Beruflich Dokumente
Kultur Dokumente
On
Potential of life insurence
At
METLIFE INSURENCE LTD
Submitted in partial fulfilment of the requirements for the
Award of degree of Bachelor of Business Administration
2008 – 2011
Submitted by: Guided by:
SUNNY GUPTA ATUL KUMAR SINGH
Student Undertaking
This is to certify that I SUNNY GUPTA had completed the Project titled “TO
STUDY OF METLIFE INSURENCE COMPANY” in METLIFE under the
guidance of Mr. ATUL KUMAR SINGH in the partial fulfilment of the requirement
for the award of degree of Bachelor of Business Administration of BVU, SDE,
Academic Study Center BVIMR, New Delhi. This is an original piece of work & I
had neither copied nor submitted it earlier elsewhere.
SUNNY GUPTA
Acknowledgement
The present work is an effort to throw some light on
“Research on insurance industry for MetLife
Insurance”. The work would not have been possible to
come to the present shape without the able guidance,
supervision and help to me by number of people.
SUNNY GUPTA
Preface
The subject of my study was Research on insurance industry for METLIFE. I have
done by applying various tools like through direct interaction with customer’s .I have
also done a market survey with the use of a questionnaire to know the clients interest
The report contains first of all brief introduction about the company. Then it contains
the complete description of the job done and in the last the growth opportunities and
suggestions.
SUNNY GUPTA
CHAPTER -1
INTRODUCTION
INDUSTRY PROFILE:-
The story of insurance is probably as old as the story of mankind. The same instinct that
prompts modern businessmen today to secure themselves against loss and disaster existed in
primitive men also. They too sought to avert the evil consequences of fire and flood and loss
of life and were willing to make some sort of sacrifice in order to achieve security. Though
the concept of insurance is largely a development of the recent past, particularly after the
industrial era – past few centuries – yet its beginnings date back almost 6000 years.
Life Insurance
In 1818 the British established the first insurance company in India in Calcutta, the
Oriental Life Insurance Company. First attempts at regulation of the industry were
made with the introduction of the Indian Life Assurance Companies Act in 1912. A
number of amendments to this Act were made until the Insurance Act was drawn up
in 1938. Noteworthy features in the Act were the power given to the Government to
collect statistical information about the insured and the high level of protection the
Act gave to the public through regulation and control. When the Act was changed in
1950, this meant far reaching changes in the industry. The extra requirements
included a statutory requirement of a certain level of equity capital, a ceiling on share
holdings in such companies to prevent dominant control (to protect the public from
any adversarial policies from one single party), stricter control on investments and,
generally, much tighter control. In 1956, the market contained 154 Indian and 16
foreign life insurance companies. Business was heavily concentrated in urban areas
and targeted the higher echelons of society. “Unethical practices adopted by some of
the players against the interests of the consumers” then led the Indian government to
nationalize the industry. In September 1956, nationalization was completed, merging
all these companies into the so-called Life Insurance Corporation (LIC). It was felt
that “nationalization has lent the industry fairness, solidity, growth and reach.”
Fundamental definition:
In the words of D.S. Hansel, “Insurance accumulated contributions of all parties
participating in the scheme.”
Characteristics of insurance
• Sharing of risks
• Cooperative device
• Evaluation of risk
• Payment on happening of a special event
• The amount of payment depends on the nature of losses incurred.
• The success of insurance business depends on the large number of people
insured against similar risk.
• Insurance is a plan, which spreads the risk and losses of few people among a large
number of people.
• The insurance is a plan in which the insured transfers his risk on the insurer.
• Insurance is a legal contract which is based upon certain principles of insurance
which includes, utmost good faith, insurable interest, contribution, indemnity,
causas proxima, subrogation, etc.
• The scope of insurance is much wider and extensive.
Functions of insurance:
Primary functions:
1. Provide protection:- Insurance cannot check the happening of the risk, but can
provide for the losses of risk.
2. Collective bearing of risk: - Insurance is a device to share the financial losses of
few among many others.
3. Assessment of risk: - Insurance determines the probable volume of risk by
evaluating various factors that give rise to risk.
4. Provide certainty: - Insurance is a device, which helps to change from uncertainty
to certainty.
Secondary functions:
1. Prevention of losses: - Insurance cautions businessman and individuals to adopt
suitable device to prevent unfortunate consequences of risk by observing safety
instructions.
2. Small capital to cover large risks: - Insurance relives the businessman from
security investment, by paying small amount of insurance against larger risks and
uncertainty.
3. Contributes towards development of larger industries.
Other Function:
Means of savings and investment:
Insurance companies are business houses. The product they sell is financial
protection. To succeed and survive, they must cover their costs, which
1818 : Oriental Life Insurance Company, the first life insurance company on Indian
soil started functioning.
1870: Bombay Mutual Life Assurance Society, the first Indian life 'Insurance company
started 'Its business,
1912 : The Indian Life Assurance Companies Act enacted as the first statute to
regulate the life 'Insurance business.
1928: The Indian Insurance 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 Insurance Act with the
objective of protecting the 'Interests of the insuring pubic.
1956: 245 Indian and foreign insurance and provident societies are taken over by the
central government and nationalized. LIC formed by an Act of Parliament, viz. LIC
Act, 1956, with a capital contribution of Rs. 5 chores from the Government of India.
1997: Insurance regulator IRDA was set up as there felt the Feed:
General Insurers:
S.No. Name of the Company
1 Royal Sundaram Alliance Insurance Company Limited
2 Reliance General Insurance Company Limited.
3 IFFCO Tokio General Insurance Co. Ltd
4 TATA AIG General Insurance Company Ltd.
5 Bajaj Allianz General Insurance Company Limited
6 ICICI Lombard General Insurance Company Limited.
COMPANY PROFILE:-
MetLife (India)
FACT SHEET
Founded 2001
Employees 7688
MetLife Inc.
Celebrating 140 years, MetLife, Inc. is a leading provider of insurance and financial
services with operations throughout the United States and the Latin America, Europe,
and Asia Pacific regions. Through its domestic and international subsidiaries and
affiliates, MetLife, Inc. reaches more than 70 million customers around the world and
MetLife is the largest life insurer in the United States (based on life insurance in-
force).
The MetLife companies offer life insurance, annuities, auto and home insurance, retail
banking and other financial services to individuals, as well as group insurance and
retirement & savings products and services to corporations and other institutions. For
more information, please visit www.metlife.com.
MetLife Today
MetLife’s corporate vision – to build financial freedom for everyone – guides the
company’s response to people’s growing need for first-rate financial products and
services through various life stages and economic cycles. MetLife’s trusted brand, capital
strength, and existing relationships with millions of individual and institutional customers
around the globe uniquely position MetLife among its competitors.
The "everyone" in MetLife’s vision took on added meaning in 2000 as the company
welcomed an important new constituency: shareholders. MetLife transformed itself from
mutual to stock ownership in April of that year through a demutualization and initial
public offering that was completed in just 18 months after Board authorization.
The year 2001 was a true test of the qualities that define MetLife. The company’s core
values, brought to life in what MetLife does every day, were no more evident than in
MetLife’s response to the tragic events that shook our nation on September 11. MetLife
responded quickly. The company served its customers, communities and employees
during this difficult time. At the same time, MetLife invested $1 billion in a broad array
of publicly-traded common stocks.
In 2001, MetLife was the first insurance company to establish a financial holding
company with a nationally chartered bank. Leveraging its unparalleled distribution
channels, MetLife entered the retail-banking arena with the launch of MetLife Bank,
making it an easy and convenient way for MetLife’s customers to realize their financial
goals.
MetLife announced in 2002 that it would be continuing its long-standing relationship with
Snoopy and the rest of the PEANUTS® characters. The company signed a new contract
that would allow the characters to appear in MetLife’s domestic and international
advertising for the next 10 years.
The sale of State Street Research & Management Company to BlackRock, Inc. was
announced in 2004. In line with MetLife’s strategy to focus on core business growth, the
sale benefited many of the company’s Individual and Institutional Business clients who
held investments through State Street Research, as it became part of one of the largest
publicly traded investment management firms in the U.S.
The company’s stated long-term goal is to become the recognized leader throughout the
world for relationship building, connectedness and caring in financial services – in the
"giant league" with over 100 million people as MetLife customers by the year 2010.
MetLife took a major step toward realizing this goal in 2005, when it acquired Travelers
Life & Annuity and substantially all of Citigroup’s international insurance businesses for
$12 billion. Completed on July 1, 2005, the Travelers acquisition made MetLife the
largest individual life insurer in North America based on sales, the second largest
provider of retail annuities and the largest provider of institutional annuities.
Working Mother magazine honored MetLife in 2005 by naming the company one of the
"100 Best Companies for Working Mothers," for the seventh consecutive year. In 2005,
the company was named to DiversityInc.’s list of the Top 50 Companies for Diversity. In
early 2006, MetLife was also named to the National Association for Female Executives’
annual list of Top 30 Companies for Executive Women.
In 2006, MetLife appointed C. Robert (Rob) Henrikson chairman of the board of
directors, president and chief executive officer of MetLife, Inc. Henrikson was appointed
CEO on March 1, 2006 and chairman of the board on April 25, 2006.
Henrikson has been the architect of an aggressive growth strategy that included double-
digit organic growth, the divestiture of non-core businesses, and an M&A strategy which
Our Values
Management team
• Rajesh Relan
Managing Director
• MSVS Phanesh Murthy
Appointed Actuary
• Shilpa Vaid
Deputy Director- Human Resources
• Gaurav Sharma
Director - Customer Service and Operations
• Girish Malhotra
Director- Agency
• KR Anil Kumar
Director - Financial Planning
& Controller
• KS Raghavan
Chief Administrative Officer
• Preetinder Chadha
Deputy Director - Corporate Sales & Training
• P. S. Sankaran
Director – Business Support
• Sameer Bansal
Director- BA & BP
• Vijay Raghavan
Director - Marketing & Strategy
Partners:-
Corporate Social Responsibility
MetLife has always been committed to making a positive difference in the lives of the
individuals and communities. Today, that commitment drives volunteer work and
philanthropy across the globe. Working with non-profit organizations, MetLife
supports programs that provide young people with the skills they need to succeed in
life and create opportunities for people of all ages.
MetLife’s core values are personal responsibility, people count, partnership, integrity
and honesty, innovation and financial strength. These values also shape the
responsibility to the communities where the organization conducts its business.
STRENGTHS
Premiums are increasing and so are commissions.
The variety of products is increasing.
Transparency in working is followed.
Fund charges are less i.e 0.8%
Stronger financial base.
WEAKNESSES
Strong competitors like LIC, ICICI Pru, Birla Sun Life etc.
Premium is priced high as compared top the market leader.
Infrastructure cost is high.
Less expenditure on promotion.
OPPORTUNITIES
The ability to cross sell financial services barely being tapped.
Technology is improving to the point that paperless transactions are available.
The client's increasing need for an "insurance consultant" can open new ways to
service the client and generate income.
THREATS
Government regulations on issues like health care, mold and terrorism can
quickly change the direction of insurance.
The increasing expenses and lower profit margins.
Intense competition from LIC.
It is easier for new companies to enter into the industry and there will be more cut throat
competition. Factors that can limit the threat of new entrants are known as barriers to entry.
So in an insurance industry the average entrepreneur can’t come along and
start a new large insurance company. The threat of new entrants lies within the insurance
industry itself. Some companies have carved out niche areas in which they underwrite
insurance. So MetLife is fearful of being squeezed out b the big players. Another threat for it
is other financial services companies entering into the market. What would it take for a bank
or investment bank to start offering insurance products? In some countries, only regulations
that prevent banks and other financial firms from entering the industry. If those barriers were
ever broken down, like they were in the U.S with the Gramm-Leach-Bliley Act of 1999.
Power Of Suppliers-low
This is how much pressure suppliers can place on a business. If one supplier has a large
enough impact to affect a company’s margins and volumes, then they hold substantial power.
So in insurance industry, the suppliers of capital might not pose a big threat,
but the threat of suppliers luring away human capital does. If a talented insurance underwriter
is working for MetLife Insurance company(or one in a niche industry), there is a chance that
person will be enticed away by larger companies looking to move into a particular market.
Power of Buyers-low
This is how much pressure customers can place on a business. If one customer has a large
enough impact to affect a company’s margins and volumes, then they hold substantial power.
So for MetLife, the individual doesn’t pose much of threat to the company.
Large corporate clients have a lot more bargaining power with insurance companies. Large
corporate clients like airlines and pharmaceutical companies pay millions of dollars in
premium annually. Insurance companies try extremely hard to get high margin corporate
clients.
Availability of Substitutes-High
What is the likelihood that someone will switch to a competitive product or service? If the
cost of switching is low, then this poses to be a serious threat.
This one is pretty straight forward, for there are plenty of substitutes in the
insurance industry. Most large insurance companies offer similar suites of services. Whether
it is auto, home, commercial, health or life insurance. In some areas of insurance, however,
the availability of substitutes are far and few between. Metlife focusing on niche areas usually
have a competitive advantage, but this advantage depends entirely on the size of the niche and
on whether or not there are any barriers preventing other firms from entering.
Competitive Rivalry-High
And last but not the least: this describes the intensity of competition between existing firms
in an industry. Highly competitive industries generally earn low returns because the cost of
competition is high.
The insurance industry is becoming highly competitive. The difference
between one insurance company and another is usually not that great. As a result insurance
has become more like a commodity, an area in which the insurance company with the low
cost structure, great efficiency and better customer service will beat out competitors. Metlife
also use higher investment returns and a variety of insurance investment products to try to
lure in customers. In the long run, we’re likely to see more consolidation in the insurance
industry. Larger companies prefer to takeover or merge with another rather than spend the
money to market and advertise the people.
Competition Information
The other market players are:
ORIENTAL INSURANCE
The oriental insurance company limited (oicl) is one of the leading general
insurance companies of India and is a subsidiary of the general insurance corporation
on India.
Chapter-2
RESEARCH METHODOLOGY
DESCRIPTIVE RESEARCH DESIGN
SAMPLING
SAMPLE SIZE
A sample of 100 people will be taken for the survey. The required data
collected through questionnaire.
SAMPLING AREA
The sampling unit may be a Geographical one such as state, District, Village etc., The
geographical sampling unit under study has covered the area of Ahmadabad like C.G
Road, Satellite, Paldi, Vasna, etc….
DATA COLLECTION
The information required for our project was collect mainly from the primary sources
and even from secondary sources. The primary source consists of the data analyzed
from questionnaire and interaction with the user at that time only. And internet is used
as secondary source.
CONTACT METHOD
Face to Face
OBJECTIVE
LIMITATIONS
1. Difference in the opinion of the customers and the company.
2. Company is not willing to disclose full information.
3. Biased behaviour of the respondents.
4. Sample size being small, may not reflect the opinion of major segment.
5. Time frame is limited.
6. Difficulty in analyzing the data because of multiple responses given by the
respondents.
SCOPE OF STUDY
In today’s emerging Indian economy the role and scope of Insurance
companies has increased manifold and hence this sector has seen tremendous
growth and competition over the years. Through my project I am trying to give
an in depth analysis on the same harping on the growth and emergence of new
companies in the turf which was predominated by government backed
companies. his study relates to evaluate various insurance companies in
terms of products, revenue, sales, and human resources. It also covers
emergence and growth of new insurance companies in India. In this study I
will go through the products of various insurance companies and evaluate all
the products and compare those products with MetLife products so that
company can easily improve their productivity and boost their sales. In this
study a research will be conducted by using a structured questionnaire to
compare the products and market share of various insurance companies. It also
helps in knowing customers needs which is very beneficial for company to
increase productivity and boost sales. It is also helpful to understand various
marketing strategies adopted by various insurance companies so that company
can increase their market share by modifying marketing strategies and can
better serve the customers’ needs. I am also collecting information from the
company, websites, journals, magazines and unpublished data available at
company to compare various insurance companies. I have also done a
certification of IRDA to get a financial advisor license. I have also gone
through compliance sales training (CST) so that I can get better knowledge of
existing products of MetLife and it is also helpful in comparing with other
companies products.
Chapter-3
Data Analysis and Interpretation
Q1. How important it is to take a insurance policy?
a. Very Important
b. Important
c. Not Important
d. Don’t Know
INTERPRETATION
48 % of the total respondents surveyed think that Life Insurance policy is important for them
and 28.8% respondent think that it is very important and only 16% think that Life insurance is
not important for them
INTERPRETATION
Television is major source which helps in making the investment decision it’s the
perception of 30% respondent surveyed and 22% respondent make there decision on
word of mouth and only 7% respondent’s takes the help of Financial
Journals/business magazines.
INTERPRETATION
28% respondents think that Investment is the main purpose for taking an insurance
policy and only 14% respondent think that there purpose of insurance policy is for
Certain Mishappening which is ultimately the main purpose of the Insurance.
Q4. According to you which among the following Life insurance companies would
you prefer?
LIFE INSURANCE CORPORATION (LIC)
AVIVA LIFE INSURANCE
ICICI PRUDENTIAL
METLIFE INDIA INSURANCE
BIRLA SUN LIFE
OTHERS
INTERPRETATION
46% of the respondent surveyed perception is that LIC is best among all the Insurance
players and 10% respondent think that Metlife is the best among other insurance
players .
Q5. Are you aware of the allocation charges of different insurance companies?
a. Yes
b. No
INTERPRETATION
70% of the total respondents surveyed don’t aware of different charges charged by
Insurance companies and only 29% respondent surveyed aware about different
charges.
Q6. Factors that influence your investment decisions in a particular company:
Ranking 1 2 3 4 5 6 7 8
Response
Brand 39 29 29 17 14 9 8 5
Promotion 28 27 31 19 16 12 9 8
Relation with 22 31 26 21 19 15 7 9
Agent
Rate of Return 16 15 21 24 27 19 20 8
Life Insurance 13 11 15 23 25 21 24 18
Cover
Tax Benefits 9 13 14 22 18 23 25 26
Better 15 15 8 13 15 25 29 30
Services
Allocation 8 9 6 11 16 26 28 46
Charges
INTERPRETATION
26% of total people surveyed have ranked Brand as #1 for influence them for taking
an investment decision and 18% respondent ranked Promotions # 1 for there
investment decision and 14% people ranked relation with agent as #1 for there
decision and 31% respondent ranked Allocation charges as #8 for there investment
decisions.
INTERPRETATION
49% of total respondent surveyed have LIC’s Insurance Policy, 18% have ICICI
Prudential & only 5% respondents have Insurance policy of companies like Metlife,
Bharti AXA, IDBI Fortis etc.
Q8. Are you satisfied with the return, which you are getting from your current
policies?
a. Very Satisfied
b. Satisfied
c. Not Much Satisfied
d. Dissatisfied
INTERPRETATION
38% respondent surveyed are satisfied with the return they are getting from their
current policies and only 46% respondent are not much satisfied & dissatisfied from
the return they are getting from their current policies.
Chapter -4
Findings and Recommendations & Conclusion
FINDINGS
• Most of the family has their members in between 5
to 6.
• Maximum number of population have their income
between Rs 20000 to Rs 40000.
• Majority of people have their investment in
insurance is below Rs 10000.
• Pension plan is still the most popular plan among
people.
• Maximum people have their investment in mutual
funds and bonds.
• Maximum number people are insured from LIC.
• Most of the people prefer LIC for insurance.
• Majority of population are familiar with Metlife
insurance company.
• The company should concentrate on sales and
marketing department so that more and more
products can be sold out.
• Advertisement should be the best method to
advertise the product and popular among the public.
• Cheaper products should be introduced by company
so that it can reach the middle level people.
• Transparency should be made in between the
product details and the original product sold to the
customers.
• Company customer ratio should be maintained.
RECOMMENDATIONS
The Metlife India Insurance Company should now try to identify the gap between
current level of customer service and customer expectations. Some of the strategies
being recommended are as follows:
Brand Building: MetLife is a very huge Brand in US in Insurance
but in India it is not known as an Insurance brand. So MetLife need to focus
on Brand building Activities which can be done through Advertising, Road
shows, Knops, Sponsoring Events in rural & Urban Areas.
CONCLUSION
The various conclusions drawn from the project are: -
There has been tremendous change in the insurance history. And with it there has
been continuous growth in this sector both in Indian as well as world context.
The opening up of the insurance sector has changed the whole look of the industry.
While the LIC in order to face the competition is coming with new strategies. New
players like Metlife, ICICI, and Birla Sunlife are leading the sector due to their
strategic management and tailored made projects.
The primary reasons for buying an insurance policy, whether life or non-life is to
protect us from vagaries of life. We do not invest in insurance for returns; rather we
invest in it for regrettable necessities. Though a large proportion of policies available
in the country provide for returns, but nobody is looking for returns to the inflation
rate. So what does insurance offer, perhaps peace of mind, but even that takes time,
due to poor claim performance
The demand for insurance is likely to increase with rising per-capita incomes, rising
literacy rates and increase of the service sector, as has been seen from the example of
several other developing countries. In fact, opening up of the insurance sector is an
integral part of the liberalization process being pursued by many developing countries
Insurance is a Rs.400 billion business in India and yet its spread in the country is
relatively thin. Insurance as a concept has not been able to make headway in India.
There has been a strong fall in insurance business in recent years. Furthermore, it can
be observed that non-life business is not increasing as strongly as life business. On the
other hand, growth fluctuations have been relatively small with growth rates varying
between 1% and 5%. Life insurance business by contrast achieved average growth
rates of 6%, although the actual rates ranged from 0% to 13%. This shows on the one
hand the increasing significance of life insurance as an instrument for old age
provisions and on the other hand indicates the sensitivity of life insurance to changes
in the institutional and economic environment.
Bibliography
Websites:
www.metlife.co.in
www.insuranceworld.com
www.Google.com
Times of india
ANNEXURE
QUESTIONNAIRE
Q4. According to you which among the following Life insurance companies would
you prefer?
LIFE INSURANCE CORPORATION
AVIVA LIFE INSURANCE
ICICI PRUDENTIAL
METLIFE INDIA INSURANCE
BIRLA SUN LIFE
OTHERS
Q5. Are you aware of the allocation charges of different insurance companies?
a. Yes
b. No
Ranking 1 2 3 4 5 6 7 8
Response
Brand
Promotion
Relation with
Agent
Rate of Return
Life Insurance
Cover
Tax Benefits
Better
Services
Allocation
Charges