1 INSURANCE SECTOR IN INDIA The insurance sector in India has come a full circle from being an open competitive market to nationalization and back to a liberalized market again. Tracing the developments in the Indian insurance sector reveals the 360-degree turn witnessed over a period of almost two centuries. A brief history of the Insurance sector The business of life insurance in India in its existing form started in India in the year 1818 with the establishment of the Oriental Life Insurance Company in Calcutta. Some of the important milestones in the life insurance business in India are: 1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. 1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses.
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INSURANCE SECTOR IN INDIA
The insurance sector in India has come a full circle from being an
open competitive market to nationalization and back to a liberalized
market again. Tracing the developments in the Indian insurance sector
reveals the 360-degree turn witnessed over a period of almost two
centuries.
A brief history of the Insurance sector
The business of life insurance in India in its existing form started
in India in the year 1818 with the establishment of the Oriental Life
Insurance Company in Calcutta.
Some of the important milestones in the life insurance business
in India are:
1912: The Indian Life Assurance Companies Act enacted as the first
statute to regulate the life insurance business.
1928: The Indian 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 public.
1956: Two Hundred and Forty Five Indian and foreign insurers and
provident societies taken over by the central government and
nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956,
with a capital contribution of Rs. 5 crore from the Government of India.
The General insurance business in India, on the other hand, can
trace its roots to the Triton Insurance Company Ltd., the first general
insurance company established in the year 1850 in Calcutta by the
British.
Some of the important milestones in the general insurance
business in India are:
1907: The Indian Mercantile Insurance Ltd. set up, the first company
to transact all classes of general insurance business.
1957: General Insurance Council, a wing of the Insurance Association
of India, frames a code of conduct for ensuring fair conduct and sound
business practices.
1968: The Insurance Act amended to regulate investments and set
minimum solvency margins and the Tariff Advisory Committee set up.
1972: The General Insurance Business (Nationalization) Act,
1972 nationalized the general insurance business in India with effect
from 1st January 1973.
Insurance sector reforms:
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In 1993, Malhotra Committee headed by former Finance
Secretary and RBI Governor R.N. Malhotra was formed to evaluate the
Indian insurance industry and recommend its future direction.
The Malhotra committee was set up with the objective of
complementing the reforms initiated in the financial sector. The
reforms were aimed at "creating a more efficient and competitive
financial system suitable for the requirements of the economy keeping
in mind the structural changes currently underway and recognizing
that insurance is an important part of the overall financial system
where it was necessary to address the need for similar reforms…"
In 1994, the committee submitted the report and some of the
key recommendations included:
1) Structure
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Government stake in the insurance Companies to be brought
down to 50%
Government should take over the holdings of GIC and its
subsidiaries so that these subsidiaries can act as independent
corporations
All the insurance companies should be given greater freedom to
operate
2) Competition
Private Companies with a minimum paid up capital of Rs.1bn
should be allowed to enter the industry
No Company should deal in both Life and General Insurance
through a single entity
Foreign companies may be allowed to enter the industry in
collaboration with the domestic companies
Postal Life Insurance should be allowed to operate in the rural
market
Only One State Level Life Insurance Company should be allowed
to operate in each state
3) Regulatory Body
The Insurance Act should be changed
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An Insurance Regulatory body should be set up
Controller of Insurance (Currently a part from the Finance
Ministry) should be made independent
4) Investments
Mandatory Investments of LIC Life Fund in government securities
to be reduced from 75% to 50%
GIC and its subsidiaries are not to hold more than 5% in any
company (There current holdings to be brought down to this
level over a period of time)
5) Customer Service
LIC should pay interest on delays in payments beyond 30 days
Insurance companies must be encouraged to set up unit linked
pension plans
Computerization of operations and updating of technology to be
carried out in the insurance industry The committee emphasized
that in order to improve the customer services and increase the
coverage of the insurance industry should be opened up to
competition.
But at the same time, the committee felt the need to exercise
caution as any failure on the part of new players could ruin the
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public confidence in the industry. Hence, it was decided to allow
competition in a limited way by stipulating the minimum capital
requirement of Rs.100 crores. The committee felt the need to
provide greater autonomy to insurance companies in order to
improve their performance and enable them to act as
independent companies with economic motives. For this
purpose, it had proposed setting up an independent regulatory
body.
Why Insurance?
Insurance is desired to safeguard oneself and one's family
against possible losses on account of risks and perils. It provides
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financial compensation for the losses suffered due to the happening of
any unforeseen events.
By taking life insurance a person can have peace of mind and
need not worry about the financial consequences in case of any
untimely death.
Certain Insurance contracts are also made compulsory by
legislation. For example, Motor Vehicles Act 1988 stipulates that a
person driving a vehicle in a public place should hold a valid insurance
policy covering "Act" risks. Another example of compulsory insurance
pertains to the Environmental Protection Act, wherein a person using
or carrying hazardous substances (as defined in the Act) must hold a
valid public liability (Act) policy.
Basically there are two types of insurance:
1. Life Insurance
2. General Insurance
Insurance - Life
Your family counts on you every day for financial support: food,
shelter, transportation, education, and much more. Insurance provides
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you with that unique sense of security that no other form of
investment provides. It gives you a sense of financial support
especially during that time of crisis irrespective of the fluctuations in
the stock market. Insurance provides for your career goals right from
your childhood years.
Life insurance is all about making sure your family has adequate
financial resources to make those plans and dreams come true. It
provides financial protection to help your family or business to manage
after your death.
Few of the Life insurance policies are:
1. Whole life policies - Cover the insured for life. The insured
does not receive money while he is alive; the nominee receives
the sum assured plus bonus upon death of the insured.
2. Endowment policies - Cover the insured for a specific period.
The insured receives money on survival of the term and is not
covered thereafter.
3. Money back policies - The nominee receives money
immediately on death of the insured. On survival the insured
receives money at regular intervals during the term. These
policies cost more than endowment with profit policies.
4. Annuities / Children's policies - The nominee receives a
guaranteed amount of money at a pre-determined time and not
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immediately on death of the insured. On survival the insured
receives money at the same pre-determined time. These policies
are best suited for planning children's future education and
marriage costs.
5. Pension schemes - are policies that provide benefits to the
insured only upon retirement. If the insured dies during the term
of the policy, his nominee would receive the benefits either as a
lump sum or as a pension every month.
Since a single policy cannot meet all the insurance objectives, one
should have a portfolio of policies covering all the needs.
Insurance - General
Every asset has a value and the business of general insurance
is related to the protection of economic value of assets. Assets would
have been created through the efforts of owner, which can be in the
form of building, vehicles, machinery and other tangible properties.
Since tangible property has a physical shape and consistency, it is
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subject to many risks ranging from fire, allied perils to theft and
robbery.
Concepts of insurance have been extended beyond the coverage
of tangible asset. Now the risk of losses due to sudden changes in
currency exchange rates, political disturbance, negligence and liability
for the damages can also be covered.
But if a person judiciously invests in insurance for his property
prior to any unexpected contingency then he will be suitably
compensated for his loss as soon as the extent of damage is
ascertained.
Few of the General Insurance policies are:
1. Property Insurance: The home is most valued possession. The
policy is designed to cover the various risks under a single policy.
It provides protection for property and interest of the insured and
family.
2. Health Insurance: It provides cover, which takes care of
medical expenses following hospitalization from sudden illness or
accident.
3. Personal Accident Insurance : This insurance policy provides
compensation for loss of life or injury (partial or permanent)
caused by an accident. This includes reimbursement of cost of
treatment and the use of hospital facilities for the treatment.
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4. Travel Insurance : The policy covers the insured against
various eventualities while traveling abroad. It covers the insured
against personal accident, medical expenses and repatriation,
loss of checked baggage, passport etc.
5. Liability Insurance : This policy indemnifies the Directors or
Officers or other professionals against loss arising from claims
made against them by reason of any wrongful Act in their Official
capacity.
6. Motor Insurance : Motor Vehicles Act states that every motor
vehicle plying on the road has to be insured, with at least
Liability only policy. There are two types of policy one covering
the act of liability, while other covers insurers all liability and
damage caused to one's vehicles.
Since a single policy cannot meet all the insurance objectives,
one should have a portfolio of policies covering all the needs. Of the
two types of insurances, MetLife deals in Life Insurance in India.
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Met-Life Begins:
The origins of Metropolitan Life Insurance Company (MetLife) go
back to 1863, when a group of New York City businessmen raised
$100,000 to found the National Union Life and Limb Insurance
Company.
The new company insured Civil War sailors and soldiers against
disabilities due to wartime wounds, accidents, and sickness. In 1868,
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after several reorganizations and five difficult years, the company
decided to focus on the life insurance business. A new company was
chartered to sell "ordinary" insurance to the middle class. The founders
chose the name because they had been most successful in New York
City, or the "Metropolitan" District.
This new venture also faced difficulties. A severe business
depression that began in the early 1870s rapidly put half of the 70 life
insurance companies operating in New York State out of business. Only
very large, long-established ordinary life insurance companies
remained strong. Policy lapses over successive years forced the
company to contract until it reached its lowest point in the late 1870s.
In 1879, MetLife President Joseph F. Knapp turned his attention
to England, where "industrial" or "workingmen's" insurance programs
were widely successful. American companies had not bothered to
pursue industrial insurance up to that time because of the expense
involved in building and sustaining an agency force to sell policies door
to door and to make the weekly collection of five- or ten-cent
premiums.
By importing English agents to train an American agency force,
MetLife quickly transferred successful British methods for use in the
United States. By 1880, the company was signing up 700 new
industrial policies a day. Rapidly increasing volume quickly drove down
distribution costs, and the new program proved immediately
successful.
The MetLife agent became an important person in the lives of
these striving families. Manuals instructed agents to call at a home at
the same time each week to ensure familiarity and contact. In the
process of collecting premiums, insurance agents listened to the
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problems, concerns, and hopes of their clients. So successful was this
approach that by 1909, MetLife became the nation's largest life insurer
in terms of insurance in force, a leadership position we continue to
hold today in North America.
MetLife Today
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. This will make an
easier and more convenient way for MetLife’s customers to realize
their financial goals.
After the tragic events of September 11, MetLife responded
quickly. First and foremost, MetLife was fully committed to its
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policyholders. Chairman and CEO Bob Benmosche remarked that "our
focus today is on lending whatever support we can to our customers,"
and that MetLife "is fully prepared financially to pay all claims."
MetLife’s support did not end there. In responding to the tragedy,
MetLife and MetLife Foundation made a number of grants to aid those
affected, including: $1 million Foundation grants to both the
September 11th Fund to meet longer-term needs of victims, and to the
Twin Towers fund to assist families and rescue workers. MetLife
Foundation also matched employee contributions to the American Red
Cross Disaster Relief Fund.
At the same time MetLife, Inc. announced that it had invested $1
billion in a broad array of publicly traded common stocks. The
company said that this was the beginning of a program to significantly
increase MetLife’s investment in the public equity markets, and one
way to get back to the basics of building America’s future.
Additional grants for disaster relief were made in 2001 and 2002
to a number of different organizations including the Children’s Health
Fund and the Renaissance Economic Development Corporation.
In 2002 Working Mother magazine honored MetLife by naming
the company one of the "100 Best Companies for Working Mothers,"
for the fourth consecutive year. In addition, the Minority Corporate
Counsel Association (MCCA) selected MetLife’s Law Department as a
recipient of the Employer of Choice Award for its commitment to
creating and maintaining a diverse and inclusive organization.
On the international front, the Mexican Government selected
MetLife to acquire Aseguradora Hidalgo, S.A., Mexico’s largest life
insurer for approximately $965 million. MetLife "has the expertise, the
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resources and the commitment to provide exceptional products and
services to customers in Mexico, one of the fastest growing life
insurance markets," noted Bill Toppeta, president of MetLife
International.
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. Commenting on the partnership,
Senior Executive Vice President and Chief Administrative Office Lisa
Weber noted that "Snoopy is our corporate ambassador and has been
an important part of our advertising campaign for 17 years."
For its future successes, the company can draw on the reservoir
of history that has produced an enduring set of corporate values based
on almost 135 years of integrity, social responsibility, strong
leadership, financial strength, and innovative products and services
with over 137 years of experience and acquiring the 36th position
among the fortune 500 companies, the MetLife companies serve
millions of customers in the Americas and Asia with one goal in mind –
to build financial freedom for everyone. The MetLife companies are a
leader in group benefits that serve 88 of the top one hundred
FORTUNE 500®* companies, and provide benefits to 37 million
employees and family members through its plans sponsors in the U.S.
The MetLife companies are also ranked #1 in group life and #1
in commercial dental in the U.S. The MetLife companies are the
number one life insurer in the U.S. with approximately US $2.5 trillion
of life insurance in force.
In India, MetLife was incorporated in 2001, and aims to differentiate
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itself through customized need based selling, simple and innovative
products, and technology-backed service experience, to tread its path
to build financial freedom for everyone.
MetLife's stated long-term goal is to become the recognized
leader throughout the world with over 100 million people as customers
by the year 2010. The company took a major step toward realizing this
goal in January 2005, when it announced its intention to purchase
Citigroup's Travelers Life & Annuity and substantially all of Citigroup's
international business for $11.5 billion.
Vision/Mission
Is build financial freedom for all through leadership in
providing financial advice and building long-term relationships
through innovative protection, accumulation and retirement products,
robust underwriting processes and creating world-class customer
service experience for the customers.
MetLife want to provide customers in India with world-class
solutions for financial security, and in the process add significant value
to our shareholders, associates and society.
Core Values
Being Innovative in offering world class and competitive products
to customers.
To build Long Term Relationships with the customers by creating
a world class service experience through operational excellence
and the innovative use of technology
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By creating a Customer Centered and Result Focused Vision that
inspires each of the Associates and has their buy-in
Committed to creating a High Performance Organization by
creating an environment that allows each of the Associates to
perform at their peak and hence recognized as an Employer of
Choice
Committed to Partnering with our internal and external
Customers for mutual success
Work with Integrity, Fairness and Financial Prudence in all the
dealings keeping the interests of the Shareholders, Customers
and Associates paramount.
CORPORATE GOVERNANCE
Venkatesh Mysore – Managing Director
Miro Farrugia – Chief Financial Officer
Suraj Kaeley – Chief Marketing Officer
B Ashwin - Chief Administrative Officer
Anil Kumar K R - Chief Planning Officer
Vikrant Pande – Director (Banc assurance and Corporate Agency)
Gaurav Suri – Director (Marketing)
Sudip Mukhopadhyay – Director (Institutional Business)
Smitashree Menon – Director (Human Resources)
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K Sriram – Chief Actuary
Ajith Vellat – Director (Information Technology)
Kailash Kulkarni – Director (Agency Sales)
Rajen Jatar – Director (Finance)
Neerav Kaushik – Director (Service Delivery)
Shiva Belavadi – Director (Institutional Service Delivery & Claims)
Corporate Partners
As the vital channel for MetLife’s products, some exemplary
banks and financial institutions have been chosen. These serve as the
interface between the customers and Metlife to aid them to understand
the unique needs and aspirations of every Indian and update the
products of Metlife with features that form the cornerstones of financial
freedom.
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J&K Bank
The J&K Bank Ltd., incorporated on October 1st, 1938
commenced its business on July 4th, 1939. The bank now, has a
network of 440 branches spread over the length and breadth of the
country. A significant contributing factor for this fast growth is the solid
founding principles that are dedicated to the cause of transforming the
Bank not only as a financial heart but also the social heart of the
community.
The J&K Bank is the first state owned bank of the country and
53% of equity is held by the Govt. of J&K. The bank has a consistent
track record of growth and profitability. It has a unique distinction of
being banker to the J&K State Govt. and has also been appointed by
RBI as its agency in J&K, responsible for carrying general banking
business of the Central Govt. and collection of taxes pertaining to the
Central Board of Direct Taxes.
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Dhanalakshmi Bank
The Dhanalakshmi Bank Limited (DLB) headquartered at Thrissur
in Kerala, was started seven decades back, at a time when banking
was less known to the people. In a high literate state of Kerala, the
bank grew in strength over the years. And today, it has 153 branches
spread over Kerala, Tamil Nadu, Karnataka, Andhra, Maharashtra,
Gujarat, West Bengal (Kolkata) and New Delhi.
The bank has ambitious plans for growth in branches, total
business and profits. All the 153 branches are classified as NRI
branches, and are computerized and in the process of implementing
Wide Area Network, ATM's, Any Branch Banking and Cash Management
Services, Telebanking and Internet Banking.
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Karnataka Bank
The Karnataka Bank Ltd., a premier private sector bank of the
country, was incorporated on February 18th, 1924 at Mangalore, a
coastal town in South Kanara, a district of Karnataka state, which has
attained renown as the Cradle of Indian Banking.
Today it is one of the leading private sector banks in the country,
known for its steady and disciplined growth and cordial customer
service. The Bank has a strong national presence through a
widespread network of 358 branches. The bank has 230 branches
wholly/partially computerized, as of now.
Plans are underway to put in place additional products to
enhance customer satisfaction and to increase income stream with the
help of upgraded technology. The bank has already put in place an
elaborate risk monitoring and asset liability management system.
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Other Partners
KARVY
In 1982, a group of Hyderabad-based practising Chartered
Accountants started Karvy Consultants Limited with a capital of
Rs.1,50,000 offering auditing and taxation services initially. Later, it
forayed into the Registrar and Share Transfer activities and
subsequently into financial services. All along, Karvy's strong work
ethic and professional background leveraged with Information
Technology enabled it to deliver quality to the individual.
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GEOJIT SECURITIES
Geojit Securities was founded by Mr.C.J George in 1987 as a
Proprietorship for doing Broking business in Cochin Stock Exchange. In
1994, the business was taken over by Geojit Securities Ltd, a Joint
Venture between Mr.C.J George and the Kerala State Industrial
Development Corporation Ltd. In the following year, the company
came up with an IPO and the shares were listed in various Stock
Exchanges in India in 1995.
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WAY2WEALTH
Way2Wealth is a premier Investment Consultancy Firm that has
been launched with the aim of making investing simpler, more
understandable and profitable for the investors. Way2Wealth brings a
wide range of product offerings from Fixed Income Securities, Life
Insurance and Mutual Funds to Equity and Derivatives (on the National
Stock Exchange) for the convenience and benefit of it customers.
Way2Wealth has over 40 easily accessible Investment Outlets spread
across 20 major towns and cities in the country.
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MINI MUTHOOTHU
Established in 1921, Mini Muthoothu with an illustrious history of
banking behind them today operates from 75 branches in Kerala and 5
in Bangalore. All business concerns of Mini Muthoothu function under
the strict guidelines set by the Department of Company Law Affairs
and Reserve Bank of India. They also have a certificate of compliance
with the requirements regarding prudential norms from the Reserve
Bank of India. Mini Muthoothu, under the able leadership of its
Chairman, Mr. Roy M Mathew, offers both the resources and
capabilities like any national player coupled with individualized
attention to its customers.
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METLIFE PRODUCT OVERVIEW:
1) Met100
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Met100 is a limited pay whole-life policy in a non-participating
form. The policy covers the entire life (or till 100 years of age) and has
a guaranteed up-front sum-assured and paid-up value. Besides, the
policyholder has the option to surrender the policy at any point of time
for cash at a pre-decided guaranteed "surrender value". Met100 thus,
assures guaranteed sum assured – to the policyholder on survival at
age of 100 or, a guaranteed amount for the nominee/beneficiary in
case of death. Also, on payment of additional premiums one or more of
the various riders like Accidental death benefit, Term Rider, Waiver of
Premium Rider, Critical Illness rider can be added to the policy.
Highlights
Life Time protection
Affordable premiums
Tax Benefit
Access to cash value of the policy
Guaranteed returns in case of survival or death.
2) Met100 Gold
Met100 Gold is a limited pay whole-life policy in participating
form, covering the entire life or till the 100 years of age. A bonus is
declared after the first two years of holding the policy, which is
credited as reversionary bonus. Besides, the company can also declare
terminal bonus. A unique feature about this policy is that the
participation in the profit continues even after the premium paying
term, provided the premiums have been paid for the full term. The
premium paying modes available are Annual, Semi-annual, Quarterly,
Monthly and Payroll Savings Scheme. Also, on payment of additional
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premiums one or more of the various riders like Accidental death
benefit, Term Rider, Waiver of Premium Rider, Critical Illness rider can
be added to the policy.
Highlights:
Life Time protection
Affordable premiums
Tax Advantage
Access to the cash value of the policy
Future prosperity of the company is shared by getting
reversionary and terminal bonuses.
3) Met Sukh
Met Sukh is a money back non-participating policy where
‘assured’ lump-sum amount is paid to the policyholder at regular
intervals. Being a non-participating policy, the premium rates, sum
assured, surrender values and paid-up values are guaranteed up-front
for Met Sukh. The plan can be availed for the term of 20 years, where
the money is paid every 5 yrs. Premiums for Met Sukh are ceased on
death or on expiry of term - whichever is earlier. Also, on survival at
the end of 20th year the policyholder receives a 40% accrued
guaranteed addition. The biggest benefit of Met Sukh however, is that
in case of death during the term of the plan, the nominee/ beneficiary
receives the guaranteed sum assured plus accrued guaranteed
additions. On payment of additional premiums one or more of the
various riders like Accidental death benefit, Term Rider, Waiver of
Premium Rider, Critical Illness rider can be added to the policy.
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Highlights
Assured sum at regular intervals
Guaranteed returns at maturity
Waiver of premium in case of death
Protection
Savings
4) Met Bhavishya
Met Bhavishya, a non-participating money-back policy with
guaranteed returns, has been specially designed to meet the financial
requirements for children at their different stages of life. The insured
here is the parent and the child – the beneficiary. The policy is suitable
for parents in the age group 20-50 years having children of 0-12 years
old. There are two options to choose from and fixed term benefits
periodic additions & terminal additions are payable based on the
option that you select. The policy can be customized through 4 riders -
Accidental Death Benefit, Critical Illness (10 illness), Waiver of
Premium (Accidental Disability) and Term Rider
Highlights
Guaranteed returns at regular intervals
Secures the present and the future for the child
Waiver of Premium in case of death.
5) Met-Mortgage Protector
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Met-Mortgage Protector is a single pay/limited pay policy,
specially designed to protect the dependants of the insurer against the
liabilities incurred on a housing loan. The individual here is insured and
not the asset. The biggest benefit of the policy is its decreasing term-
assurance plan, which reduces the burden on the dependants, while
providing guaranteed sum assured to the beneficiary. Met Mortgage
Protector is available for terms of 5-25 yrs
Highlights
Protect dependents against liabilities incurred on housing loan.
Cover continues even after the premium paying term is over.
Flexible terms
6) Met Suvidha
Met Suvidha is a participatory endowment plan that provides
savings and security in one policy. It provides a lot of flexibility in
choosing the premium paying term between 15-30 years i.e. terms are
available for 15, 16, 17, 18…30 years. Met Suvidha has been
developed keeping in mind people with shorter and irregular earning
spans e.g. Celebrities. The policy allows for flexibility in paying
provides protection to an individual whenever required, and offers tax
advantage. Also, being a participatory policy it is suitable for people
who would like to share the future prosperity of the company by
getting reversionary bonuses and terminal bonuses.
management) to help acquire customers thorough various touch
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points and translate operational data into actionable insights for
proactively serving customers.
CRM with BI (Business Intelligence) tools can help
insurance firms monitor the ebb and flow of customer behavior,
giving them a holistic 360-degree view of their customers.”
CRM has helped customers through effective event-based
marketing and lead tracking to cross- and up-sell products. CRM
helps categories and segment customers and align products that
best suit them. CRM is helps to expand into rural areas
3. Strengthening the distribution network –
MetLife India mainly operates in all the metros and in
certain big cities. In order to expand its position and to reach to
its customers what MetLife needs is to set-up its branches in
more cities and should also get into the rural areas where there
is a huge untapped market. As MetLife already has a wide global
set up it can easily expand in India also in order to reach to the
customers and be available at their door steps.
4. Strong tie-ups with well known and already `
established companies or banks –
Tie-ups act as a backbone for any company as they too
represent the main company as a whole. MetLife being
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associated with banks such as Jammu & Kashmir bank,
Dhanlakshmi bank & the Karnataka bank, which in itself are not
so common with the general mass, makes it difficult for MetLife
to get itself placed in the Indian market. For overcoming the
same MetLife can go for further mergers and acquisitions with
strong banks which would help it grow, for example, it
announced its intention to purchase Citigroup's Travelers Life &
Annuity and substantially all of Citigroup's international
business for $11.5 billion. Such purchases and tie-ups would
help it strengthen its roots and create its own niche in the Indian
market.
5. Product diversification –
Instead of catering to only one kind of product MetLife can
slowly diversify with the kind of products it deals with. MetLife
only provides life insurance products; it can get into the debt
market by providing housing loans and various other vehicle
loans as these are on a high these days.
6. Emphasis on use of Information Technology –
In the insurance industry today, there is a clear trend away
from selling a broad range of products to a large volume of
customers in a one –size-fits-all manners. Instead of focusing on
their different products lines as silos (i.e., life, property and
casualty etc) insurers are looking for ways to offer highly
targeted insurance products that are tailored to the individuals
customers with the highest propensity to buy them.
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There is a evolutionary change in the technology that has
revolutionized the entire insurance sector. Insurance industry is a
data-rich industry, and thus, there is dire need to use the data
for trend analysis and personalization.
With increased competition among insurers, service has
become a key issue. Moreover, customers are getting
increasingly sophisticated and tech-savvy. People today don’t
want to accept the current value propositions, they want
personalized interactions and they look for more and more
features and add ones and better service.
The insurance companies today must meet the need of the
hour for more and more personalized approach for handling the
customer. Today managing the customer intelligently is very
critical for the insurer especially in the very competitive
environment. Companies need to apply different set of rules and
treatment strategies to different customer segments. However,
to personalize interactions, insurers are required to capture
customer information in an integrated system.
With the explosion of Website and greater access to direct
product or policy information, there is a need to developing
better techniques to give customers a truly personalized
experience. Personalization helps organizations to reach their
customers with more impact and to generate new revenue
through cross selling and up selling activities. To ensure that the
customers are receiving personalized information, many
organizations are incorporating knowledge database-repositories
of content that typically include a search engine and lets the
customers locate the all document and information related to
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their queries of request for services. Customers can hereby use
the knowledge database to manage their products or the
company information and invoices, claim records, and histories
of the service inquiry. These products also may be able to learn
from the customer’s previous knowledge database and to use
their information when determining the relevance to the
customers search request.
The insurance sector remains a very competitive market
and those companies that are able to best utilize their data and
provide their customer with the most personalized options will
have the distinct competitive advantage. The insurers that come
up to the top will be those who leverage the appropriate
technology solutions effectively in order to foster customer
loyalty, attract new customers and improve operational
efficiency by providing common information across their lines of
business.
Conclusion
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The insurance business is major service oriented business in the world. The services offered by the insurance industry are well recognized and utilized by the general public and commercial sector of the world. The life insurance business has covered nearly 40% of the population of the world. Global players with strong brands in the insurance industry today set up their back office operation in low cost countries, manage capital on a global basis, make use of their special skills worldwide and use their superior managerial ability to secure leadership positions in the industry.
The claims management is an integral part of insurance. It involves the storage, processing and transmission of information relating to settlement of insurance claims. The use of Information Technology also plays a very important role in claims settlement. In managing the claims handling function, insurers seek to balance the elements of customer satisfaction, administrative handling expenses, and claims overpayment leakages. As part of this balancing act, fraudulent insurance practices are a major business risk that must be managed and overcome. Disputes between insurers and insured over the validity of claims or claims handling practices occasionally escalate into litigation which should be solved with due care.
In this fast developing scenario it will not be enough if companies have the futuristic strategies. Implementation of the strategies, effectively adapting them to ongoing changes can spell success. The success of claim management depends on the satisfaction of the customers. The customers are attracted to an insurance company by its state of art claim service. Therefore, before designing an IT system for claim management, customer’s expectations are to be taken in to account. The customers, their needs, knowledge of how the market works, and what they want, these are the things that are important for an insurance company for serving the customers in a better manner through better technology.