ISSN: 0974-438X
Imapct factor(SJIF): 6.56
A Refereed Monthly International Journal of Management

Home | Editorial Board| Author Guidelines| Review Process| Indexing | Publication Ethics & Malpractice | Reviewers Guidelines | Subscription | Disclaimer

 

 

PBRI is now indexed in ESCI by THOMSON REUTERS.

 
Editorial Board A Refereed Monthly International Journal of Management
Prof. B. P. Sharma
(Editor in Chief)
Prof. Mahima Birla
(Additional Editor in Chief)
Dr. Khushbu Agarwal
(Editor)
Ms. Asha Galundia
(Circulation Manager)

 Editorial Team

Dr. Devendra Shrimali
Dr. Dharmesh Motwani
 

Customer Relationship Management Practices in Insurance Sector

Dr. S. Karthick
Assistant Professor (Guest), Thiru Kolanjiappar Govt. Arts College,
Vriddhachalam, Cuddalore District, Tamilnadu, India
Email: karthick.sambasivam@gmail.com
Mobile: 09962585947

Abstract

Customer Relationship Management is becoming an important factor in Indian insurance sector. Now each and every insurance company is realizing the significance of relationship with customer to survive in the competitive world. This research is aimed to examine the customer relationship management based on demographic profile of the policy holders of Life Insurance Corporation of India in Chidambaram. Hence, descriptive research is applied. Primary data were collected from 120 policy holders by using convenience sampling method. t-test, Analysis of variance and Chi square test are the tools used by the SPSS for data analysis. From this study, it is found that the demographic profile of the policy holders have significant influence on customer relationship management in LIC of India. The results of this study will help to the Life Insurance Corporation of India to take measures in improving their relationship with policy holders.

Keywords: Customer Relationship Management, Life insurance, LIC of India, Policy holders

Introduction

Customer Relationship Management (CRM) is one of the most talked and emerging concept recently in Insurance sector. It is mostly concentrated about needs and behaviours of the customers in order to develop stronger relationship with them. The concept of customer relationship management has been a core concept which has attracted all facets of business. CRM has relevant and demanding applications in service marketing. Insurance sectors have also not been an exception to this phenomenon. CRM is an integration of business processes and technologies employed to satisfy the needs of a customer during any given interaction. The concept of CRM involves acquisition, analysis and use of knowledge about the customers with a view to effectively sell more and more goods and services. The implementation of a customer centered strategy and reengineering the current customer interaction of the process of the organization will help in retaining the existing customers and attracting new ones. Kotler and Keller defines CRM is the process of carefully managing detailed information about individual customers and all customer “touch points” to maximize loyalty.

Advantages of CRM

  • Reduces advertising costs.
  • Makes it easier to target specific customers by focusing on their needs
  • Makes it easier to tract the effectiveness of a given campaign.
  • Allows organization to compete for customer based service, not prices.
  • Prevents overspending on low-value clients or under-spending on high value ones.
  • Speeds up the time to develop and market a product.
  • Improves the use of the customer channel, thus making the most of each contact with a customer.

CRM in LIC

LIC which was once upon a time put customers through a lot of hard­ships now with the advent of private life insurance companies has reinvented itself in terms of Customer Relationship Management. Customization of life insurance products have enabled customers to choose among variety of life insurance products that are need based and customer centric. This culture was not prevalent in LIC when it was the sole Life Insurance provider in the country till year 2000. The com­pany now provides online services for customers regarding policy status, online payment, new plans and brochures, policy guidelines, tax benefits, fund performance and SMS enquiry. It also provides premium calculator and multiple premium payment options. It was found that LIC had the most number of channels for customers to pay their premiums both online and offline when compared to private life insurance companies.

Literature Review

Arulsuresh (2011) found most insurance companies are not adequately equipped to help their agents deal with customer centered problems CRM insurance enables insurance organizations to survive in a tough economic climate by using the data the insurance company has on the existing customers and then use it to increase the level of profitability.  Agariya and Singh (2012) identified the critical factors in CRM in Indian Insurance Sector are claim payment security, knowledge about products, personalization, transparency in product selling and service quality.  Pappeswari and Rajalakshmi (2013) suggested that insurer must build up unique imagery appeal for their insurance products through creative advertisement. Kuldeep Chaudhary et. al., (2014) recommended that LIC should think strategically to improve its customer services on selected dimensions of service quality so that the status of market leader can be maintained.  Durai Kannan and Vikkraman (2016) found that customers' perspective towards implementation of CRM processes by the Private Life Insurance players is higher than by the Public sector Life Insurance Player.

Scope of the Study

In today’s competitive world all the companies are mostly concentrate more on their customers rather than their business profit. Due to this reason companies are coming up with many marketing strategies to attract their valuable customers. So that the companies implementing Customer Relationship Management practices in order to develop stronger relationship with their customers. Almost every company feels the need for CRM to meet their customer demands and provide them the best of the services. CRM has emerged as an essential tool in handling an organizations customer and it has gaining a lot of importance in modern scenario.

Statement of the Problem

The present situation in the Insurance Industry is complex and competitive environment tinged with little stability. The major problem in the industry faces acquisition of new customers and it has become difficulty in insurance sector to gain profile while. It has become difficult for this sector to getting profits while acquisitions, mergers have all contributed to the difficulty insurance agents and other professionals from this industry face. Few years back selling insurance policies only restricted to insurance companies, but in the modern scenario banks also selling insurance policies to its customers. This resulted in increased as well as unwelcome competition to the insurance companies and the customers also confused in selecting the right source to purchasing the insurance policies. In addition to this the internet has increased the pressure for insurance companies in capturing the market. All the above said reasons make insurance industry become more complicated. The insurers now required database of information about customers who hold insurance policies choosing a customer centric strategy can go a long way in achieving this CRM helps the insurers to ensure that the customer is understood better. Right now the insurers can achieve excellent policy administration, good billing systems and the like but fall short on the customer front. However this alone is insufficient to survive in industry. Insurers have now realized that CRM is essential if they want to deliver high quality services since it satisfies current customers and gains new ones. This is because policies get sold only it relationship are built. Customer Relationship Management solves the problems with its user friendly web based CRM tools that increase sales opportunities.

Objective of the Study

  • To examine the factors which influence the customer relationship management with reference to Life Insurance Corporation of India in Chidambaram.

Methodology

The purpose of this research is to examine the customer relationship management from policy holders’ point of view. This study is confined to LIC of India, Chidambaram, Cuddalore District, Tamilnadu, India. Descriptive research as a methodology is particularly suited to explore questions regarding customer relationship management. Primary data were collected from the policy holders of LIC of India in Chidambaram. Data were collected from 120 policy holders by using convenience sampling method. Structured questionnaire was used for primary data collection. Secondary data was collected from earlier research work, various published journals, magazines, websites and online articles. Frequency analysis, t-test, Analysis of variance and Chi square test are the tools used by the SPSS 20 for data analysis.

Analysis and Interpretation

Table 1: Demographic profile of the policy holders

S. No

Demographic Profile

Frequency

Percent

1

Age

Below 35 years

52

43.3

35- 45 years

32

26.7

Above 45 years

36

30.0

2

Gender

Male

80

66.7

Female

40

33.3

3

Occupation

Employees (Govt./Pvt.)

49

40.8

Business

38

31.7

Others

33

27.5

4

Educational Qualification

HSC & below

40

33.3

UG/PG

54

45.0

Others

26

21.7

5

Annual Income

Below 2 Lakhs

74

61.7

2-4 Lakhs

36

30.0

Above 4 Lakhs

10

8.3

6

Experience in investment

Below 5 years

54

45.0

5-10 years

52

43.3

Above 10 years

14

11.7

     Source: Primary data computed;

Table 1 shows that 43.3% of the respondents belong to the age group of below 35 years and 26.7% of the respondents belong to the age group of 35-45 years.  66.7% of the respondents are male and 33.3% of the respondents are female. 40.8% of the respondents are employees and 27.5% of the respondents have some other occupations like self employment, professionals, etc. 45% of the respondents have completed UG/ PG and 21.7% of the respondents have completed some other qualifications like ITI, Diploma, professional degree, etc. 61.7% of the respondents’ annual income falls under the category of below 2 lakhs and 8.3% of the respondents’ annual income falls under the category of above 4 lakhs. 45% of the respondents have below 5 years of experience in investment with LIC and 11.7% of the respondents have above 10 years of experience in investment with LIC.

Table 2: Customer Relationship Management

S. No

Factors

Level of Opinion

Frequency

Percent

1

Good quality of service

Strongly agree

46

38.3

Agree

49

40.8

Neutral

12

10.0

Disagree

6

5.0

Strongly disagree

7

5.8

2

Better service after sales

Strongly agree

15

12.5

Agree

42

35.0

Neutral

37

30.8

Disagree

19

15.8

Strongly disagree

7

5.8

3

Correct responsiveness on time

Strongly agree

24

20.0

Agree

52

43.3

Neutral

28

23.3

Disagree

10

8.3

Strongly disagree

6

5.0

4

Polite and friendly service

Strongly agree

42

35.0

Agree

52

43.3

Neutral

13

10.8

Disagree

7

5.8

Strongly disagree

6

5.0

5

Remembrance about policy due dates

Strongly agree

10

8.3

Agree

33

27.5

Neutral

42

35.0

Disagree

24

20.0

Strongly disagree

11

9.2

6

Transparent policy documentation

Strongly agree

15

12.5

Agree

51

42.5

Neutral

36

30.0

Disagree

12

10.0

Strongly disagree

6

5.0

7

Explanation about policy terms & conditions

Strongly agree

26

21.7

Agree

62

51.7

Neutral

19

15.8

Disagree

6

5.0

Strongly disagree

7

5.8

8

Money is growing in LIC

Strongly agree

24

20.0

Agree

59

49.2

Neutral

21

17.5

Disagree

10

8.3

Strongly disagree

6

5.0

9

Feel secured about investment in LIC

Strongly agree

36

30.0

Agree

46

38.3

Neutral

21

17.5

Disagree

7

5.8

Strongly disagree

10

8.3

10

Friendly interaction by LIC agents/employees

Strongly agree

12

10.0

Agree

41

34.2

Neutral

49

40.8

Disagree

10

8.3

Strongly disagree

8

6.7

11

Attending customer interaction camp

Strongly agree

22

18.3

Agree

50

41.7

Neutral

20

16.7

Disagree

22

18.3

Strongly disagree

6

5.0

12

Funding for future goals  through life insurance plans

Strongly agree

39

32.5

Agree

48

40.0

Neutral

18

15.0

Disagree

6

5.0

Strongly disagree

9

7.5

13

Better tax benefits schemes

Strongly agree

7

5.8

Agree

34

28.3

Neutral

49

40.8

Disagree

22

18.3

Strongly disagree

8

6.7

14

Policy holders are satisfied with LIC plans and policies

Strongly agree

16

13.3

Agree

51

42.5

Neutral

36

30.0

Disagree

9

7.5

Strongly disagree

8

6.7

15

Recommend LIC policy to friends & relatives

Strongly agree

18

15.0

Agree

48

40.0

Neutral

23

19.2

Disagree

22

18.3

Strongly disagree

9

7.5

16

Policy holders are satisfied with overall services

Strongly agree

20

16.7

Agree

69

57.5

Neutral

16

13.3

Disagree

7

5.8

Strongly disagree

8

6.7

     Source: Primary data computed;

Table 2 shows that 40.8% of the respondents agree that LIC providing good quality of service to them and 5% of the respondents disagree that LIC providing good quality of service to them. 35% of the respondents agree that LIC providing better service after sales and 5.8% of the respondents strongly disagree that LIC providing better service after sales. 43.3% of the respondents agree that LIC offering correct responsiveness on time and 5% of the respondents strongly disagree that LIC offering correct responsiveness on time. 43.3% of the respondents agree that LIC employees/agents providing polite and friendly service to them and 5% of the respondents strongly disagree that LIC employees/agents providing polite and friendly service to them. 35% of the respondents have neutral mindset about remembrance of due dates and 8.3% of the respondents strongly agree that LIC employees/agents remember about policy due dates. 42.5% of the respondents agree that LIC always have transparent policy documentation and 5% of the respondents strongly disagree that LIC always have transparent policy documentation. 51.7% of the respondents agree that LIC employees/agents are clearly explain about terms and conditions of policy and 5% of the respondents disagree that LIC employees/agents are clearly explain about terms and conditions of policy. 49.2% of the respondents agree that their money is growing in LIC and 5% of the respondents strongly disagree that their money is growing in LIC. 38.3% of the respondents agree that they feel secured about their investment in LIC and 5.8% of the respondents disagree that they feel secured about their investment in LIC. 40.8% of the respondents have neutral mindset about friendly interaction by LIC employees/agents and 6.7% of the respondents strongly disagree that LIC agents/employees always have friendly interaction with them. 41.7% of the respondents agree that they attending customer interaction camp where new investment plans are presented and 5% of the respondents strongly disagree that they attending customer interaction camp where new investment plans are presented. 40% of the respondents agree that LIC is funding for their future goals through life insurance plans and 5% of the respondents disagree that LIC is funding for their future goals through life insurance plans. 40.8% of the respondents have neutral mindset about tax benefits and 5.8% of the respondents strongly agree that LIC offering better tax benefits schemes. 42.5% of the respondents agree that they are satisfied with LIC plans and policies and 6.7% of the respondents strongly disagree that they are satisfied with LIC plans and policies. 40% of the respondents agree that they highly recommend LIC policies to their friends & relatives and 7.5% of the respondents strongly disagree that they highly recommend LIC policy to their friends & relatives. 57.5% of the respondents agree that they are satisfied with overall services provided by the LIC and 5.8% of the respondents disagree that they are satisfied with overall services provided by the LIC.

Table 3: t-test showing the mean difference between gender and friendly interaction by LIC agents/employees

Gender

N

Mean

S.D

t-test Result

t-value

P-value

Male

80

2.60

1.086

10.861

0.001

Female

40

2.83

0.781

     Source: Primary data computed;

Table 3 shows that there is a mean difference between gender and friendly interaction by LIC agents/ employees. Hence the P-value is less than 0.05 (0.001). It is found that gender wise policy holders have difference of opinion towards friendly interaction by LIC agents/ employees.

Table 4: Analysis of variance between age and polite & friendly service by LIC employees/agents

Age

N

Mean

S.D

ANOVA Result

F-value

P-value

Below 35 years

52

1.75

0.837

3.189

0.045

35- 45 years

32

2.19

1.148

Above 45 years

36

2.28

1.233

     Source: Primary data computed;

Table 4 shows that there is a mean difference between age and polite & friendly service by LIC employees/agents. Hence the P-value is less than 0.05 (0.045). It is found that polite & friendly service by LIC employees/ agents are differed on the basis of age of the policy holders.

Table 5: Analysis of variance between age and future funding by life insurance plans

Age

N

Mean

S.D

ANOVA Result

F-value

P-value

Below 35 years

52

2.37

1.268

6.813

0.002

35- 45 years

32

2.44

1.190

Above 45 years

36

1.58

0.692

     Source: Primary data computed;

Table 5 shows that there is a mean difference between age and LIC is funding for future. Hence the P-value is less than 0.05 (0.002). It is found that future funding by life insurance plans are differed on the basis of age of the policy holders.

Table 6: Analysis of variance between occupation and satisfaction with overall services provided by the LIC

Occupation

N

Mean

S.D

ANOVA Result

F-value

P-value

Employees (Govt./Pvt.)

49

2.16

0.965

3.307

0.040

Business

38

2.11

0.831

Others

33

2.67

1.242

     Source: Primary data computed;

Table 6 shows that there is a mean difference between occupation and satisfaction with overall services. Hence the P-value is less than 0.05 (0.040). It is found that overall service satisfaction is differed on the basis of occupation of policy holders.

Table 7: Analysis of variance between qualification and quality of service by LIC

Qualification

N

Mean

S.D

ANOVA Result

F-value

P-value

HSC & below

40

1.70

0.758

3.527

0.033

UG/PG

54

2.00

1.133

Others

26

2.42

1.362

     Source: Primary data computed;

Table 7 shows that there is a mean difference between qualification and quality of service by LIC. Hence the P-value is less than 0.05 (0.033). It is found that quality of service is differed on the basis of qualification of the policy holders.

Table 8: Analysis of variance between annual income and better service after sales

 

Income

N

Mean

S.D

ANOVA Result

F-value

P-value

Below 2 Lakhs

74

2.93

1.051

6.083

0.003

2-4 Lakhs

36

2.28

0.779

Above 4 Lakhs

10

2.20

1.549

     Source: Primary data computed;

Table 8 shows that there is a mean difference between annual income and after sales and service. Hence the P-value is less than 0.05 (0.003). It is found that after sales and service by LIC is differed on the basis of policy holders’ annual income.

Table 9: Analysis of variance between annual income and attending customer interaction camp for new plans

Income

N

Mean

S.D

ANOVA Result

F-value

P-value

Below 2 Lakhs

74

2.81

1.167

9.081

0.001

2-4 Lakhs

36

1.89

0.747

Above 4 Lakhs

10

2.40

1.265

     Source: Primary data computed;

Table 9 shows that there is a mean difference between annual income and attending customer interaction camp. Hence the P-value is less than 0.05 (0.001). It is found that policy holders have difference of opinion towards attending customers’ interaction camp based on their annual income.

 

Table 10: Analysis of variance between experience in investment and correct responsiveness by LIC employees/agents

Experience in investment

N

Mean

S.D

ANOVA Result

F-value

P-value

Below 5 years

54

2.07

0.887

8.368

0.001

5-10 years

52

2.38

1.087

Above 10 years

14

3.29

0.994

     Source: Primary data computed;

Table 10 shows that there is a mean difference between experience in investment and correct responsiveness by LIC. Hence the P-value is less than 0.05 (0.001). It is found that responsiveness by LIC agents/employees are differed on the basis of investment experience of the policy holders.

Table 11: Analysis of variance between experience in investment and transparent policy documentation

Experience

N

Mean

S.D

ANOVA Result

F-value

P-value

Below 5 years

54

2.31

0.886

4.109

0.019

5-10 years

52

2.58

1.036

Above 10 years

14

3.14

1.099

     Source: Primary data computed;

Table 11 shows that there is a mean difference between experience in investment and transparent policy documentation. Hence the P-value is less than 0.05 (0.019). It is found that transparency in policy documentation is differed on the basis of investment experience of policy holders.

Table 12: Chi square test showing the association between educational qualification and explanation about policy terms & conditions

Opinion

Educational Qualification

Total

χ2 value

P-value

HSC & below

UG/PG

Others

Strongly agree

3

20

3

26

23.144

0.003

Agree

28

22

12

62

Neutral

6

7

6

19

Disagree

3

2

1

6

Strongly disagree

0

3

4

7

Total

40

54

26

120

     Source: Primary data computed;

Table 12 shows that there is an association between educational qualification and explanation about terms and conditions of policy. Hence the P-value is less than 0.05 (0.003). It is found that explanation about policy terms and conditions by agents/employees are influenced by educational qualification of the policy holders.

Table 13: Chi square test showing the association between annual income and tax benefits schemes

Opinion

Annual income

Total

χ2 value

P-value

Below 2 Lakhs

2-4 Lakhs

Above 4 Lakhs

Strongly agree

4

1

2

7

24.940

0.002

Agree

12

16

6

34

Neutral

32

15

2

49

Disagree

20

2

0

22

Strongly disagree

6

2

0

8

Total

74

36

10

120

     Source: Primary data computed;

Table 13 shows that there is an association between annual income and tax benefits schemes. Hence the P-value is less than 0.05 (0.002). It is found that annual income has the influence on tax benefits schemes.

Table 14: Chi square test showing the association between experience in investment and growth of money in LIC

Opinion

Experience in investment

Total

χ2 value

P-value

Below 5 years

5-10 years

Above 10 years

Strongly agree

2

18

4

24

25.168

0.001

Agree

33

20

6

59

Neutral

12

9

0

21

Disagree

6

2

2

10

Strongly disagree

1

3

2

6

Total

54

52

14

120

     Source: Primary data computed;

Table 14 shows that there is an association between experience in investment and growth of money in LIC. Hence the P-value is less than 0.05 (0.001). It is found that years of investment has the influence on growth of money.

 

Managerial implications

The Life insurance Corporation of India should have friendly interaction with their policy holders irrespective of their gender. Since, opinion towards friendly interaction is differed on the basis of gender of the policy holders. The LIC of India should provide polite & friendly service to its customers and also it should ensure future funding by life insurance plans irrespective of age of the policy holders. The LIC of India should provide better service after sales of the insurance policies to all policy holders, because income wise respondents have difference of opinion towards service after sales. So the LIC of India should concentrate more on after sales service. It will help to retain the existing customer and also acquisition of new customers. The LIC of India should create awareness about attending customer interaction camp where new plans and policies are discussed. The LIC of India should offer correct responsiveness on time to all policy holders, because respondents have difference of opinion about responsiveness based on their investment experience. The LIC of India should remember to the policy holders about their due dates, it will helps to reduce the discontinuation of policies. The LIC of India should create awareness about their plans and policies to its policy holders and also the employees should have friendly interaction with the policy holders. The employees/agents of LIC of India should explain about the terms and conditions of policy to all customers, whether they are educated or illiterate. The employees/agents should be polite in nature. Then only the policy holders will interact with them without any hesitation. The LIC of India may advise to their policy holders that their money will grow in any insurance plans when they will wait for a long time.

Conclusion

Customer relationship management plays a vital role in success of organizations particularly insurance companies. When the insurance sector grows larger and larger, complexity increases in controlling potential customers.  Implementing systematic and well structured customer relationship management systems help to understanding and analysing the key success factors. This research is aimed to examine the customer relationship management in LIC of India.  It is found that demographic profile of the policy holders such as gender, age, qualification, occupation, income and investment experience have significant influence on CRM practices. So the policy makers should concentrate more on individual factors. Further it is suggested that the LIC of India may concentrate more on better tax benefits, correct responsiveness, transparent policy documentation, explanation of terms & conditions of policy, funding for future goals, better service after sales, customer interaction camp and friendly interaction by employees/agents which are helps to build the strong relationship with the customers. It concludes that the LIC of India is providing better services to its policy holders, since majority of the policy holders are satisfied with overall services provided by LIC of India.

Reference

Agariya, A. & Singh, D. (2012). CRM Scale Development and Validation in Indian Insurance Sector. Journal of Internet Banking and Commerce, 17(2), 1-21.

Arulsuresh, J. (2011). Empirical Study on Satisfaction of the Policyholders towards the Services provided by LIC of India in Madurai Division. International Journal of Multidisciplinary Research, 1(8).

Durai Kannan, A., & Vikkraman, P. (2016). Implementation of CRM Processes in Life Insurance Sector: A Customers' Perspective Analysis. Purushartha: A Journal of Management Ethics and Spirituality, 8(2), 78-84.

Kenneth Black, Jr. and Harold, D. Skipper, Jr., Life and Health Insurance. Pearson Education, Singapore, 600-632.

Kotler, P., & Keller, K. (2011). Marketing Management. Pearson Education, England

Kuldeep Chaudhary, Jagdeep Singla and Nisha Chaudhary (2014). Examining expected and Perceived Service Quality in Life Insurance Corporation of India. International Journal of Application or Innovation in Engineering & Management, 3(1).

Pappeswari, C. and Rajalakshmi, S. (2013). Customer Relationship Management Practices in Insurance Sector –A Study on LIC of India in Tiruchendur area.  Research journali’s Journal of Management, 1(1).

Shanmugasundaram, S. (2010). Customer Relationship Management. Eastern Economic Edition, PHI Learning Private Limtied.

Sheela Rani, S. (2016). Customer Relationship Management. Margham Publications, Chennai.

 
 

Pacific Institute of Management, Pacific Hills, Airport Road, Udaipur - 313001, E-mail: edit@pbr.co.in
Phone : +91-294-2494506, +91-294-2494507

©Pbr.co.in, All Right Reserved IT Department , Pacific Group