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PROBLEMS AND CHALLENGES FOR LIFE INSURANCE BUSINESS IN INDIA.
India’s rapid charge per unit of measurement of economical growth over the past times decade has been ane of the to a greater extent than important developments inwards the global economy. This growth has its roots inwards the introduction of economical liberalization inwards the early on 1990s, which has allowed Bharat to exploit its economical potential in addition to elevate the population’s touchstone of living.1 Insurance has a real of import role inwards this process. Health insurance in addition to pension systems are cardinal to protecting individuals against the hazards of life in addition to India, every bit the 2nd most populous acre inwards the world, offers huge potential for that type of cover. Furthermore, burn downwards in addition to liability insurance are essential for corporations to maintain investment risks in addition to infrastructure projects nether control. Private insurance systems complement social safety systems in addition to add together value past times matching risk with price. Accurate risk pricing is ane of the most powerful tools for setting the right incentives for the resources allotment of resources, a characteristic which is a key to a fast developing terra firma similar India. By nature of its business, insurance is closely related to saving in addition to investing. Life insurance, funded pension systems in addition to non-life insurance, volition accumulate huge amounts of upper-case alphabetic character over fourth dimension which tin give the axe live invested productively inwards the economy. In developed countries reinsurers frequently ain to a greater extent than than 25 per cent of the upper-case alphabetic character markets.2 The mutual dependence of insurance in addition to upper-case alphabetic character markets tin give the axe play a powerful role inwards channeling funds in addition to investment expertise to back upward the evolution of the Indian economy.
With a huge population base of operations in addition to large untapped market, insurance manufacture is a large chance surface area inwards Bharat for national every bit good every bit unusual investors. Bharat is the 5th largest life insurance marketplace seat inwards the emerging insurance economies globally in addition to is growing at 32-34 per cent annually.3 This impressive growth inwards the marketplace seat has been driven past times liberalization, with novel players’ significantly enhancing production awareness in addition to promoting consumer educational activity in addition to information. The strong growth potential of the terra firma has also made international players to aspect at the Indian insurance market. Moreover, saturation of insurance markets inwards many developed economies has made the Indian marketplace seat to a greater extent than attractive for international insurance players.
Notwithstanding the rapid growth of the sector over the lastly decade, insurance inwards Bharat remains at an early on phase of development. At the destination of 2003, the Indian insurance marketplace seat (in terms of premium volume) was the 19th largest inwards the world, only slightly bigger than that of Kingdom of Denmark in addition to comparable to that of Ireland.4 This was despite Bharat beingness the 2nd most populous terra firma inwards the the world every bit good every bit the twelfth largest economy. Yet, at that topographic point are strong arguments inwards favour of sustained rapid insurance line of piece of work organisation growth inwards the coming years, including India’s robust economical growth prospects in addition to the nation’s high savings rates. The dynamic growth of insurance buying is partly affected past times the changing income elasticity of insurance demand. It has been shown that insurance penetration in addition to per capita income remove hold a strong non-linear relationship. Based on this relation in addition to other considerations, it tin give the axe live postulated that past times 2014 the penetration of life insurance inwards Bharat volition increment to 4.4 per cent in addition to that of non-life insurance to 0.9 per cent.5
The insurance manufacture inwards Bharat was opened upward to private sector participation inwards the twelvemonth 2000. Prior to this, Life Insurance Corporation of Bharat was the sole instrumentalist inwards the life insurance manufacture inwards India. Since the entry of private players inwards the insurance market, LIC has lost 29 per cent marketplace seat part to the private players, although both, marketplace seat size in addition to the insurance premium beingness collected, are on the rise. In 2005, life insurance accounted for 79 per cent of the total insurance marketplace seat inwards India.6 In sentiment of the increasing competition, this study attempts to empathize the dimensions of service character which helps ensuring maximum client satisfaction, in addition to hence, helps life insurers to acquire a larger part of the market.
6.2 Progress of Indian Life Insurance Industry In The Post LPG Era
In the post LPG period, the Life Insurance Industry of Bharat witnessed a marvelous growth in addition to touched its historical height. So many factors remove hold collectively contributed to this remarkable achievement. In this tenure, the LIC of Bharat introduced many phenomenal line of piece of work organisation strategies past times way of offering colorful schemes in addition to products. The argue for these kinds of extraordinary lawsuit was only because of the rigid contest emerging past times the private insurance players. The private insurance companies are offering enough of novel attractive schemes in addition to products to acquire meaningful part inwards the insurance market.7 However, the LIC of Bharat has the powerful network in addition to it is launching attractive advertisements inwards the regular interval to create non bad awareness with the full general public. Simultaneously, the private life insurance companies are also taking much hurting to cover-up the major populations nether their boundary. As a result, they are sponsoring serial of effective awareness programmed through many attractive advertisements. This good for y'all contest motivates the full general public to travel inwards favour of to a greater extent than investments inwards insurance. While comparison the efficiency in addition to progressiveness of life insurance line of piece of work organisation inwards pre in addition to post LPG arena, the Indian life insurance Industries are achieving a magnificent growth.
6.3 Current Scenario:
Global integration of fiscal markets resulted from de-regulating measures, technological information explosion in addition to fiscal innovations. Liberalization in addition to Globalization remove hold allowed the entry of unusual players inwards the Insurance sector. With the entry of private in addition to unusual players inwards the Insurance business, people remove hold got a lot of options to pick out from.8 Radical changes are taking identify inwards client profile due to the changing life style in addition to social perception, resulting inwards erosion of create loyalty. To survive, the focus of the modern insurers shifted to a customer-centric relationship.
x Competition: Private in addition to Foreign entrants inwards the Insurance Industry made others hard to retain their market. Higher client aspirations atomic number 82 to novel expectations in addition to compel him to displace towards the insurer who provides him the best service inwards time.9 it becomes less feasible for them fifty-fifty to maintain the functional networks or competitive standards in addition to services. To hold out inwards the Industry they analyze, the emerging requirements of the policyholders in addition to they are inwards the forefront inwards providing essential services in addition to introducing novel products. Thereby they travel niche specialists, who provide the right service to the right individual inwards right time.
x Information Technology: Insurers are the before adopters of technology. Because of the Information revolution, customers are gratuitous to pick out from a broad make of novel in addition to innovative products. The Insurance companies are utilizing the Information applied scientific discipline applications for improve client service, cost reduction, novel production blueprint in addition to evolution in addition to many more. New applied scientific discipline gives the policyholders better, wider in addition to faster access to products in addition to services. The impact of Information Technology inwards Insurance line of piece of work organisation is beingness felt at an accelerating pace.10 In the initial years information technology was used to a greater extent than to execute dorsum business office functions similar maintenance of accounts, reconciling broker accounts, client processing etc. With the advent of database concepts, these functions are improve integrated inwards an administrative efficiency. The existent evolution is withal emerged out of Internet boom. The Internet has provided create novel distribution channels to the Insurers. The applied scientific discipline has enabled the insurer to innovate novel products, provide improve client service in addition to deeper in addition to wider insurance coverage to them. At present, Insurance companies are giving customers a distinct claim id to rail claims on-line, entertaining on-line enrollment, eligibility review, fiscal reporting, billing in addition to electronic fund transfer to its do goodness clan customers.
x Product Innovations: Insurers are continuously innovating novel products based on forward-looking models. They remove hold developed novel products addressing the novel challenges inwards gild in addition to products to address the hazards from novel environmental issues. Companies volition demand to constantly innovate inwards terms of production evolution to run into everchanging consumer needs. Understanding the client improve volition enable Insurance companies to blueprint appropriate products, determine cost correctly in addition to to increment profitability. Since a unmarried policy cannot run into all the Insurance objectives, ane should remove hold a portfolio of policies roofing all the needs.11 Product evolution is made possible past times integrating actuarial, rating, claims in addition to illustration systems. At present, the Life Insurers are concentrating on the pension schemes in addition to the NonLife Insurers on many innovative schemes of diverse realms in addition to thereby enriching their marketplace seat share. Moreover, with increased commoditization of insurance products, create edifice is going to play a vital role.
x Distribution Network: While companies remove hold been successful inwards production innovation, most of them are soundless grappling with right mix of Distribution Channels for capturing maximum marketplace seat part to create do equity, edifice strong in addition to effective client relationships in addition to cost effective client service.12 While the traditional channel of tied upward advisors or agents would live the principal distribution channel, insurer should innovate in addition to observe novel methods of delivering the products to customers. Corporate agency, brokerage, Banc-assurance, e-insurance, cooperative societies in addition to panchayats are some of the channels, which tin give the axe live tapped past times the insurers to make the appropriate marketplace seat segments. Now days, the urban masses are tapped with the novel techniques provided past times Information Technology through Internet.13 Rural masses are attracted past times the consultative approach adopted past times the Insurers. Moreover, they attract the customers through telephone in addition to mobile also.
x Customer Education in addition to Services: Insurance is a unique service industry. The key manufacture drivers are related to life style issues inwards terms of perceiving insurance every bit a savings musical instrument rather than for risk cover, demand based selling, character of service in addition to customer’s awareness.14 In the nowadays competitive scenario, a key differentiator is the professional person client service inwards terms of character of advice on production selection along with policy servicing. Servicing focus is on enhancing the customer’s sense in addition to maximizing his convenience. This calls the effective CRM system, which eventually creates sustainable competitive wages in addition to enables to create long lasting relationship.
x Modern Marketing Approach: Having done marketplace seat research in addition to finalizing on segmentation, targeting in addition to positioning the strategy would focus on the marketing mix namely, Product, Price, Place in addition to Promotion. While determining the implementation methodology, the iv characteristics viz. Intangibility, Inseparability, Perish powerfulness in addition to Variability gives ascent to for certain unique requirements that deserve careful attending spell formulating the marketing strategy for insurance. After implementation, the insurers should concentrate on the effective command that would elevate their business. In Bharat Insurance is sold in addition to non bought. The agents / Advisors past times using diverse strategies sell the production past times convincing the customers.15 Moreover, they force Policies with the highest premium to bag a higher commission. The consultative approach to selling is the modern approach, which helps customers in addition to prospects to buy. Influenza A virus subtype H5N1 consultant makes calls in addition to sells only similar whatever other sales person. The deviation is inwards their attitude, their approach in addition to their commitment. Here, the client is seen every bit a individual to live served in addition to non a individual to live sold. It helps the purchaser to create an intelligent decision. The four-step physical care for includes - Need discovery, Selection of the product, Need satisfaction presentation, in addition to Serving the sale. The commitments referred are:
Finding in addition to agreement the needs of the customers.
Partnering with the customers.
Helping the customers to attain his line of piece of work organisation in addition to other objectives past times the purchase of the production or service.
Believing that your products / services are a non bad fit with your customer’s needs, and
Believing inwards yourself in addition to your powerfulness to aid the customers inwards solving their problems.
A consultant is willing to forego short-term gains to attain greater long – term do goodness to him in addition to to the customers he serves. He builds relationships on a foundation of trust, honor in addition to performance. Moreover, consultants don’t sell – they’re specialists who create recommendations to aid the prospect to buy. They human activity every bit a professional person in addition to offering real–world solutions that create sense to the customer. Today, the insurers adopt this technique in addition to thereby plough over off increasing their marketplace seat share.
In the global era, Insurance companies are increasingly willing to pass to a greater extent than on the client satisfaction in addition to create edifice exercises. Though it is ane of the highly regulated industries, it soundless provides lot of reach for inventiveness in addition to innovations. As our manufacture is predominantly dominated past times personal selling in addition to personalized services many a fourth dimension the service standards vary based on the intermediary involved inwards the process. In monastic enjoin to attain the competitive border over others standardize the physical care for in addition to convey nearly character improvement in addition to acquire feedback from the customers regarding the character of services rendered. This volition resultant inwards client satisfaction, client retention, client acquisition, in addition to employee retentivity in addition to cost reduction. This newspaper focuses on the marketing approach adopted past times the modern insurers to withhold their existing customers in addition to attract novel ones.
6.4 Reaching Out To Customers:
The client profile inwards the insurance manufacture is changing with the introduction of large number of divergent intermediaries such every bit brokers, corporate agents, in addition to banc assurance. The manufacture forthwith deals with customers who know what they wish in addition to when, in addition to are to a greater extent than demanding inwards terms of improve service in addition to speedier responses. With the manufacture all laid to displace to a de-tariffed regime past times 2007, at that topographic point volition live considerable improvement inwards client service levels, production invention in addition to newer standards of underwriting.16 In a de-tariffed environment, contest volition manifest itself inwards prices, products, underwriting criteria, innovative sales methods in addition to creditworthiness. Insurance companies volition vie with each other to capture marketplace seat part through improve pricing in addition to client segmentation. The battle has so far been fought inwards the large urban cities, but inwards the side past times side few years, increased contest volition drive insurers to rural in addition to semi-urban markets.
6.5 Life Product Development:
Before the opening of the insurance sector, the state-owned LIC sold insurance every bit a tax-efficient savings musical instrument rather than only offering protection. Most customers were underinsured with fiddling flexibility or transparency inwards their policies. With the entry of the private insurers, consumers are forthwith turning to the private sector for novel innovative products. The marketplace seat is already firstly to witness a wider make of products from players whose numbers are laid to grow. As a result, the differentiating factors with the dissimilar players volition live products, pricing in addition to service. The twelve private sector insurers inwards the life insurance marketplace seat remove hold already captured nearly xiii per cent of the marketplace seat inwards terms of novel line of piece of work organisation written. This should live welcome tidings to an manufacture that is inwards demand of a improve production mix to sustain farther growth. This is especially truthful every bit the sale of traditional products suffered from lowering involvement rates – novel line of piece of work organisation premiums brutal past times 18.6 per cent during the 2002 fiscal twelvemonth partly every bit a resultant of the withdrawal of revenue enhancement benefits on unmarried premium products, which has been instrumental inwards fuelling growth inwards preceding years.17 Such sensitivity of premium growth to interest-rate cycles reflects the focus on savings products inwards the Indian life insurance market.
In the past, the LIC had 3 usually sold policies inwards the marketplace seat for life insurance: whole life, endowment in addition to money-back policies. The number of novel policies sold each twelvemonth went from nearly 0.95 ane M 1000 a twelvemonth inwards 1957 to 26.97 ane M 1000 inwards 2003. The total number of in-force policies went from 5.42 ane M 1000 inwards 1957 to 141 ane M 1000 past times March 2003. There are presently several dozen life products offered past times the LIC. However, they are little variations on the 3 products mentioned above. In addition, fifty-fifty though term life policies were available, they were non actively promoted. LIC also has several pension products. Following the entry of the private insurers, at that topographic point was a proliferation of products. 116 life products were offered past times life insurance companies inwards Bharat every bit of 31 March 2002. Of course, they were non all distinct products.18 Many products across dissimilar companies were real similar, if non identical. Some of the to a greater extent than pop products launched lately include creditor protection products similar mortgage life, in addition to unitlinked products.
6.6 High Potential in addition to Competitiveness inwards Indian Insurance Industry:
India with nearly 200 ane M 1000 middle flat identify shows a huge untapped potential for players inwards the insurance industry. Saturation of markets inwards many developed economies has made the Indian marketplace seat fifty-fifty to a greater extent than attractive for global insurance majors. The insurance sector inwards Bharat has come upward to a seat of real high potential in addition to competitiveness inwards the market. Indians, remove hold ever seen life insurance every bit a revenue enhancement saving device, are forthwith of a abrupt turning to the private sector that are providing them novel products in addition to multifariousness for their choice.19
Consumers remain the most of import centre of the insurance sector. After the entry of the unusual players the manufacture is seeing a lot of contest in addition to thus improvement of the client service inwards the industry. Computerization of operations in addition to updating of applied scientific discipline has travel imperative inwards the electrical flow scenario. Foreign players are bringing inwards international best practices inwards service through work of latest technologies. The insurance agents soundless remain the main source through which insurance products are sold. The concept is real good established inwards the terra firma but soundless the increasing work of other sources is imperative. At nowadays the distribution channels that are available inwards the marketplace seat are - Direct selling, corporate agents, Group selling, Brokers in addition to cooperative societies, Banc-assurance, etc.
Customers remove hold tremendous selection from a large multifariousness of products from pure term (risk) insurance to unit-linked investment products. Customers are offered unbundled products with a multifariousness of benefits every bit riders from which they tin give the axe choose. More customers are buying products in addition to services based on their truthful needs in addition to non only traditional money-back policies, which is non considered real appropriate for long-term protection in addition to savings. There is lots of saving in addition to investment plans inwards the market. However, at that topographic point are soundless some key novel products yet to live introduced - e.g. wellness products.
The rural consumer is forthwith exhibiting an increasing propensity for insurance products. In the insurance the awareness flat for life insurance is the highest inwards rural India, but the consumers are also aware nearly motor, accidents in addition to cattle insurance. Maximum respondents were said that they had purchased some form of insurance with the maximum penetration skewed inwards favor of life insurance. The study also pointed out the LIC remove hold huge chore to play inwards creating awareness in addition to credibility with the rural populace. The perceived benefits of buying a life policy make from safety of income volume homecoming inwards future, daughter's marriage, children's educational activity in addition to goodness homecoming on savings.
6.7 Application of Information Technology In Insurance Sector:
There is an evolutionary alter inwards the applied scientific discipline that has revolutionized the entire insurance sector. Insurance manufacture is a data-rich industry, in addition to thus, at that topographic point is a demand to work the information for tendency analysis in addition to personalization.20 With increased contest with insurers, service has travel a key issue. Moreover, customers are getting increasingly sophisticated in addition to tech-savvy. People today don’t wish to remove hold the electrical flow value propositions, they wish personalized interactions in addition to they aspect for to a greater extent than in addition to to a greater extent than features in addition to add together ones in addition to improve service
The insurance companies today must run into the demand of the lx minutes for to a greater extent than in addition to to a greater extent than personalized approach for handling the customer. Today managing the client intelligently is real critical for the insurer especially inwards the real competitive environment. Companies demand to apply dissimilar laid of rules in addition to handling strategies to dissimilar client segments. However, to personalize interactions, insurers are required to capture client information inwards an integrated system.
With the explosion of Website in addition to greater access to direct production or policy information, at that topographic point is a demand to developing improve techniques to give customers a really personalized experience.21 Personalization helps organizations to make their customers with to a greater extent than impact in addition to to generate novel revenue through cross selling in addition to upward selling activities. To ensure that the customers are receiving personalized information, many organizations are incorporating cognition database-repositories of content that typically include a search engine in addition to allow the customers locate the all document in addition to information related to their queries of asking for services. Customers tin give the axe hereby work the cognition database to care their products or the society information in addition to invoices, claim records, in addition to histories of the service inquiry. These products also may live able to acquire from the customer’s previous cognition database in addition to to work their information when determining the relevance to the customers search request.
A number of web-sites are coming upward on insurance, a few fiscal magazines alone devoted to insurance in addition to also a few preparation institutes beingness prepare hurriedly. Many of the universities in addition to management institutes remove hold already started or are contemplating novel courses inwards insurance. Life insurance has today travel a mainstay of whatever marketplace seat economic scheme since it offers enough of reach for garnering large sums of coin for long periods of time. Influenza A virus subtype H5N1 well-regulated life insurance manufacture which moves with the times past times offering its customers tailor-made products to satisfy their fiscal needs is, therefore, essential if nosotros wish to progress towards a worry-free future.
6.8 problem in addition to Challenges facing Insurance Industry:
LIC remove hold forthwith to human face upward contest to private sector insurance companies non only inwards issuing diverse make of insurance products but also inwards diverse aspects inwards terms of client service, channels of distribution, effective techniques of selling the products etc. privatization of the insurance sector has opened the doors to innovations inwards the way line of piece of work organisation tin give the axe live transacted.22
New historic catamenia insurance companies are embarking on novel concepts in addition to to a greater extent than cost effective way of transacting business. The thought is clear to cater to the maximum line of piece of work organisation at the to the lowest degree cost. And tardily with time, the age-old norm prevalent with authorities companies to expand past times setting upward branches seems getting lost. Among the techniques that seem to catching upward fast every bit an alternative to cater to the rural in addition to social sector insurance is hub in addition to spoke arrangement. These along with the participants of NGOs in addition to Self Help Group (SHGs) remove hold done with most of the selling of the rural and
social sector policies.23
The Indian life insurance manufacture has its ain beginning in addition to history. Since its inception, it has passed through many obstacles, hindrances to attain its nowadays status. The income earning capacity of an private citizen of a acre in addition to the eagerness in addition to awareness of the full general public are the 2 key determinants of the growth of whatever insurance industry. As a result, wider mass-employment opportunities in addition to audio educational scheme should live made available. In addition, the full general public must live kept abreast of to a greater extent than cognition in addition to importance of life insurance, every bit these steps aid to boost the growth of insurance industries. In this Indian context, insurance habit with the full general public during the independence decade was quite rare in addition to inwards the next decades, it increased slowly. There was a remarkable improvement inwards the Indian insurance manufacture shortly after the credence in addition to adaptation of liberalization, privatization, in addition to globalization (LPG) inwards the twelvemonth 1991.24 After 1991, the Indian life insurance manufacture has geared upward inwards all respects, every bit good every bit it beingness forced to human face upward a lot of good for y'all contest from many national every bit good every bit international private insurance players. The autumn inwards the savings charge per unit of measurement in addition to increased contest inwards the primary marketplace seat in addition to specially the aggressive mobilization past times the mutual fund posed serious challenges to LIC.
x Threat of New Entrants: The insurance manufacture has been budding with novel entrants every other day. Therefore the companies should carve out niche areas such that the threat of novel entrants powerfulness non live a hindrance. There is also a gamble that the large players powerfulness squash the little novel entrants.
x Power of Suppliers: Those who are supplying the upper-case alphabetic character are non that large a threat. For instance, if someone every bit a real talented insurance underwriter is presently working for a little insurance company, at that topographic point exists a gamble that whatever large instrumentalist willing to acquire into the insurance manufacture powerfulness entice that individual off.
x Power of Buyers: No private is a large threat to the insurance manufacture in addition to large corporate houses remove hold a lot to a greater extent than negotiating capability with the insurance companies. Big corporate clients similar airlines in addition to pharmaceutical companies pay millions of dollars every twelvemonth inwards premiums.
x Availability of Substitutes: There be a lot of substitutes inwards the insurance industry. Majorly, the large insurance companies provide similar kinds of services - live it auto, home, commercial, wellness or life insurance.
6.9 Other key challenges:
Apart from the main challenges, such every bit production invention in addition to distribution, the 2 other issues that urgently demand to live addressed are the escalating burden of the unfunded authorities pension in addition to the challenge of increasing investment inwards the wellness insurance sector. One number that urgently needs to live addressed is the escalating burden of the unfunded authorities pension in addition to the building-up of retirement income for the non-salaried workforce. In the initial years, pension contributions were little at a quarter of a pct signal of gross domestic product – the same monastic enjoin of magnitude every bit life insurance savings. Pension savings so grew faster than life insurance savings inwards the subsequent years. They also exhibited a higher variability than life insurance savings. By 2000, pension savings had reached 2.5 per cent of gross domestic product per twelvemonth whereas insurance savings remained below 2 per cent of GDP.25 However, every bit suggested past times the tendency lines inwards the figure, the growth charge per unit of measurement of life insurance savings has been accelerating over the past times decade whereas pension savings are hovering closed to a linear trend.
6.10 Important Steps For Overcome the Challenges:
Important steps remove hold thus been already taken, but at that topographic point are soundless major hurdles to overcome if the marketplace seat is to realize its total potential. To laid about with, Bharat needs to farther liberalize investment regulations on insurers to strike a proper residue betwixt insurance solvency in addition to investment flexibility. Furthermore, both the life in addition to non-life insurance sectors would do goodness from less invasive regulations. In addition, cost structures demand to reverberate production risk. Obsolete regulations on insurance prices volition remove hold to live replaced past times risk-differentiated pricing structures.
In the life sector, insurers volition demand to increment efforts to blueprint novel products that are suitable for the marketplace seat in addition to create work of innovative distribution channels to make a broader make of the population. There is huge untapped potential, for example, inwards the largely undeveloped private pension market. At the moment, less than xi per cent of the working population inwards Bharat is eligible for participation inwards whatever formal old-age retirement scheme.26 Private insurers volition remove hold a key role to play inwards serving the large number of informal sector workers. The same is truthful for the wellness insurance business. In addition, the rapid growth of insurance line of piece of work organisation volition position increasing pressure level on insurers’ upper-case alphabetic character level. The electrical flow equity belongings ceilings, however, could trammel the powerfulness of novel companies to quickly inject upper-case alphabetic character to check line of piece of work organisation growth.
As far every bit reinsurance is concerned, policymakers remove hold to recognize that insurance in addition to reinsurance cannot live treated inwards the same manner.27 Due to the unique nature of reinsurance, it is necessary to delink the sector from regulations governing direct insurance companies. To allow branching of unusual reinsurers, for example, would create the marketplace seat to a greater extent than attractive for international players in addition to secure comprehend for natural catastrophe risks which, today, are mainly uninsured. Finally, the largely underserved rural sector holds non bad hope for both life in addition to non-life insurers. To unleash this potential, insurance companies volition demand to demo long-term commitment to the sector, blueprint products that are suitable for the rural population in addition to utilize appropriate distribution mechanisms. Insurers volition remove hold to pay special attending to the characteristics of the rural labour force, similar the prevalence of irregular income streams in addition to preference for uncomplicated products, before they tin give the axe successfully penetrate this sector.
In monastic enjoin to ensure such an environment, internal marketing of the concept is required for the insurance agents. The challenge would live to non only gain novel customers, but to retain them every bit well. If customers are satisfied with the responsiveness of the life insurance service provider, they are probable to take-up novel policies, in addition to also engage inwards positive word-ofmouth which would farther increment the number of policies beingness sold. In a sector similar fiscal service, word-of-mouth is a real effective mode of communication every bit credibility is a major concern inwards this sector. Satisfied customers recommend the society in addition to the insurance agent to friends in addition to acquaintances thus bringing inwards farther line of piece of work organisation for the concerned company. Some aspects of the regulatory framework also demand to live changed inwards sentiment of the results of the study. At nowadays life insurance agents cannot undertake premium payment on behalf of their clients. This regulation should live scrapped to ensure regular premium payment in addition to improve service to the customers.
In Bharat has express sense of insurance. Given that authorities has liberalized the insurance industry, insurance is going to develop quickly inwards future. The challenge is to see that it benefits the miserable in addition to the weak inwards terms of improve coverage in addition to wellness services at lower costs without the negative aspects of cost increment in addition to over work of procedures in addition to applied scientific discipline inwards provision of wellness care. The sense from other places advise that if wellness insurance is left to the private marketplace seat it volition only comprehend those which remove hold substantial powerfulness to pay leaving out the miserable in addition to making them to a greater extent than vulnerable. Hence Bharat should proactively create efforts to develop Social Health Insurance patterned where at that topographic point is universal coverage, equal access to all in addition to cost controlling measures such every bit prospective per capita payment to providers. Given that Bharat does non remove hold large organized sector work the only alternative for such social wellness insurance is to develop it through cooperatives, associations in addition to unions. The existing wellness insurance programmes such every bit ESIS in addition to Medi-claim also demand substantial reforms to create them to a greater extent than efficient in addition to socially useful. Government should catalyze in addition to guide evolution of such social wellness insurance inwards India.28
6.11 LIC Should Focus on:
Marketing Strategy:
Until the Indian insurance manufacture was liberalized, LIC did non remove hold whatever clear marketing strategies. Since it enjoyed monopoly status, it could afford to remove hold a real express focus on marketing. For the average Indian, LIC became synonymous with life insurance, in addition to over the years it built upward an enviable create icon inwards both rural in addition to urban areas. The society grew past times leaps in addition to bounds, with people buying its policies due to the revenue enhancement concessions attached to it. On line of piece of work organisation human relationship of its seat every bit a monopoly, LIC did non standardize its practices nor did it focused on providing improve client service to the policyholders.29
Key insurance marketing strategies volition ever include an in-depth review of the value of follow-up. All successful sales agents empathize that consumers demand to live contacted in ane lawsuit to a greater extent than in addition to in ane lawsuit to a greater extent than inwards monastic enjoin to create a vital connection. Also, non bad follow-up protocol lets the potential client know that good, enterprise client service volition live component subdivision of the over-all packet of attracting in addition to caring for its’ customers. The consumer today non only wants a production at a non bad price, they also wish a personal relationship, especially, when it comes to fiscal scheme sales such every bit diverse insurances. Influenza A virus subtype H5N1 real mutual way to promote a life insurance society through Life Insurance Marketing is to create the holler of the society familiar to others past times agency of television set commercials, handling out pamphlets, hanging banners inwards populated areas in addition to past times providing exciting offers.
Distribution:
LIC had a large network of 8 lakh agents for distributing its products.
The society had several marketing personnel designated every bit 'Development Officers' inwards each branch. These evolution officers, inwards turn, employed in addition to trained a number of agents, in addition to received incentives for the line of piece of work organisation generated past times these agents, inwards add-on to their regular salaries. However, this network was non real cost-effective every bit LIC had to pay bonuses in addition to commissions twice - to the agents every bit good every bit the evolution officers - for every novel policy in addition to every subsequent renewal. Despite the efforts of the evolution officers, the retentivity of agents had travel difficult.
Customer Service:
In monastic enjoin to live able to serve its customers better, LIC had a wellorganized grievance redressal system. The grievance redressal scheme consisted of Grievance Redressal Officers, electrical load cells, a claims review committee, policyholders' councils, an advisory board, a consumers' affairs commission in addition to a citizens' charter. Grievance redressal officers were designated past times LIC at all levels of the organization.30
Human Resources:
LIC has had many problems relating to the efficient work of its human resources since the fourth dimension it was laid up. Many of these problems related to the fact that it was a public sector organization. The corporation's managers were too bureaucratic. The piece of work civilisation inwards the organisation was sloppy. Strong merchandise unions made it hard for managers to acquire the piece of work done. The corporation's evolution officers focused on their ain earnings in addition to incentives, rather than on client satisfaction.
Future Outlook:
LIC planned to acquire into into to a greater extent than alliances with banks in addition to with leading educational institutes for training. It would also increment offshore activities in addition to prepare an exclusive applied scientific discipline society for sourcing software. Other priorities were the setting upward of special cells in addition to single-window facilitation centers for high-end customers, rapid introduction of innovative policies, in addition to a renewed thrust on mass in addition to grouping business. The corporation also decided to offering value-added services to high-end customers, too special services. At a after stage, it planned to remove hold dissever dedicated branches for high-end policyholders. The determination to remove hold its ain dissever information technology set-up was driven past times the requirement of software for the sprawling network of LIC's branches in addition to other offices.
1.1 Need of Worksite Marketing:
Worksite marketing is the physical care for of distributing private or grouping insurance products to people at their identify of piece of work on a voluntary, payrolldeduction basis.31 nether a worksite marketing arrangement, an insurer approaches an employer nearly offering its employees the chance to purchase insurance coverage at work. If the employer agrees to the offering, the insurer’s sales representative so markets the products direct to the employees at the worksite. The employer implements a payroll deduction computer program to withhold employees’ premium payments from their paychecks in addition to so submits the premium payments to the insurance company. This surface area needs to live tapped, every bit inwards whatever terra firma ane of the biggest markets is through the worksite. With changes inwards human resources management polices in addition to compensation packages, grouping products or work-site products do remove hold a definite marketplace seat that cannot live ignored. The advantages of worksite marketing:- x Captive client base of operations x Potential to sell private insurance in addition to grouping insurance x Potential to sell private insurance in addition to grouping insurance x High hitting ratio for intermediaries
x Usually employees perceive this every bit a facility provided to them past times the employer for their welfare in addition to this creates goodwill.
x High persistency.
This channel of distribution is beneficial to employer, employees in addition to life insurer. One possible argue for insufficient evolution of this channel inwards Bharat is that employers by in addition to large aspect some form of incentive to provide the facilities to the life insurers for making presentations in addition to making arrangements for deduction of premium from salaries. The challenges would live the cost effectiveness, production customization in addition to efficient post sales servicing, which would determine continued business. Technology has a key role to play inwards worksite marketing to ensure cost benefits. Banks in addition to fiscal institutions remove hold been successfully marketing credit cards in addition to other fiscal products using this channel. If non an identical model, a similar approach tin give the axe live used for selling insurance.
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