CRM in Max New York Life Insurance

CHAPTER I
INTRODUCTION OF CRM

What is meant by CRM?

CRM stands for customer relationship management. It is a strategy used to

learn more about customers’ needs and behaviors in order to develop
stronger relationship with them. Customer Relationship Management helps
companies achieve growth by focusing on each of the links in the customer
relationship value chain.
To successfully attract, acquire and retain customers, organization
needs to consider implementing a strategy based on an enhanced Customer
Relationship Management (CRM) model. Though hardly a new concept, this
enhanced CRM has become more difficult to implement and maintain, since
it requires fundamental business and technology changes in order to produce
the expected results.

Definition of CRM :- Customer Relationship Management (CRM) is an

information industry term for methodologies, software, and usually Internet
capabilities that help an enterprise manage customer relationships in an
organized and efficient manner. In many cases, an enterprise builds a
database about its customers. This database describes relationships in
sufficient detail so that management, salespeople, and customer service reps
can access information; match customer needs with product plans and

1
offerings; remind customers of service requirements; know what other
products a customer had purchased; etc.

WHAT CUSTOMER RELATIONSHIP MANAGEMENT IS ALL

ABOUT?

According to Kotler, CRM principally revolves around marketing. It

involves integrating information gathered from all the distribution channels
and analyzing the data, with the help of IT, to understand customer behavior.
The continuous analysis and improvements over a long period of time
should result in enhancing customer’s lifetime value with the firm.

CRM PURPOSE

The purpose for engaging in customer relationship management

could be to increase marketing efficiency like achieving lower distribution
cost, streamlining order processing or it could be to increase marketing
effectiveness by building customer loyalty and commitment, personalizing
the market offerings etc. effectiveness means completing the job we set out
to efficiency means using the least amount of resources to do the job. It is
very difficult to achieve a balance between the two. Whatever the purpose
the organization must decide the need and the specific requirement from the
customer relationship management process.

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EMERGENCE OF CRM

1. Direct interaction between producers and consumers :- This

period was dominated by agricultural producers and artisans.

Agricultural producers used to exchange their product and hence
there was a possibility of high levels of customization. The artisans
used to make build to order products such as sculptures, portrait
etc. hence here also there was high level of customer interactions
leading to possibility of practicing customer relationship.

2. Industrial era of mass production :- Mass production is a

process by which identical products are produced in bulk. This era

did not see any growth in customer relationship because there was
a huge time and space difference between the producers and
consumer.

3. Middleman :- Industrial era saw the separation of the production

and consumption function and also led to the concept of

middleman. There are the people who facilitate the transportation
of goods from the place of production to the place of consumption.

4. De-intermediation :- The advent of computers and

telecommunication introduced the concept of internet shopping.
This idea enforced customer interaction and rekindled the growth
of customer relationship management.

3
5. Growth of Service Economy :- Services are typically produced

and delivered at the same place. Because of this characteristic of

service customer relationship became more important for the
service industry. With the growth in service industry during the
last decade of 20th century customer relationship management also
saw vigorous growth.

6. System Selling Approach :- This approach emphasized the

integration of the supplier and the seller. Sellers were able to sell
augmented products and this was appreciated by the customers.
The augmented products are nothing but services and other value
added to the basic product. In order to provide this the suppliers
the manufacture and after sales people had to come together hence
this is known as system selling approach.

7. Customer Expectation :- The customer expectations have rapidly

changed over the last two decades fueled by new technology and
growing availability of knowledge to the customers. This literate
customer can be handled by an effective customer relationship
management.

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 CHAPTER II
CRM IN PUBLIC SECTOR GENERAL INSURANCE
COMPANIES IN LIBERALIZED DE-TARIFF REGIME

CRM, as is well known, stands for customer relationship

management. It is perceived by Common man as basically an I.T. solution to
ensure a better customer service. But obviously it goes much beyond that. It
is a business approach that tries to integrate the employees, the process and
technology to improve an organizations relationship with its customers –
both the existing and prospective; as well as internal and external. Though a
complex process to put in place, the ultimate aim of CRM is to increase
business in a highly competitive environment by attending to the demands of
the market and needs of the customer. The customer is the focus all through
in the process. CRM though. Buzzword now is not really so new. In fact
ever since the start of organized trading the customer has always been the
centre of focus, more so if we look at service sector. However, in an open
market his status has considerably increased because he has lot many
options before him and the various service providers are wooing him to their
fold. Having brought to their fold, they have the new challenges of retaining
him. General Insurance policies are up for grab every twelve month. The
challenge therefore is not only to get new customers but to retain their
loyalty as well. Acquiring a new customer is more expensive than retaining
an existing one. The cost aspect in a competitive environment can not be
ignored. Therefore, we need to understand what goes into the mind of the

5
customer and how it is reflected in his behaviors. Fortunately for us, new
technology is allowing to do so now. Analysis of data collected through
CRM initiative and its updating help understand and anticipate the
customers need, his expectation and behaviors pattern. It also helps to
understand the competitor’s strategy. This in turn will enable in matching
out the unfulfilled needs of the customer. We can apply the customer
knowledge to continuously improve performance through a process of
learning from success and failure.

Customer expectations are rising. They want individual attention,

responsiveness, customization and other value additions without any
premium for these services. There is therefore an urgent need to improve
and increase the convenience and comfort level of the customers. It is
possible to meet these challenges through CRM initiatives. While it is very
important to retain customer, no retention strategy can be 100% success.
Customer
Acquisition becomes vital to ensure growth in customer base. CRM
packages are available / can be developed which can be of immense help,
both in retention of existing customer and increasing the new customer base.
However, it should be very clearly understood that CRM is driven by
technology but it is not about technology and therefore the people issues are
very important. It should be appreciated that (CRM) technology is only an
enabler and not a solution by itself. The attitude, approach and response of
the people in the organization will determine the success and failure of any
such initiative. Organization having satisfied employees with right attitude
create satisfied customer. Basically the employees are the key to keeping the
customer happy. When the employees are unhappy, they create unhappy

6
customers. In a study about customer migration it was Found that majority
of the customer (almost 68%) who stop coming do so because they’re dis-
satisfied with the employees serving them. The position may not be very
different in PSU’s General Insurance Companies. It did not matter much in
post nationalization era but it will certainly matter much more in post
liberalized era. In view of the above, any CRM initiative must necessarily
have to be an inclusive approach. Greater involvement of staff and officer
through improved performance at all levels and in all function must go along
with CRM initiative. Various functional departments have supportive role
for each other and they have to work in true team-spirit. This integrated
approach will enhance both performance and desired behaviors vis-à-vis the
customer. Let’s now briefly examine the state of affairs in PSU General
Insurance Companies post nationalization in reference to the attitude of the
people towards their work as also towards the customer. The nationalization
brought about job security without any system of accountability. The era
saw the growth of trade-unionism of not very healthy kind.

The priorities changed after nationalization. Most of the business

was brought under tariff. The casualty in the process was customer service.
On the positive side of it, attempt was made to bring insurance to the
common man, penetration in rural areas, and investment in socially relevant
scheme and most important induction of educationally qualified person in
the industry through a transparent recruitment system. The nationalization
served some of its avowed objectives. But it also brought in its wake a work-
culture that left much to be desired. The monopolistic tariff regime ensured
rigidity in approach. It killed innovation and creativity. U/W was reduced to

7
referring to tariff pages. The customer did not have choices. At best they can
rotate in the four PSU’s. Instead of the insurance companies coming out
with new products to meet the customer need it was the other way. The
clients have to tailor their needs in line with available insurance cover.
Insurance marketing was no more than commodity selling. One important
lesson that was forgotten in the whole process was – unless the companies
show excellence in operation and performance, stand on their own and
generate profit on a sustainable basis – they can not meet the social
objectives or any other objective for that matter. This basic fact and
therefore the need to achieve all round operational excellence was never
drilled into the minds of the people in insurance industry through-out the
length and breadth of the country. This was in a way failure of the top
management. There was no reward/punishment system and the mind-set that
developed was that the premium in any case is going to remain with one of
the nationalized companies under GIC umbrella and therefore why to worry.
This mind-set was anti-thesis of what was expected in post liberalization era.
There was no appreciation of the fact that if there is no customer, there is no
business and everybody has to pay a prize. With the nineties started the age
of globalization. There was tremendous development on technological front.
Distances started shrinking. There was opening of economy and removal of
barriers. There was a perceptible change in social and legal environment.
The global wind of change meant that insurance business, which also has
international dimension must also change. And change it did with the
passing of IRDA Act. The year 2006 saw the demise of tariff regime and
w.e.f. 1.1.2007 we are in a de-tariff regime in a free market. The
liberalization has brought many private players. More are expected to join
with further liberalization in the offing. The four PSU’s are no longer under

8
GIC’s umbrella. We are now living in a very dynamic insurance
environment.

The implications are:-

• An average customer who used to be a non-entity in not too distant a

past has become the king. In fact he is now a dictator. Dealing with
him calls for new approaches, better relationship management and
better understanding of his psyche.

• Demise of tariff means fierce competition and price-war. The

challenge is to maintain a price-level which is fair to both the
insurance companies and the customer. This indeed is a difficult job
and a big challenge. Detariffing after all is not all about rate cutting
alone.

• You can not deal with the present day customer with a rigid mind-set
rooted in the past. Your attitude, behavior and conduct vis-à-vis the
customer must change. The challenge is not only in selling insurance
to external customer but also in selling discipline, punctuality, team-
work, quality and better behavior pattern to our internal customer. We
have to see ourselves through the eyes of the others. Poor service is no
longer an option.

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 • Product development & innovation are new challenges for PSU
Insurance. A company as this was a totally neglected area because of
tariff regime. The Private players will try to bring in the tested and
tried product of their foreign partners.

• Yet another challenge that has come in the wake of liberalization and
de-tariffing is retaining the knowledgeable and competent people.
Companies spend huge amount in training people, in upgrading their
knowledge and skill. People do leave for greener pasture in a
liberalized setup.

• Companies may face difficulty in placing re-insurance if the direct

Underwriting rate goes too low because of price-war. In fact the
companies have started feeling the heat.

How can CRM help in addressing these challenges? They indeed can. We
have basically two kinds of CRM initiatives:-

i) Operational CRM
ii) Analytical CRM

The operational CRM is meant to bring operational improvement

and excellence. It is focused on customer convenience. IT can be used in
General Insurance industry in areas like:

a) Integrating customer information from multiple channel

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b) Sales automation – web-based sale – reduction in transaction costof
business
c) Better claim management and grievance handling - claim /grievance
status on web.

The analytical CRM is meant to analyze the data created on operation side
of CRM. It can be used with advantage in matters like:

• Marketing opportunity within an existing customer data-base.

• Information on customer retention / attrition
• Predictive capability to determine customer behaviour
• Portfolio analysis to know how various portfolios are behaving and to
take Corrective steps.
• Pricing
• Huge mass of data created on operational side of CRM can be made
use of in various ways for various purposes.

The pricing of an insurance product has to take care of all cost

elements. To keep the price competitive, all costs must be kept at bare
minimum. CRM initiative can be of help in this effort. It should be
appreciated that we are moving from a supply driven environments to
demand driven environment. The need to acquire, retain and support
customer will stimulate greater investment in CRM. The need of the hour is
to think of the requirement of customer before he thinks of it himself. We
have to manage customer’s expectation so that it is never higher than we can

11
deliver. All challenges also bring in its wake opportunities. CRM is also an
opportunity which can be leveraged for customer communication and
convenience and development of market and for bringing overall operational
excellence.

CHAPTER III
CUSTOMER EXPECTATIONS & SATISFACTION AT
MAX NEWYORK LIFE INSURANCE

In the today era, Customer expectations are rising. Customers, faced with a
dizzying array of insurance products expect customized offerings, value,
ease of access, and personalization from insurers. Today, customers are
expecting individual attention, responsiveness, customization and access. At
the same time, they don’t want to pay a premium for these services. High
customer expectations and lower exit barriers could lead to increased
customer attrition.

To meet the customer expectations is a daunting task for today’s insurance

companies. If the customer’s expectations are met, then only he will be
satisfied and continue your services.
The company tries to utilize every moment of truth and tries to satisfy him
at maximum possible touch points.

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Total Customer
Benefit

13
 CUSTOMER PERCEIVED
VALUE

Total Customer
Cost

Product Benefit Monetary Cost

Services Benefit Time Cost

Personnel Benefit Energy Cost

Image Benefit Psychological

Cost
14
CUSTOMER SATISFACTION

Customer satisfaction refers to the extent to which customers

are happy with the products and services provided by a business. Gaining
high levels of customer satisfaction is very important to a business
because satisfied customers are most likely to be loyal and to make
repeated orders and to use a wide range of services offered by a business.
Since sales are the most important goal of any commercial enterprise, it
becomes necessary to satisfy customers. For customer satisfaction it is
necessary to establish and maintain certain important characteristics like:

a. Quality
b. Fair prices
c. Good customer handling skills
d. Efficient delivery
e. Serious consideration of consumer complaints.

Satisfaction is the feeling of pleasure or disappointment attained

from comparing a products perceived performance (outcome) in relation
to his or her expectations. If the performance falls short of expectations,
the customer is dissatisfied. If the performance matches the expectations,
the customer is satisfied. If the performance exceeds expectations, the
customer is highly satisfied or delighted.

MNYL is an ISO 9001-2001 Certified Company. Some of the

benefits it provides to its customers are as follows:

15
• MNYL issues Policies to its customers in quick time and with
maximum accuracy.
• Fast settlement of Claims and demonstrate reliability and trust
amongst our customers
• Effective touch points for the customers who are regularly working
towards resolving customers’ queries and needs.
• MNYL is constantly designing products keeping in mind long term
customer benefits and responsibly fulfill the regulatory requirements.

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 CUSTOMER DEVELOPMENT PROCESS

Potentials

Prospects Disqualified
Prospects

First time
customers

Repeat
customers

Clients Inactive or
Ex-customers

Members

CHAPTER IV
Advocates
PROFILE OF MAX NEW YORK LIFE INSURANCE

Partners

17
Max New York Life Insurance Company

• VISON:
 To become the most admired life Insurance Company in India.

• MISSION:
 Become one of the top quartile life insurance companies in
India.
 Be a national player.
 Be the brand of first choice.
 Be the employer of choice.

 Become principal of choice for agents.

• Joint Venture Partner-

Max New York Life Insurance Company is a joint venture between New
York Life International Inc., a Fortune 100 company and America's largest
life insurance provider and Max India Limited one of the leading multi-
business corporations in India. Max New York Life Insurance Co Ltd is a
Rs. 250 crore joint venture with a paid up capital of Rs. 807 crore. Max

18
India has raised its economic interest in life insurance joint venture with a
foreign partner, Max New York Life (MNYL) from 50% to 74%.

It is widely known that as per the agreement signed between the two leading
giants in 2003, the New York Life was contributing 26 percent in the 26:74
joint venture for every equity investment made. Max was contributing 50
percent and the remaining 24 percent was funded through an advance paid
by New York Life to it. New York Life had an option to raise its
shareholding in the JV close to 50 percent at the par value, in case of a
relaxation up to 26 percent in the FDI sectoral cap in the insurance segment.
These terms were approved by the Insurance Regulatory and Development
Authority (IRDA) and were highlighted in the successive annual reports of
Max India.

• Asset Under Management-

Max New York Life Insurance announced that it has clocked Rs. 2,100 crore
in collected premiums for the period Jan - July 2008 recording a growth of
81% over the similar period last year. Of this, first year premiums
contributed Rs. 1195crore, while earnings from renewal premium stood at
Rs.905 crore. The company has acquired around 27 lakh policies since
inception and is ranked number 3 amongst private life insurers in terms of
number of policies sold (YTD June). The Assets Under Management have
also increased to over Rs.4138 crore on July 31, 2008 as compared to
Rs.2271 crore on July 31, 2007. The capital base of the company is expected
to expand to Rs.3600 crore from current equity base of Rs.1,232 crore.

19
New York Life is one of the largest and strongest life insurance companies
in the world with more than USD$215 billion assets under management and
has received among the highest ratings for financial strength from the life
insurance industry's principal rating agencies: A.M. Best (AA+), Standard &
Poor's (AA+), Moody's (Aa1), Fitch (AAA). According to Moody's, "New
York Life's rating reflects the company's good quality investment portfolio,
ample liquidity, and sound capitalization, as well as the good growth
potential of its international business.”

• Strategies-

Max New York Life Insurance is further strengthening its investment

function, the growth strategy of the company. The company plans to
strengthen its investment desk by adding analysts and fund managers and
launching more fund options to provide better value to its customers of both
ULIP and traditional products. The company also announced completion of
one year of its Growth Super Fund, which has provided a return on
investment of 20.2% as on 30th May 2008. At a time when equity markets
have been volatile, the Growth Super Fund has performed exceptionally
well. During the same period CNX 500 recorded a growth of 11.11% and
the BSE Sensex a growth of 12.86%. Growth Super is a fund that has the
mandate to invest a minimum of 70% in equity and can scale it up to 100%,
with the rest invested in debt and cash instruments.

• Products –

20
Max New York Life brings to you specially customized products and
services that are flexible and can e customized to suit your needs
It now has 30 life insurance products and 8 riders that can be customized to
over 800 combinations enabling customers to choose the policy or plan that
best fits their need. These include:

INDIVIDUAL INSURANCE
Protection Plans:
• Whole Life
• Level Term
• Five Year Term R & C
• Life Partner Plus
Savings:
o Life Gain Endowment
o Life Pay Money Back
o Life Gain Plus 20
o Life Gain Plus 25
o 20-Year Endowment
Unit Linked:
o Life Maker Premium
o Life Maker Gold
o Life Maker Platinum
o Life Maker Pension
o Life Invest
GROUP INSURANCE
o Group Term Life

21
 o Group Gratuity
o Employee Deposit Linked Insurance
o Credit Shield
o Unit Linked Group Gratuity
o Unit Linked Group Superannuation
RURAL INSURANCE
o Max Suraksha
o Easy Term
o Max Mangal Endowment
o Max Vriksha Money Back

MAX ASSURE
o Max Assure Bonus Builder
o Max Assure Business Builder
o Max Assure Money Back
o Max Assure Future Builder
o Max Assure Secure Returns Builder

NAV
• Life Maker Investment Plan
• Life Maker Pension Plan
• Life Maker Premium
• Smart Steps
• Group Gratuity
• Group Superannuation

• Max Amsure Secure Returns Builder

22
Different Channels of Distribution

i) Agency Channel:- In Max New York Life Insurance, business is

done mainly through Agent Advisor. In India it has more than 55000
agents.

Two Programs is run under Agency Channel

i) AAP: - Agency Association Program

ii) Bancassurance: - Bancassurance is an innovative distribution

channel involving banks to sell insurance products of Insurance
Companies. Max New York Life Insurance has tied up with Yes Bank

iii) Direct Sales Team (DST):- Max New York Life Insurance makes
a data base of potential customers; contact them on the telephone to
market different policy of the company.

iv) Alternate channels - Business is done through associate partners,

internet etc.

Max New York Life invests only in safe debt instruments with
the highest credit ratings.

23
Our current portfolio has almost 70% invested in GOI bonds, 25% in
corporate bonds (AAA and AA rated bonds only). The balance 5% is
invested in short-term cash instruments to meet working capital
requirements.
.IRDA has overarching rights to amalgamate companies and change the
management to protect policyholder interests.

Actuarial of Max New York Life

Appointed actuaries are a life insurance company’s watchdogs. They are

there to ensure that a life insurance company is run properly and that all
liabilities towards policyholders are appropriately and correctly recorded in
the books
.IRDA has mandated that life insurance companies get two auditors to
certify the accuracy of accounts. Max New York Life’s auditors are
PricewaterhouseCoopers and Ernst & Young. The regulator keeps a close
watch on a life insurance company’s assets to ensure that all investments are
safe and secure.

Span of Organization

24
Max New York Life Insurance has a strong growth focus. The company
plans to significantly expand its distribution footprint by opening more than
100 new offices every year for next 3-4 years. The number of agent advisors
is expected to touch 2, 00,000 from current 36,500. The growth in agency
distribution will be complemented by strong growth in partnership
distribution. The company currently has an equity base of Rs.1, 032 crore.
To support this growth plan, the shareholders are committed to increase the
capital base to Rs. 2,650 crores over the next 3-4 years. There are 13000
employees all over India and 55000 Agent advisors.

CEO (Chief Executive Officer)

25
 Channel Head

2 Vice President

M.P (Managing Partner)

SGO (Senior General Officer)

Partner

6 A.P (Associate Partner)

9 ASM/SM (Assistant Sales Manager/Sales Manager)

26
Investment of Max New York life

68.50%

18.3%

7.8%
5.30%
G-Sec (Rating: Sovereign)
Infrastructure (Rating:AAA /AA+)
Corporate
Cash & Short Term

CHAPTER V

27
 CUSTOMER RELATIONSHIP MANAGEMENT AT MAX
NEW YORK LIFE INSURANCE

CUSTOMER RELATIONSHIP MANAGEMENT is the process of

carefully managing detailed information about individual customers and all
customers touch points to maximize customer loyalty. A customer touch
point is any occasion on which a customer encounters the brand and
product-from actual experience to personal or mass communications to
casual observation.

Max New York Life Insurance Company has also undertaken various steps
to strengthen its customer relationship management.

Max New York Life Insurance has announced the introduction of

INTERACTIVE VOICE RESPONSE (IVR) service in 10 different
languages. The leap is in a bid to enhance and improve max New York
Life’s customer and distributor experience by availing the customer service
in their own language.

Sanjeev Mago, executive vice president, Customer Operations and

Service Delivery, Max New York Life Insurance, said, "This initiative is yet
another step towards improving customer satisfaction by enhancing their

28
ease of resolving pre and post policy issues. At Max New York Life, we lay
emphasis in interacting with our customers and distributors in their choice of
language."

In order to improve its customer relationship management, MNYL has

maintained internal records and marketing intelligence systems to maintain a
database of profile and contact information of the customers.

DATABASES, DATA WAREHOUSING AND DATA MINING AT

MNYL

MNYL Insurance has organized their information:-

• Customer databases

• Product databases

• Salesperson databases

The most important of the above three is the customer database

in which the profile and the contact information of the customer is saved.
The customer database may even include the demographics and
psychographics (activities, interests and opinions) according to which a
customized policy is formulated for his/her needs.

“Carpet Bombing” is also being done to target the random

customers in order to spread awareness and market the policies at a large
scale.

29
 MYNL conducted a study in association with AC Nielsen, which
revealed that the customers want return and protection in an insurance
policy. Based on this study, the company launched ‘Smart Express’ for
a smooth ride through the volatile markets

MAX NEW LIFE INSURANCE WINS OVER CUSTOMERS WITH

CRM

Max New Life Insurance has over 15,000 employees and a

turnover of Rs 3,857 crore. It also has about 1 lakh agent advisors at 712
offices across 389 cities. But agents were not the only way the insurer's
customers could approach the company. It also had a website, tie-ups with
banks and distribution partners.

The problem with these multiple customer touch points was that the
organization didn't have single view of the customer. This had an impact in
multiple areas: from customer service to agent management and training and
a decline in the company's ability to effectively control collections,
renewals, and retention processes. It also impacted Max New York Life's
ability to increase profitability. "One of the key business challenges that
paved the way for this project was a lack of an efficient lead management
system, which could enhance our ability to increase our wallet share from
existing customers," says Hitesh Arora, EVP and head-IT, Max New York
Life Insurance.

These problems brought about the decision to implement a "pivotal

enterprise CRM" says Arora. It would lead to the implementation of a
customer service management system, a lead management system, a policy

30
holder portal, a collection, renewals and agent management and performance
system.

Because it sought to fix many problems in many departments, the

project needed to be wide and deep. And that made it unwieldy. "Managing
cost and schedule overruns of a project of this magnitude was a major
challenge," says Arora.

The project was also the first of its kind in the Indian insurance
industry, which left Arora and his team with little guidance. They had to
start from scratch by documenting requirements and working out the flow
and design of the system - and simultaneously manage changing
requirements and additional request that impacted the project's timelines.

Despite these challenges the first three phases of the Rs 4.5-crore

project were launched by August 2009 and they have seen wide acceptance.
Today, the system has over 1,600 simultaneous users and it has served about
75,000 customers. "It has also resulted in fewer customer calls because they
can access information for themselves. The system has registered more than
our target expectations," says Arora.

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Why CRM Is Your Organizations Biggest Asset
Why CRM? When we look around us we see that the hand of
business touches us in every walk of life. We're faced with products and
services at every single turn. How many of those products and service
providers actually know the person who uses them?
Major corporations fail to realize that it is the customer who is their biggest
ally.
Their employees prefer to treat them at times with indifference, at
times with arrogance and sometimes even with anger. The customer is in
reality the king, the one who makes the difference between a companys
success or failure and yet from the corporate giant to the small entrepreneur
struggling to keep his business alive, they are all prone to making the same
mistake at some point of time.

What is this grave mistake, so often overlooked yet so profound in its

impact, making the difference between the success and failure of million
dollar enterprises? The answer lies in a companies "attitude" towards its
customers. This approach is by far the most vital in any organization.

32
KNOW YOUR BIGGEST ASSET
Several million dollars are lost yearly as corporations scramble to
make profits, beat competitors, and stay ahead in the rat race. Huge amounts
of money are spent on marketing, endeavoring to gain customers, often in
vain. What is it that the "lucky few" or shall we say "successful few" organ
izations have, that actually give them that edge over the others? Why is it
that organizations very often find their best customers drawn to competitors?

Most organizations have an extremely faulty customer centred

system being adopted. They are not open to customer suggestions and more
often than not they do not provide the customer with a proper avenue to vent
his ideas. This often leads to unhappy customers and eventually their loss.

Why choose CRM?

CRM (Customer Relationship Management) software aids in
increasing efficiency, serves to aid the sales department in all of its efforts,
manages to boost sales, and fundamentally contributes to the overall
development of the company. It also manages to work towards
organizational goals. This is achieved through a concise study of potential
customers.

Their preferences are taken into consideration and used to

coordinate and implement a customer centric business strategy that focuses
primarily on the customer, yields to recording the importance of his ideas
and suggestions and results in increased customer retention.

33
Opt for CRM
Why CRM? CRM solution helps to reduce the time required for
sales cycles while hanging onto potential sales leads. Customer retention is
also maximized. Sales orders and sales revenues increase as a matter of
increased organization growth.

CRM facilitates growth in that it aids the reduction of costs and the
increased availability of information to the organization - that can be used
according to customer information requirements. This information is
increasingly important to an organization and can prove to make the
difference between success and failure.

CRM IS REWARDING

The benefits of CRM are enormous.The marketing department is

yet another department that stands to gain enormously as CRM aids in
marketing functions. The customer centered strategy that provides
information on potential customers, boosts the marketing function by
providing the marketing department with a clear idea of what the customer
needs are and enables them to work accordingly.
Why CRM? CRM helps in integrating all the essential information
available in the organization itself and from outside resources and serves to
assimilate information about sales, marketing, market trends, employees,
customer attitude, customer retention etc. CRM raises the market share by
keeping a keen eye on the various market segments and adopting strategies
accordingly.

34
CRM - FIND OUT WHAT MAKES IT ONE OF THE FASTEST
SELLING STRATEGIES OF THE DECADE

What s new in customer approach?

Look closely and you will find that the organizations that
succeed are the organizations that have adopted the "right approach" towards
their customers-CRM (Customer Relationship Management). A decade ago
the traditional modes of marketing were in vogue but the last few years have
evidenced a tremendous change in this approach.

The new trend now gaining ground is slowly causing corporate

heads to turn in the direction of customer focus. They are beginning to
realize that this methodology is essential. After all, good customer
relationships are at the heart of business success. This newly developed
business strategy generally takes around 15 months for its implementation.

CRMS PROMISE
Why CRM? Several organizations are moving ahead -the ones who place
their customers first. This customer centric approach is termed as CRM.
Although a more recent one it is concerned with the development of
customer relationships and the maintenance of those relationships in order to
facilitate continued patronage by the customer.

CRM manages to increase call centre effectiveness and aids the

marketing and sales department. It serves to collect data from varied
resources and uses this data so collected in the enhancement of customer
strategies. The said data is provided to all the departments in the

35
organization thus making it easier for all those who have direct dealings
with customers.

CRM NECESSITY
Why use CRM? CRM is as vital to a company as its employees,
management and resources. Its importance cannot be diminished and should
be understood in terms of its ability to provide a holistic customer approach.
CRM uses the varied resources available at its disposal and tries to collect as
much information as possible about the customer and how to deal with them
in the appropriate manner.

CUSTOMER RELATIONSHIP MANAGEMENT SERVES TO:

 Increases the efficiency in a call center

 Streamlines sales

 Assists remarkably in reducing costs and aiding marketing

 Improves cross selling and hangs on to sales leads

 Increases the market share

 Endeavors to upgrade the entire marketing process

 Contributes to overall organization efficiency and profitability

CRM brings together information from all data sources within an

organization. It also collects information about the customer from outside
resources and endeavors to give an overall view of the customers purchasing
patterns, likes , dislikes ,etc. This allows employees who are in the front line
to solve customer oriented problems. It enables sales and marketing to learn

36
more about customer needs and behaviors in order to develop stronger
relationships with them.

BOOST YOUR ORGANIZATIONS CAPACITIES

The sales department makes use of the stored customer data, to

assimilate and use in sales dealings. This comprehensive data collected
proves to be useful in holding on to sales leads. CRM also boasts of
doubling a company's profits in a 5/6 year period and manages to achieve
this with its customer centric strategies. Customer loyalty and customer
retention go a long way in boosting profits as is evidenced by CRM.

Customer Relationship Management is not a technical term. CRM

can be thought of more in terms of being a process - one that serves the
collation of data from within and outside the organization and serves to
assimilate and use this data in customer centered strategies.

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 CHAPTER VI

CRM INVADES THE INSURANCE SECTOR WITH

AMAZING RESULTS

The current scenario in the insurance industry is a complex and

competitive environment tinged with little stability.
The major hassle the industry faces is obtaining clients. This is due
to the fact that the big fish in the insurance industry dominate the sector. It
has become increasingly difficult for this particular sector to gain profits
while curtailing costs. Acquisitions, mergers, have all contributed to the
difficulty insurance agents and other professionals from this industry face.

Long considered a job only restricted to insurance companies,

selling insurance policies has now become an option for banks as well. This
has resulted in a lot of increased as well as unwelcome competition.
Customers tend to lose out as they are not buying from the right provider. In
addition to this the Internet has increased the pressure for insurance
companies in capturing the market. All this has succeeded in making the
insurance world more complicated.

What is required is a comprehensive database of information about

customers who hold your insurance policies. The answer? Choosing a
customer centric strategy can go a long way in achieving this. CRM -
Customer Relationship Management holds the key. CRM helps insurance
companies to ensure that the customer is understood better.

38
 Right now insurers can achieve excellent policy administration;
good billing systems etc but fall short on the customer front. However this
alone is insufficient to survive on. 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 if
relationships are built. CRM solves these problems with its user-friendly,
web-based CRM tools that increase sales opportunities.

WHY OPT FOR CRM INSURANCE SOFTWARE?

• Insurance CRM decreases the time required to make product changes

• A holistic integrated customer view

• Targeted marketing

• Customer retention

• Increased growth

• Increased policy sales

• Increased insurance market share

• CRM Insurance integrates marketing with other operations

• Efficient distribution channels are secured

• CRM provides the chance to reduce operating expenses

• It provides for more affective and efficient communication

• It improves the response time

• It increases customers satisfaction

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 • Insurance application queries/ claim status queries can be answered
sooner

• It reduces the time that is normally taken for printing

• Policy mailing time is reduced

• It decreases overall costs

• Aids the call centre activities

• Insurance CRM guarantees lead management

INSURANCE CRM GAINS

Since 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. It manages to enhance your customer
relationships based on customer's unique requirements.

A wealth of customer data is available but insurance companies do

not have it readily assessable nor is it coherent. CRM insurance software
creates a holistic view of the customer which helps eliminate customer
irritation experienced due to this, when they need to identify themselves
repeatedly. Insurance CRM assists Customer Service Representatives when
they are not able to properly access customer data. Having ample customer
information on hand enables a CSR to be more confident of dealing with the
client. It removes the chance of errors.

40
 CRM enables customers themselves to do research on products,
have answers to their questions etc. In addition to this policyholders or
beneficiaries can check their claim status, change their account information,
submit complaints etc. Insurers find that CRM is assisting them in their
marketing efforts as well through a comprehensive understanding of the
client base. CRM aids the insurance companies by ensuring that campaigns
are more affective.

41
CRM INSURANCE IMPLEMENTATIONS - GETTING IT RIGHT

Before embarking on a CRM implementation insurers need to:

1. Understand prospective policy holder requirements

2. Understand what products and services will retain them and increase
profitability
• It is imperative that the objective behind the implementation is
clearly spelt out and understood. Without this it is almost
impossible to proceed further. Clarity of objectives both CRM
and general organizational goals is mandatory for Insurance
CRM success. It is only against this that the actual results are
marked. Goals although varying from company to company
should be realistic and benefit the firm in the log run.
Establishment of these goals has to be done after excessive
scrutiny of company requirements. The more clearly defined
objectives are the more chance your CRM implementation has
of succeeding.

• Organizations need to understand that the insurance CRM

implementation is not merely about technology. CRM
encompasses far more than mere technology and transcends to
the customer as well. Organizations need to assimilate the fact
that it is a combination of people, processes and technology.
Obliterating this fact will surely hamper the process.

42
• Making the customer the focal point and understanding that it is
about meeting their needs will go a long way in ensuring
success.

• It is imperative that the entire organization realizes the

importance of the implantation and endorse it. It requires
approval not only from top management but individual
employees as well need to give their support Staff need to
accept the fact that this will do them good and willingly give
off their best customer support effort.

• Implementing in phases is always easier and far less time

consuming as well as being cost advantageous. There are
always added advantageous when the implementation is done in
stages rather than as a one time plan. It facilitates the easy
involvement of resources when done on a short term basis, and
makes easy the constant monitoring of results so that corrective
measures can be taken.

• Adequate metrics need to be established if the organization

wants to succeed at its CRM insurance implementation.
Without this there will be no benchmark against which
performance can be measured.

• It is imperative to train staff adequately in order to ensure that

they are equipped to deal with the CRM implementation. It is
essential to have productive staff in order to better customer
service. Inexperienced staff will undoubtedly give wrong
responses to questions and yield wrong customer service. It is

43
 important to see that staff maintains proper customer service.
Training staff is thus essential.

• CRM manages to put the insurance company in a position

where it is able to let staff know which customers are likely to
leave and move to competitors. This helps staff take the
required steps to stop this from happening and prevents the loss
of valuable policy holders

CRM IN INSURANCE: CAPITALIZING ON THE CUSTOMER

SERVICE OPPORTUNITY

For insurance companies today, focusing on the customer is more

important than ever. Getting closer to customers and effectively responding
to their needs is a great way to boost their loyalty and encourage deeper
business relationships and additional spending—and it is also a much more
strategic route to success than cutting costs and improving efficiency.
Insurance buyers have many more options for the ways in which they
purchase insurance and interact with their insurance suppliers. They can
work through agencies. They can work directly through insurance
companies or brokers. They can purchase insurance through online sites or
exchanges. And, no matter which approach is used, customers are now
demanding multiple channels through which to interact with their providers
—including face-to-face contact, phone, Web sites, e-mail, mobile devices,
etc.

44
 This new business climate has elevated the role of customer
relationship management (CRM) technologies into a highly strategic
position within the insurance industry. CRM technologies focus on
managing all interactions that the organization has with its customers,
maintaining contact information and customer status in order to leverage the
data in a variety of business applications.
Clearly, vendors of CRM products are in a great position to
capitalize on the customer service opportunity. Insurers know that if they
can't get their customer service acts together, they'll lose customers to the
competition.
And there's no shortage of CRM products to choose from. The
problem is, the CRM market—just like the definition of the term "CRM"—
is so broad that all sorts of different software products fall under its
umbrella. For example, sales and field force automation, marketing
analytics, e-mail response management, campaign management,
personalization, and customer service are all legitimate application areas,
and there are a variety of CRM products on the market that handle one or
more of these functions.

PRIORITIZING CUSTOMER SERVICE

Of these areas, customer service is the biggest priority for many

insurance organizations. While many CRM technologies can handle a range
of applications, including sales force automation and marketing analytics,
those that handle customer service applications are worth special attention
because they are at the center of the customer's interaction with the business.

45
CHANNELS ARE EXPANDING

Customer service is a tough area to tackle, especially as the channels

of customer interaction have expanded from face-to-face or phone contact to
include automated telephony systems, the Web, fax, e-mail, and even
wireless devices and voice-over-IP. Consequently, many organizations are
transforming their customer service centers from call centers into "virtual
contact centers" that handle the myriad channels of contact in an integrated
fashion. The goal is for the customer to have a consistent experience across
multiple channels, and for the organization to have a common view of each
customer's interactions and contact histories.

Call centers are labor-intensive environments that have

traditionally struggled with providing their customer service representatives
with access to all the customer information and related information needed
to quickly service incoming requests. For example, a customer service
representative (CSR) may need access to customer records, policy
information, billing systems, and other information that may be stored in
disparate back-end systems and data sources. What's more, many customers
now want to help themselves to that information.CRM products can help
insurers serve their customers better by allowing CSRs or the customers
themselves to access any information they need, whenever they need it, via
whatever mechanism they choose. Customer service should be viewed as a
comprehensive process applied across multiple e-business applications,

46
rather than as an isolated process. Success depends on how well a customer
service application enables an insurance company to change customer-
centric processes as emerging trends, customer demand, and requirements
change.From a CRM product perspective, these customer service needs
translate into a wide variety of functional requirements, including:

Support for multiple contact channels, with the ability to create a

common view of the customer across all channels—From the CSR's
perspective, it is important to have a single view of the customer. This
means tracking the various channels through which the customer interacts
with the carrier, understanding the information requests at each point,
tracking the current status of any pending requests, and reporting on contact
histories. With a common, unified view of the customer, the company can
ensure consistent service and follow-up, no matter which combination of
interaction channels the customer chooses to employ.

Support for customer self service—Many customers want to help

themselves to information rather than talk with a customer service
representative. These users need access to a wealth of content to satisfy their
requests, such as frequently asked questions (FAQs), recent bills and
statements, policies and product documentation. By providing rich content
around customer transactions and self-service activities, organizations can
increase the value of their customer service operations to their customers.
Many CRM systems provide a central online "knowledge base" to support
customer self-service, while others rely on integrating the disparate back-
end systems that may exist within the organization

47
 Integration with back-end systems and repositories of content and
data—The content that customers may require often resides in disparate
systems or repositories. A good CRM solution should provide a means to
integrate this information for easy access by customers and CSRs alike.

Ability to automate the business processes required to deliver

customer service—While many call centers already utilize technology for
queue management and routing in order to effectively handle incoming
inquiries, such capabilities must also be provided for the myriad electronic
contact channels that customers may choose to use. A good CRM system
should provide a unified mechanism for automating customer service
processes and workflows across all channels.

Personalization—Customer service applications should provide

customers with content that is related to their current activities or navigation.
For example, a customer that has recently moved and is looking at
information for a new homeowners insurance policy should also be
presented with information about a new life insurance policy.
Personalization enables organizations to reach their customers with more
impact, and to generate new revenue through cross-selling and up-selling.

Detailed reporting and analytics—These capabilities allow

organizations to leverage the information contained in their back-end
systems, as well as in the CRM system itself, to identify key data such as
customer trends, demographics, tendencies, and preferences—data that can
be leveraged in personalization and marketing efforts.

48
UNDERSTANDING THE CRM LANDSCAPE

But with so many CRM products to choose from, it can be tough to

sort them all out, let alone understand which ones are best for customer
service applications. And the CRM market landscape seems to be changing
almost daily, with all sorts of recent merger and acquisition activity.

For example, Janna was recently acquired by Siebel Systems,

ServiceSoft was just bought out by Broadbase, and Avaya recently acquired
Quintus. These moves follow Nortel Networks' acquisition of Clarify last
year. Other vendors, such as Cisco, are focusing on acquisitions as a means
of adding new capabilities to their products to support contact centers. At
Doculabs, we expect the consolidation to continue as vendors extend their
products' functionality to personalization and content management, or target
selected vertical industries.

At the same time, CRM is gaining favor not just as a stand-alone

technology category, but as one of the strategic infrastructure layers needed
for successful e-business. Thus, CRM software will continue to evolve from
specialty solutions into the primary layer for supporting the business, just as
ERP systems have evolved into primary layers for back-office applications.
We're already seeing some convergence in the CRM and ERP arenas, as
PeopleSoft and Oracle have added offerings to their ERP suites.

49
 Finally, we're already seeing e-commerce software vendors such as
Intershop and Blue Martini extend their platforms by incorporating CRM
capabilities. This is likely to blur the lines among different software
categories—the capabilities of CRM will still be critical, but you may be
able to use a variety of different systems in order to get them.

For insurance companies looking at CRM tools for their customer

service applications, the key is to get a firm grasp of the business needs. Do
you simply want to capture customer contact information from multiple
channels? If channel capture is the priority, most CRM products can handle
it. However, such an approach will limit the company's ability to provide its
customers with more value through content access and self-service.

Are you looking for more advanced capabilities, such as content

publishing, personalized presentation, and the ability to give users self-
service access to a common repository with library services? If so, plan on
integrating a third-party content management solution with your CRM
product. Today, most CRM products don't offer the level of sophistication
offered by leading content management products. This is understandable, as
the CRM vendors have been more focused on adding support for new
channels, such as wireless, than on content management.

But as insurers focus on their customer service initiatives, they

should keep their ""big-picture"" e-business strategies in mind. Realize that
a customer service application is one of many applications in which the
same content and data can be leveraged to serve customer needs. Many

50
organizations are not yet looking at customer service together in the context
of their overall e-business strategies, and they should.

In the short term, if a carrier is serious about integrating customer

service into its e-business strategy, it should be prepared to integrate
separate technologies with its CRM solution. For example, e-commerce
systems, content management systems, and enterprise application integration
(EAI) technologies all represent important pieces of an e-business
architecture. While CRM packages do not provide this range of capabilities,
many are beefing up their functions in these areas. Over the next 18 months,
the result will be an e-business technology market that grows even more
crowded before the winners emerge.

Frank Meister is a senior analyst, Bill Chambers is a principal

analyst, and Joe Fenner is a senior technical editor with Doculabs, an
independent research and advisory firm that helps companies choose the
right technologies and strategies for e-business

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Insurance
CRM is essential to enable organizations offer their customers the
chance to review policy coverage information, check policy/claim status etc.
It also helps in solving customer problems.

CRM's New Areas of Expertise

• Enterprise CRM

• Relationship Marketing

• Vertical CRM Solutions

• Business Intelligence

• e-Business

• Content Management

• Customer Analytics

• Data Mining

• Email Marketing

• Employee Relationship Management

• Enterprise Resource Planning

• Knowledge Management

• Partner Relationship Management

• Sales Automation

• Enterprise Resource Planning

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 Large corporate, medium industries and small business units as
well can all opt to benefit from this application. CRM's application being
diverse in nature has made it one of the fastest growing customer centric
strategies of the decade. Its diverse applicability has increased its appeal.

53
Conclusion:-

Max New York Life is the first company to be awarded license by IRDA
after liberalization of the insurance industry. The Company's paid up capital
is Rs. 657 crore, which is more than the norm laid down by IRDA.

I think that the company has positioned itself on the quality platform and it
has developed a strong corporate governance model based on the core values
of excellence, honesty, knowledge, caring, integrity and teamwork. The
main strategy is to establish itself as a trusted life insurance specialist
through a quality approach to business. Their financial practices are prudent
enough to ensure safety of policyholder's funds. Its primary channel of
distribution is individual agents. As being the best in class agency
distribution model in place, the company is spearheading a major thrust into
additional distribution channels to further grow its business. The five-
pronged strategy to pursue alternative channels of distribution includes the
franchisee model, rural business, direct sales force involving group
insurance and telemarketing opportunities and corporate alliances. It also
offers a suite of flexible products.

So the company has a strong distribution channel and solid strategies. It also
has a wide range of products, which will certainly help the company to grow
in the near future.

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Annexure

1. Whether You have a separate department for CRM?

Ans. Yes

2. How are you servicing to the individuals and Corporate Sectors?

Ans. We are serving to the individuals and corporate sectors separately

and solve their queries and objections regarding particular product and
services

3. How do you make aware of your products to the customers?

Ans. By making advertisement through media newspaper etc and also
provide a service through call centers.

4. What are the fee services and post services?

Ans. Underwriting, leasing, hire purchasing, is the fee based services and
post shipment finance and guarantees are post based services.

5. What are the documents you are expecting from customers for

different policies?
Ans. In case of Life Insurance policy we need a customers detail like
electricity bill ration card pan card and a medical certificate etc.

6. Whether you have any online process?

Ans. Yes

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7. What are the information you are providing through online process?
Ans. Policy detail to the NRI Clients, and information about new policy
to the customer by sending a mail to them.

8. How are you arranging your agent through online process?

Ans. We arrange agent through online by taking personal details of
customers i.e. his contact no., address, name etc then we contact him and
ask him whether you have applied for arranging agent .

9. Which all the services you are rendering to NRI customers?

Ans. We are providing no. of services to NRI Customer namely
providing policy detail to them and giving up to date information
regarding the existing policies. Etc.

10.How you are giving the information to the customer after maturity
period?
Ans. Normally all this work is done by a Agent.

11.How you are doing service through banc assurance?

Ans. We are not dealing with bancassurance.

12.What are the duties of advisor underwriter’s leasers for the

customers?
Ans. The duty of advisor is to advice the policy holder or a customer how
to mobilized their money and in which plan they should invest their
money to get more benefit alongwith death benefit and accidental
benefits.

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13.How are you maintaining the secrets of policy?
Ans. We have software which help us to maintain the secrecy of policy.

14.What are the obligations of maintaining secrecy of account

information?
Ans. We are protecting the account information with the help of
Password protection which will be known by some of the top level
managers.

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Bibliography:-

Books Referred:-
 CRM in Banking – V.V Gopal
 CRM Implementation- Kaushik mukharjee
 CRM – anderson kerr

Websites:-
 www.maxnewyorklife.com

 www.google.com

 www.scribd.com

 www.managementparadise.com

 www.wikipedia.com

 www.business-standard.com

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