VIEWS: 22 PAGES: 107

									    PROJECT REPORT
Submitted For the Partial Fulfillment of the Degree


                  METLIFE INDIA

                                                 Submitted By:
                                                Anubhav Tyagi
                                                IIIT Allahabad

       Indian Institute Of Information Technology- Allahabad


Something I never thought about as a student, but that becomes very
clear as a trainee, in such a big organization is that while making a
project, you come to face or have different experiences and by that
you come to know that ―A project is not produced by just one person,
it takes lot of hard work by lot of talented people who guide you with
there expert advices and experiences.‖

And for making my project successful I have many person to thank for
helping and guiding me in completion of the project.

I would like to especially thank to Mr. Vijay Chourasia(Internal
guide) and Mr. Abhijeet Mukerji (Branch manager), who kept the
ship afloat for the past two months and shared there expert advices to
make my project full of content and also provided me the facilities to
prepare the project.

Also I would like to thanks, Mr. Sachin Tyagi and Mr. Kumud. K.
Tyagi for correcting, formatting and polishing my work with his special
advices and guidance. Also I appreciate the staff of Metlife India,
Kailash Colony and facility support provided by them for the past two

                                                       Anubhav Tyagi
                                                       IIIT Allahabad

          Indian Institute Of Information Technology-Allahabad


The main objective of the project was to study the recruitment
methodologies of the High Net-Worth Individuals and High Net-
Work Individuals and at the same time study their inclination
towards the business opportunity available in the insurance
sector and their awareness towards the same. The study also
aimed at knowing the brand recall of MetLife India Insurance.

         Indian Institute Of Information Technology-Allahabad


The insurance sector in India has come a full circle from being an open
competitive market to nationalisation and back to a liberalised 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.

             Indian Institute Of Information Technology-Allahabad

1956: 245 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

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 (Nationalisation) Act,
1972 nationalised the general insurance business in India with effect
from 1st January 1973.

             Indian Institute Of Information Technology-Allahabad

107 insurers amalgamated and grouped into four companies viz. the
National Insurance Company Ltd., the New India Assurance Company
Ltd., the Oriental Insurance Company Ltd. and the United India
Insurance Company Ltd. GIC incorporated as a company.

Insurance sector reforms:

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

     Government stake in the insurance Companies to be brought
      down to 50%

          Indian Institute Of Information Technology-Allahabad

     Government should take over the holdings of GIC and its
      subsidiaries so that these subsidiaries can act as independent

     All the insurance companies should be given greater freedom to

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

     Only One State Level Life Insurance Company should be allowed
      to operate in each state

3) Regulatory Body

     The Insurance Act should be changed

     An Insurance Regulatory body should be set up

          Indian Institute Of Information Technology-Allahabad

     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

     Computerisation 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

     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
      public confidence in the industry. Hence, it was decided to allow

          Indian Institute Of Information Technology-Allahabad

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

    Indian Institute Of Information Technology-Allahabad
                                  - 10 -

Why Insurance ?

Insurance is desired to safeguard oneself and one's family against
possible losses on account of risks and perils. It provides 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
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

           Indian Institute Of Information Technology-Allahabad
                                  - 11 -

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:

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..

Endowment policies - Cover the insured for a specific period. The
insured receives money on survival of the term and is not covered

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.

Annuities     /   Children's   policies -   The   nominee   receives   a
guaranteed amount of money at a pre-determined time and not
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.

Pension schemes - are policies that provide benefits to the insured
only upon retirement. If the insured dies during the term of the policy,

          Indian Institute Of Information Technology-Allahabad
                                  - 12 -

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
subject to many risks ranging from fire, allied perils to theft and

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:

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.

           Indian Institute Of Information Technology-Allahabad
                                   - 13 -

Health Insurance: It provides cover, which takes care of medical
expenses following hospitalization from sudden illness or accident.

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.

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.

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.

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.

           Indian Institute Of Information Technology-Allahabad
                                   - 14 -


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,
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

           Indian Institute Of Information Technology-Allahabad
                                     - 15 -

to door and to make the weekly collection of five- or ten-cent

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

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 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.

           Indian Institute Of Information Technology-Allahabad
                                    - 16 -

After the tragic events of September 11, MetLife responded quickly.
First and foremost, MetLife was fully committed to its 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

            Indian Institute Of Information Technology-Allahabad
                                     - 17 -

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 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

          Indian Institute Of Information Technology-Allahabad
                                   - 18 -

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
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 to 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.

            Indian Institute Of Information Technology-Allahabad
                                 - 19 -

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
     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
     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 .

          Indian Institute Of Information Technology-Allahabad
                                   - 20 -


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 (Bancassurance and Corporate Agency)

Gaurav Suri – Director (Marketing)

Sudip Mukhopadhyay – Director (Institutional Business)

Smitashree Menon – Director (Human Resources)

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)

          Indian Institute Of Information Technology-Allahabad
                                  - 21 -

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

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.

           Indian Institute Of Information Technology-Allahabad
                                 - 22 -

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.

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
          Indian Institute Of Information Technology-Allahabad
                                         - 23 -

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.

Other Partners


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.

             Indian Institute Of Information Technology-Allahabad
                                    - 24 -


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.


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.
           Indian Institute Of Information Technology-Allahabad
                                 - 25 -


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.

          Indian Institute Of Information Technology-Allahabad
                                   - 26 -


1) Met100

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.


      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

           Indian Institute Of Information Technology-Allahabad
                                     - 27 -

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 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


      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

           Indian Institute Of Information Technology-Allahabad
                                       - 28 -

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.


      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

           Indian Institute Of Information Technology-Allahabad
                                   - 29 -


      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

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


      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

           Indian Institute Of Information Technology-Allahabad
                                  - 30 -

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 eg. 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.

7) Met Suvidha(Non- Participating Endowment Assurance)

Met Suvidha provides the savings and security in one policy. It
provides a lot of flexibility for the policy terms between 15 - 30 year
i.e for the terms 15,16,17,18…30 years. This product is developed
keeping people in mind especially people who have irregular and
shorter earning spans. It provides protection to an individual during
the need and whenever required. It provides tax advantage

8) Met Suraksha

Met Suraksha is a term assurance plan and provides pure protection at
the cheapest price for a specified period of time. The policy has a term
of 5/10/15/20/25 years and level term is up-to 60 years of age. It is
an participating endowment policy. The tax benefits are provided
throughout the premium paying terms. Met Suraksha provides multiple
premium paying options like annual, semi-annual, quarterly, monthly
and payroll savings scheme (PSP).

          Indian Institute Of Information Technology-Allahabad
                                   - 31 -

      Financial security after retirement
      Multiple premium paying options
      Tax benefits throughout the premium paying options.

9) Met Pension Participating Deferred Annuity

Met Pension is structured as a participating endowment and a
participating immediate annuity. This provides only one annuity option
i,e Life Annuity. Being a pension plan it is developed to provide
financial security after retirement. It provides tax benefits throughout
the premium paying options. The death benefit during the endowment
phase will be the return of premium plus the reversionary bonus if
any. In case of the immediate annuity phase there will be no benefits
in this phase for the beneficiary of the policy. The maturity benefits at
the end of the endowment phase is equal to the face amount plus
guaranteed addition plus attached reversionary bonuses, if any plus
terminal bonus, if any. MetLife‘s pension product offers multiple
premium paying options.


      Financial security after retirement
      Tax benefits throughout the premium paying options
      Multiple premium paying options

           Indian Institute Of Information Technology-Allahabad
                                       - 32 -

10) Met Ultimate-"A universal life insurance policy"

Met Ultimate acts as a flexible policy which combines elements of
protection and accumulation simultaneously and provides ready access
to the accumulated cash value. It also acts as a savings account where

in the premiums are deposited, various charges deducted and interest
credited to the accumulated amount. Met Ultimate provides minimum
guaranteed return(net rate 3.5 p.a) an an additional bonus interest
declared on the investment performance. It has the facility of tax free
withdrawals after two policy years from the accumulation account. Met
Ultimate offers "Premium Holidays" where there is no schedule for
premium payments after third policy year which allows for skipping
payment of premiums without lapsing the policy.


       Flexiblity
       Tax benefits
       Provides coverage upto 100 years of age
       Skipping of premium payments after the third policy year
        without lapsing the policy.
       Tax    free    withdrawals    after     two   policy   years   from   the
        accumulated account.
       Flexibility to increase/decrease the Face Amount


              Indian Institute Of Information Technology-Allahabad
                                   - 33 -


Met Group Life is a flexible group insurance policy that would enable
both employer and employees to select the right mix of life insurance
to suit their individual needs. It‘s a yearly term insurance product
which pays a face amount to the employees against the risk of death
thereby assuring peace of mind. Met Group Life presents a hassle free
implementation and flexible premium paying modes- annual, semi-

annual, quarterly or monthly. It offers easy enrolment process with no
medical underwriting up to free cover limit, non-transferable employer
liability, non-taxable face-amount for beneficiary and an additional
cover on a contributory basis. Met Group also offers the option of
converting Group Coverage to Individual Coverage if the employee
desires, and the advantage of covering spouse and children – subject
to minimum participation levels.


     Flexible Group Insurance Policy
     Provides protection for employee‘s family
     Provides significant increased employee motivation, morale and
      loyalty leading to a better work environment

          Indian Institute Of Information Technology-Allahabad
                                    - 34 -

   Unit-Linked Plans of MetLife


Met Smart is a transparent, unit linked whole life plan that matures at
age 100. The premium you pay is used partly for insurance cover and
the balance is invested in funds to buy units. Met Smart offers 3
insurance options as well as 6 investment options that you can choose
from, based on your risk profile.

Met Smart at a glance:

      A Unit linked whole life plan that matures at age 100
      Offers you life protection and the advantage of investing in
       stocks, debt instruments and government securities
      3 insurance options
      A never before choice of 6 investment options covering the
       complete range of investment possibilities to suit your risk-
       return profile
      Offers you the option of switching between funds
      Convenient limited pay option that allows you to complete
       premium payment over a fixed term and enjoy the full benefits
      Offers a premium holiday after 3 years
      Gives you the freedom to withdraw from your funds.


Met Advantage is a unit-linked pension plan that works hard for you
when you stop working. And, like the name suggests, it comes with
the maximum number of advantages. For one, it ensures that you lead

           Indian Institute Of Information Technology-Allahabad
                                 - 35 -

a comfortable lifestyle. Always. More importantly, it helps you plan
ahead, keeping in mind the escalating cost of living. What‘s more,
unlike any other plan, Met Advantage comes with six investment
options, seven annuity options, and, much more.

Met Advantage at a glance:

     Transparent unit-linked pension insurance plan
     Choice of 6 investment options.
     Dump-in option.
     Life cover protection up to vesting age
     Tax savings on premium up to Rs.3,366* per annum.
     Postponement of vesting age
     Option of switching between funds
     No health check-up
     Flexible premium paying terms
     Option to commute up to 1/3rd of vesting benefits tax-free

          Indian Institute Of Information Technology-Allahabad
                                  - 36 -


   MetLife India Insurance sales function previously dealt in two
   functional structures within the organization. These two Structures

      Corporate sales
      Agency sales

Corporate/Group Sales:

Corporate sales includes that part of MetLife India Insurance in which
the sales are affected through the various sales manager , who on
behalf of the company meet various corporate heads and try to sell
group insurance on the condition that all the employees of that
particular corporate will have insurance from MetLife India Insurance,
automatically when they will join that organization.

Group Insurance has been recognized as an ideal tool to enhance
productivity and build employee satisfaction in business houses and
offer value-added benefits to customers of financial institutions and
members of various affinity groups. MetLife India‘s Group Insurance
solutions have been created to satisfy the changing needs of various
group customers.

           Indian Institute Of Information Technology-Allahabad
                                  - 37 -

Agency Sales:

Agency sales includes that part of Met-life in which sales are affected
through various individual agents known as Financial advisors(or can
be called agents) who are basically working with the company on the
commission basis. Leads are generated by advisors themselves and
sales are affected henceforth. The hierarchy structure of the Agency
sales is as under:

         o Branch Sales Manager (BSM)/ Center Sales Manager
         o Agency Manager (AM)
         o Sales Manager(SM)
         o Assistant Sales Manager (ASM)
         o Financial Advisors(FA)

With the opening up of the insurance sector and with so many players
entering the Indian insurance industry, it is required by the insurance
companies to come up with innovative products,            create more
consumer awareness about their products and offer them at a
competitive price. New entrants in the insurance sector had no
difficulty in matching their products with the customers' needs and
offering them at a price acceptable to the customer.

But, insurance not being an off the shelf product and one which
requiring personal counseling and persuasion, distribution posed a
major challenge for the insurance companies. Further insurable
population of over 1 billion spread all over the country has made the
traditional channels of the insurance companies costlier. Also due to

          Indian Institute Of Information Technology-Allahabad
                                  - 38 -

heavy competition, insurers do not enjoy the flexibility of incurring
heavy distribution expenses and passing them to the customer in the
form of high prices.

With these developments and increased pressures in combating
competition, companies are forced to come up with innovative
techniques to market their products and services. At this juncture,
banking sector with it's far and wide reach, was thought of as a
potential distribution channel, useful for the insurance companies. This
union of the two sectors is what is known as Bancassurance.

What is Bancassurance?

Bancassurance is the distribution of insurance products through the
bank's distribution channel. It is a phenomenon wherein insurance
products are offered through the distribution channels of the banking
services along with a complete range of banking and investment
products and services. To put it simply, Bancassurance, tries to exploit
synergies between both the insurance companies and banks.

Bancassurance if taken in right spirit and implemented properly can be
win-win situation for the all the participants' viz., banks, insurers and
the customer.

Advantages to banks

      Productivity of the employees increases.

           Indian Institute Of Information Technology-Allahabad
                                    - 39 -

     By providing customers with both the services under one roof,
      they can improve overall customer satisfaction resulting in
      higher customer retention levels.
     Increase in return on assets by building fee income through the
      sale of insurance products.
     Can leverage on face-to-face contacts and awareness about the
      financial conditions of customers to sell insurance products.
     Banks can cross sell insurance products Eg: Term insurance
      products with loans.

Advantages to insurers

     Insurers can exploit the banks' wide network of branches for
      distribution of products. The penetration of banks' branches into
      the rural areas can be utilized to sell products in those areas.

     Customer database like customers' financial standing, spending
      habits, investment and purchase capability can be used to
      customize products and sell accordingly.

     Since   banks   have    already        established   relationship   with
      customers, conversion ratio of leads to sales is likely to be high.
      Further service aspect can also be tackled easily.

Advantages to consumers

     Comprehensive financial advisory services under one roof. i.e.,
      insurance services along with other financial services such as
      banking, mutual funds, personal loans etc.

          Indian Institute Of Information Technology-Allahabad
                               - 40 -

   Enhanced convenience on the part of the insured
   Easy access for claims, as banks are a regular go.
   Innovative and better product ranges

        Indian Institute Of Information Technology-Allahabad
                                    - 41 -


This project is based on the study of High net worth individuals and
high net work individuals, there recruitment methodologies and there
inclination towards the available business opportunity in insurance
sector. Keeping this in mind we started thinking about, that how to
know the basic thinking of HNI‘s i.e what they all have in there mind
while investing there money and time in certain business and how
much they are aware of the opportunities in which they are investing.

After meeting few clients and collecting some data it was known that
the clients are making their investment decisions with the advice of
different consultancy bodies.


We are experiencing some of the most turbulent times in history.
There are literally thousands of different marketing strategies one
would be using to grow one‘s business but only a few that one need to
do consistently that will allow him to make all the money he desire.
Here are some of the strategies:

Do not rely on simple sources of Business

A Marketing Parthenon means having multiple/different sources of
revenue   and   lead   generation    instead   of   relying   on   just   one.
For example, let's say your primary method for generating new
business is through direct mail. What happens if, for whatever reason,
your postcards stop working tomorrow? How will that impact your

          Indian Institute Of Information Technology-Allahabad
                                     - 42 -

business? Now imagine you also generate leads through the internet,
space advertising, referrals, word of mouth, joint ventures, etc.?
You have now successfully diversified your portfolio like a good
money        manager.
Start now by conservatively testing other methods of marketing so
that if one method stops working, it won't put down your entire

Follow up

This is probably the most important marketing strategy, yet only few
follow it. It has been proved time and again that 70% of people who
respond to a cold call or letter will buy the product/service. But they
may not buy from the original caller; the reason cited is lack of
following up the leads.

Whenever a prospect responds to your cold call/letter, it only shows
that he is only interested and there may not be any immediate sale.
Further, it must be remembered that because people buy when THEY
are ready to buy not when YOU are ready to sell. So it is up to you to
follow up till you close the sale.

Maintain Relationships

Did you know it's far easier to re-sell an existing client than to sell to
someone who doesn't know and trust you? Did you also know that you
lose 1/12 of the value of a client every 30 days you don't communicate
with them?
So knowing these two facts, what's the easiest, most profitable way to
maintain relationships and re-sell existing clients? You guessed it right.

            Indian Institute Of Information Technology-Allahabad
                                    - 43 -

A Monthly Newsletter! But don't just send a monthly newsletter. Make
sure you also enclose inserts about other products and services that
you offer.

Create A Back-End For Your Business (Cross Selling)

It's far easier to re-sell to an existing client. It's also... Far More
Profitable! to create a Back-End For Your Business. Once you've spent
the high upfront costs to acquire a new client, it's relatively
inexpensive to send them a letter promoting another product or

For example, once you are successful in selling, say a car insurance
product, you can sell other related insurance products such as health
insurance, householders insurance etc. by proper follow up to promote
these products.

For the purpose of checking the validity of hypothesis a sample
questionnaire (Refer to Appendix A) was prepared           on the basis of
which the findings and analysis were being made.

             Indian Institute Of Information Technology-Allahabad
                                    - 44 -



Risk is one of the primary factor that an individual have in mind while
investing his/her money or while analyzing any business opportunity.
Due to this I surveyed the people for the amount of risk they are
willing to take while investing there money.

―Risk is the potential loss that may on the happening of certain

The major risks are:

Interest-Rate Risk:

When interest rates rise, bond prices will fall.
Existing bond portfolio will lose value and vice versa.

Reinvestment risk:

Risk is of interim cash flows being reinvested at a lower rate.

Call Risk:

If issuer calls back call option bonds,when interest rate falls,they can
be replaced with cheaper debt.The investor cannot keep a high coupon

             Indian Institute Of Information Technology-Allahabad
                                  - 45 -

Default risk:

Issuer may default on its obligation to make timely principal and
interest payments.

Inflation risk:

When inflation rates rises, the value of interest payment is reduced.
Higher interest rates will make the existing bonds lose value again.

Risk and return co-relation:

Risk and return are closely related with each other, they are inversely
proportional to each other. With increase in risk the rate of return rises
and with decrease in risk the rate of return decreases.
There is one more type of risk that an individual have to face while
investing his/her money in any kind of business or other activity, and
that is Inflation.

―Inflation is an increase in the general price level of goods and

Over time, inflation reduces the purchasing power of the rupee and
making it less worth year after year.
To find out the exact situation in the market, I surveyed different
persons and ask about the amount of risk they want to bear in
achieving returns while investing there money in any market or

           Indian Institute Of Information Technology-Allahabad
                                 - 46 -

product. After collecting the responses I came to the conclusion that
maximum number of people are the one which are in the category of
low risk ,this means that people are very much protective about there
money and does not want to invest at the places at where the risk is
high (for ex-equity). As seen in the Pie chart below that people are not
willing to take high risk ,but if there are returns then they can go
towards the options where the risk are medium(32%) or low(34%).

                  Risk Bearing Capacity

                   no risk                high
                    24%                   10%


                   high      medium       low    no risk

The tendency of people to save is now changing and now people want
to earn more income by investing there money in a profit giving
activity. As shown in the chart below that a large mass of people, i.e.
78%, had said yes to the question

          Indian Institute Of Information Technology-Allahabad
                                 - 47 -

                   Extra Income Generation



                               yes        no

that whether they want to earn more money or not. This clearly
indicates that there is a huge market for the companies who are in the
sector of selling insurance products and other market linked products.

The maximum people in this survey was the persons in the age group
of 25-35 who are young, dynamic and have a large network of people
around them. These young and dynamic persons should be targeted
because from them only there will be the upcoming entrepreneurs.


Flexible working hours means that there is no restriction of timings
while working. The need is that the work should be completed on the

          Indian Institute Of Information Technology-Allahabad
                                   - 48 -

due date, not necessary at what timing you have worked to complete

Flexible working hours are nowadays very much accepted pattern of
doing work in an organization. It is very much prevalent in the IT
industries, but now it is being adopted by the other industries or sector
too. Due to the fact that it makes the person feel free in its job, and
also due this the work is being completed to the perfection.

Our survey also signifies this fact that flexi-working hours are the
choice of today. We surveyed a number of people(High net work and
High net worth individuals) and found out that what actually they
inclined too, so that we understand that while investing there money
and time in the business opportunity available in the insurance sector,
will they be giving there free time to it.

                     Flexible Working Hours



                                 yes        no

           Indian Institute Of Information Technology-Allahabad
                                 - 49 -

As shown in the pie chart above, out of people HNI‘s surveyed a large
percentage of them showed interest in Flexible working hours(i.e 80%)
as compared to the people who were not interested in it(i.e 20%).

So, while targeting the High network or High net worth individuals, we
should try to make them feel that they need not have to work at
bounded timings, and should make them feel the easiness of working
in flexi working hours and how they can make there unproductive
time, a productive one.


Since the liberalistion of insurance industry the opening of insurance
industry has been a key landmark. The Indian insurance industry is
sitting on a volcano of growth and potential waiting to explode. Since
the last three years that the industry is opened to private players it
has shown a renewed vibrancy resulting in new opportunities.

These opportunities are in terms of employment, savings,new channels
of insurance distribution, wider coverage to rural areas and even to
the economically deprived section of the society.

Insurance industry is providing business opportunity to HNI‘s, that is
very much profitable to both the parties i.e inurance company and the
Individual who is joining them. For insurance companies they are
getting there products and policies sold to large mass of people who
comes under the network of these HNI‘s. At the same time these HNI‘s
are getting a opportunity of extra income generation, without effecting
there present working or business or job.

          Indian Institute Of Information Technology-Allahabad
                                  - 50 -

                Other Business Opportunity


                                 yes       no

Nowadays people are becoming more and more inclined to generate
extra sources of income, They want to invest there money and free
time in fruitfull work which give in return huge revenues to them.

To find out the exact thinking of HNI‘s towards these business
opportunities, we surveyed quite a number of people and found out
that the percentage of people who want to earn more thorough these
business opportunities are very much larger then the one‘s who do not
want to go towards these opportunity. The pie chart below shows the
exact pattern we got after the survey, i.e 62% people are inclined
towards it, while 38% are not.

So while targeting these High net worth and high net work individuals,
one should be clear about the opportunities available and have the
adequate    information   to   make    the      individual   understand   the
opportunity available.

           Indian Institute Of Information Technology-Allahabad
                                              - 51 -

The above analysis of our showed that HNI‘s are very much eager to
go for the business opportunities available, but the next thing is that,
how many of them are aware of the income generation source, i.e
awareness of the people about these opportunity.

                      Awareness about the exisiting
                         business oppurtunity

                 25                                        23

                 15                            12
                 10              6
                                         no. of people

                          good       little        no idea      want to know

The bar-diagram above clearly indicates that maximum percentage of
people are those who have no idea(around 50%)about the business
opportunities and the fact that really important that only 10-12%
people are those who have a good knowledge of these.

So, for tapping these section of individuals, insurance companies
should make there communication systems more stronger and finer,

                 Indian Institute Of Information Technology-Allahabad
                                      - 52 -

so that the information about these opportunities should reach the
individuals adequately.

Also the companies who want to target these HNI‘s should know the
places   where   they   will   find   these    influential   individuals.   Such
influencial individual are generally attached to some or the other
community organizations such as by being a member of civic group,
social or political group or any of the religious groups.

The finding done through the questionnaire showed that each of these
HNI‘s are related to one or the other community organizations.

                        Community Groups



            political     social       civic    religious      none


MetLife being 136 years old private company in the insurance sector
and holding its 36th position in the list of fortune 500 companies, it is

          Indian Institute Of Information Technology-Allahabad
                                  - 53 -

shocking that in the Indian market it is the least known company in
comparison to other private sector insurance companies.

The main reason for this is mainly its late entry in the Indian
market (in 2001) wherein the older companies have already have a
stronger foot hold it is just a beginning for this and so it will have to
pay for its share of time to get to the roots. Again it being a foreign
company Indian mass cannot rely on the same at such an early
stage, they have this thinking that it may anytime get shut down.
They lack trust and faith in MetLife and so fear in investing their
money with it.

                       Know Met-life?


                            yes     no

Again a reason to why more than 50% of the sample surveyed doesn‘t
know MetLife is because of its weaker tie-ups with banks such as
Jammu & Kashmir bank, Dhanlakshmi bank and the Karnataka bank. If
it would have made tie-ups with any of the giants in this insurance

          Indian Institute Of Information Technology-Allahabad
                                    - 54 -

sector than may be the competition would have been much less than it
is actually now. Even the other partners of MetLife are not that strong
that would have helped it gain the same position as it has in the U.S.

MetLife is a private company that believes in its ethics very strongly
and stick to them very tightly. It believes in actions rather than speech
and so it hardly spends its funds in advertising and publicity because it
wants its work to speak for them, so it‘s advertising as compared to
other companies is very weak. But in here, in the Indian market
most of the people go by seeing the advertisements and the heights of
publicity done. This is one of the major reasons of people not being
aware   of     such   a   big   company!     But   now   they   getting   into
advertisements and publicity because this is one of the major
pathways to reach out to its customers and be at their doorsteps as
this is what the mass wants!

             Indian Institute Of Information Technology-Allahabad
                                   - 55 -


The hypothesis we took when we had started the project was that the
HNI‘s while investing there money consult with some consultants, that
can be a banker, a investment consultant or a chartered accountant,
also that most of these person want to have extra income, but the
major concern is the risk associated with it i.e the risk should be less
or no risk should be there. Adding to it these HNI‘s are inclined
towards the new business opportunities available and are pretty much
aware about these opportunities present. Also that they are not sure
about the credibility of the private companies and that‘s why they do
not want to invest there money in the private sector i.e they prefer the
public sector companies..

Taking the example of MetLife we also took in the hypothesis that the
foreign companies are the least wanted companies at present in this

According to the data we have collected and analysis done that is
shown with the help of pie-charts and bar graphs above in the project,
it is clear that :

      HNI‘s while investing there money use to consult either with a
       banker(26%) or investment consultant(32%) or a chartered

      Most of HNI‘s want to generate extra income

            Indian Institute Of Information Technology-Allahabad
                                 - 56 -

     While investing and generating extra income maximum of these
      HNI‘s major consideration is about the risk factor associated with
      the investment. That is most of them were not interested in
      taking risk or can only want to have a low risk investment.

     Met-life India pvt limited ,due to having foreign name and due to
      the fact of having weak partners in India is lagging behind as
      compared to the other companies having strong Indian partners
      and a Indian company name attached with them.

All of the above things we took in hypothesis were proved, to be
accepted but the only thing that our hypothesis failed to prove is that
the awareness about the business opportunities available in the
market     is   high.    Our     study    showed      that       maximum
percentage(23%),were the person who have no idea about these
opportunities and only 8% of the total were having good idea.

          Indian Institute Of Information Technology-Allahabad
                                      - 57 -


The liberalization followed by growth of the Indian Insurance industry
has opened wide opportunities for Service and Infrastructure sectors.
This growth has to be properly channelised. Some of the major
challenges which have to addressed for channelising the growth of
insurance    sector   are   Product     Innovation,   Distribution   Network,
Investment Management, Customer Service and Education.

Product Innovation

Customers are now looking at Insurance as complete financial solution
offering stable returns coupled with total protection. Companies will
need to constantly innovate in terms of product development to meet
ever changing consumer needs. Understanding the customer better
will enable Insurance companies to design appropriate products,
determine price correctly and increase profitability. In this context
Management Guru Peter Drucker has rightly said "Markets are
changing from Cost lead Pricing to Price lead Costing".

Distribution Network

While companies have been successful in product innovation, most of
them are still grappling with right mix of Distribution Channels for:

   a. Capturing maximum market share to build brand equity.

            Indian Institute Of Information Technology-Allahabad
                                       - 58 -

   b. Building    strong     and       Effective     Customer     relationships.

   c. Cost effective customer service.

This calls for Selection of right type of Distribution channel mix along
with prudent and efficient FOS (Fleet On Street) Management.

   1. Distribution Network:

      While the traditional channel of tied up advisors or Agents would
      be the chief distribution channel, insurer should innovate and
      find new methods of delivering the products to customers.
      Corporate    agency,    brokerage,         Bancassurance,    e-insurance,
      cooperative societies and panchayats are some of the channels
      that can be tapped by the insurers to reach the appropriate
      market segments.

   2. FOS Management

      The major issues to be addressed in Insurance FOS management
      are High Attrition, lack of Motivation and Product knowledge.
      Continuous training, performance linked reward systems, and
      career counseling can effectively tackle these issues.

Customer Education and Service

Insurance, particularly life insurance is never bought but sold. To
convince a large population, which is comparatively not well informed
about the intangible benefits of life insurance, is indeed an onerous
task. This apart, the task would be to position Insurance as a risk
planning   tool   rather   than    a    tax     saving   and   investment   tool.

           Indian Institute Of Information Technology-Allahabad
                                      - 59 -

In the present competitive scenario, a key differentiator would be
professional customer service in terms of quality of advice on product
choice along with policy servicing. Servicing should focus on enhancing
the customer experience and maximizing customer convenience. This
calls    for   effective   CRM   system    which    eventually    would      create
sustainable competitive advantage and build long lasting relationship.

Investment Management

The most difficult challenge would be to provide returns comparable to
other financial instruments. The problem is further aggravated by
interest rates moving south. Need of the hour for an insurer is to
follow    prudent     underwriting   practices     and   efficiently   cut   down
management and administrative expenses. Insurers must follow best
investment practices and have a strong Asset management Company
to maximize returns.


   1. Untapped market Segments

         Apart from meeting the above challenges, it is important to
         increase customer base in semi urban and rural areas which
         offer huge potential. The fact that major chunk of business for
         life insurance giant, LIC comes from rural and semi urban areas
         stands as a testimony. However, this ignores the difficulties of
         approaching this segment. Much of the demand may not be
         accessible because of large distances or high costs relative to

               Indian Institute Of Information Technology-Allahabad
                                   - 60 -

   2. Health Insurance:

      Health insurance is another growth area which offers huge
      potential. Estimates indicate that out of the total potential of
      Rs.3000 - 4000 crores only Rs.450 - 500 crores is being tapped.
      Lack of requisite infrastructure, non standardization of pricing
      and procedures, lack of product variants has hampered the
      growth      of    this   lucrative    market.


In the Indian market, where insurance is sold after considerable
persuasion , the selling over the net would take some more time. Also,
Insurers need to design products where auto underwriting is feasible.
Certain products like term insurances, vehicle insurances, mediclaim
and others can be sold through internet. But a pure e-commerce
model may not be possible for insurance sector where Customer-Need-
Analysis, Capital-Need-Analysis and other factors go into determining
the exact customer solution. But even then, selling on internet is very
attractive because of low distribution costs. It makes sense for the
insurance companies to supplement their traditional sales channels
with Internet.

The passage of IT bill has given legal sanctity to transactions over the
net and subsequent modification of insurance act allows payment of
premium through credit card. While the technology capability is there,
improvement in bandwidth and infrastructure are needed to give the
required boost to e-commerce on the net.

          Indian Institute Of Information Technology-Allahabad
                                   - 61 -


Competition will result in the market to grow beyond current rates and
offer additional consumer choice through the introduction of new
products, services and price options. Development of industry code of
conduct, contributing to a common catastrophe reserve fund and
chalking out agreements to settle claims to the benefit of customer
can   be   expected   with   concerted      efforts   from   all   the   players.

The current impediments such as 26% equity cap on foreign partner,
limited investment avenues, ill defined regulatory role of IRDA in
pension business etc are to be removed in near future. As the industry
evolves, the present classification of life and non life insurance may
change. There may be specialization in each class of business. In the
years to come, we may witness Insurers underwriting only one or two
classes of business such as health insurance, auto insurance, life
insurance, pension provider, property and casualty etc.

Challenges in      Distribution

KPMG have prepared a report on `Insurance Trends and Issues` which
examines the future of distribution for both life and general insurance
in India once the sector is opened. It is based on KPMG research in
India and abroad and on insights gained through working with clients
in different markets. There are four significant issues which the report

            Indian Institute Of Information Technology-Allahabad
                              - 62 -

1. The threat of new players taking over the market has been

2. Nationalized players will continue to hold strong market share
  positions, but there will be enough business for new entrants to
  be    profitable.

3. New companies often overestimate the need for insurance
  expertise. They assume that a joint venture is the most
  appropriate type of alliance, when in fact many forms are

       Indian Institute Of Information Technology-Allahabad
                              - 63 -


4. Both new and existing players must explore new distribution and
  marketing channels.

       Indian Institute Of Information Technology-Allahabad
                                    - 64 -

Insurance sector to drive Indian CRM market

After telecom and banking, it‘s the turn of insurance companies to
deploy   customer    relationship   management       (CRM)   solutions.   As
competition intensifies, insurers are trying every trick in the book to
retain existing customers, with a wide range of services driving the
market for CRM applications in the process

CRM with BI tools can help insurance firms monitor the ebb and flow of
customer behaviour, giving them a holistic 360-degree view of their

While the insurance sector is seeking to maintain a balance between
acquiring    customers    and    developing     existing   ones,   customer
acquisition is vital, as no retention strategy will entirely stem customer
defection. Insurance companies are experiencing unacceptable levels
of customer churn, thanks to which they are focusing on keeping the
customers they already have in a bid to ensure a net growth in their
customer base. Today, the focus is on selling more products to existing
customers     to   improve   profitability.   Customer-focused     strategies
require CRM (customer relationship management) to help acquire
customers thorough various touch 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 behaviour, giving them a holistic
360-degree view of their customers.‖
            Indian Institute Of Information Technology-Allahabad
                                   - 65 -

CRM has helped customers through effective event-based marketing
and lead tracking to cross- and up-sell products. CRM helps categorise
and segment customers and align products that best suit them. CRM is
helps to expand into rural areas

Insurance companies with huge customer databases, servicing their
customers through numerous branches and call centres will invest
between 15 to 20 percent of their total IT budget on CRM applications

Current market scenario

Insurance firms are tactically rolling out an application here and there
rather than strategically implementing a complete CRM suite. In this,
they are on the right track. ―They (insurance firms) are taking baby
steps,   starting   with   operational      CRM   to   increase   sales   force
automation. Once they have a sufficiently large customer database,
they use BI tools to mine data from various sources (such as contact
centres and from banks with which they align) pushing the need for
analytical CRM solutions.

CRM technologies such as sales force automation, contact centre
segmentation and campaign management tools are maturing and
finding wider adoption with large insurance companies.

The banking, financial services and insurance (BFSI) sector and
telecom will continue to drive the CRM market, but the uptake of CRM
in the insurance vertical will climb steeply in 2004 and growth will be
rapid and higher [than in other verticals] The insurance vertical has

           Indian Institute Of Information Technology-Allahabad
                                  - 66 -

crossed the threshold of IT and process maturity beyond which an
investment in CRM investments starts yielding good returns. The need
to integrate customer data from multiple channels and to increase
sales force productivity (including that of agents) and running
productive marketing campaigns will continue to drive demand for
CRM software.

Spending on CRM is up

Insurance firms spend close to 12 percent of their IT budgets on CRM
software and services. The cost includes operational CRM and spending
on BI tools. Industry pundits believe that insurance firms are looking
for CRM initiatives with budgets ranging from Rs 50 lakh going right up
to Rs 3 crore. The sector is busy compiling data on individuals,
including their purchasing patterns and buying preferences of policies,
pension plans and the like. In many cases, policy renewal marketing to
existing   customers   remains   an    unsophisticated   exercise,   often
amounting to little more than a request to renew, with no attempt at
putting a value proposition before the customer. With a little help from
CRM software, insurance firms can sell multiple insurance policies and
pension plans to the same customer.

The opportunity is huge

Within the financial services sector, IT investment in insurance is
expected to grow the fastest with a CAGR of 35 percent in the five-
year forecast period (2001-02 to 2004-05). [Source: IDC India] Other
sub-verticals of the financial services sector are expected to grow at a

           Indian Institute Of Information Technology-Allahabad
                                  - 67 -

CAGR ranging from 21 to 25 percent. Much of this spending will be on
CRM applications and integrating multiple delivery channels. IDC says
that new delivery channels are evolving as the insurance market

According to a report from Indian Infoline (January 2004), India has
the highest number of life insurance policies in force in the world. The
industry is pegged at Rs 400 billion in India. Gross premium collections
stand at 2 percent of the GDP and this has been growing by 15 to 20
percent per year from the Life Insurance Corporation of India (LIC)
and other government-owned insurers. Privatisation has led to new
players entering this market and it is expected to grow at a rapid pace.

More than three-fourths of India‘s insurable population has no life
insurance, pension cover and post-retirement protection cover. A
substantial part of the insurance market—the portion dealing in
pension plans and insurance as an investment option—is protected by
a tariff and administered price regime. Competition in pricing is yet to
emerge. Once that happens, as with all dynamic customer-oriented
service industries such as banking and telecom, the race to gain and
retain customer mind share will be on.
Business drivers for CRM

Margins are under pressure: A couple of years ago, LIC dominated the
insurance market with the help of its sales force and channels and
margins were reasonably high. Today, there are close to 20 companies
offering both life and general insurance products. All of them have
equally strong international and local partners; all are focusing upon

           Indian Institute Of Information Technology-Allahabad
                                  - 68 -

similar geographies and target audiences. The new firms selling life
insurance and non-life insurance [pensions, insurance as saving, etc]
have failed to emulate the LIC model because margins are getting
squeezed. There are several pain areas that new insurance firms
face—acquiring new customers, retaining them, cross-selling products
and controlling rising costs while providing comprehensive support.

Insurers have added a plethora of products and services to their kitty.
These range from insurance as an investment option to pension plans.
They target the younger generation in the 20 to 30 years age group.
The convergence of four factors—protection, saving (investment
option), loans and pension—have compelled insurance companies to
align with banks in reaching out to a larger audience

This trend has led to another—insurance companies are joining hands
with banks by becoming channel partners for insurance. This strategy
helps insurance firms increase their footprint to cover a larger part of
the customer base in the 20-30 years demographic. CRM helps
connect a bank’s high net worth customers with insurance firms.

More than three-fourths of India's insurable population has no life
insurance, pension cover and post-retirement protection cover giving
an indication of the insurance opportunity in India

Customer expectations are rising: Customers, faced with a dizzying
array of insurance products expect customised offerings, value, ease
of access, and personalisation from insurers. Today, customers are
expecting individual attention, responsiveness, customisation and

          Indian Institute Of Information Technology-Allahabad
                                   - 69 -

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.

Where to begin—operational CRM or analytical CRM?

The choice between operational and analytical CRM as a starting point
depends upon the insurer‘s needs. Insurance companies with multiple
financial products and a big customer base, such as integrated
insurance solution providers, will leverage their customer base to
cross- and up-sell different financial products, including insurance.
Such providers will benefit from adopting analytical CRM. Market
segmentation, campaign management and data mining applications
will benefit them in many ways.

Call center text mining: This tool can help improve the customer
experience by resolving complaints rapidly. Insurers are using these
tools to mine text from call center transcripts to identify issues faced
by customers.

Text mining tools also help detect and capture other useful pieces of
information around a customer‘s life stage, financial needs and product
interests. These can be used to generate leads and trigger cross
selling.   However,    to   be     fully    effective,   customer   service
representatives must be trained to probe for information that will help
in cross selling during the text-mining phase. Text mining tools are
leading edge today, but are predicted to take off quickly.

           Indian Institute Of Information Technology-Allahabad
                                    - 70 -

Insurers can use event triggers to generate leads that can be acted
upon quickly, usually within 24 hours

Event-triggering tools monitor incoming transaction and contact
data in near-real-time to recognize changes in a customer‘s behavior
or profile to trigger actions or alerts.

Lead management gets sophisticated: Often the ability of an insurer
to generate leads by means of event-triggering, re-engineered touch
points and cross line-of-business referral can outstrip their ability to
manage said leads. In such a situation, though the number of leads
generated rises, the conversion rate does not. It may even drop.

CRM can help provide sales representatives with a mechanism to
prioritise and manage leads.

Pure insurance providers who do not have a large customer base will
derive the maximum value from operational improvements, especially
in integrating customer information from multiple channels and sales
force automation.

Most insurers will look to empower their agents by deploying partner-
facing applications. Apart from making agents more productive, it will
let insurers keep in touch with customers, otherwise difficult in a
primarily channel-driven business.

           Indian Institute Of Information Technology-Allahabad
                                     - 71 -

Analytical CRM insurance companies can enhance Cross- and up-
selling capability to provide market opportunities within an existing
customer database. Information regarding customer retention or
attrition helps determine the likelihood of policy lapses and helps
identify customers worth targeting for retention campaigns.

Customer       segmentation      ,   leverages    data   to   create   accurate
categories for use in marketing strategies.

Market automation , combines analytics with campaign management
functionality to help drive a more effective and efficient marketing

Broad CRM perspective

CRM module Areas where it can be applied

      Collaborative CRM

Applying collaborative interfaces (such as e-mail, conferencing, chat,
real-time)     to   facilitate   interaction     between      customers    and
organisations, as well as between organisational entities dealing with
customer information
(customers to sales representatives, sales to marketing, agent to

             Indian Institute Of Information Technology-Allahabad
                                  - 72 -

      Operational CRM

Automating horizontal integrated business processes involving front-
office customer touch points-sales, marketing, and customer service-
via multiple, interconnected delivery channels and integration between
front-office and back-office

      Analytical CRM

Analysing data created on the operational side of the CRM equation for
the purpose of business performance management. Analytical CRM is
tied to a data warehouse architecture; it is most often evident in
analytical applications that leverage data marts.

          Indian Institute Of Information Technology-Allahabad
                                    - 73 -



         Brand name:

     The Metropolitan Life Insurance Company (MetLife ) is the
     number one insurer in the U.S. based on over US$2 trillion of
     life insurance in force. MetLife serves approximately 9 million
     individual households in the U.S. as well as 87 of the Fortune
     100      companies.        MetLife's     institutional     clients        have
     approximately        33     million     employees        and   members.
     Headquartered in New York, MetLife through its affiliates,
     subsidiaries     and      representative    offices      operates     in    15
     countries throughout the Americas, Europe and Asia. The
     MetLife     brand,     known     for    empowering       people      to    feel
     protected, guided and hopeful about their lives, will it is
     hoped do the same for its Indian customers.

         Experience in this particular field of insurance (136
          yrs old):

     MetLife India inherits its parent company's over-130-year-old
     reputation of helping build financial independence for its
     customers. MetLife India has developed and distributes a
     range of life insurance products in India.

         Indian Institute Of Information Technology-Allahabad
                               - 74 -

        International Backup:

    MetLife India benefits from its parent company's global
    presence in the field of insurance, track record of establishing
    successful insurance operations in emerging markets and the
    unique strengths of its other Indian promoters. Drawing from
    these experiences, MetLife India hopes to be able to address
    the needs of the Indian customer. MetLife India aspires to
    build on MetLife's history of meeting policy holder and
    contract obligations and the ability to withstand the impact of
    adverse economic factors.


        Weaker tie-ups

    The major problem with the progress of Metlife in India is its
    weak partners. In India partners of Met-life are J & K Bank, M
    Palonji & co. pvt ltd, Dhanlaxmi bank,all three of them are
    certainly cannot be considered as India wide banks. Also in
    comparison to other strong competitors such as ICICI
    Prudential, Tata AIG etc who are in partnership with strong
    names in India such as ICICI & TATA, MetLife‘s partners are
    too weak

        Indian Institute Of Information Technology-Allahabad
                                 - 75 -

          Late entry

      As compared to other Insurance companies who are at
      present have more market share than Met-life, it had entered
      into the market after these         companies, Also, Met-Life was
      the last one to enter into the market of MLPI‘s (market link
      products),which are the major selling products of any
      insurance company.


          Large untapped Indian market
  With such a large population and the untapped market area of
  this population Insurance happens to be a very big opportunity
  in India. Nearly 80% of Indian populations are without Life
  insurance cover and the Health insurance. This is an indicator
  that growth potential for the insurance sector is immense in

          Can go for product diversification

  Innovative products and aggressive distribution have become
  the say of the day. Indians, have always seen life insurance as a
  tax saving device, are now suddenly turning to the private sector
  that are providing them new products and variety for their
  choice. The There has been a plethora of new and innovative
  products      offered   by   the   new     players.   Customers   have

          Indian Institute Of Information Technology-Allahabad
                                - 76 -

  tremendous choice from a large variety of products. More
  customers are buying products and services based on their true
  needs and not just traditional money back policies, which is not
  considered     very   appropriate      for   long-term   protection   and
  savings. There is lots of saving and investment plans in the
  market. However, there are still some key new products yet to
  be introduced - e.g. health products.


         Increased competition in the insurance sector

  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

         Increase in the number of new players in this sector

  The introduction of private players in the industry has added to
  the colors in the dull industry. The initiatives taken by the
  private players are very competitive and have given immense

         Indian Institute Of Information Technology-Allahabad
                            - 77 -

competition to the on time monopoly of the market LIC.Since the
advent of the   private players in the market the industry has
seen new and innovative steps taken by the players in this
sector. The new players have improved the service quality of the
insurance. As a result LIC down the years have seen the
declining phase in its career. The market share was distributed
among the private players

    Indian Institute Of Information Technology-Allahabad
                                    - 78 -


   1. Advertising and Publicity –

These days everybody is going for things, which they see on air.
Advertising and Publicity hold a very strong role in any products life
cycle, it helps the public know about the existence of the products and
the role, which they play in the lives of the people. MetLife believes in
strong ethics and believes that actions speak more than words and so
want its work to prove for itself and so doesn‘t believe in advertising
and publicizing itself but in the Indian context it is a must for any
company to publicize itself because it holds the best medium to reach
to its customers and also to increase its customer base.

   2. Implementation of CRM –

While the insurance sector is seeking to maintain a balance between
acquiring    customers    and    developing     existing   ones,   customer
acquisition is vital, as no retention strategy will entirely stem customer
defection. Today, the focus is on selling more products to existing
customers     to   improve   profitability.   Customer-focused     strategies
require CRM (customer relationship management) to help acquire
customers thorough various touch points and translate operational
data into actionable insights for proactively serving customers.

            Indian Institute Of Information Technology-Allahabad
                                   - 79 -

CRM with BI (Business Intelligence) tools can help insurance firms
monitor the ebb and flow of customer behaviour, 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 categorise
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

   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 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

          Indian Institute Of Information Technology-Allahabad
                                    - 80 -

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.

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.

             Indian Institute Of Information Technology-Allahabad
                                 - 81 -

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

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 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

          Indian Institute Of Information Technology-Allahabad
                                 - 82 -

previous knowledge database and to use their information when
determiningthe 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.

          Indian Institute Of Information Technology-Allahabad
                                 - 83 -


Appendix A


For the purpose of finding out the exact market scenario and behavior
of HNI‘s I prepared a questionnaire in which there was questions
through which I would be able to understand various mindsets of these


   Name:

   Organization:

   Area of operation:

   Annual Income (approx):

   Age:

   Address:

   Phone Number:                         Mob no. :

   E mail:

          Indian Institute Of Information Technology-Allahabad
                                 - 84 -

 Are you attached with any community organization:

          Any Civic Group
          Any Social Group
          Any Political Group
          Any Religious Group

 Basic generic objective for making an investment:

          Saving
          Income generation
          Security
          Tax redemption
          Other (please specify)

 Whom would you consult before making an investment :

          Banker (name of the bank) :
          Chartered accountant (specify) :
          Investment consultant (specify) :

 How much money do you to invest annually :

 How much is your rate of return:

 What would be your expected rate of return :

 How much risk will you be able to bear :

       Indian Institute Of Information Technology-Allahabad
                                 - 85 -

           High
           Low
           Medium
           No risk

 Would you be interested in extra income generation:

           Yes
           No

 How much extra income would you want to generate:

 Are you interested in flexible working hours:

           Yes
           No

 Would you be interested in Business opportunity with low
  investment and high return:
           Yes
           No

 Are you aware of the business opportunity available in Insurance

           Have good knowledge
           Have little knowledge
           No idea
           Want to know about

       Indian Institute Of Information Technology-Allahabad
                              - 86 -

 Would you like to invest your money in Metlife :

          Yes
          No

       Indian Institute Of Information Technology-Allahabad
                                  - 87 -


Bancassurance in India

Bancassurance in India is a very new concept, but is fast gaining
ground. In India, the banking and insurance sectors are regulated by
two different entities (banking by RBI and insurance by IRDA) and
bancassurance being the combinations of two sectors comes under the
purview of both the regulators. Each of the regulators has given out
detailed guidelines for banks getting into insurance sector. Highlights
of the guidelines are reproduced below:

RBI guideline for banks entering into insurance sector provides three
options for banks. They are:

     Joint ventures will be allowed for financially strong banks wishing
      to undertake insurance business with risk participation;
     For banks which are not eligible for this joint-venture option, an
      investment option of up to 10% of the net worth of the bank or
      Rs.50 crores, whichever is lower, is available;
     Finally, any commercial bank will be allowed to undertake
      insurance business as agent of insurance companies. This will be
      on a fee basis with no-risk participation.

          Indian Institute Of Information Technology-Allahabad
                                        - 88 -

Some of the Bancassurance tie-ups in India are:

Insurance Company               Bank

                                Bank of Rajasthan, Andhra Bank, Bank of
Birla Sun Life Insurance
                                Muscat, Development Credit Bank, Deutsche
Co. Ltd.
                                Bank and Catholic Syrian Bank

Dabur          CGU       Life
                                Canara Bank, Lakshmi Vilas Bank, American
Insurance Company Pvt.
                                Express Bank and ABN AMRO Bank

HDFC       Standard      Life
                                Union Bank of India
Insurance Co. Ltd.

                                Lord Krishna Bank, ICICI Bank, Bank of
ICICI      Prudential    Life India,   Citibank,   Allahabad    Bank,   Federal
Insurance Co Ltd.               Bank, South Indian Bank, and Punjab and
                                Maharashtra Co-operative Bank.

                                Corporation Bank, Indian Overseas Bank,
                                Centurion Bank, Satara District Central Co-
Life               Insurance
                                operative Bank, Janata Urban Co-operative
Corporation of India
                                Bank, Yeotmal Mahila Sahkari Bank, Vijaya
                                Bank, Oriental Bank of Commerce.

Met         Life        India Karnataka Bank, Dhanalakshmi Bank and
Insurance Co. Ltd.              J&K Bank

SBI     Life       Insurance
                                State Bank of India
Company Ltd.

Bajaj   Allianz      General Karur Vysya Bank and Lord Krishna Bank

             Indian Institute Of Information Technology-Allahabad
                                   - 89 -

Insurance Co. Ltd.

National Insurance Co.
                            City Union Bank

Royal           Sundaram
                            Standard Chartered Bank, ABN AMRO Bank,
General         Insurance
                            Citibank, Amex and Repco Bank.

United India Insurance
                            South Indian Bank
Co. Ltd.


Issues to be tackled

Given the roles and diverse skills brought by the banks and insurers to
a Bancassurance tie up, it is expected that road to a successful alliance
would not be an easy task. Some of the issues that are to be
addressed are:

   1. The tie-ups need to develop innovative products and services
        rather than depend on the traditional methods. The kinds of
        products the banks would be allowed to sell are another major
        issue. For instance, a complex unit-linked life insurance product
        is better sold through brokers or agents, while a standard term
        product or simple products like auto insurance, home loan and
        accident insurance cover can be handled by bank branches

            Indian Institute Of Information Technology-Allahabad
                                     - 90 -

  2. There needs to be clarity on the operational activities of the
    bancassurance i.e., who will do the branding, will the insurance
    company prefer to place a person at the bank branch, or will the
    bank   branch      train   and   put      up   one    of   its    own    people,
    remuneration of these people.
  3. Even though the banks are in personal contact with their clients,
    a high degree of pro-active marketing and skill is required to sell
    the insurance products. This can be addressed through
           proper        training.
  4. There are hazards of direct competition to conventional banking
    products. Bank personnel may become resistant to sell insurance
    products since they might think they would become redundant if
    savings were diverted from banks to their insurance subsidiaries.

Factors that appear to be critical for the success of
bancassurance are :

  1. Strategies consistent with the bank's vision, knowledge of target
    customers'      needs,     defined     sales    process     for    introducing
    insurance services, simple yet complete product offerings, strong
    service delivery mechanism, quality administration, synchronized
    planning across all business lines and subsidiaries, complete
    integration of insurance with other bank products and services,
    extensive and high-quality training, sales management tracking
    system for reporting on agents' time and results of bank
    referrals    and    relevant      and      flexible    database         systems.

         Indian Institute Of Information Technology-Allahabad
                                     - 91 -

   2. Another point is the handling of customers. With customer
      awareness     levels    increasing,     they   are    demanding   greater
      convenience        in      financial      services.

   3. The emergence of remote distribution channels, such as PC-
      banking and Internet-banking, would hamper the distribution of
      insurance   products       through        banks.

   4. The emergence of newer distribution channels seeking a market
      share in the network.

With huge untapped market, insurance sector is likely to witness a lot
of activity - be it product innovation or distribution channel mix.
Bancassurance, the emerging distribution channel for the insurers, will
have a large impact on Indian financial services industry. Traditional
methods of distributing financial services would be challenged and
innovative, customized products would emerge.

Banks will bring in customer database, leverage their name recognition
and reputation at both local and regional levels, make use of the
personal contact with their clients, which a new entrant cannot, as
they are new to the industry.

In customer point of view, a plethora of products would be available to
him. More customized products would come into existence and that
too all within a hand reach.

Finally Success of the bancassurance would mostly depend on how
well insurers and banks understand each other's businesses and seize

          Indian Institute Of Information Technology-Allahabad
                                  - 92 -

the opportunities presented, weeding out differences that are likely to
crop up.

Appendix C

Alternative channels of Insurance distribution

With the liberalization of the insurance sector and competition tougher
than ever before, companies are increasingly trying to come out with
better innovations to stay that one-step ahead.

Progress has definitely been made as can be seen by the number of
advanced products flooding the market today            - products with
attractive premiums, unitised products, unit-linked products and
innovative riders. But a hitherto untapped field is the one involving the
distribution of these insurance products.

Currently, insurance agents are still the main vehicles through which
insurance products are sold. But in a huge country like India, one can
never be too sure about the levels of penetration of a product. It
therefore makes sense to look at well-balanced, alternative channels
of distribution.

Nationalised insurers are already well established and have an
extensive reach and presence. New players may find it expensive and
time consuming to bring up a distribution network to such standards.
Yet, if they want to make the most of India's large population base and
reach out to a worthwhile number of customers, making use of other

           Indian Institute Of Information Technology-Allahabad
                                  - 93 -

distribution avenues becomes a must. Alternate channels will help to
bring down the costs of distribution and thus benefit the customers.

In March 2003, a seminar conducted by the Asia Insurance Review and
attended by leading consultants in the Asian insurance market, threw
up some interesting findings.

However much the traditional agent's role be part of the company, the
insurer must still be ready to adopt alternative distribution channels
not to compete with agents but as a complementary effort to provide
customers with an array of products
Several insurers in Asia, are coming up with innovative, multi-channel
and direct marketing techniques with successful results .

Insurance distribution channels

At present the distribution channels that are being utilized are:

      Direct selling
      Corporate agents i.e. pushing the insurance product through the
       directors or partners of a company
      Group selling
      Worksite marketing
      Brokers and cooperative societies

Alternate delivery channels -

      Bancassurance: Bancassurance can be a sure fire way to reach a
       wider customer base, provided it is made use of sensibly. In

           Indian Institute Of Information Technology-Allahabad
                                - 94 -

India there is an extensive bank network established over the
years. Insurance companies will have to take advantage of the
customers' long-standing trust and relationships with banks. This is
a mutually beneficial situation as banks can expand their range of
products on offer to customers and earn more, while the insurance
company profits from the exposure at the bank branches, and the
security of receiving timely payments. The products that are likely
to sell well through bancassurance are commodotised term and
annuity products. Also, those products that combine insurance and
banking needs help to create demand - such as loan cover, term
assurance and simple products that can be sold over-the-counter at
banks. Another advantage is that banks, with their network in rural
areas, help to fulfil rural and social obligations stipulated by the
Insurance Regulatory and Development Authority (IRDA).

   Selling through employees or authorised officials of a corporate:
    Selling through employees can also be a lucrative prospect. But
    the full potential of this channel has not yet been utilised since
    selling is now permitted only through directors or partners of the
    company. Worksite marketing is inexpensive and provides the
    opportunity to market products to large groups of people

   Call centres: Call centres can be utilised for generating leads. As
    the market keeps expanding, call centres have the potential of
    becoming an       important medium for     customer    relationship
    management (CRM) and up selling to the customers.

        Indian Institute Of Information Technology-Allahabad
                                    - 95 -

      Cooperative societies and Brokers: Cooperative societies and
       brokers offer immense support to insurance companies to widen
       their reach. Private companies that are already appointing
       corporate   agents,    and   non-banking     financial   corporations
       (NBFCs) with a sound retail network are in demand.

      Marketing   through    mailers   etc.:   Direct   marketing   through
       mailers, pamphlets etc. require customised simple products that
       can be purchased through such mediums, or through the
       Internet. Though the unavailability of good databases in India,
       and the high expenses to reach the target audience through
       direct mailers is a cause for concern, it is definitely a problem
       that can be solved through better management of resources,
       data collection etc.

Winds of change

Sustaining huge sales force is a costly affair especially when low-cost
electronic distribution channels are available.
Alternate delivery channels are not burdened by the monetary and
geographic limitations of maintaining a physical presence.

Alternate channels also help to cut back costs and enhance customer
service thereby giving the company a competitive edge.

To sum up, it is apparent that multiple distribution channels will help
an insurance company to offer a range of contact points to the
customer, thereby increasing the chances of success. However, along

           Indian Institute Of Information Technology-Allahabad
                                  - 96 -

with these distribution channels comes the challenge of 'relationship
management'. Since most of the new channels involve collaboration
with various entities whose demands and powers of negotiation are
varied, it requires delicate skills on the part of the insurance company

to manage these relationships. Effective management of channel
conflict, and curtailing the costs of distribution will be of utmost

          Indian Institute Of Information Technology-Allahabad
                                  - 97 -

Appendix D

Insurance companies

IRDA has so far granted registration to 12 private life insurance
companies and 9 general insurance companies. If the existing public
sector insurance companies are included, there are currently 13
insurance companies in the life side and 13 companies operating in
general insurance business. General Insurance Corporation has been
approved as the "Indian reinsurer" for underwriting only reinsurance
business. Particulars of the life insurance companies and general
insurance companies including their web address is given below:


Public Sector

Life Insurance Corporation of India

Private Sector

     Allianz   Bajaj   Life   Insurance     Company         Limited
     Birla Sun-Life Insurance Company Limited
     HDFC      Standard       Life    Insurance     Co.     Limited
     ICICI Prudential Life Insurance Co. Limited

          Indian Institute Of Information Technology-Allahabad
                                         - 98 -

      ING       Vysya       Life         Insurance           Company             Limited
      Max       New       York          Life          Insurance      Co.         Limited
      MetLife Insurance Company Limited
      Om       Kotak      Mahindra             Life      Insurance         Co.      Ltd.
      SBI Life Insurance Company Limited
      TATA AIG Life Insurance Company Limited
      AMP Sanmar Assurance Company Limited
      Dabur CGU Life Insurance Co. Pvt. Limited

Reforms In Insurance Sector

Insurance sector has been opened up for competition from Indian
private   insurance      companies       with     the     enactment    of    Insurance
Regulatory and Development Authority Act, 1999 (IRDA Act). As per
the    provisions   of   IRDA     Act,     1999,        Insurance   Regulatory       and
Development Authority (IRDA) was established on 19th April 2000 to
protect the interests of holder of insurance policy and to regulate,
promote and ensure orderly growth of the insurance industry.

IRDA Act 1999 paved the way for the entry of private players into
the insurance market which was hitherto the exclusive privilege of
public sector insurance companies/ corporations. Under the new
dispensation Indian insurance companies in private sector were
permitted to operate in India with the following conditions:

1. Company is formed and registered under the Companies Act, 1956;

             Indian Institute Of Information Technology-Allahabad
                                   - 99 -

2. The aggregate holdings of equity shares by a foreign company,
  either by itself or through its subsidiary companies or its nominees,
  do not exceed 26%, paid up equity capital of such Indian insurance

3. The company's sole purpose is to carry on life insurance business or
  general insurance business or reinsurance business.

The minimum paid up equity capital for life or general insurance
business is Rs.100 crores.

The minimum paid up equity capital for carrying on reinsurance
business has been prescribed as Rs.200 crores.

Protection of the interest of policy holders:

IRDA has the responsibility of protecting the interest of insurance
policyholders. Towards achieving this objective, the Authority has
taken the following steps:

1. IRDA has notified Protection of Policyholders Interest Regulations
  2001    to   provide   for:   policy      proposal   documents   in   easily
  understandable language; claims procedure in both life and non-
  life; setting up of grievance redressal machinery; speedy settlement
  of claims; and policyholders' servicing.
2. The Regulation also provides for payment of interest by insurers for
  the delay in settlement of claim.

          Indian Institute Of Information Technology-Allahabad
                                  - 100 -

3. The insurers are required to maintain solvency margins so that they
  are in a position to meet their obligations towards policyholders
  with regard to payment of claims.
4. It is obligatory on the part of the insurance companies to disclose
  clearly the benefits, terms and conditions under the policy. The
  advertisements issued by the insurers should not mislead the
  insuring public.
5. All insurers are required to set up proper grievance redress
  machinery in their head office and at their other offices.
6. The Authority takes up with the insurers any complaint received
  from the policyholders in connection with services provided by them
  under the insurance contract.

          Indian Institute Of Information Technology-Allahabad
                                    - 101 -


Equity still the best

Equity continues to remain the fancied asset class for investors-both
for 2005 and over a medium term of three years. Gold, can also give
double-digit returns,is the next preferred class,according to experts.

The Indian economy is witnessing one of its best ever Bull Run on the
bourses. Traditional rules for allocating assets ,making investment
decisions     ,gauging   upside   and     weighing   risk-returns   are   all
changing.And changing rapidly.Those who had followed the golden rule
of investment guru – ―Sell when everyone is buying and buy when
everyone is selling‖- when the equity market had crested the 6000
level early in the year would be representing.As would have those who
, braving the wrath of their wives ,sold off the family bullion.Both
assets have returned double-digit growth on a year on year basis. Had
the investors who had been hasty in booking profits invested in bank
deposits or debt markets , he would have seen his capital eroding bit
with every rise in inflation rates , which is currently hovering around 6-
7 percent.

However, experts believe that 2005 will be The Year of the Equity and
the yellow metal – a view well corroborated by over two dozen market
movers , analysts , brokers ,fund managers and research houses. For
once , the verdict was unanimous. If you have invested , stay
invested. If you have not made allocations, give a higher weightage to
equity class-atleast 40% on a conservative level and 60% for

             Indian Institute Of Information Technology-Allahabad
                                  - 102 -

agggressive investors.The estimate on returns also varied- from the
very conservative 15% to as high as 30% for one year ; and,over a
three year period.

Most analysts also feel that , with no tax on dividend or capital gains ,
there is bound to be a shift in capital from local investors. The total
exposure to equity of the mutual funds boasting of a collective corpus
of Rs.1,50,000 crore is less than 30%.And individual retail investors
account for less than 2%.Given this abysmal level of exposure to
equity , even a fraction change will see incremental funds now parked
in bank deposits , mutual funds and household deposits moving to the
equity markets.

Added to this is the large number of equity offerings in the pipeline.
With. the government going in for piecemeal disinvestment of its
prized public sector offerings , both at the Central and the state level ,
the interest in equity is bound to remain high.

2005 will be The Year of the Equity and the yellow metal

Enthuse banks

One concern expressed by many experts was regarding the low level
of equity held by Indian investors. Most of the gains being lapped up
by FIIS , which have funds virtually on tap.In such a scenario the
government will do well to enthuse banks and institutions to take a
wider exposure to equity.Hardly any banks have breached the 5%
ceiling permitted for equity investments. If the future is indeed bright
and the industry is undergoing a structural change, it makes sense for
          Indian Institute Of Information Technology-Allahabad
                                 - 103 -

them to use their burgeoning base of low cost deposits for temporarily
store housing the shares.Rich profits could be reaped when the proper
price is discovered.

A case in point is the cross-holdings effected in ONGC, Indian Oil and
Gas Authority.All three companies gain more than 15,000 crore over
their investments of less than three years. And this was in a flat
market..Gains in the booming market can be even more.Nationalised
banks were forced to invest in other banks , going in for initial public
offerings , on fears of there not being sufficient takers. However ,
investment in banks , if done by design , would help gilt plate the
bottom line of these institutions , besides ensuring that the collective
wealth remains within the country

For banks which have made wrong calls on reading the dollar
movement and dwindling treasury gains from risking interest rates ,
judicious investments in equity is also a commercial necessity.

Non-index stocks

While stating that equity is the best option , experts take pains to
point out that this is meant for investors willing to take a longer view
and not for traders wearing a grabs of investors. Horizon should be for
atleast one year and more.Moving in and out may not give decent
returns. Quite a few believe that non-Sensex stocks may be in a
position to outperform index returns. However , this requires a proper
selection procedure and adherence to investment discipline. Fund
managers feel that diversified schemes would be the best bet for the

          Indian Institute Of Information Technology-Allahabad
                                  - 104 -

non-savvy investors , though thematic schemes or sector funds may
generate better returns in a bull market.

Investments in Equites will continue to fetch decent returns in

Equities still hold investment potential owing to strong economic
growth , good corporate results , better investment climate , higher FII
inflow and lack of other investment avenues with similar returns.
There are still opportunities to cash in on the growth.

Equity investors should only with a medium-term perspective of at
least threee years and beyond , especially when there has been a
significant rally in the markets over the past two years and the BSE
Sensex is quoting at a historical high of around 6400. However , it
should be kept in mnd that the global experience is that long term
equities as an asset class tend to outperform other asset classes like
bonds ,etc.

Businesses and companies that have a competitive advantage and can
outperform their global rivals will create value. These companies may
lie in the mid-cap sector or the large-cap sector. However , the key
determinant of long term growth capability will be their to create value
innovate and deliver superior performance in the face of global
competition. Any of the mid-caps today may be the large-caps of
tomorrow,which has been demonstrated by the IT sector ,which was in
the mid-cap segment in the early 1990s and today forms a significant
part of the large-cap segment.

          Indian Institute Of Information Technology-Allahabad
                                 - 105 -

Indian equity markets look attractive on account of the
economy’s strong fundamentals.

The equity market is on a growth and dividend yeild basis is looking
far more attractive, compared to bank deposits.The year 2004 was
marked with a great amount of volatility.The markets swung from
euphoria to panic and again back to reasonable levels.It is believed
that the year 2005 will not be as volatile as 2004.

The risk in 2005 could emerge from the fact that the flows , which
have come into the Indian equity markets , could have come from the
currency view. There is a sensus that the dollar is going to weaken .
Dollar funds are chasing non-dollar assets . India has received some of
these flows . If the dollar gets a pull back from the exisiting level ,
some of these flows could return and it could have an adverse impact
on our Indian markets

          Indian Institute Of Information Technology-Allahabad
                                   - 106 -

Appendix F


MetLife believes that every team requires a leader and every leader,

For getting the best out of the team Motivation is a must and so is
inspiring the team to reach greater heights. For doing the same
support from the team leader as well as the Company is a must, which
simultaneously enhances the qualities essential for being a Leader at
MetLife and such qualities, are required to be awarded.

Some of the rewards and recognition are:

     Trigger Award (for the sales manager in self-sales mode)

     Eagle Award (for the sales manager in self-sales mode)

     Eagle Maker (for the sales manager)

     The    President‘s   &   Leader‘s      Conferences   (for   outstanding
      performers of the year)

     The President‘s & Leader‘s Conferences (for Sales Managers)

     The President‘s & Leader‘s Conferences (for Agency Managers)

            Indian Institute Of Information Technology-Allahabad
                               - 107 -

   The President‘s & Leader‘s Conferences (for Regional Managers-

   Best Region Award-Monthly & Best Region Award 2005

   The Best Sales Manager Award

   Sales Hall Of Fame

        Indian Institute Of Information Technology-Allahabad

To top