. My target was to reinstate the lapsed policies. Lastly
50 MetLife customers were contacted at Head Office and there feedback
towards company was recorded, analyzed and interpreted as well.
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The major findings of the study are:
MetLife has been successful in building confidence and hope for

better future in the customers.
MetLife ought to provide proper guidance regarding policy
matters to its customers as well as its CSO’s.
Better services in terms of timely delivery of renewal notices,
premium receipts should be provided.
MetLife’s major causes for lapses of policies were B ank
Employees, Delay in operations process and C SO’s as well as its
customers up to certain extent.
Need for online system was recognized by most of the
customers.
Operations department was not cooperative at all towards its
CSO’s
Bank employees ought to make accountable and responsible.
The due date of premium ought to be maintained on 3 0 t h of
/every/ month.
MetLife is exerting every effort to gain market share but due to huge no. of
lapsed cases the retention part is still lacking. It is very much driven towards
the acquisition of new customers as compare to retain the existing ones.
Delivering quality product should be the first preference of an organization
towards its customers as quality service is the basic element of today’s era
which frames the firm’s quantitative advantage. Improvement in quality in
terms of simplified procedures, personal follow up of customers, product
effectiveness, its flexibility and simplicity should be provided. Relationship
marketing should be preferred as retention of customers is MUST.
Expectations of customers should be satisfied to the maximum level so that
both the parties achieve their end. Thus I can say that by overcoming such
loopholes there is very much space for MetLife to grow to its fullest.
AHMAD’s
Chapter 1.
Introduction
AHMAD’s
History of Insurance
Everyone knows what life insurance or property insurance is and usuall y

knows something about how it works but not everyone knows the history and
reasons for and behind insurance in general. In the most basic sense,
insurance is the compensating of a person or business for a loss. There are
many types of insurance to cover any situation including, auto insurance,
health insurance, dental ins urance, home insurance, personal insurance and
even pet insurance. A type of Property Insurance first became popular about
3000 BC in China. Chinese merchants, as well as their investors, wanted to
ensure that they would see a profit from their goods that they shipped
overseas. In the event that a ship was lost at sea or pirated, an insuring
partner would reimburse the owners of the ship and goods. To pay for the
loss the merchant would be sold into slavery to the insurer until the debt was
repaid. This was a mutually beneficial arrangement since a merchant could
not afford to pay for the lost goods or even to buy a ship unless someone
invested. The merchant could become very rich and even own a fleet of ships
if he was successful. Of course property insurance wasn't just available in
China. In Babylon merchants and investors devised a system of contracts in
which the supplier of money for a trade venture agreed to cancel the loan if
the trader was robbed of his goods. The trader who borrowed the money paid
an extra amount for this protection in addition to the usual interest. As for
the lender, collecting these premiums from many traders made it possible for
him to absorb the losses of the few. This arrangement proved to be more
appealing and sensible than the earlier one. Later this series of contracts was
extended to include provisions for a family's home and even covered murder,
the start of life insurance.
Of course news of a good idea spread fast. Soon the Phoenicians and to the
Greeks, Hindus and Romans also had similar concepts in place. Each culture
had its own interesting twist on the laws. For example the Roman's had a
"jettison" law which stated that if a ship's crew had to lighten the ship by
throwing things overboard then the loss would be split between the merchant
and the insurer. In f act, this law still exists today as part of our own laws for
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protection against losses at sea and the very word " insurance" is derived from
the Latin word for " security."
Other forms of insurance terminology are also derived from ancient practices
of Mediterranean commerce. The origin of the word "underwriter," for
example, is Italian, from an old s ystem of signing contracts on marine
insurance. Those businessmen who had agreed to share in the profit or loss
on a certain venture signed their names underneath the contract, writing at
the same time the amount of ris k assumed by each. It is possible that " policy"
is also of Italian origin - derived from "promise" - although other sources
have been claimed for this word. Things changed dramatically in the 17th
century. In 1666 the Great Fire of London finally and forcibly demonstrated
the need for fire insurance. The primitive fire-fighting methods of the day
were virtually helpless against the hungry flames that roared unchecked
through narrow streets reducing timbered dwellings to ashes. The Great Fire
of London burned f or four days and nights. It razed 436 acres, devouring
13,200 houses, 89 churches (including Saint Paul's Cathedral), the Custom
House, the Royal Exchange and dozens of other public buildings. Only six
people perished in the flames, but hundreds died from shock and exposure.
Ins urance protection as we know it today can be traced to the aftermath of

that tragedy and a man call Nicholas Barbon. Profoundly shaken by the Great
Fire, Barbon promptly opened an office "to insure buildings. " This venture
was apparently successful, because in 1680 he founded a partnership and
established England's first fire insurance company, The Fire Office, to insure
brick and frame houses. The first mutual fire insurance company was
established in 1696 with the cumbers ome name of "Contributor ship for
Insuring Houses, Chambers, or Rooms from Loss by Fire by Amicable
Contributions" . This company was highly successful, eventually being
absorbed by the Commercial Union Ass urance Company, Ltd., of London in
1905. In 1704 the Lombard House inaugurated fire insurance for household
and business goods, and in 1762 the first mutual life insurance company was
formed, The Equitable of London. The earliest authenticated insurance
contract (i.e. That which displays the characteristics of insurance in the sense
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of a transfer of risk of loss due to a fortuitous uncertain event in lieu of

payment of consideration / premium), is a marine insurance contract on a ship
“The Santa Clara” dated 1347 in Genoa. The policy is in the Italian language
and appears in the form a maritime loan to avoid the canon (church)
prohibition against usury.
The earliest insurance contracts did not appear in the form of a modern
insurance contract, but rather was drafted in the form of either a fictional
sale or loan, until the insurance contract proper was recognized and accepted.
The earliest insurers were merchants underwriting risks for fellow merchants,
on a part time basis. Until the 1800-1900’s premiums were not determined by
statistics kept etc. as in the modern sense, but was often arrived at as a result
of haggling. The contract of insurance was not created as a result of judicial
or legislative innovation, but by the merchants themselves as a result of
commercial expediency and need (Necessity being the mother of invention).
It is evident from the implementation of the earliest legis lative measures

enacted that there was a distinct divergence between the legal position and
what occurred in practice. Very few reported cases exist, or legal principles
were established by the judiciary on the Continent, until Lord Mansfield C.J.
took office in the Highest Court in England. During his tenure in office a
large number of cases and principles were established by the eminent judge,
many of which today exist unaltered (examples of which would be that
insurances contracts are contracts of good faith, the duty of disclosure, the
effect of misrepresentation and non-disclosure on the insurance contract, the
effect of fraud on the insurance contract, warranties, etc, to name a few).
Due to the fact that insurers were in fact fellow merchants who underwrote
risks on a part time basis, with no accurate data or statistics or experience to
determine premiums , such “insurers” were clearly in an unequal or weaker
bargaining position than the insured’s at the time. For this reason a large
number of decisions handed down, and principles enunciated were to a large
extent for the protection of the insurer. However despite the establishment of
corporate ins urers and the advancements made in the determination of risk,
statistics, data sharing and collection, experience, and expertise in
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underwriting risks, many of the early principles have not been adapted to suit
modern times or take into account insurer’s greater bargaining power. This is
particularly evident in the instance of the duty of disclosure where Lord
Mansfield CJ in the seminal case of Carter V Boehm explained the duty of
disclosure on the part of the Insured as being a duty to disclose facts which
were within the own peculiar knowledge of the Insured, and which could not
have been reasonably discovered by the insurer by reasonable inquiry or facts
which were common knowledge to both the parties to the insurance contract.
Those policy wordings have to a large extent, remained unaltered and follow
the example of the Lloyds policy wordings which had been created more than
200 years ago. This is particularly evident in the field of marine insurance.
Personal lines insurance policy wordings however have been greatly
improved and simplified in recent times.
Despite insurance being a “contract”, the general principles in contract law

are not applied, or followed in the insurance context. This is particularly
evident when one has regard to the principles relating to misrepresentation,
non-disclosure, breach of contract, and the remedies available to the parties.
The clearest example of this would be that the remedies available to a party
in the law of contract would extend to damages, whereas in the case of the
insurance contract the parties would not have the remedy of damages
available to them.
Very often one finds that sight is lost of the above when dealing with the
insurance contract, and more often than not, a large number of parties who
are exposed/ involved in dealings/interpreting the insurance contract do not
take account of the remarkable background of this contract.
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History of insurance sector in India
The Indian Life Insurance Sector has been witnessing considerable prosperity
in many fronts after its opening to private sector in 1999. Foreign
investments of Rs.8.7 billion have poured into the Indian market and 21
private companies have been granted licenses. India has a favorable market,
which is growing fast. There are currently 14 life including LIC and 14 non-
life insurers companies. The compound growth rate of new business of
individual life insurance premium income rose to 18 percent during 200-05 as
compared to average of 14.5 percent during pre privatization period from
1957-1999. The business in force of individual life insurance premium has
grown at a compound annual growth rate of 22.6 as compared to 14.2 percent
before privatization. During the same period number of policies issued also
has grown to 10.07 percent from 6 percent. Management expenditure to
premium has come down to 17.3 percent in 2004 from 23.24 percent in
1991.At the present compound growth rate, it is estimated that premium from
individuals may go up to Rs.357000 crores by 2020 from Rs.47303 crores in
2006. During the same period the group insurance premium may rose up to
Rs.160000 Crores from 100000 Crores. Insurance Regulatory and
Development Authority (IRDA) has cleared 386 new insurance products
between 2001 and 2005. The contribution of life fund at market price has
gone up from 10.58 percent of GDP in 2002-03 to 13.8 percent in 2004-
05.The Life insurance penetration was doubled from 1. 41 in 1999 to
2.67.However it stands lowest when compared to world average of 4.53,
Asian average of 5.18, South African average of 14.38 and North American
average of 4.12. Similarly though the density of Life Insurance went up from
11.7 to 15.7 during the same period, it stood lowest when compared to world
average of 291.5,As ian average , North American average of 1617.2, South
African average of 545.5 . Thus there is a lot of potential for insurance
consumption in India when compared the world average. Among many other
factors which are coming in the way of consumption of life insurance policies
discontinuation of policies (here after called as lapsation) in the first year of
their sale is considered as virus for the growth of the sector. Perhaps the
most disturbing feature of Indian life insurance business is the high
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proportion of lapses. If we take into consideration all lapses including paid-

ups and surrenders as wastages, the proportion will be substantially higher.
The insurance sector in India has come a full circle from being an open
competitive market to nationalization and back to a liberalized market again.
Tracing the developments in the Indian insurance sector reveals the 360-
degree turn witnessed over a period of almost 190 years. The busines s of life
insurance in India in its existing form started in India in the year 1818 with
the establishment of the Oriental Life Insurance Company in Calcutta.
Some of the important milestones in the life insurance business in India are:
1912 - The Indian Life Assurance Companies Act enacted as the first
statute to regulate the life insurance business.
1928 - The Indian Ins urance Companies Act enacted to enable the
government to collect statistical information about both life and non-
life insurance businesses.
1938 - Earlier legislation consolidated and amended to by the
Ins urance Act with the objective of protecting the interests of the
insuring public.
1956 - 245 Indian and foreign insurers and provident societies taken
over by the central government and nationalized. LIC formed by an
Act of Parliament, viz. LIC Act, 1956, with a capital contribution of
Rs. 5 crore from the Government of India.
The General insurance business in India, on the other hand, can trace
its roots to the Triton Insurance Company Ltd., the first general
insurance company established in the year 1850 in Calcutta by the
British.
AHMAD’s
Some of the important milestones in the general insurance business in India are:
1907 - The Indian Mercantile Insurance Ltd. set up, the firs t company
to transact all classes of general insurance business.
1957 - General Insurance Council, a wing of the Insurance Association

of India, frames a code of conduct for ensuring fair conduct and sound
business practices.
1968 - The Insurance Act amended to regulate investments and set
minimum solvency margins and the Tariff Advisory Committee set up.
1972 - The General Insurance Business (Nationalization) Act, 1972
nationalized the general insurance business in India with effect from
1st January 1973.
107 insurers amalgamated and grouped into four companies viz. the
National Insurance Company Ltd., the New India Assurance Company
Ltd., the Oriental Insurance Company Ltd. and the United India
Ins urance Company Ltd. GIC incorporated as a company.
AHMAD’s
Literature Review
1. M. ShriNivas Osmania University Hyderabad, 2008
This study was a modest attempt to analyze the causes for lapsation after
privatization on the basis of the experiences of the functionaries like branch
managers, development officers, Agency managers and insurance agents
(CSO’s) who are the core marketing staff for MetLife India Ins. Co. Pvt. Ltd.
After privatization significant progress has taken place in Indian insurance
sector especially in life insurance business. However still lot of potential for
life insurance consumption is available in India as the India's Life Insurance
penetration and density is low when compared to Asian average or world
average. In spite of rapid progress the sector is suffering with high rate of
lapsation of policies. This study reveals that forced selling of policies
without caring for matching of MetLife products with requirements of the
policy holders plays a vital role in lapsation of policies in the first year of
policy life. This is happening due to the fact that beneficiaries are unaware
about the insurance products and their comparative merits and limitations. In
addition the services after sale of policies are not as per the requirements of
the policy holders. Hence there is a need to organize special training camps
to agents and awareness camps to beneficiaries periodically. Attention has to
be paid on not to yield for forced selling, target oriented last movement
selling without caring for matching of insurance products with that of the
requirements of policy holder.
2. Misbah Showkat, Student of K.U., J&K, 2008
In her study Misbah has clarified that For the purpose of identifying prime
causes for lapsation, the perceptions of the core functionaries in the
marketing network of MetLife are ascertained by canvassing questionnaire.
They include Branch managers, Area Managers, Sales Managers,
Development Officers and Agents. For the purpose stratified random
sampling is applied in selecting sample of Branch managers (B Ms),
Development Officers (Dos) and Banca Agents. The study is confined to the
city of Srinagar. The findings include awareness levels of the customer
(about personal risks, insurance and insurance product knowledge), product
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mismatch (lack of need based selling/ forced selling/ wrong selling),

incompetent services (by agent and MetLife), financial problems of
customers (due to insufficient income, inflation, lack of financial planning),
Competition (with other financial institutions and other investments with
higher returns ).
3. Irfan Ali Zargar, student of Kashmir University, J&K, 2007
In his study Irfan Ali has listed that purchase of insurance more than
affordability, purchase of wrong type policies, purchase of expensive policies
etc are some of the causes for lapsation. He has included the Srinagar city as
epicenter, since Srinagar is the best site of Kashmir valley for successful
busines s. Presently he is the Area manager of Sales Department; this is the
result of his sincere efforts towards the mission of organization. The
conclusion and recommendations were very helpful to the management. He
has reinstated almost 100 (one hundred) lapsed policies.
4. IRDA journal Aug., 2008:
The focus of this issue of journal is on “LAPSATION OF LIFE INSUR ANCE

BUSINESS”. It starts with an article discussing inter alia the vulnerabilities
that insurers are exposed to account of early lapsation. In the next article, a
team of life insurance domain consultants project ‘persistency’ of business
as the fifth ‘p’, which is as important as the other four ‘p’s of Marketing.
Another article draws light about the important role that the distributor
[Agency personnel or CSO] plays in ensuring that life insurance contracts
don’t die an immature death. One significant adverse feature of high
lapsation in life insurance is the financial crisis that it brings about, both for
the insurer as well as the insured. This journal also focuses on the remedial
measures adopted by life insurers. Although in an insurance contract, the
insurer promises to pay the assured sum on the happening of the event,
sometimes the claims are not paid on account of various reasons, this gives
birth to the problem of “REPUDATION OF CLAIM S”.
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Chapter 2.
Introduction to MetLife India Insurance Pvt. Co. Ltd.
AHMAD’s
The spirit of MetLife’s commitment………..
VISION
Build financial freedom for all through leadership in providing professional

financial advice and building long term relationships through innovative
protection, accumulation and retirement products, robust underwriting
processes and creating a world-class customer service experience for our
customers.
OUR MISSION
By 2010, provide 5 million customers in India world-class solutions for

financial security and in the proces s add significant value to our
shareholders, associates and society.
OUR CORE VALUES
We lead through innovation to offer world class and competitive

products to our customers.
We build long term relationships with our customers by creating a

world class service experience through operational excellence and the
innovative use of technology.
We create a customer centered and result focused division that inspires

and has the buy in of all our associates and has their buy-in.
We are committed to creating a high performance organization by

creating an environment that allows each one of our associates to
perform at their peak. As a result we will also be recognized as an
employer of choice. We are committed to partnering with our internal
and external customers for mutual success.
We work with integrity, fairness and financial prudence in all our
dealings keeping the interest of our shareholders, customers and
employees paramount. ………….Partnering for excellence
AHMAD’s
MetLife proudly inherits its parent company's over- 136 year-o l d r e p u t a t i o n

of helping build financial freedom for everyone.
Ranked 43 on the Fortune 500 list (Dec. 31, 2007). MetLife insurances
(MetLife) is one of the largest, strongest and most respected financial
organizations. MetLife through its' affiliates is the number one life insurer in
the U.S with approx. @3.4trillion of life insurance in force (as of Dec. 2007)
and has been delivering reliable, high quality service to its customers since
1868.
MetLife is a leader in group benefits that serve over 90 of the top 100
FORTUNE 500® companies, and providing benefits to 70 million employees
and family members through its spons ors in the U.S. The MetLife companies
are also ranked #1 in group life and #1 in commercial dental in the U.S.
Headquartered in New York. MetLife through its affiliates, subsidiaries and
representative offices, operates in 15 countries throughout the America,
Europe and Asia. MetLife's institutional clients have approx. 39,800
employees in the USA, and more than 55,300 employees worldwide. MetLife
has assets under management worth $521.3 billion (third quarter 2008).
(FORTUNE 500® is a registered trademark of FOURT UNE®

Magazine, a division of Time, Inc)
AHMAD’s
MetLife insurance Company private L imited was incorporated in India on

April 11, 2001 as a joint venture between MetLife international Holdings
Inc., The Jammu and Kashmir Bank, M. Pallonji and Co. Private Limited and
other private investors. MetLife has-developed and distributes a range of life
insurance in India.
MetLife is headquartered in Bangalore with officers and presence in major

Indian cities, and an additional 1000 outreach points through its channel
partners. Through our highly professional agency system, we are dedicated to
helping Indian consumers plan for their financial security through customized
solutions. MetLife is driven by the principles of uncompromising integrity
and the highest level of professionalism. Its mission is to work with utmost
integrity, fairness and financial prudence in all its dealings.
MetLife benefits from its parent company's global presence in the field of
insurance, track record of establishing successful insurance operations in
emerging markets and the unique strengths of its other Indian promoters.
Drawing from these experiences, MetLife will be able to address the needs of
the Indian customer.
MetLife aspires to build on MetLife history of meeting policy holder and

contract obligations and the, ability to withstand the impact of adverse
economic factors. The MetLife brand, known for empowering people to feel
protected, guided and hopeful about their lives, will do the same for its
Indian customers. In the past two years, MetLife has made significant
contributions to the growth of MetLife international. Since selling its firs t
policy in January 2002, MetLife has experienced strong growth from its
agency force, which increased 45% during 2003 alone. The company
presently has more than 240, 00 policies in place and has recently entered the
institutional market with a group life product. While group insurance in India
is not currently a large market, the segment is forecasted to grow rapidly in
the next two-to-three years. By focusing on this untapped market, MetLife
can meet the needs of large corporations, helping them establish benefit
programs that help them attract and retain top talent. However, it is pertinent
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to mention here that India's Banc assurance and Corporate Agency has also
played a significant role in contributing to this success. The goal is for
MetLife to contribute significantly to the MetLife mis sion of reaching 100
million customers by 2010. To help reach that goal, MetLife plan on
launching innovative products in the near future, this will act as a major
differentiator among competitors. In additions, with the launch of the new
MetLife television commercials, which is a first for our India operation, this
will add greatly to MetLife's global brand recognition. The combination of
this brand and the continued outs tanding efforts will provide the fuel to drive
MetLife further up the road of success.
MetLife delivers value and world-class service to customers through its

financial advisors and corporate sales representatives. The mission of
MetLife Insurance is to build financial freedom for all. What is financial
freedom? It is all about securing one's future. It is about approaching life’s
major milestones without any worries. True financial freedom arises from
identif ying your financial capabilities, setting realistic goals based on your
dreams and aspirations and achieving them through a comprehensive plan.
Most importantly, while you set out to draw up financial plans for your life-
you need to unders tand that it isn't a one-time plan. The planning that goes
into attaining your financial freedom should be dynamic, since life itself is
dynamic. What's good for you today might not be next year. During the
course of your life you need to achieve your aspirations (life owning of
house), meet certain financial obligations (life educating your children or-
getting them married), ride over unforeseen contingencies and plan a
financially independent retirement phase. The Met Advice Financial Planning
could be the first step in your planning exercise. It attempts to give you on
overview of the various investment options available in the market today.
In India MetLife has presence in 192 branch offices and 440 agency
units as of December 2008.
Also its presence is in over 680 locations with access to 1892
branches of banc assurance partners.
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AFYP of 1153.6 crore for period January 2008 to Dec. 2008[a growth
of 80% over 2007].
It has sold 2, 94,400 individual policies during Jan. 2008 to Dec. 2008
[a growth of 155% of the policies last year].
A Banc Assurance and business partnership {BAB P} has done a
busines s of Rs 641.2 Crores for the period of Jan. 2008 to Dec. 2008.
[it is 195% of the business done for last year same period].
Since MetLife was founded in 2001with its headquarters in Bangalore India

but its operations started in financial year 2001-02. Mr. Rajesh Relan is
Managing Director of MetLife and the no. of Employees is 7688 (up to 6 t h
March 2009). The total no. of advisors was 56,072 and the 5 members of
Bancassurance Tie-ups are J&K BANK, AXIS BANK, DHANALAKSHMI
BANK, KARNATAKA BANK AND BARCLAYS. There are almost twenty
products of life policies of MetLife in the market.
Recent happenings: July 09, 2008
MetLife Ties-up with Siemens Enterprise Communications to launch MIVR A-

'MetLife Integrated Voice Response Application’ an Advanced Telephony
System that combines the cutting edge attributes of technology with the
human resources. With this, MetLife will have a 24/7 perspective on the
customer requirements.
Benefits of MIVRA
Check the renewal premium due along with the due date
Request for a premium paid certificate through e-mail or courier

Request an account statement (For unit linked policy owners)
Fix up appointments for medical examinations
Check application status online
AHMAD’s
PRODUCTS OF MetLife
Met Growth, ULIP [Non Par]: A unit linked plan to grow wealth for
your retirement years.
Met Suraksha [Non Par]: a pure risk cover plan at low cost.
Met 100 [Par & Non Par]
Met Suvidha [Par & Non Par]: flexible endowment plan that combine
savings and security.
Met sukh [Non Par]: Guaranteed Money-Back
Met Bhavishya [Non Par]: Guaranteed Money-Back plan to secure
child’s future.
Met Riders [Non Par]
Met Easy, ULIPS [Non Par]: A simple tick and take unit linked plan.
Met Smart Gold ULIP [Non Par]: A unit linked endowment plan for
accelerated wealth creation and protection.
Met advantage plus ULIP [Non Par]: A unit linked pension plan to
meet your retirement needs.
Met Smart Plus & Met Smart Premier ULIP [Non Par]: Whole life
unit linked life insurance plan.
Met Mortgage Protector: Reducing term plan to protect loans.
Met Sukh: Guaranteed money back plan.
AHMAD’s
BANC ASSURANCE
AHMAD’s
Banc assurance in its simplest form is the distribution of insurance

products through a bank's distribution channels. In concrete terms banc
assurance, which is also known as Allfinanz - describes a package of
financial services that can fulfill both banking and insurance needs at the
same time. It takes various forms in various countries depending upon the
demography and economic and legislative climate of that country.
Demographic profile of the country decides the kind of products banc
assurance shall be dealing in with, economic situation will determine the
trend in terms of turnover, market share, etc., whereas legislative climate
will decide the periphery within which the bane assurance has to operate.
The motives behind banc assurance als o vary. For banks it is a means of
product diversification and a source of additional fee income. Insurance
companies see banc assurance as a tool for increasing their market
penetration and premium turnover. The customer sees banc assurance as a
bonanza in terms of reduced price, high quality product and delivery at
doorsteps. Actually, everybody is a winner here.
Benefits to bank
Using bank as a distribution channel benefits both the insurance company and
the bank. Benefits of using bank as a distribution channel are:
1) Banks provide a readymade infrastructure and, therefore, reduces

the time and cost in establishing distribution network by the
insurance company.
2) Bank can supplement fee income without utilizing large amounts of
capital.
3) Leverage its strength in distribution of banking.-products.
4) Customer retention by offering convenient window for banking and

insurance products.
AHMAD’s
Benefits to the insurance companies
Benefits that would accrue to the insurance companies:
1 Banks have the potential to avoid expensive agency system and

facilitate prospecting of smaller term life insurance policies which
are not covered by the existing agency sys tem.
2 Banks' customer focused information system in the banks facilities
automating the process of prospecting customers for specific
products.
3 Banks provide an effective channel for direct marketing by periodic
mailing and also online access.
4 Access to readymade customer base for selling insurance products.

5 Avoiding wasteful expenditure on data procurement, data
warehousing and data mining.
Critical success factor

Bank Assurance has been successf ul f or selling ins uranc e pro ducts du e to:
Eas y ac cess ibi lit y
Custom er trust on ba nk
Freque nt int eraction with th e custom er

Qu ick servic e
Im proved sales
High convers ion rate s of the custom er
AHMAD’s
Chart showing Market Share of ULIPS in Kashmir region
Market Share Of Major Players
Bajaj Allianz
MetLife
27%
40%
ICICI Prud
33%
Inference and analysis:
The Graph shows that 31.39 Cr is the market share of Kashmir region
regarding ULIPS(Unit
Unit Linked Insurance Policies),
Policies ), 27 C
Crr is that of ICICI
IC IC I
prudential and 22.5 Cr that of Bajaj Allianz.
Inference:
It implies that major portion of ULIPS market is that of MetLife India

Ins urance Ltd. But there is a tough completion among the three that is Bajaj
Insurance
Allianz, ICICI
ICIC I Prudential and MetLife. So, MetLife have an edge over others
and should
ould continue the same in the market.
AHMAD’s
Why choose MetLife?
It takes great pride in the financial solutions that it offers. But that’s not all.
The customer requirements and comfort are always at its priority. That is why
its interactions are distinguished by its expertise, compassion and sensitivity.
The MetLife companies are one of the world’s largest and most respected
financial services organizations. For over 140 years, it has been helping
people build financial freedom. For some, this means protection for their
families. For others, it means wealth optimization or preservation. Combined
with its innovation, it makes the MetLife companies truly formidable players
in the Life Insurance industry.
Why life insurance?
Just think!!!! Your son’s education, your daughter’s marriage, your

home loan, your retirement planning is your
responsibility.
But if you are not there then!!!!!!!
Your son’s education, your daughter’s marriage, your

home loan, your retirem ent planning is your responsibility.
So life insurance!!!! An umbrella to cover all your need.
AHMAD’s
Financial Status of MetLife

{See annexure for fin. report}
From balance sheet
The figure of total assets has increased from $ 356,808.0 (2004) to

$ 559,149.0(2007) during past four years but it showed drastic
decline in the financial year 2008, [ $ 501,678.0]. This might be the
result of huge economic meltdown which effected all over the
world. There is increase in cash amount but the long term
investments have declined due to high risk in the slowing down
economic scenario. Also the good will of company has increased to
satisfactory level.
Similarly the liabilities figure has increased from 2004 ( $ 333,984.0)

to 2007 ( $ 523,970.0) but declined in 2008 financial year up to
$ 477,944.0. The highest figure ( $ 408,961.0) is of policy liabilities
i.e. the amount which the company owes to its policy holders in
case of their claim/ accident. The amount of long term debt has
shown an increasing trend from past five years ( $ 7,412.0 to
$ 13,425.0). There is a huge amount of retained earnings ( $ 6,608.o
to $ 22,403.0) which depicts that the company is not distributing its
all net profit after tax in its shareholders. So the figure of total
liability & shareholders’ equity is $ 501,678.0 in financial year
2008.
AHMAD’s
From income statement

Total revenue figure shows increasing trend i.e. $38,701 to $50,989
where the total premium earned increases from $25,067 to $31,295.
Gross profit shows small inclination from 2004 to 2007 but slows
down in 2008 ($24,189 to $23,155). The company is doing
increased expenses year after year, in 2005 it was $7,553 but in
2008 it was $7,907.0.
Net income after tax figure shows incline from 2004 ($2,572.0) to
2007 ($4,102.0), but in 2008 the net income after tax amount is US
$3,510. The EPS has increased in last 4 years but in 2008 it remains
low at 4.72.
From past ten years income statement predicts similar increase in coming
financial year but there might the effect of economic slowdown. Figure moves
from EBIT $1,175 to US $5,762 [In millions] (up to 2007), and in 2008
it declines to US $5,090 [In millions] Also ES (earning per share)
varies from 0.83 to 5.2 (4.54 in 2008).
From past 10 years balance sheet similar trend is viewed i.e.

Current Assets varies from $225,232.0 (in millions) to $501,678, up
to 2008. Also current liabilities vary from $211,542 to $477,944. In
addition long term debt increases from $2,514.0 to $13,425.0.
All above figures are forecasting better future of MetLife but C.A.
should be utilized properly and lowering the liabilities. It is better
to retain earnings than long term debt by discussing the same issue
with share holders.
AHMAD’s
Chapter 3.
OBJECTIVES AND RESEARCH METHODOLOGY
AHMAD’s
Objectives of Study
The objectives of my research included the following important functions:
i. To know the factors responsible for the lapsed policies
ii. To provide feedback of customer to MetLife
iii. To explain the benef its of policy to the policy holder and
motivate him to pay the pending premium.
iv. Ultimately reinstate the lapsed policies.
Research Methodology
Research design:- it constitutes the blueprint for the collection,

measurement, and analysis of data. It helps the researcher in the allocation of
limited resources by posing crucial choices in methodology.
In this research some selected branches of J&K Bank were visited and the
cases of lapsed policies were taken one by one and worked over for their
REINTATEMEN T . Also a customer survey was undertaken to know the factors
responsible for lapsation of policies and working of MetLife.
Since there was lack of clear idea about factors causing lapsation of policies,
thus an exploratory research design was adopted to conduct the study in order
to know the above mentioned objectives. The data collection method was
Random sampling.
AHMAD’s
Sampling plan
Population of Sample
The population of interest were the policy holders of Kashmir Valley (Active
as well as lapsed) Total of 50 MetLife customers were contacted. The
customers were approached personally with the prior appointment at a
convenient place of the client at a suitable time and day/ some of them were
contacted when they visited the Head Office Srinagar, J&K.
Sample size
Monthly 20% of 50 = 10 respondents
Quarterly 10% of 50 = 5 respondents
Semi-annually 10% of 50 = 5 respondents
Annually 60% of 50 = 30 respondents
Data Collection
Data Source
Primary as well as secondary were used
Primary data has been collected from the survey conducted through
systematic gathering of data from structured sample of customers through
questionnaire. Secondary data comprised mainly of management books like
Business Research Methods, IRDA journals and various webs ites.
The report mainly consists of primary data gathered through the schedule of
questions asked to the respondents directly.
AHMAD’s
Research instrument
A structured interviewer administered questionnaire was used containing the

relevant questions seeking information from the existing policy holders of
MetLife (lapsed cases particularly).
Statis tical tools
Microsoft Excel is used for tabulation of data, charts are drawn in M. S.Word
in continuation of Excel, percentages are drawn for generalizing the study
and graphs are used for having better pictorial representation.
Limitations of technique
The first and most crucial hurdle in this study was shortage of time, being
one and a half months duration. Secondly no vast researches were done over
the problems faced by MetLife at Kashmir valley; this forced us to start from
zero. Since the research was exploratory based and no hypothesis testing was
worked out. Also no tests like Z-test, T-test etc were applied. Some other
points related to our research were:
Although every effort was undertaken to conduct the study as rigorously as

possible, there are certain limitations of the project as follows: -
Time limit is not sufficient enough to collect all the data to complete
the project report.
The sample size was limited to 50 respondents.

Some confidential information was not allowed to be analyzed by the
management which might have more relevance from the study angle.
The study was limited to Srinagar city.
Some of the respondents didn’t take research seriously and didn’t
give enough time
While filling the questionnaire.
Due to continuous strikes in valley I faced lot of problems in data

collecting.
AHMAD’s
Chapter 4.
Data presentation and analysis
AHMAD’s
Q 1. Which among following influenced you

to join MetLife?
Hoardings/Bill Other Friends

Boards 20% 24%
0%
T.V.
Advertisement
J&K Bank 18%
38%
24% respondents came to know about MetLife through Friends
18% respondents came to know about MetLife through T.V. Advertisement
38% respondents came to know about MetLife through J & K Bank,
0% respondents came to know about MetLife through Hoardings/bill boards
20% respondents came to know MetLife through other means.
Most of the customers were introduced to MetLife through J&K Bank and
lesser number of customers got aware of it through hoardin
hoardings and
advertisement. Though most of its marketing is done by J&K bank but it
needs to use other marketing tools to capture more and more market. Since
the presence of MetLife has been made more visible through Co branding
wherein both names appear ((J&K bank and MetLife).
AHMAD’s
Q.2. You choose MetLife because of its:

Better risk coverage
8%
tax benefit
14%
varieties of policies
12%
affiliation with
J&K Bank high returns
48% 18%
14% re sponde nts chose MetLif e bec ause of its Tax Benef its
12% re sponde nts chose MetLif e bec ause its variet y in po lic ie s
18% re sponde nts chose MetLif e bec ause of its High returns
48% re sponde nts chose MetLif e bec ause it is af f iliated with J&K Bank
8% res pondents c hose MetLif e beca use i t’s better risk cover age.
The Goodwill that J&K Bank has created in Kashmir valley is the major
factor that influences customers mostly to go for MetLif e policy. Other
reason being its high returns on policies, variety it provides and tax rebates.
AHMAD’s
Q 3. MetLife makes your investment secure

Disagree Strongly Disagree
Can't Say 4% 4%
18%
Strongly Agree
36%
Agree
38%
36%
% respo
respondents
ndents strong
strongllyy agre
agreee that the ir investm ent is secur e
38%
% respo
respondents
ndents agree that their invest
inv est ment
m ent is secure
18%
% respo
respondents
ndents m entioned
ention ed Can’t
Can ’ Sa y.
4% res pondents d is agree that their in vest ment is secure
4% res pondents strongl y D

Disagree
isagree that their investm ent is secure
More than 50 percent customers agree that their investment is secure and
only few customers are not sure about their investments. So MetLife needs to
build confidence in their customers. By publicizing the annual growth
returns and the financial position of
o f company, it will overcome the customers
who mentioned their disagreement towards the above question.
AHMAD’s
Q 4. Is MetLife Staff friendy to you?

Strongly Disagree Strongly Agree
Disagree 4% 8%
4%
Agree
26%
Can't Say
58%
8% res pon dents Stro ngl y agree that MetL if e staff is f riendly
26% respo ndents Ag ree that MetL if e staff is f riend ly
58% respo ndents m entioned C an’t Say
4% res pon dents Disagree that MetLif e staff is f riendl y
4% res pon dents Stro ngl y Disagr ee that MetLife staff is f riendly
Most of the respondents agree that the staff of MetLife is helpful and
provides proper guidance regarding policy matters. Few respondents did not
experience any such behavior; this response comes as most of the respondents
were those whose policy has lapsed from last one year [approx.].
AHMAD’s
Q.5. You pay your premium via:
automatically
deducted
28%
other mode
Other
18%
36% by cheque
18%
cash
36%
36%respondents pay their premium through cash
28% respondents pay their premium through their bank account
18% respondents pay their premium through cheque
18% res pondents pay through mixed/ other means.
Most of the customers pay their premium by cash, yet some of them pay their
premium through their bank accounts. They find it easy as the amount
automatically gets deducted from their respective accounts. Since this method
is the easy one, I found that all customers have applied for SIM facility at
their respective branches. Cheques are also given by some customers and few
of the customers pay in mixed manner i.e. sometimes cash, sometimes cheque
etc.
AHMAD’s
Q. 6. you get renewal premium notice in time
never
34% regularly
38%
seldomly usually
20% 8%
38%
% res
respondents
pondents mention that they regularly receive Renewal premium
notice in time.
% respondents mention that they usually receive their Renewal premium

8%
notice in time.
% respondents mention that they seldom receive Renewal premium notice

20%
in time
34%
% respondents mention that they never receive Renewal premium notice
in time.
Though most of the customers receive

re ceive their Renewal premium Notice in
time but there are customers who receive Renewal notice but not in time. So
MetLife needs to improve their services and should send such notice in time
because this becomes the cause for Policy lapsation. 34% responden
respondents were
became prey of lapsation due to absence of reminder about their premium
due date and most of them were monthly paying premium customers. Now
they were advised to apply for facility of SIM i.e. automatic way of
deducting the premium amount from the bank account.
AHMAD’s
Q.7. You recieve reminder when you don't

pay your premium on due date:
never always
20% 8% usually
20%
sometimes
52%
8% respondents say that they receive reminder always
20% respondents say that they receive reminder us ually
52% respondents say that they receive reminder sometimes
20% respondents say that they never receive reminder

rem
As about 70% res

respondents
pondents never receive any reminder regarding their
premium payment. There was found a delay in sending the reminder to
customers, usually the mode of telecommunication is used to remind the
customers their due date. But the problem is that the contact numbers are out
dated. A need to update the contact numbers is the issue to be kept at highest
highes t
priority.
AHMAD’s
Q. 8. After the payement of premium, Do you

receive its reciept?
12%
always
29% usually
32%
sometimes
56% never
3%
56% respondents Always receive their Premium receipts.
12% respondents usually receive their premium receipts
29% respondents sometimes receive their premium receipts
3% respondents never receive their premium receipts
Most of the customers receive the receipt after paying their premium. But
there are some who sometime receive or don’t receive at all. This again
focuses on the service .MetLife should try their best to improve their services
and should give proper receipts while accepting premium from customers.
Premium receipt is an important document for customer as well for MetLife.
If there had been on-line system then this issue might not have been so
important, so on-line system is recommended in Kashmir Valley particularly.
AHMAD’s
Q. 9. In case you don't receive the

reciept, You do :
other
3%
contact Head
Office contact CSO
36% 42%
call MetLife
19%
42%respondents
%respondents contact their CSO
C SO or insurance Managers in case they don’t
receive their premium receipts.
19%
% respondents call MetLife in case they don’t receive usually receive their
premium receipts
% respondents contact MetLife head office in case they don’t Head office
36%
sometimes receive their premium receipts
3%
% mentioned “other specify’
specif when asked.
Most of the customers contact their CSO

C SO or Insurance manager in case they
don’t receive their premium receipts. Few of them either call MetLife office
or contact them personally. There are many customers who have never faced
such problem i.e.. they have always received their Premium Receipts and
there are some who don’t bother about their receipts because of many reasons
like busy
bus y schedules. But as this Premium receipt is an important document
both for insurer and insured so customers should keep
k eep a track of all receipts
and contact MetLife people in case they don’t issue it.
AHMAD’s
Q.10. Your policy has lapsed,

never
4%
many times
20% once
46%
twice
30%
46%
% respondents say that their policy has been lapsed once.
30%
% respondents say that their policy has been lapsed twice.
20% respondents say that their policy has been lapsed many times.
4%
% respondents say that their policy has never lapsed.
Though most of the customers policy has never been lapsed once but there
are many whose policy
cy has been lapsed either twice or many times. This
lapsation creates
tes a problem for both the customers
cus and MetLife people as
well. Customers need to re-activate
re their policy, in such case, by paying the
premium amount without interest rate as today is the special scheme for
lapsed policy holders. And MetLife staff needs to do all cumbersome
calculations involved in reinstating the lapsed cases for customers and give
them details regarding their policy, if demanded/needed.
AHMAD’s
Q.11. The policy got lapsed because,

paid premium late Got reminder late paid on time but reconciled late other
30% 26%
22%
22%
36% customers mentioned “I

“ paid premium late” as the reason of lapsation
22%
% customers mentioned “I
“ got Renewal premium notice late” as the reason
of their policy lapsation
22%
% customers mentioned “I
“ paid on time but it was reconciled late”
26%
% customers mentioned “Other
“ specify”
There were varied reasons

ns for Policy lapsation. Majority of people admitted
that the cause of their policy lapsation was that they paid the premium late
which had its own reasons like having some financial problem, or the
customer being out of station, or bus
busyy schedules. Many customers
cu stomers mentioned
that though they paid in time but it was reconciled late the reason being
CSO’s ignorance., system error, server problem causing workloads in
MetLife staff and resulting in late reconciliations of premium which finally
results in Policy lapsation.
apsation. Also other gave the blame that bank employees
{other option} entered there premium amount in wrong policy number,
without any notice to the real owner. Thus an improved system should be
provided with trained and responsible CSO’s which will minim
minimize the
lapsation case.
AHMAD’s
Q. 12. Did you received any reciept regarding

policy reinstatement
Yes No
20%
80%
80% respondent mentioned that they received the receipt/ ticket No. raised.
20% respondent said that they did not received the receipt due to lack of
time/ bus y schedule.
It is obvious that after the cumbersome work of reinstating the lapsed policy,
all the customers will demand any receipt No. from the concerned authority,
whether it is the customer itself or the CSO. A few cases are here who have
not received the receipt no. due to exhaustion from the process. Management
should try to put all the customers at motivated level s o that the goodwill of
company would be sustained.
AHMAD’s
Q. 13. Do you recommend any favorable

mode of paying premium,
Yearly/Annually 10
half Yearly 4
Quartely 2
Monthly 35
35 respondents recommend payment of premium as monthly.
2 respondents recommend payment

pay of premium as Quarterly.
4 respondents recommend payment of premium as Half yearly
10 respondents recommend payment of premium as yearly
Majority of the respondents find monthly mode of premium payment more

feasible than other modes of premium Payment despite they are paying
through annual mode and many others pay quarterly, half yearly or yearly.
The choice of mode depends on many factors like Regularity of income,
occupation. some
ome find it easy
eas y to pay small amount every month while for
others it’s more feasible to pay in one whole yearly installment. And also for
some it’s feasible to pay half yearly and quarterly
AHMAD’s
Q.14 Do you wish online-system

online system to check the
policy status?
22%
Yes
No
54%
Can't Say
24%
54%
% respondents mentioned’ YES’
24%respondents
ondents mentioned ‘NO’
22%
% respondents mentioned ‘CAN’T SAY’.
Most of the respondents agreed that there should be an online system through
which customers can keep a track of their policy and could easily check their
Policy details and other necessary info
information
rmation concerning their policies.
There were few who were indifferent.

indifferent Two main reasons were found
found, one
being that they had no knowledge about such systems.
systems . And other being their
bus y schedules where they couldn’t find to check all such details online.
busy
Andd there were very less number of respondents who were not in favors of
such ssystems
ystems Major reason for this being that they were less educated and
had no knowledge about computers.
Thus As 54%
% customers find the need of such online system, so MetLife
should develop such a system which will help customer to check their details
anywhere at any time and get all necessary information regarding their
policies and also regarding MetLife.
AHMAD’s
Q. 15.Does MetLife Inform you about its new

Products?
No
Yes
0
10
20
30
40
50
90% respondents say that they are informed by MetLife about new products.
10% respondents
nts say that they are never informed by MetLife about new
products.
Majority of the res

respondents
pondents say that they are informed by MetLife regarding
their new products. To maintain this facility they ought to send such
information notices to customers and also their C SO’s
’s should provide such
information to cus
customers
tomers who visit them or who are in touch with the
them. This
will create a feeling among customers that they are being cared and will keep
customers satisfied
ed which will finally result in the increase in sales/ goal of
organization.
AHMAD’s
Q. 16. Now, Would U like to rcommend

MetLife to others?
30
28
25
20
18
15
10
5
4
0
Yes No Some times
28 respondents said that they would like to recommend MetLife to others
18 respondents said that they would not like to recommend MetLife to others
4 respondents mentioned ‘CANT SAY’.
This question is directly related to the customer satisfaction. Though many

customers were satisfied to the extent that they wanted to recommend
MetLife to other People they know. But there were also many other customers
who either did not want to recommend it to others or were not sure whether
they will recommend or not. Such a response from customers side
questions/doubts the satisfaction level in customers by MetLife .The main
reason for this being bitter experience of customers with MetLife
Thus MetLife should try its best to satisf y its customers and make customer
their first priority. MetLife should also appoint well trained CSO”s that’ll
develop confidence in their customers. MetLife should also focus on proper
selling of policies. The customer should not feel that he/she has been
cheated. Thus wrong selling should be avoided. Proper and correct
information should be provided to customers regarding policy.
AHMAD’s
Q. No. 17. Any Suggestion?

ONLINE SYSTEM NEEDED
14%
20% RESPONSIBLE/ ACCOUNTABLE
STAFF
TIME MGT. IN PROCESSING
14% PREMIUM RENEWAL
WORK ON CUSTOMER
6% SATISFACTION TECH.
24%
INCREASE MOTIVATIONAL
POWER/GOOD WILL OF COMPANY
22%
DON'T FOCUS ON HIGH
TARGET, PROVIDE BEST QUALIT
20% respondents recommend online system
24% respondents recommend responsible staff
22% respondents
ondents recommend better time Mgt.
Mgt . In process of operations dept.
6% respondents recommend better techniques of customer satisfaction
14% respondents recommend increment in motivational approach
14% respondents recommend not to focus on high targets but try to retain the
existing policy holders, since this tech. is low in cost basis and takes the
goodwill of firm up to the sky.
From this open question, as no option was given to them, was a new
experience to me? I got confronted with the inner opinion of respondents
res pondents
towards the MetLife.
Thus I can infer from the above result, that if fortune favours MetLife will
me the market leader in Kashmir valley in no time, until it focuses on
customer attraction.
AHMAD’s
Special term applicable to all policy holders
If payment of premiums is discontinued:
a) Discontinuance within three years of commencement – If all the

premiums have not been paid for at least three consecutive years from
inception, the insurance cover shall cease immediately. Insurers may give an
opportunity for revival within the period allowed; if the policy is not revived
within that period, surrender value shall be paid at the end of third policy
anniversary or at the end of the period allowed for revival, whichever is
later.
b) Discontinuance after three years of commencement -- At the end

of the period allowed for revival, the contract shall be terminated by paying
the surrender value. The ins urer may offer to continue the insurance cover, if
so opted for by the policy holder, levying appropriate charges until the fund
value is not less than one full year’s premium. When the fund value reaches
an amount equivalent to one full year’s premium, the contract shall be
terminated by paying the fund value.
AHMAD’s
Chapter 5-
AHMAD’s
Summary
The project work stared with a fruitful discussion with the management of
MetLife at Srinagar, J&K. then a problem was assigned to me that is to work
on the lapsed policies. I with another trainee [Mr. sayeem] worked all
together towards our assigned task and by the grace of Almighty ALL AH we
did our best to accomplish the task. Particularly J&K branch SKIMS SOURA
and karanagar Sgr. were analyzed. The response from the concerned
Insurance Manager and CSO [Channel sales Officer] was satisfactory. Cases
were taken on regular basis and necessary action was taken to reinstate/ make
them active policies. Almost 10 policies were reinstated and 20 other were
near to be made active. The concerned policy holders were visited personally
and the case was informed them and they too participated at most. Operations
department of MetLife Sgr. Was profoundly ready to help at every step. All
these steps and our sincere efforts were appraised by management as well.
Lastly the company gave me best regards and blessings to succeed in future
period and assure me that you will get placement in a reputed corporate due
to my smart work plus hard work also.
AHMAD’s
Conclusion
MetLife is exerting every efforts to gain market share but the retention part
is still lacking it is very much driven towards the acquisition of customers as
compare to retaining the existing ones. Customers are dissatisfied by the
nature (quality and value) of service they are getting.
Customers usually complain about the various errors that are being created by
the organization by not providing the policy documents and renewal receipts
on time.
Delivering quality product should be the first preference of an organization

towards its customers as quality service is the basic element which frames
firms quantitative advantage.
Improvement in quality in terms of simplified procedures, personal follow up

of customers, products effectiveness, its flexibility and simplicity.
Relationship marketing should be preferred as retention of customers is must.
Expectations of customers should be satisfied to the maximum level so that
both the parties achieve their end.
As observed there is lack of staff, MetLife should recruit personal to lessen

the burden and perform various activities effectively.
Thus we can say that by overcoming the loopholes there is very much space
for MetLife to grow to the fullest.
AHMAD’s
Recommendations
Though most of the Marketing is done by J&K Bank but MetLife

should not solely depend on it and should adopt other marketing tools
to capture more and more market.
Wrong selling should be avoided.
MetLife should equally concentrate in the retention of existing
customers as well as capturing new ones, as retention of customers
requires low cost.
MetLife should provide user friendly online system which will help
customers to check their policy details anywhere and at any time and
get all necessary information about their policies and also about
MetLife.
MetLife should update their customers about their new products and
their CSO’s should also provide such information to customers.
MetLife should have a proper training Mechanism to train and
Develop CSO.
MetLife should send periodic Policy details to customers so that they
have a track on their policy.
MetLife should update its customer information database like
customer address, phone number etc.
MetLife should try to minimize its policy requirements so that policy
taking becomes easy and less time consuming.
MetLife should try to personalize its s ervices to some extend like
giving reminders through phone calls, sms’s and emails.
AHMAD’s
Annexure
AHMAD’s
GLOSSARY
TERMS USED I N IN SU R ANC E & LIF E INSUR AN CE
INSURER/ASSURE R; The insurance company with whom an article is

insured is known as insurer. Also known as underwriter, the insurer issues
insurance policies. In life insurance the insurance company is called
ASSURER.
INSURED/ASSURE D; The person who obtains insurance policies from an

insurance company is called insured or assured. Every insured party must
possess insurable interest in the subject-matter insured.
PROPOSAL; It’s the application made by the assured to secure insurance

policy from the insurer. Proposal has to be made on a prescribed form
supplied by the insurance company.
POLICY; Insurance policy is a contract between insurer and insured. It

contains all terms and conditions of the contract as agreed by both parties.
Its a stamped and sealed document issued by the insurance company.
PREMI UM: It is the amount of installments payable by the insured to the

insurance company in consideration for the company’s assurance to
indemnify him against a specific loss.
CLAIM; It is a demand made by the insured on the insurance company to

compensate him against the loss or damage suffered by him in the event of
materializing of the risk for which insurance cover was obtained.
SURRENDER VAL UE; This is the value which an insurance company

assesses and is prepared to Pay to the assured who desires to surrender his
policy by giving up his rights the policy. Sometimes the policy holder finds
it impossible to continue pay premiums due to his poor economic conditions
or some other unavoidable circumstances. A policy can be surrendered only
after paying premiums for at least three years
AHMAD’s
PAID UP VALUE; A policy holder who wishes to discontinue his policy and
stops payments of further premiums may get the policy converted into a paid
up value. In such case , the policy holder is entitled to receive the paid up
value of the policy. The amount is payable only on maturity or death of the
policy holder whichever is earlier.
ASSIGNMENT OF POLI CY; Assignment of policy means transfer of

property in the policy to the third party It is possible to assign a policy
without assigning the rights to it. Assignment of policy is governed by the
following rules;
(a) Assignment must be made in writing.
(b) The notice of assignment must be given to the insurer. It is essential

to observe these rules to make these assignee’s title effective against
insurance company otherwise If the company makes any payment to
the assignor ,without the assignee’s knowledge ,the company would
stand protective. The assignment of the policy carries with it the right
to all profits, Bonus etc.
NOMINATION OF POLICY; When a policy holder specifies the name of
the person in the policy with a view to enabling him to get the amount of the
policy in case of his death, its called nomination. The person who is so
entitled to get the amount of the policy is called Nominee. If the policy
matures within the life time of assured, the amount is payable to the assured
himself or his nominee as per his own desire .
AHMAD’s
QUESTIONNAIRE
Pol ic y Holder: ……………………….. Incom e: ……………………..
Pol ic y No: …………………………….. Type of policy: ……………..
Mod e of Polic y: ……………………….
1. W ho am ong the f ollowin g inf lu ence d you to join MetLife:-
Frie nds/Fam ily

T. V. Adv ertisem ents
J&K b ank
Hoard ings/Bi ll Boards
Others Spec if y ………………………………………..
2. You chose MetL if e because of its:-
Tax benef it
Variet y of policies
High returns o n your investm ents
Aff ili atio n with J&K Bank
Better R isk Covera ge
3. MetLife m ak es your investm ent secure:
Strongl y agr ee
Agree
Can’t say
Dis agree
Strongl y D is agree
AHMAD’s
4. Is MetL if e staff f riend ly to you:-
Strong ly agree
Agree
Can’t sa y
Dis agre e
Strong ly Disagree
5. You pa y your pre mium via:
Cash
It autom aticall y gets deduct ed f rom your account (SIM)
Cheque
Others sp ec if y …………………………………………….
6. You get renewal p rem ium notice in tim e:-
Regularl y
Usuall y
Sel dom
Never
7. You rec eive rem inders wh en you don ’t pa y your pr em ium on due date:
Always
Usuall y
Som etim es
Never
8. Af ter you pa y yo ur prem ium you rece iv e the receipt of your prem ium
Always
Usuall y
Som etim es
Never
AHMAD’s
9. In case you don’t receive your prem ium receipt, you
Contact yo ur CSO
Call MetLif e toll f ree no.
Contact Head off ice
Others Spec if y …………………………………………
10. Your p olicy has lapsed
Once
Twice
Man y t im es
Never
11. The polic y got lapsed b ecause
I paid pr em ium late

I got rene wal prem ium rem inder notice late
I paid on tim e but it was rec onciled late.
Others(Spec if y)
12. Di d you rece ive an y ticket no. or receipt regarding your pol ic y
reinstat em ent?
Yes
No
13. Do you recom mend an y f avorab le m ode of pa ying prem ium ?
Monthl y
Quarter ly
Half year ly
Yearl y
AHMAD’s
14. W ould you lik e to pay your prem ium and check your polic y stat us on-
li ne?
Yes
No
Can’t Say
15. Does Met Lif e inf orm you about its new products?
Yes
No
16. W ould you lik e to recom m end MetLif e to others?
Yes
No
Can’t Say
17. Any s uggestio ns:

____ _____________ _______ _______ _______ _____________ _______
____ _____________ _______ _______ _______ _____________ _______.
Note : This quest ionnair e is designed to get ins ights re gard ing the factors
respons ib le for la ps ed p olicies of ex isting policy H olders of MetLife Ind ia
Insuranc e Co. Pvt. Ltd. This infor mati on wil l b e kept in security b y A hmad
Mustafa, Student of LPU PUNJA B R eg. No. 108116 88.
AHMAD’s
Bibliography
• http ://www.metlife .co.in /

• http ://www.all ba n kingsolut ions.com /in sure sub3. ht m
• http ://www.in dia nmb a.com/O ccas iona l_Papers/O P85/ op8 5.ht ml
• http ://ww.smash its.com/ vide o/sn oop /12802/indian-in sur an ce -se ct or-at-
boom.html
• http ://bu sine ss.ma psofin dia .com/india-insuran ce /ma r ket.html
• http ://www.business-stand ard.com/i nd ia /n ews /mar ket-share psu-pla yers -
in-mf -indu stry-f alls/3 62390/
• http ://prasath r.sule kha.com/b log/p ost/2006/09/insura n ce-i nd ustr y-in -
ind ia.ht m
• http ://www.financia lexpress.com/ne ws/met life-wont-ta ke-tarp-
mone y/446796/
• http ://www.business-stand ard.com/i nd ia /n ews /met life -stre ngt hens-its-
cust omer -servi ce -p lat for m/328282/
• D.R. Cooper P. S. Sc hindler, Bus iness Re search Methods-9 t h edit ion,
Tata Mc Graw-H ill co m panies, 200 8
• IRDA journal Aug. 2008, vol.-VI, no.8, “lapsation in life

insurance , the No-Win”.
• Ms. Misbah (2008), project work on “customer satisfaction at
MetLife Insurance, Srinagar city”
• Mr. Irfan Ali Zargar (2007) project work on “lapsation of
policies with MetLife’s loopholes”
AHMAD’s

The Persistency in Life Insurance Industry at MeyLife Srinagar by Ahmad Mustafa

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MetLife India Insurance Co. Pvt. Ltd.

LOVELY PROFESSIONAL UNIVERSITY

Report on Summer Training

“The Persistency In Life Insurance Industry

With Special Thrust On Lapses And Loopholes”

MetLife India Insurance Co. Pvt. Ltd.

Lovely Professional University (LPU)

In partial fulfillment of the Requirements for the award of Degree of

Master of Business Administration (MBA)

Name: Ahmad Mustafa

Reg. No. 10811688

DEPARTMENT OF MANAGEMENT (2009)

ACKNOWLE DGEM ENT

I would like to express my sincere gratitude to Mr. Irfan Ali Zargar

I am also highly indebted to Mr. Ifthikar Bashir (Operations Manager)

Special thanks are owed; in particular to every member of MetLife

Lastly I express my thanks to my family members particularly my

Since while probing that whether the management is in dilemma or not, I

The major findings of the study are:

MetLife has been successful in building confidence and hope for

Everyone knows what life insurance or property insurance is and usuall y

Ins urance protection as we know it today can be traced to the aftermath of

of a transfer of risk of loss due to a fortuitous uncertain event in lieu of

It is evident from the implementation of the earliest legis lative measures

Despite insurance being a “contract”, the general principles in contract law

History of insurance sector in India

proportion of lapses. If we take into consideration all lapses including paid-

1957 - General Insurance Council, a wing of the Insurance Association

2. Misbah Showkat, Student of K.U., J&K, 2008

mismatch (lack of need based selling/ forced selling/ wrong selling),

3. Irfan Ali Zargar, student of Kashmir University, J&K, 2007

4. IRDA journal Aug., 2008:

The focus of this issue of journal is on “LAPSATION OF LIFE INSUR ANCE

The spirit of MetLife’s commitment………..

Build financial freedom for all through leadership in providing professional

By 2010, provide 5 million customers in India world-class solutions for

OUR CORE VALUES

We lead through innovation to offer world class and competitive

We build long term relationships with our customers by creating a

We create a customer centered and result focused division that inspires

We are committed to creating a high performance organization by

MetLife proudly inherits its parent company's over- 136 year-o l d r e p u t a t i o n

(FORTUNE 500® is a registered trademark of FOURT UNE®

MetLife insurance Company private L imited was incorporated in India on

MetLife is headquartered in Bangalore with officers and presence in major

MetLife aspires to build on MetLife history of meeting policy holder and

MetLife delivers value and world-class service to customers through its

Since MetLife was founded in 2001with its headquarters in Bangalore India

Recent happenings: July 09, 2008

MetLife Ties-up with Siemens Enterprise Communications to launch MIVR A-

Request for a premium paid certificate through e-mail or courier

Banc assurance in its simplest form is the distribution of insurance

1) Banks provide a readymade infrastructure and, therefore, reduces

4) Customer retention by offering convenient window for banking and

Benefits to the insurance companies

Benefits that would accrue to the insurance companies:

1 Banks have the potential to avoid expensive agency system and

4 Access to readymade customer base for selling insurance products.

Critical success factor

Eas y ac cess ibi lit y

Freque nt int eraction with th e custom er

Chart showing Market Share of ULIPS in Kashmir region

Market Share Of Major Players