‘CUSTOMER VALUE MANAGEMENT’ AT

ICICI PRUDENTIAL LIFE INSURANCE COMPANY LTD.

BANGALORE

Submitted in partial fulfillment of the requirements for the award

of
Masters of Business Administration Degree of Bangalore University

Submitted
By:
Ms. Divya Ramesh
( Reg. No. 02XQCM6019 )

Under the guidance

of
Dr. K.V.PRABHAKAR
(Adjunct
Professor)

M.P.BIRLA INSTITUTE OF MANAGEMENT

( Associate BHARATIYA VIDYA BHAVAN )
RACE COURSE ROAD, BANGALORE – 560 001

OCTOBER – 2004
 DECLARATION

The research work embodied in the dissertation entitled

‘Customer
Value Management’ at ICICI Prudential Life Insurance Company
Ltd.,
is an original work carried out by me under the guidance
and
supervision of Dr.K.V.Prabhakar, Adjunct Professor, M.P.Birla
Institute of Management, Bangalore (Internal Guide)
and
Mr.Raghavendra Bhat, Unit Manager, ICICI Prudential Life Insurance
Company Ltd., Bangalore (External Guide) and has been submitted
in
partial fulfillment of the requirements for the award of MBA degree
of
Bangalore University.

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

and
have not formed the basis for the award of any other
Degree/Diploma
of any other University or
Institution.

Place : Bangalore ( Ms.Divya Ramesh)

Date : 13 September 2004

 COMPANY
CERTIFICATE

September 13, 2004

TO WHOMSOEVER IT MAY
CONCERN
This is to certify that Ms. Divya Ramesh, bearing register no. 02XQCM6019, a
student
of M.P.Birla Institute of Management, Bangalore has succesfuly completed the
Project
Work titled ‘Customer Value M anagement’ at ICICI Prudential Life Insurance
Company
Ltd., Bangalore as a partial fulfilment of MBA program, during the months of May
to
August 2004.

We wish her a ll success in her future

endeavors.

Mr.Raghavendra Bhat, Mr.Sivaram,

Unit Manager Sales Mana ger
 CERTIFICATE

I hereby certify that the research work embodied in this dissertation

entitled,
“Customer Value Management” at ICICI Prudential Life Insurance Company
Ltd.,
Bangalore has been undertaken and compl eted by Ms.Divya Ramesh,
bearing
Register Number 02XQCM6019 under my guidance and
supervision.
I also certify that she has fulfilled all the requirements under the
covenant
governing the submission of dissertation to the Bangalore University for the
award
of MBA
Degree.

Place : Bangalore Dr.K.V.Prabhakar

Adjunct
Professor
Date : 13 September 2004 (Internal Guide)
 CERTIFICATE

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

at
ICICI Prudential Life Insurance Company Ltd., Bangalore is an offshoot of
the
research work undertaken and completed by Ms.Divya Ramesh under the
guidance
of Dr.K.V.Prabhakar, Adjunct Professor, MPBIM, Bangalore (Internal Guide)
and
Mr.Raghavendra Bhat, Unit Manager, ICICI Prudential Life Insur ance
Company
Ltd., Bangalore (External
Guide)

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

Date : 13 September 2004
Principal
 ACKNOWLEDGEMENT

I express my immense gratitude Dr.K.V.Prabhakar , Adjunct Professo ,

to r M.P.Birla
Institute of Management, Bangalore. He has been my mentor and guide and
his
continuos enc ouragement and valuable suggestions helped me at e very stage of
this
project
.

I am grateful to Principal, Directors and the staff of M.P.Birla Institute of

Management
for their comments and encouragement a t various phases of this
project.

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

Insurance
Company Ltd., Bangalore for giving me this opportunity to successfully complete
this
project. His ideas, continuous support and comments have been quite useful for
the
completion of this
study.
I also Mr.Sivaram , Sales at ICICI Prudential Life Insurance
thank Manager Company
Ltd., Bangalore for giving me permission to carry out this project in the
Company.

I extend my gratitude to the staff of Sales at ICICI Prudential

the Department Life
Insurance Company Ltd., Bangalore for their co-operation while carrying out
this
project
.

My grateful thanks are also due Ms.Veen , Insurance with ICICI

to a Advisor Prudential
Life Insurance Compa ny Ltd., Bangalore and parent for their incredible
my s support.

Place :
Bangalore

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

 CONTENTS

Sl. No. CHAPTERS Page No.

Executive Summary 1 - 2

PART ‘A’ – THEORITICAL

SETTING
I
Introduction
1. Conceptual Framework of 3 –4
CVM
2. Problem 5
Statement
3. Need & Significanc e of the 6–7
Study
4. Objectives of the 8
Research
II Review of
Literature
1. Purpose 9 –14
2. Conclusion 15
3. Methodology 16
4. Benefits from the Literature 16
Review
III Research 17 -18
Methodology
1. Scope of the Study
2. Type of
Research
3. Data
Collection
4. Sampling Technique
5. Sample
Size
6. Sample
Description
7. Instrumentation
Technique
8. Tools used for Hypotheses
testing
9. Limitations of the
Study
IV Company Profile 19 - 26
 CONTENTS

Sl. No. CHAPTERS Page No.

PART ‘B’ – SURVEY FINDINGS

V Data Analysis &

Interpretation
1. Statement of 27
Hypotheses
2. Hypotheses 28 – 36
Testing
3. Inferences from the 37 - 50
analysis
PART ‘C’ – CONCLUSION &
RECOMMENDATIONS

VI Summary, Conclusion & A scheme of

Recommendation
1. Major Research 51 – 52
Findings
2. A scheme of 53 – 54
Recommendation
3. Directions for further 55
research
Annexure
1. Select 56 - 57
Bibliography
2. 58 – 61
Questionnaire
3. Research instrument 62
used
4. Data incidental to
research
• IEPA Attribute 63 – 65
Model
• Product 66 – 71
Comparison
• Task assigned by the company - 72 - 79
Survey
EXECUTIVE
SUMMARY
 EXECUTIVE SUMMARY

This project is done for ICICI Prudential Life Insurance Company Ltd. In
today’s
environment the customers have become sovereign authorities. They constitute the
focal
point for any business. The effectiveness of Customer Value Management helps
a
business enterprise to create and sustain differentiating value, which has been focussed
in
this study.

Customer Value Management represents the best prac tices use d today by
companies
worldwide to attain their visions of finding out what customers want and giving it
to
them. Customer Value Manage ment provides a rational set of technology; methods
and
strategies to weave needs and wants of customers into key process designs
and
management activities of a
company.

Customer Va lue Management is a vehicle to understand what the customers want

from
the Company and how it can go about aligning its business to deliver the
same
consistently. Every Company has perspectives about Finance, Customers,
Internal
Business & Growth. Customer Value Management deals with the
‘Customer
Perspective’ which along with the other perspectives are aligned with the strategic
intent
and posture of the
company.

The Customer Value Map will be designed to assess where the company’s service
stands
against compe titors on the relative quality versus price
matrix.

This Study is based on certain objectives and the re search on Customer

Value
Management has been developed based on these objectives. The objectives are
as
follows
:
• To identify the route to provide superior delivered value to
customers
• To unzip the direct link between customer value and the market
share
• To determine whether the ‘Customer Value Map’ can assess the position of
the
company’s service against its competitors on the relative quality – price
matrix

1
 The important findings of this study
are :
The most important reasons for buying a Life Insurance Policy from ICICI
Prudential
are brand name, wide varieties of policies to choose from and good servicing
of
policie
s
The most important value added features in ICICI Prudential’s policies are
¡ wide
range of options within the same policy, multiple benefits packed in a single
policy,
flexibility and good
returns
The manifestations of value of ICICI Prudential in order of ranking are –
¡ maximum
risk cover, profitable mode of investment, tax rebate, multiple benefits,
pre -
sales/during-sales/after-sales service and
premium.

Some of the prominent recommendations

are :
The positive fe atures already e xisting in policies should be highlighted. Thus
¡ the
customers will find extra value in their
policies
The settlement of policy amount should be expedited and never unduly delayed
¡ so
that the customer is not aggrieved. This will also help the company to
avoid
migration of its
customers
The value of ICICI Prudential can be enhanced by being customer centric,
¡ increasing
awareness about the company among customers, introduce new policies according
to
changing needs of customers, to provide switching between various options
more
than once a year, give guaranteed returns, handle complaints effectively and
provide
value for money for the
customers
Companies must be ‘customer creating’ and ‘customer satisfying’ organisations
¡ i.e.
they must do the things that induce customers to do business with them.
We
recommend this strategy to ICICI
Prudential.
The Company ca n use this information to reengineer their business capabilities
with a
focus on customer envisioned
value.

2
 INTRODUCTIO
N

1) Conceptual Framework of
CVM
2) Problem
Statement
3) Need and Significance of the
study
4) Objectives of the research
CONCEPTUAL FRAMEWORK OF CVM

The concept of Customer Value Management was developed by Dr.John Henderson

of
Boston University together with an IBM consultant to enable management teams to
get
an actionable customer view and take actions resulting in increased
customer
satisfaction, loyalty and market
share.

Customer Value Management (CVM) represents the very best practices used
by
companies worldwide to attain their visions of finding out what customers want
and
giving it to them. It has become a leading approach to attract market share. It is a
means,
by which a company can balance the demand for service and products with
an
infrastructure that is customer centric, delivers increased productivity & benefits
the
customer’s product
line.

Customer Value Management is a way to build customer loyalty and improve value
for
the company. It provides a way to understand customers’ values and then leverage
that
knowledge to prevent customer dissatisfaction or to influence buyer behavior. It
creates
an alignment between customer’s dyn amic vision of ideal value delivery and
business
capability to deliver that value. The company should focus on specific c apabilitie s
and
infrastructure to delive r value a nd also reengineer business capabilities with a focus
on
customer envisioned
value.

Customer Value Management is a very powerful tool to make the company

truly
customer oriented, attain top of the line growth and bottom line results. It is a
formal,
systematic approach to compete and grow, based on delivering customer value. CVM
is
also fast emerging as the ‘Ruling Currency’ to the growth of the
company.

In implementing CVM, how a customer perceives the company and obtains value
should
be identified and managed. If employed correctly it can help a business enterprise
create
and sustain differentiating value. CVM helps a company in the following ways
:
a) Develop and implement a business vision to become customer centered i.e.
be
number one in the eyes of their
customers
b) Implement strategy to differentiate and compete on service and value to
customers,
not merely on products and
price
c) Understand what drives customers’ loyalty a nd give it to 3
them
The implementation of CVM be gins with the company identifying the needs/wants
of
their customers and building on specific capabilities and business practices to
fulfill
these needs/wants. CVM is thus a top down
approach.

Customer Value Management is a methodical approach that enables a company to

fulfill
its vision of becoming a premier service provider to its target customers. This can
be
applied at the level of an individual service or on an organisation wide basis. CVM is
an
ongoing proce ss that
includes :
a) Monitor changing needs of target
segment
b) Monitor changing customer perceptions of company’s
performance
c) Input business
improvements
d) Monitor and measure
results.
Customer Value management is a way of thinking and running an organisation. It
helps
the company to provide high value experience to customers and thus forms a
winning
strategy for customer loyalty and
growth.

4
PROBLEM STATEMENT

To meet the challenges faced in the Life Insurance Industry, ICICI Prudential
Life
Insurance Company Ltd. has to gear up itself. Customer Value Management is a
leading
approach to attract market share. It can emerge as the ‘ruling currency’ to the growth
of
the company.
The emphasis is on how ICICI Prudential Life Insurance Company Ltd. can arrest
the
value migration of their customers and capture new value of the customers by
modifying
their business
design.
Specifically, the problem statement is – “How can ICICI Prudential ensure
customer
equity through an effective Customer Value Manage ment Program?”. The study
will
focus on the three aspects of Customer Value Management
i.e.
a) Being customer ce
ntric
b) Delivering increased
productivity
c) Benefits provided to the consumer’s product
line

5
NEED AND SIGNIFICANCE OF STUDY

Customer Value Management is a relatively new concept. It is now as an emerging a

rt
and science that is proving its worth in increased market share and shareholder value
for
the companies that prac tice
it.
Virtually every company has a vision and a strategy to achieve it. But missing
element
from all of these companies is the very presence of the word ‘Customer’.
Incorporating
the word custome into the vision statement has been a fairly recent phenomenon.
r In
today’s environment the customers ha ve become monarchs. They have taken on
new
importance as the focal point for business. Today’s management philosophy is to
find
out what the customers want and give it to them. This helps company to stay head
of
competition
.
There are key issues for major companies that need to be addressed. These can
be
summarised as
follows :
• Just having a clear vision and strategy to achieve that vision is not enough.
Even
when a strategic vision is in place it might have little impact on the goals of
the
company. Hence this strategic vision has to be tied to the custome r’s
expectations
from the
company.
• To remain successful today, the theme for a business’s vision and strategy
must
change from, “Where do we want to be in five years?” to “Where do our
customers
want us to be, and how do we get
there?”
• Another thing shared by many companies is a marked absence of an approach to
put
a customer-focused vision into real action. The company’s ability to develop a
vision
has often exceeded its grasp in terms of being able to implement the realities of
the
required changes down to their organisa tional
level.
• For every given customer desired outcome, the full value chain relating to how
a
customer perceives and obtains value from the company must be identified
and
managed having the customer as the focal
point.
Customer Va lue Management he lps address all the above issues. It he lps to
leverage
customer value to drive business performance. Organizations can successfully
employ
customer value management system to know their customers precisely. They can
also
know their competitors’ customers. Effective customer value management
allows
organizations to assess which products and services meet customer’ needs
and
appropriately define their value proposition relative to their
competitors.
According to a research conducted by Dr.John Henderson of Boston University and
an
IBM consultant, it was concluded that “Companies th at fully lever the potential
of
Customer Value Management will become ideally customer centered and attain its
vision
to become the superior provider to its
customers.
Customer Value Management acts as a source of sustainable competitive advantage
and
a driver of customer value
creation.
The need for the study stems from the fact that the Management at ICICI Prudential
Life
Insurance Company Ltd. has to observe the effectiveness of Customer
Value
Management. This study will help the company to understand as to how it can
arrest
value migration, protect existing va lue of customers and capture new value by
modifying
their business
design.
The significanc of the study is that the company would benefit by knowing
e how
effective the perspective of Customer Value Management presently is. The
policyholders
and the employees of the company have been involved in this study to give the
company
an in depth picture of the views of both of these two categories of people. The areas
of
improvement (recommendations) will be highlighted in the study, which will
immensely
benefit the
company.

7
OBJECTIVES O F THE RESEARCH

The Life Insurance industry currently is characterized by speed, quality,

customer
satisfaction, innovativeness etc. Also all the Life Insurance companies are vying
with
each other to increase their market share and profitability. This highlights
the
significance for Life Insurance companies to develop new ways of keeping the
ir
customers satisfied and hence minimise the risk of losing
customers.
The most relevant objective is to develop and examine the market perceived
quality
profile and also customer
value.

Specifically the following objectives have been set for our research
investigation :
• To identify the route to provide superior delivered value to
customers
• To unzip the direct link between customer value and the market
share
• To determine whether the ‘Customer Value Map’ can assess the position of
the
company’s service against its competitors on the relative quality – price
matrix

8
REVIEW OF LI TERATURE

1) Purpose
2) Methodology of review
3) Conclusion
4) Benefits
Purpose of the Review of
Literature
• To identify the problem
statement
• To understand the secondary data that has been gathered in the field of the
study
• To attempt to make new findings on the problem stateme nt without re
inventing
what has already been done in this field of
study
If CRM is the "pipes" of a system for two-way communica tion with customers,
then
CVM is the human factor. Businesses that know what customers value, know how
to
deliver this value better than the compe tition, and know when it's important
to
communicate with customers so that they perce ive the true value delivered
achieve
competitive advantage, better business results and shareholder value. The challenge
for
business is to turn this understanding into practica l action that delivers
measurable
results. The idea that business success comes from focusing on customers is not new,
and
vision and statements are full of aspirational language about creating value
mission for
customers. Yet some of the most metrics-driven companies would be hard pressed
to
explain how they are measuring and managing customer value. There is now
an
emerging art and science of customer value management that is proving its worth
in
increased market sha re and shareholder value for the companies that practice
it.
Companies that capture and use customer data with the same kind of discipline,
passion
and understanding they give to operational and financial data are learning that
this
business practice is well worth the time and money invested. By focusing on winning
in
the customer market, they also win in attracting and retaining talented people and in
the
financial market. Customer value management about:
is
Choosing value: Asking customers in the target market what they value, finding out
how
they rate the value that is de livered compared to the compe tition, and using
this
understanding to focus priorities and then decide what value proposition to take
to
market
.
Delivering value: Making sure that the business processes are aligned with the
value
proposition, and determining what business improvements will delive r the greatest
value
to
customers.
Communicating value: Educating the market on the value proposition and how
the
company is focusing investment to delive r greater value than the
competition.
Source : Playing a People Tune on the CRM 9
‘ Pipes’
1. Customer Value
Management
Customer Value Management (CVM) helps leverage customer value to drive
the
company’s business performance. Organizations successfully employing a
customer
value manage ment system know their customers. They also know their
competitors’
customers. Effective customer value management a llows organizations to assess
which
products and services their customer’s demand and need, and appropriately define
their
value proposition relative to their competitors. Focus Areas
are :
• Internal/External CVM
Assessments
• Competitive
Analysis
• Strategic CVM Business
Plans
• Customer Relationship Management
System
• Implementation Plans/Staff
Training
CVM integrates a range of strategies that allow your organization to be more valuable
to
your current and future
customers:
• Implement innovative methodologies to manage customer transactions
and
engagements and improve the efficiency of customer service
delivery.
• Develop systematic ways to teach, encourage, and support your staff
with
consultative customer solution skills and
techniques.
• Add value to customers through a disciplined approach to listening to
the
marketplace and understanding their business better than the
competition.
• Improve your capability to strategically assemble enterprise-wide expertise
experience
and to empower each staff member to become more valuable
and
responsive to
customers.
• Maximize the future value of products and services by strategically
directing
research and development investment dollars to those areas generating
the
optimal value to the
customers.
The process of developing and implementing effective CVM strategies can be done
by
tools and techniques
like :
• Internal CVM
Review
• Map of customer acquisition, service and delivery
processes
• Employee perceptions of where and how they add customer
value
Review Consolidated
Findings
10
 • Identify major business processes and products/services valued highest
by
customers
.
• Present gaps between employee and customer value
perceptions.
• Identify strategic market segments and competitive positioning of
your
products/services
.
CVM Plan
Implementation
• Phase-in required organizational alignment
changes.
• Conduct Customer Relationship Management (CRM) a nd CVM
employee
training.

• Implement customer business process and product/service

improvements.
• Launch customer marke ting and communication program
advancements.
• Implement CRM and CVM performance tracking
systems.
Benefits of Customer Value Management
are
• Know and understand your customers
needs
• Increase customer
loyalty
• Assess product and service lines to align with client
Source needs
: John Re nner, Vice President, Sabre’s Customer Value
Management
solutions (25/6/2004)

2. Leveraging Customer Value

Management
How companies in the insurance industry can improve financial
performance?
The life insurance industry, long considered a rock of stability, is now facing
major
challenges brought about by several factors like increased competition,
new
technologies, pricing pressures, declining industry profitability & incre ased
customer
demand for better service, timely claim settlement, and dispute resolution.
How
insurance firms respond to these challenges affects not only short-term profitability,
but
also long-term survival. Many companies will be forced out of specific market
segments
or whole markets because of poorly defined customer mana gement & customer
service
strategies. The need has never been greater for solutions based on an
improved
understanding of customer behavior and customer lifetime value. An integrated view
of
behavioral data contributes to an improved understanding of customer potential
value.
The benefits of proactive view of customer value
:
Life insurance companies have made significant IT investments and are increasing
their
adoption rate of CRM technologies. The industry lags others in leveraging
this
information to improve customer profitability and gain competitive advantage in
the
market. Customer Value Management (CVM) views data as a strate gic resource
that
enables the organization to make better and more informed decisions. Its focus
is
prediction and explanation - the identification, quantification, and prioritization
of
factors having a n impact on the value chain and customers' current and potential
value.
Being able to accurately identify and rank order customer characteristics and
behaviors
having the highest impact on risk, premium and servicing costs can yield
immediate,
bottom-line benefits to insurance companies. ith this insurance companies can more
W
quickly identify which factors are significant to improve pricing and refocus sales
and
marketing
programs.
The result of this proactive CVM approach to insurance
is:
Risk : Groups of customers and policy claims having similar risk profiles
segments and
identification of key risk factors and value differentiators across
segments.
Propensity-to-claim : Predictive models that quantify the like lihood of
scores submitting
claims, size of claim, fraud
propensities.
Loss : Quantification of the potential revenue loss due to unit changes
elasticities among
the risk
factors.
Prioritized Market Test : Recommended list of potential pilots to test in the
pilots market.
The CVM approach expands the scope of information by supplementing it with
external
relationship-based customer data. This relationship view of customer lifetime value
is
what we call the next evolution in management. It helps insurance companies realize
the
many benefits from positioning their products and services to meet customers
evolving
security and financial needs. CVM enables insurance companies to achieve
significant
improvements in its profitability and increase the effectiveness of their
customer
management, product design and sales management stra
tegies.
Source : Edgar Ortiz and Jay Norman – Nov 2003

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

Cycle
Customers rarely stand still – their preferences, behavior, lifestyle and buying
habits
invariably change ove r time. And while marketing executives recognize the
dynamic
nature of customer behavior and customer relationships, many miss the opportunity
to
create new value because of organizational inertia that prevents many enterprises
from
keeping pace with customers’ changing needs. Companies aren’t clear about what,
when
and how of meeting customers evolving needs and preferences. This uncertainty and
lack
of knowledge translates into lost revenues and missed opportunities to cement
profitable,
long-term customer relationships. A customer-centric life insurance company
should
deeply understand the needs of its highly focused segments and services
them
accordingly. It doesn’t take a major effort to a chieve impressive results – adding
two
columns to a customer file the first identifies the value of a customer, second
identifies
the appropriate offer to present to that customer. This simple redesign makes it
possible
to provide customer service reps with important details about a customer’s value
and
preferences. Companies can garner 20 to 30 percent increases in terms of the
percentage
of customers adding at least one additional product to their portfolios. They can
increase
sales yield 10 to 20 percent by improving their ability to match
product
recommendations to customers’ profiles. And by carefully targeting
product
recommendations in response to incoming customer ca lls, sales rate improvements of
10
to 25 percent are not uncommon. The net profits from CVM can be reinvested
into
additional incremental improvements, creating a cascade of successful results that
ripple
throughout the
organization.
Source : Kevin Grieve & Edgar Ortiz, DM Direct Newsletter, Sep
2003

4. Customer Value Management: Turning Customer Insight into More

Profitable
Relationship
s
CVM helps to understand how line of business, marketing, sales managers
and
executives in the insurance business
can:
• Improve customer re
tention
• Increase
revenue
• Drive down cost in their
businesses
Customer Value Management approach can be used for more accurate cost
projection,
and to better measure actual value contribution by
customers.
Customer Service - Products and prices in an Insurance industry can be easily
duplicated.
Thus service becomes the only differentiator which will provide the
competitive
advantage in the long run. Insurance companies should have a cell for
customer
management, which caters to the customer needs and complaints. The Insura nce
agents
are the interface between the customer and the Insurance company. The agents should
be
able to accomplish the following to improve 13
service.
• Assessing and analyzing the client’s risk
profile
 • Finding the best product or products available in the
market
• Negotiating the best deal
available
• Continuity of service throughout the period of
Insurance
• Claims advisory
service
Source : Sherwin Loudermilk, Kenking – IBM, SAS, Nov. 2003

5. CRM: Moving Toward Customer Value

Management
Changes in technologies, business processes, organization models and
customers
themselves have fundamentally affected the marketing, sales and service
continuum.
CRM’s evolution is temporarily slowed, but a new round of more dramatic change is
on
its way and new customer strategies will be built on a platform of new
technology
capabilitie
s.
Looking into the future, CRM will be more about consistently managing and
exceeding
customer expectations. Improved measurement and greater financial rigor will
move
customer manage ment from CRM’s relationship -focused approach to a more
financially
driven value-based approach, which we call customer value management. The focus
on
the customer will rema in, but businesses will simultaneously step up their efforts to
gain
value for
themselves.
Companies that aspire to serve their customers both well and profitably need to be
aware
of five major trends that will play a role in the evolution of CRM into CVM -
rising
customer expectations, vie wing customers as assets, improving customer inte
lligence
quotients, de veloping new organization models and increasing financial rigor. It
is
important to have a customer value measurement system, which often succeeds
the
customer satisfac tion measure ment system. The customer value measurement
systems
need to cater to many dimensions of the relationship including those of
competitor
analysis. Sharing the customer value measures with the customer forms an integral pa
rt
of a me trics based customer rela tionship management
system.
Source : Michael & Robert Haas
Gorsage

14
CONCLUSIONS

All the above articles are related to Customer Value Management and also
implications
of adopting CVM in the Life Insurance industry. It therefore, becomes important for
us
to understand as to how a Life Insurance company can increase value for its
customers,
protect the existing customers, avoid migration of customers and also to add new
value
to customers by way of modifying the business
design.
A research on Customer Value Mana gement in a Life Insurance company would help
us
to bring out the following
concepts :
It will help to understand the intricate details of CVM in a Life Insuranc e
industry
The role and importance of CVM in the services sector can also be
understood
The implications of adopting CVM on the business, the expected value of customers
and
the capability of the company to deliver the same can be
examined

15
METHODOLOGY OF THE REVIEW OF
LITERATURE

Review of the literature has been done with the help of the following
sources :
Company
¢ Literature
Brochure
¢ s
The
¢ Internet
ICICI Prudential – Quarterly
¢ Report
Publication
¢ s
Articles on
¢ CVM
A text book on Customer Value
¢ Management

BENEFITS OF REVIEW OF LITERATURE

The review of literature has been very informative, as it has thrown light on the
research
and articles that have been written on Customer Value
Management.
Moreover it has helped in identifying the degree of research that has been done
already
on this topic. It has helped our study, as it constituted the basis of secondary data for
our
study.

16
 RESEARCH
METHODOLOGY

• Scope of the study

• Type of research

• Data
Collection
• Sampling
Technique
METHODOLOGY

Scope of the Study

This study is restricted to the Personal Life Insurance sector. Research is conducted
at
Bangalore Metropolitan Area
only.

Type of
Research
Our research is a formal study with some elements of exploration involved. This
research
is also aimed at recognising the areas of improvement for ICICI Prudential
Life
Insurance Company Ltd. in terms of their relationship with
customers.

Data
Collection
Data sources consisted of primary and secondary. Sources of primary data included
the
policyholders of ICICI Prudential Life Insurance Company Ltd. and also its
employees.
Sources of secondary data included the information provided by the organisation
and
various text books, magazines, internet and company
broucheres.
A structured questionnaire was developed and administered to generate the primary
data.

Sampling Technique
Random Sampling
It is also called probability sampling or chance sampling. Under this sampling
design
every item of the universe has an equal c hance of inclusion in the sample. All choices
are
independent of one another. It gives each possible sample combination an
equal
probability of being chosen. We, therefore, adopted this technique in our
study.

Sample
Size
The composition of our sample consisted of policyholders of ICICI Prudential
Life
Insurance Company Ltd., the employees and insurance advisors. The respondents
whom
we have approached are 50 in
number.

17
Sample
Description
Age 20 – 30 30 - 40 40 - 50 50 - 60 Total

No. 25 9 3 13 50

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

Gender Male Female Total

No. 35 15 50

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

Instrumentation
Techniques
Structured Questionnaire : The primary data has been collected through
structured
questionnaires, which were administered to the
respondents.

Tools used for testing

Hypotheses
The Chi-Square and z-test were used for testing the Hypotheses. Three hypotheses
were
stated and the sta tistica l testing of hypotheses was conducted by these tests.
These
statistical tools were used keeping in mind the distribution of the
population.

Limitations of the
Study
Research investigation is beset with time and resource constraints. Research is
limited to
Bangalore Metropolitan Area and hence the limitation of generalisation
becomes
obvious.

18
COMPANY PROFILE
THE ICICI
GROUP

incorporated at the initiative of the World Bank in 1955, the Government of India
and

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

housing finance, consumer finance, mutual funds and its latest venture Life
Insurance.

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

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

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

financial

GROUP COMPANIES OF ICIC

I

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

first private sector insurance companies to begin operations after receiving approval
from

several steps towards its realizing its goal. ICICI Prudential understands that
different
people have their own sets of needs at various stages of their lives. That's why they
offer
a choice of solutions depending on whether you are a young individual planning for
the
years ahead or a n established professional planning for your retire ment. The Company
is
now operational in ten cities throughout the
country.
ABOUT ICICI PRUDENTIAL LIFE INSURANCE COMPANY
LTD.
ICICI Prudential Life Insurance company is a joint venture between ICICI, a
premier
financial powerhouse and Prudential, a leading international financial services
group
headquartered in the United Kingdom. ICICI and Prudential came together in 1993
to
form Prudential ICICI Asset Management Company, which has today emerged as one
of
the largest private sector mutual fund company in India. The two companies
bring
together the strongest financ ial service brands in Asia, known for the ir
professionalism,
excellent quality of service and long - term commitment to consumers. Riding on
the
success of this relationship, the two companies joined hands once more in 2000, to
form
ICICI Prudential Life Insurance Company, with a commitment to provide leading-
edge
life insurance solutions. This venture plans to take care of the insurance needs at
various
stages of life. ICICI Prudential has been theBest Life Insurer by
adjudged Outlook
Money. This is the award that the value delivered to customers
only recognises in
addition to business
performance.
ICICI Prudential's equity base stands at Rs. 6.75 billion with ICICI Bank having
74%
stake in the company and Prudential having 26%. The Company was granted
Certificate
of Registration for carrying out Life Insurance business, by the IRDA on November
24,
2000. It commenced commerc ial operations on December 19, 2000, becoming one of
the
first few private sector players to enter the liberalized arena. ICICI Prudential
was
positioned as an enabler of protection relevant to the needs of the life stage.
The
Company issued its first policy on December 12, 2000. In the year ended March
31,
2004, the company had issued over 430,000 policies. ICICI Prudential was amongst
the
first to identify the emerging opportunity in the Pension segment and launched
two
linked pension products- LifeTime Pe nsion and LifeLink Pension, which have been
well
received in the market. The company has a network of about 30,000 advisors as well
as
12 bancassurance tie-ups. ICICI Prudential has one of the largest distribution
networks
amongst private life insurers in India. Today the company is the #1 leading private
life
insurer in the country. The company has a commitment to increase consumer
knowledge
about Life . 20
Insurance
HISTORY
ICICI Prudential was established in Dec 2000. Sine the brand ICICI is well known in
the
country, they did not have to face that particular challenge. They wanted to build
an
organisation with culture different from that of LIC. Life Insurance was positioned
as a
high excitement and emotive product. The task at the time of set up was to establish
the
ICICI brand, build awareness and give the brand a larger than life image by
addressing
the issue of credibility and trust to invest funds with. Another big initiative that
ICICI
Prudential launched was a quality initiative – Six Sigma. For promoting the
company,
the the me was ‘cover every Indian with joy, hope, freedom, life’. Further, they
chose
children from municipal schools who received endowment policies. These
programs
were to deliver the brand promise. Today the company has set themselves metrics that
is
best in class for various categories of players. In terms of service the
company’s
benchmarks are the best retail financial services player in the world. The company
is
hopeful of playing a major role in the expanding the life insurance market in
this
country.

MILESTONES OF THE COMPANY

Dec 12th 2000 : ICICI Prudential issues its first policies to underprivilege d
children
Dec 20th 2001 : Launched Market-linked insurance
schemes.
Feb 19th 2002 : Launched innovative child
product
Feb 25th 2003 : Company grabs 73% of private sector pensions
market.
April 7th 2003 : ICICI Prudential crosses Rs. 500 crore premium
milestone.
July 15th 2003 : ICICI Prudential became the first Life Insurance company to cross
Rs.
500 crore capital
base. th
Sept 25 2003 : ICICI Prudential launched Smartkid unit – linked child
plans
April 2004 : ICICI Prudential tops the premium income chart among private playe rs
for
the third time in a
row.
ICICI Prude ntial Life Insurance has increased its market share among private
life
insurers to nearly
40%
Best Life Insurer award by Outlook
Money
ABOUT THE PARTNERS – ICICI BANK
ICICI Bank is India’s second largest bank. ICICI Bank provides a broad spectrum
of
financial solutions for corporate and retail customers. It has about 450 branches
and
extension counters, 1675 ATMs, call centers and Internet banking. ICICI Bank is
the
only Indian company to be rated above the sovereign rating by the interna tional
rating
agency Moody’s and the only Indian company to be awarded an investment
grade
international credit rating. The Bank enjoys the highest AAA (or equivalent) rating
from
all leading Indian rating agencies. This is one of the largest financial institutions in
India
and trusted by millions of Indians over the
years.

FOREIGN PARTNER – PRUDENTIAL PLC.

Prudential is a leading internationa l financial services company in the UK. Prudential
has
brought to market an integrated range of financial services products that now
includes
life assurance, pensions, mutual funds, persona l banking, investment management
and
general insurance. Prudential is one of the largest life insurance companies in the
world.
It also has its presence throughout Asia. Since 1923, Prudential has
championed
customer – centric products and services. Solid reputation built over 150 years.
Already
established as one of the biggest mutual fund companies in India (Prudential
ICICI
AMC). It is truly a global
brand.
PRUDENTIAL ASIA

Prudential is the largest life insuranc e company in the United Kingdom. Asia has
always
been an important region for Prudential and it has had a presence in Asia for over
75
years. It has over 45,000 staff agents and over 1 million customers. It has its
operations
in 12 countries throughout
Asia.
SERVICE

ICICI Prudential has recruited and trained over 18,000 insurance advisors to
interface
with and advise customers and has the highest number amongst private life insurers
on
the renowned Million-Dollar Round Table (MDRT). Further, it leverages its state-of-
the-
art IT infrastructure to provide superior quality of service to customers. It
has a
‘Customer First’
philosophy.

COMPETITORS
ICICI Prudential faces tough competition from Life Insurance Corporation of
India
which is one of the oldest insurance company and also from other private insurers
like
Birla Sunlife, Tata AIG, MetLife etc, HDFC Standard Life Insurance, ING Vysya
etc.
22
LIFE INSURANCE SCORE CARD - (First year & single premium in 2003 –
04)
Insuranc Income (in % Grow th
e
Company Rs.
Crore (over
the previous
) year)
Allianz Bajaj 179.70 183.50

ING Vysya 72.60 311.15

AMP Sanmar 27.88 341.50

SBI Life 195.90 172.54

Tata AIG 180.15 245.07

HDFC Standard 209.33 61.88

ICICI Prudential 750.91 106.23

Birla Sunlife 449.86 247.20

Aviva 77.13 472.83

OM Kotak 127.10 260.99

Max Newyork 131.48 95.34

MetLife 23.38 203.70

Private Total 2425.46 153.15

LIC 16284.68 1.93

Source : IRDA
Website

VARIOUS DEPARTMENTS
Sales & Distribution Department Operations
Department
Bancassurance Risk Management
Group Assurance Department Front Desk
HR & Administration Department Training
Department
The organisation structure is given on Page
26.

23
YEAR OF REVIEW 2003 – 2004
Life Market Market share Market share as
Insurance
company share
as % of as % of no. of % lives
of under
premiu policies/scheme group schem
m s e
Allianz Bajaj 0.96 0.65 1.63

ING Vysya 0.39 0.32 0.11

AMP Sanmar 0.15 0.16 0.97

SBI Life 1.05 0.30 12.38

Tata AIG 0.96 0.57 3.04

HDFC Standard 1.12 0.71 0.93

ICIC 4.01 1.52 0.74

I
Prudentia
l
Birla Sunlife 2.40 0.54 3.18

Aviva 0.41 0.25 1.42

Om Kotak 0.68 0.18 0.85

Max New York 0.70 0.51 1.89

Met Life 0.12 0.09 0.66

Private Total 12.96 5.79 27.78

LIC 87.04 94.21 72.22

Grand Total 100.00 100.00 100.00

Source : IRDA
Website
No. of Policies Issued by Pvt. Life
Insurance Companies No. of Policies
Issued
500000
450000
400000
350000
300000
250000
200000
150000
100000
50000
0

P vt . Life Insurance Companies

 Premium collection of all Pvt. Life Insurance
Companies Allianz Bajaj

ING Vysya
AMP Sanmar
SBI Life
Tata AIG
HDFC Standard
ICICI Prudential
Birla
Sunlife
Aviva
OM Kotak
Max Newyork
MetLife

Source : IRDA
Journal
PRODUCTS
ICICI Prudential Life Insurance offers a range of innovative, customer-centric
products
that meet the needs of customers at every life stage. There a re 13 policies to cater
to
individuals, which can be enhanced with six riders so as to create a number
of
combinations. Given the demographic and social conditions of India - like an
aging
population, absence of a social sec urity system and inflation - ICICI Prudential Life
sees
immense potentia l in the growth of retirement
products.
Solutions for
£ individuals
Savings Solutions : SecurePlus, CashPlus, Save ‘n’ Protect,
CashBak
Protection Solutions :
LifeGuard
Child Solutions : SmartKid Child Plans,
SmartKid
Market-Linked Solutions : LifeLink,
LifeTime
Retirement Solutions : ForeverLife, SecurePlus
Pension
Market-linked Retirement Products : LifeTime Pension, Lifelink
Pension
Group Solutions
£
ICICI Prudential also offers group insurance solutions for companies seeking to
enhance
benefits to their employees. The group plans are : Group Gratuity Plan,
Group
Superannuation Plan, Group Term
Plan
Products for the rural
£ market
A basket of policies have been designed specifically for the rural market like
Mitr,
Suraksha & Salaam
Zindagi
Flexible Rider Options Six different rider options to choose 25
£ – from
 CEO & MD

Page 26

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

Mgr. Mgr. Mgr. Mgr. Financ
e

Regional Regional Regional Regional Actuaria

Sales Operation HR Mgr. Mktg M gr. l
Mgr. Mgr.
Chief
Zonal Mgr.
Zonal Zonal HR Zonal IT
Operation
Mgr. Mgr. Mktg M gr.

Branch
/Territory Branch HR Branch
Branch O&U
Mgr. Mgr. Mktg M gr.
Mgr.
SM/
Assistant
SM HR Marketin
Team
Executive gExecutiv
Leade
s e
r
Unit Mgr.
Underwrite
FSC(Banca)
r
Advisors
 DATA ANALYSIS AND INTERPRETATION

• Statement of
Hypotheses
• Testing of Hypotheses

• Inferences from the analysis

STATEMENT OF HYPOTHESES

The following three hypotheses which are appropriate to our study have been
tested
1. Ho = There is not more than one route to provide superior delivered value
to
customer
s
H1 = There is more than one route to provide superior delivered value to
customers
2. Ho = There is no direct link between Customer Value and Market
Share
H1 = There is a direct link between Customer Value and Market
Share
3. Ho = Customer Value Mapping ca nnot assess where the company’s services
stand
against compe titors on the relative quality versus price
matrix
H1 = Custome r Value Mapping can assess where the company’s services
stand
against compe titors on the relative quality versus price
matrix

27
I (a) Ideas/Meanings associated with the Life Insurance Policy of ICICI
Prudential
Meanings No.
Percentage
Max Risk Cover 21 42%
Profitable Mode of Investment 26
52% Tax Rebate 21 42%
Multiple Benefits 21
42%Premium 4 8%
Pre/During/After Sales Service 12
24% Total 105 -
Note : The respondents have more than one meaning associated with ICICI
Prudential
Source: Field
Investigation
Meanings/Ideas associated with Life
Insurance policy of ICICI
Prudential
120
100
80
No.
60
Percentage
40
20
0

Meanings/Ideas

Source: Field
Investigation
Interpretation : The most important association of idea with Life Insurance policy
of
ICICI Prudential is as a profitable mode of investment (52%). The other
associations
with the company are in terms of the maximum risk cover, tax rebate and
multiple
benefits provided by the policies. Presales, during-sales and after-sales service is
also
another idea association given by the
respondents.
I (b) Ranking the above manifestations of value as associated with the
Life
Insurance policy of ICICI
Prudential
Manifestations of Value Rank (No. of
respondents)
Max Risk Cover 38
Profitable Mode of Investment
34 Tax Rebate 29
Multiple Benefits
28 Premium 5
Pre/During/After Sa les Service
7
Source : Field 28
(Ib) Investigation
 Rank (No. of respondents)

40
35
30
Weighted
25
Average 20
Rank 15
10
5
0

Rank (No. of
respondents)
Manifestations
of Value

Source: Field
Investigation
Interpretation : We need to identify the most important value associated with
Life
Insurance policy of ICICI Prudential. The most important values according to
the
customers are providing maximum risk cover, profitable mode of investment, tax
rebate
enjoyed by them, multiple benefits provided, pre-sales:during-sales:after-sales
service
provided. Premium comes last in the order of
ranking.

29
 Hypothesis Testing
I
Ho = There is not more than one route to provide superior delivered value to
customers
H1 = There is more than one route to provide superior delivered value to
customers
The statistical tool used to test this hypothesis is Chi-square test. This non-
parametric
test is used keeping in mind the sample size. Chi-square = (Oij-
Eij)²/Eij

Meanings associated with ICICI

Maximum Prudential Tax
Profitable Multiple Premiu Pre/During/ Total
Risk Cover Investment Rebate Benefits m After Sales
Service
No. (O) 21 26 21 21 4 12 105

Rank 38 34 29 28 7 5 141

Total 59 60 50 49 11 17 246

Chi- -Eij)²/Eij where Oij is the observed frequency in the i,jth cell and
¥¤§
© !# Eij
is the expected frequency in the i,jth
"¨¦
cell.
We calculate chi-square as : Expected (E) is calculated as
(21+26+21+21+4+12)/6
E = 17.5
Degrees of freedom is (c-1)(r-1) = (2-1)(6-1) =
5
E O (O-E)2/E
17.5 21 0.70
17.5 26 4.12
17.5 21 0.70
17.5 21 0.70
17.5 4 10.41
17.5 12 1.72
Chi-Square 18.37

Inference : At 5% leve l of significance and 5 degrees of freedom the table value of

chi-
square is 11.07 and calculated value is 18.37 which is higher than the table value.
Hence
we re ject the null hypothesis and conclude that there is more than one route to
deliver
superior delivere d value to customers, the most important route being to
provide
maximum risk cover to
customers.
30
II (a) Preference of companies to buy a Life Insurance
Policy
Preference No.
Percentage
ICICI Prudential 45
90%Pvt. Companies 5 10%
Other
Total 50 100%
Source Field
: Investigation
Preference of companies to buy a Life
Insurance policy

50
45
40
35
30
Percentage 25
20
15
10
5
0
ICICI Other Pvt. Total
Prudential Companies Series1
Series2
Life Insurance companies

Source: Field
Investigation
Interpretation : We need to identify the preference of customers towards a
particular
company to buy a Life Insurance policy. It is inferred from the table and graph that
90%
of the respondents prefer policies of ICICI Prudential and only 10% of them prefe
r
buying it from other Pvt. Life Insurance companies. Hence it is inferred that
ICICI
Prudential forms the most preferred Life Insurance company among the private
players
and hence can gain a large market
share.
II (b) Reasons for preferring ICICI
Prudential Reasons No.
Percentage
Wide varieties of policies 8
18%
Satisfaction with policy features 3
7% Most popular brand 24 53%
Customer Loyalty 4 9%
Returns- Good & Consistent 4
9%
Good servicing of policies 7
15%Highly Professional 2
4%company are better known to me 4
Products of this
9% Policies are affordable & highly flexible 1
2% Simple process to obtain a policy 1
2% Total 58 -

31
Note : The respondents have more than one reason for preferring a policy from
ICICI
Prudential. Hence the total is not
additive.
Reasons for preferring ICICI Prudential
25

20

15
P er ce nt ag e
10

Series1
Series2
Reasons for preference

Source: Field
Investigation
Interpretation : This helps to know the reasons for preferring policies of
ICICI
Prudential. The most important reasons are the company’s well known brand name,
wide
varieties of policies to choose from, good service provided to customers, good
returns
and also highly affordable and flexible policies. Hence it can be inferred that
this
company’s polici es are preferred due to its bra nd name and other value
additions
provided by the company.

II (c) Reasons for preferring other Private

Players
Reasons No.
Depends on whether a Percentage
suitable LI policy product is 5 100%
on offe
r otal 5 100%
T
Source Field
: Investigation
Note : The tota l represents only those respondents preferring policies from other
private
Life Insurance Compa
nies.
Interpretation : The respondents who prefer a Life Insurance policy from other
private
Life Insurance companies do so depending on whether a suitable Life Insurance
policy
product is offered by them and not because of the value provide by those
companies.

32
 Hypothesis Testing
II
Ho = There is no direct link between Customer Va lue and Market
Share
H1 = There is a direct link between Customer Value and Market
Share
The statistical tool used to test this hypothesis is z -
test.
The formula is given
as
Z = p1 – p2

$H
5318)'%
A
C
E
IG H
9720(&
64@
B
"F
D P = n1p1 +n2p2 and Q = 1 - P
n1 +n2

(a) Market share of ICICI Prudential =

90%
(b) Reasons for preferring ICICI
Prudential
Reasons No.
Percentage
Wide varieties of policies 8
18%
Satisfaction with policy features 3
7% Most popular brand 24 53%
Customer Loyalty 4 9%
Returns- Good & Consistent 4
9%
Good servicing of policie s 7
15%Highly Professional 2
4% known products 4 9%
Better
Policies are affordable 1
Simple2%process to obtain a policy 1
2% Total 58 -

Considering the first two reasons with the highest percentage , we use the z-test
as
follows
:
p1 = 0.53 and p2 = 0.18 (sample proportions)
n1 = 58 and n2 = 58 (sample
size)
P = n1p1 +n2p2 = 58 (0.53) +58 (0.18) = 0.355
n1 +n2 58 + 58

Q = 1 – P = 1-0.355 = 0.645

Z = 0.53 – 0.18 = 3.93

P
U
V
cbS
Y
fihQ
X U g g Y
R
&
`¨W
p42edaT
q@
rD Inference : Critical value of Z at 5% level of significance is 1.96. As the calculated
value
of Z is greater than the critical value, we reject the null hypothesis and conclude
that
there is a direct link between customer value and market
share.
33
III (a) Quality of ICICI Prudential in terms of its
value
Quality No.
Percent
High 35 70%
Medium 15 30%
Low 0 0%
Total 50 100%
Source : Field
Investigation

Quality of ICICI Prudential in terms

of its value

Total

Low Series2
Series1
Medium

High

0 20 40 60
No. of responses

Source: Field
Investigation
Interpretation: This is to find out the quality of ICICI Prudential in terms of its
value.
The quality of the company is found to be high with majority of the respondents i.e.
70%
and only 30% of them feel that the quality of the company in terms of its value
is
medium. This shows that the quality of ICICI Prudential in terms of the value
provided
to customers is high. This is also evident from the
graph.
III (b) Price of premium policy of ICICI
Prudential
Price No.
Percent
High 5 13%
Low 1 3%
Affordable 31 84%
Total 37 100%
Source: Field
Investigation

34
 Price of policy of ICICI Pru

40
35
30
25
20 Series1
15 Series2
10
5
0

Price of policy

Source: Field
Investigation
Interpretation : We need to identify the customer’s opinion about the price of
premium
policies of ICICI Prudential. It is evident from the graph and the table that 84% of
the
respondents stated that the policy is affordable while only a small percentage of
them –
13% stated that the price is high. The price of the policy of ICICI Prudential seems to
be
affordable
.

35
 Hypothesis Testing
III
Ho = Customer Value Mapping cannot assess where the company’s services
stand
against compe titors on the relative quality versus price
matrix
H1 = Customer Value Mapping can assess where the company’s services stand
against
competitors on the relative quality versus price
matrix
Customer Value
Map

Higher 1.25
25

Fair Value
Line

1.0
0

0.84
Lower

0.75
0.40 0.60 0.70 0.80
Lower Higher
X – axis : Relative Quality (in
%)
Y – axis : Relative Price (in
%)
Inference : This map helps us to assess where the company’s service stands
against
competitors. The position of the ICICI Prudential is to the right and below the fair
value
line. This is indicated by the black dot as shown above. Hence ICICI Prudential is in
a
gain sharing position. Hence we reject the null hypothesis and conclude that
Customer
Value Mapping can assess where the company’s services stands against competitors
on
the relative quality versus price
matrix.

36
INFERENCES
Table-1
Gender
Gender No.
Percentage
Male 35 70%
Female 15 30%
Total 50 100%

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

Table-2 Age
Age No.
FromPercentage
20 to 30 25 50%
From 30 to 40 9 18%
From 40 to 50 3 6%
From 50 to 60 13 26%
Total 50 100%

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

Table –3 Do you have a Life Insurance Policy?

Policy No
Percentage
Yes 46 92%
No 4 8%
Total 50 100%

This project is based on certain objectives and seeks to find out as to how
many
respondents have a Life Insurance Policy at pre sent. It is noted that 92% of them have
a
policy and the rest of them indicate potential customers for the
company.

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

bought
Life Insurance Company No
Percentage
ICICI Prudential 37
80% LIC 9 20%
Total 46 100%

The data indicates that majority of the respondents who have a life insurance policy
have
purchased it from ICICI Prudential –80%. A small percentage of them have
purchased
the policy from Life Insurance Corporation of
India.

Table-4a Specify the policy

type
Policy Type No.
Percentage
ICICI LifeTime 18
ICICI 39%Retirement Solutions 14
30% LIC Endowment 4 8%
LIC Jeevan Shree 3
7%
ICICI Smart Kid 3
7%
ICICI Save n' 1 2%
Protect
ICICI Secure Plus 1
2% Jeevan Chaya 1
LIC
2% Jeevan Surabhi 1
LIC
2% Total 46 100%

The table indicates that ICICI Prudential’s ‘LifeTime’ and ‘Retirement Solutions’
are
most preferred among all types of policies followed by ‘SmartKid’ polic y.
Among
policies of Life Insurance Corporation of India ‘Endowment’ see ms to be the
most
preferred
policy.

Table-4b Level of satisfaction for the policy

service
Level of satisfaction No
Percentage
High 29 63%
Medium 17 37%
Low Nil
Total 46 100%

This indicates the satisfaction level of policyholders in terms of service provided by

the
company. It is inferred that a high percentage of respondents – 63% have a high level
of
satisfaction and 37% of them stated that the level of satisfaction for policy
service is
medium.

Table-5 If you don’t have a Life Insurance policy, give

reasons
Reasons No.
Percentage
Do not feel the need for it 2
50%afford to buy one a t
Can't 2 50%
this stag
eTotal 4 100%
Note : This total includes only those respondents without a
policy
The data potrayed in this table helps us to know the reasons for not having a
life
insurance policy. From the table it is seen that an equal percenta ge of respondents
(50%)
felt no need for a life insurance policy a t present and another 50% of them cannot
afford
to buy a life insurance policy at this
stage.

Table-6 Satisfaction with the existing features of life insurance

policy
Satisfied No.
Percentage
Yes 46 100%
No Nil
Total 46 100%
Note : This total includes only those respondents having a life insurance
policy
The data indicates that all respondents who have a life insurance policy are satisfied
with
their policy feature s. This infers that existing policies are properly
designed.

Table-7 Benefits expected from the life insurance

policy
Benefits Expected No.
Percentage
Income Tax rebate 37
74% Life risk cover 35
Mainly
Loan76%
Facility against the policy 7
14%
Appreciation of capital invested 32
64%
Note : The respondents expect more than one
benefit
The table shows life risk cover is the main criterion with the majority of
respondents-
76%. At the same time the same respondents look for additiona l financial benefits
by
way of income tax rebates. Also 64% of them buy a life insurance policy to
appreciate
the capital invested. A very small percentage of the respondents think of
availing
themselves of loans against their polic
ies.

Table-8 Are private life insurance companies more

trustworthy?
Particulars No.
Percentage
Yes 38 76%
No 12 24%
Total 50 100%

The data shows that majority of the respondents – 76% stated that private life
insurance
companies are more trustworthy. A small percentage of them did not agree with
this.
This infers that a majority of the respondents have faith in private life
insurance
companies and hence have purchased policies from
them.

39
Table-9 Why private life insurance companies are not
trustworthy?
Reasons No.
Percentage
Relatively new in India compared to LIC 5
42%
Liable for a shakeup 3
25%
Risk involved - Govt. policies 1 8%
could
change
Fear of closure 1
8%
Exit norms are not 1 8%
widely
known
Very complicated procedures 1
8% Total 12 100%

This table indicates the reasons for the customers not having faith in private
life
insurance companies. 42% of the respondents stated that private life
insurance
companies are relatively new in India compared to Life Insurance Corporation of
India
and 25% of them felt that private companies do not have a strong financ ial
foundation.
The other reasons are fear of closure, risk involved and complicated procedures
followed
by the m.

Table-10 Prices of policies of private life insurance

companies
Price No.
Percentage
High 4 8%
Low 1 2%
Affordable 45 90%
Total 50 100%

This table shows the customer’s view about the prices of policies of private
life
insurance companies. 90% of the respondents stated that the price is affordable.
Only a
small percentage of them felt that the price is
high.

Table-11 Guidance/Service expected from a life insurance

advisor
Guidance No.
Percentage
Policy features to be explained properly 18
36%
Guidance regarding the best policy to suit my needs 16
32%
Policy features to be put forth honestly without supressing the facts 12
24%
Reminders regarding premium payment falling due to be 8 16%
conveyed
on time
Whether switch over facility between policies is available 2
4%
Tax planning to obtain max IT benefits under sec 88 & 80ccc(1) 1
2%
Help & guidance needed to file the proposal form 1
2%
Regarding policy which will give me highest returns 1
2%
Note : The respondents expect more than one kind of guidance/service
40
Most of the respondents desire an insurance advisor to thoroughly explain
policy
features. 32% of them need advisors’ guidance regarding the policy best suited for
their
needs. The other services expected are honest explanation of policy without
supressing
facts and also to remind about the payment of premium when it is
due.

Table-12 Are you aware of ICICI

Prudential?
Awareness No.
Percentage
Yes 50 100%
No Nil -
Total 50 100%

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

Table-13 Source of awareness of ICICI

Prudential
Source of awareness No.
Percentage
Advertisement 27
Life54%Insurance Agent 24
48% Friends 10 20%
Other- Employee 9 18%
Colleagues 4
8% - Advisor 2 4%
Other
Neighbor 1 2%
Other - Internet 1
2% Total 78 -
Note : The respondents have more than one source of
awareness
The table indicates that advertise ments followed by life insurance agents form the
main
source of awareness for ICICI Prudential. 20% of the respondents came to know
about
ICICI Prudential through their friends, 18% of them are aware of ICICI Prudential
as
they are employed there. A small number of respondents stated the personal internet
as
their source of
awareness.

Table-14 If you are aware of the polic ies of ICICI Prudential and other
private
companies, your prefe rence would
be :
Preference No.
Percentage
ICICI Prudential 45
Other90%
Private Companies 5
10% Total 50 100%
This table shows the preference of customers to buy a life insurance policy of a
particular
company. It is inferred that 90% of the respondents prefer policies of ICICI
Prudential
and only 10% of them prefer other private companies. This shows that ICICI
Prudential
forms the most preferred company among the private
players.

Table-15(a) Reasons for preferring ICICI

Prudential
Reasons No.
Percentage
Wide varieties of policies to 8 18%
choose
from
Satisfied with the existing feature s of the policy 3
7%
Customer loyalty 4 9%
The returns provided are consistent and good 4
9%
Good servicing of policies 7
15%
Professionalism is exhibited in all their working 2 4%
&
operation
sProducts of this company are known better than the others 4
9%
Policies are affordable and are highly flexible 1
2%
Process to obtain the policy is very simple 1
2%
Total 58
Note : The respondents have more than one reason for preferring ICICI
Prudential
This shows the reasons for preferring policies of ICICI Prudential. The most
important
reasons for this seem to be well-known brand and most popular company among
private
players, wide varieties of policies to choose from and also good service provided
along
with a host of other
reasons.

Table-15 (b) Reasons for preferring other private

companies
Reasons No
Percentage
Depends on whether a suitable insurance 5 100%
policy
product is on
offer
Total 5 100%
Note : This total represents only those respondents who prefer policies from
other
private
players
All the respondents who prefer policies from other private life insurance companies
do
so as their choice depends on whether a suitable insurance policy is
offered.

42
Table-16 Extra value added features in ICICI Prudential’s
policies
Extra Features No.
Percentage
Wide range of options within the same policy 14
28%
Multiple benefits packed in a single policy 13
26%
Don't Know 12 24%
Good returns provided 10 20%
Flexibility 10 20%
Liquidity 4 8%
Different riders/top ups are provided 3
6%
Low lock in period 2 4%
Switching between options allowed free 2 4%
once
every
year
Policy details - easy to understand in the brochure 1
2%
Total 71 -
Note : Each respondent finds more than one value added feature in the
policy
This shows the value-added features in policies of ICICI Prudential. Wide range
of
options –28%, multiple benefits-26% and flexibility and good returns (20% each)
seem
to be the most important value-added features. About 24% of the respondents are
unable
to identify extra value-added features provided by ICICI
Prudential.

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

Prudential
Meanings No.
Profitable Percentage
mode of investment 26
52%
Max risk cover 21 42%
Multiple benefits 21
42%
Tax rebate 21 42%
Pre/during/after sale services 12
24%
Premium 4 8%
Total 105 -
Note : Respondents have more than one meaning associated with ICICI
Prudential
The most important idea associated with insurance policy of ICICI Prudential
is
profitable mode of investment (52%). Maximum risk cover and tax rebate are the
other
meanings associated. 24% of the respondents have the sales service as a
meaning
associated with ICICI
Prudential.

43
Table-18 Rank the above manifestations of value in the order of
merit
Manifestations of Value Rank (No. of
respondents)
Max Risk Cover 38
Profitable Mode of Investment
34 Tax Rebate 29
Multiple Benefits
28 Premium 5
Pre/During/After Sa les Service
The7 table shows that the most important value associated with the life insurance
policy
of ICICI Prudential is maximum risk cover. The other values in the order of merit
are
profitable mode of investment, tax rebate, multiple bene fits, pre/during/after sales
service
and premium.
Note : The total is not additive a s the respondents have more than one value assoc
iated
with ICICI
Prudential

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

Prudential?
Particulars No.
Percentage
High 5 13%
Low 1 3%
Affordable 31 84%
Total 37 100%
Note : The total represents respondents who have an ICICI Prudential
policy
This shows the customer’s opinion about the premium polic y of ICICI Prudential.
It
indicates that 84% of the respondents felt that the policy is affordable. Only 13% of
them
felt that the premium rate of policy is
high.

Table-20 Quality of ICICI Prudential in terms of its

value
Particulars No.
Percentage
High 35 70%
Medium 15 30%
Low Nil -
Total 50 100%

The table indicates the quality of ICICI Prudential in terms of its value. 70% of
the
respondents have rated the quality of ICICI Prudential as ‘High’ in terms of its
value.
30% of them have rated the company’s quality as ‘Medium’. However no respondent
felt
that the quality of the company is
‘Low’.

44
Table-21 Satisfaction with ICICI Pr udential in policy
servicing
Satisfaction No.
Percentage
Yes 37 100%
No Nil -
Total 37 100%
Note :The total represents respondents who have a policy from ICICI Prude
ntial
This table shows the satisfaction of customers with ICICI Prudential in servicing
of
policies. All respondents (100%) who have policies from ICICI Prudential
have
expressed satisfaction with respect to servicing of their
policies.

Table-22 Comment on the promotional policy of ICICI

Prudential
Comment No.
Percentage
Quite good in all aspects 39
78%
Frequency of ads could be increased 9
18%
Contents of the ads can be 6 12%
made
simple
rReach is to a limited sector/audience 2
4%
Should reach rural areas also 2
4%
Quite impressive 1
2%
Excellent 1 2%
Change of logo to reflect objectives 1 2%
company
of
Total 61 -
Note : The respondents have more than one
opinion
Data indicates that 78% of the respondents felt that the promotional policy of
ICICI
Prudential is quite good in terms of its theme, logo and frequency. 18% of them
stated
that advertisement frequency could be increased. 12% of them are of the view that
the
contents of advertisement could be made simpler. A very small percenta ge
of
respondents felt that the reach is to a limited
audience.

Table-23 Is ICICI Prudential becoming popular day by

day?
Popular No.
Percentage
Yes 49 98%
No 1 2%
Total 50 100%

This shows the popularity of ICICI Prudential growing day after day. 98% of
the
respondents agreed about the growing popularity of ICICI Prudential while only 2%
of
them
disagreed.
45
Table-24 Reasons for its
popularity
Reasons No.
Percentage
Marketing strategy/Sales tactic 14 28%
s
adopted
Aggressive promotion 11 22%
Wide ne twork of agents 10
20%
Established brand name 10
20%
Service level is good 6
12%
Superior product features 5
10%
Policies provides various benefits 4
8%
Good returns on policie s 2
4%
Understand customers better 1
2%
Total 63 -
Note : The respondents have more than one reason for its
popularity
The reasons that a re most important for the popularity of ICICI Prudential are –
the
marketing strategies adopted, aggressive promotion, its wide network of
advisors,
established brand name in the order of merit. The other reasons are quality of
service,
superior product features and various other benefits provided by
policies.

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

Prudential?
Recommend No.
Percentage
Yes 20 40%
No 30 60%
Total 50 100%

It is seen from the table that 60% of the respondents do not recommend a heavy dose
of
personnel selling for ICICI Prudential while only 40% of them seem to be in favor of
a
heavy dose of personnel
selling.

Table-26 Reasons for recommending personnel se lling for ICICI

Prudential
Reasons No.
Percentage
For max sales and profitability 10
50%
Penetrate deeper in the private 3 15%
life
insurance
market
To give customers a more personal touch 3
15%
To stay ahead of competition 2
10%
To increase awareness about 1 5%
company's
products
Develop need for insurance 1 5%
among
customer
s Total 20 -
Note : The respondents have more than one reason for its popularity
46
A majority of the respondents (50%) recommend personnel selling for ICICI
Prudential
so as to increase its sales and profitability. 10% of them stated that personnel se
lling
helps to stay ahead of competition. 15% of them e ach recommend personnel selling
to
give customers a more personal touch and to penetrate deeper into the life
insurance
market
.

Table-27 Have you visited ICICI Prudential anytime for

transactions?
Visited No.
Percentage
Yes 12 40%
No 25 60%
Total 37 100%
Note : The total represents respondents who have a policy from ICICI
Prudential
The data indicates that a majority of the respondents-68% who have a policy from
ICICI
Prudential have not approached the company anytime for transactions. Only 32%
of
them have approached the company for
transactions.

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

of
frontline e
mployees
Comment No.
Percentage
Good 8 67%
Helpful 4 33%
Friendly & co-operative 2
17% Very patient 1
8%
Customer focussed 1
8% Total 16 -
Note : The respondents have more than one view about the
behaviour
This exhibits the behaviour of frontline employe es of ICICI Prudential. The
behaviour
pattern according to 67% of the respondents is ‘good’, 33% of them stated that
the
frontline employees are very ‘helpful’, 17% of them felt that key personnel are
very
‘friendly’ and ‘co
-operative’.

Table-29 Do you have any complaints against ICICI

Prudential
Complaint No.
Percentage
Yes 1 3%
No 36 97%
Total 37 100%
Note : The total represents respondents who have a policy from ICICI
Prudential
This shows the number of respondents having complaints against ICICI Prudential.
A
vast majority (97%) of the respondents have no complaints and only one
respondent
(3%) among the total number of respondents have a complaint against the company.
This
infers that a majority of the policyholders are happy and satisfied with ICICI
Prudential.

Table-30 Please specify the complaint, if

any
- The settlement of the policy amount was
delayed

Table-31 Please suggest remedial

measures
- ICICI Prudential should speed up the process regarding the settle ment
amount

Table-32 Image of ICICI

Prudential
Image No.
Percentage
Good 50 100%
Bad Nil -
Ugly Nil -
Total 50 100%

The opinion of all the respondents (100%) about the image of ICICI Prudential
is
positive. None of the respondents felt that the company’s image is
negative.

Table-33 Do you recommend a ‘Policy Holder’s Club’ for ICICI

Prudential?
Recommend No.
Percentage
Yes 12 32%
No 25 68%
Total 37 100%

A majority of the policyholders (68%) do not recommend a policyholders club for

ICICI
Prudential. Only 32% of them feel the need for it. The current policyholders may favor
a
club in the
future.

Table-34 Role prescriptions for the

club
Roles No.
Percentage
Status of policy to be provided to customers 4
33%
Left to the company to decide 3
25%
Function as grievance redressal cell 3
25%
Listen to suggestions/feedback from 2 17%
customerschanging needs of customers
Address 1
8%
Regular follow up of policies 1
8%
Regular information about company's 1 8%
performance
New customers can be obtained through the 1 8%
club
member
s
member
sTotal 16 -
Note : The respondents have more than one role
prescription
The table shows the role prescriptions for ‘policy holder’s club’. 33% of the
respondents
felt that the status of their policy could be provided to them through the club. The
other
roles prescribed are the club should function as a grievance redressal cell so as to
make
suggestions for the company, to address the changing needs of customers,
regular
follow-up of policies and to provide regular information about the
company’s
performance
.

Table-35 Recommendations to enhance the value of ICICI

Prudential
Recommendations No.
Be customer centric Percentage 10
27%
Introduce new policies according to changing 5 14%
needs
of
customer
Switch between various options more than once a year 5 14%
be
to
allowed
Give guaranteed returns 4
9%
Reduce the pre mium amount of certain policies 4
9%
Increase awareness among customers 3
8%
Handle complaints effectively 2
5%
Facts related to policy can be put across to customer 2 5%
in
simpler
way
Introduce an exclusive health policy 1
3%
Provide ECS facility 1
3%
Introduce a policy that covers the whole family 1
3%
Reduce the price of policies 1
3%
Policies to be made more common man oriented 1
3%
Maintain good service throughout the term of policy 1
3%
Total 41 -
Note : The respondents have more than one
recommendation
This shows the ways and means of enhancing the value of life insuranc e policy of
ICICI
Prudential. It is seen from the table that 27% of the respondents want the company to
be
customer centric, 14% of them each felt that the company should introduce new
policies
in accordance with the changing needs of customers and also allow to switch
between
various options more than once a year. Other recommendations are to give
guaranteed
returns to the customers and to reduce the premium amount of certain
policies.

49
Table-36 Future outlook visualised for ICICI
Prudential
Future Outlook No.
Percentage
Increase in growth & profitability 50
4%
Good future ahead 20 40%
Quite bright 16 32%
Will remain as the No. 1 Pvt. 6 12%
Life
Insurance
company
Fabulous 4 8%
Will e merge as a powerful brand 1
2%
Future is challenging 1
2% Total 98 -
Note : The respondents have more than one opinion about the future
outlook
40% of the respondents state that ICICI Prudential has a good future ahead. 32% of
them
stated that the future of the company is quite bright, 12% of them hope that
ICICI
Prudential will re main as the leading private life insurance company. The
remaining
respondents opined that ICICI Prudential would emerge as a powerful brand. 2% of
them
stated that the future is
challenging.

50