project on metlife india

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GAUHATI UNIVERSITY A training report submitted in partial fulfillment of the requirements for the award of the degree of the Bachelor of Business Administration (Industry Integrated) 3rd Semester, Gauhati University on “CUSTOMER BEHAVIOUR TOWARDS INSURANCE PRODUCTS” AT METLIFE INDIA VISAKHAPANTAM

Under Organisation Guidance Of: Mr. K.V.R. Murthi Senior Sales Manager Metlife India

Under Institutional Guidance Of: Mr. Hari Krishna Faculty , SITAM

Prepared And Submitted By: Surya Prakash

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CERTIFICATE

This is to certify that Surya Prakash, a student of the Gauhati University has prepared his Training Report entitled “CUSTOMER BEHAVIOUR TOWARDS INSURANCE PRODUCTS” under my guidance. He has fulfilled all requirements under the regulations of the BBA (IIP) Gauhati University, leading to the BBA (IIP) degree. This work is the result of his own investigation and the project; neither as a whole nor any part of it was submitted to any other University or Educational Institution for any research or diploma.

I wish his all success in life.

Mrs. Rajani priya Head of the Department, Sun Institute of Technology And Management, Visakhapatnam

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DECLARATION I HEREBY DECLARE THAT THE PROJECT REPORT CONDUCTED AT Metlife India, Visakhapatnam UNDER THE GUIDANCE OF PROF Hari Krishana Submitted in partial fulfillment of the requirement of the Degree of

BACHELOR OF BUSINESS ADMINISTRATION
Industry integrated 3rd semester

Gauhati University, Assam

Is my original work and the same has not been submitted For the award of any other degree/ diploma/ fellowship or Other similar titles or prizes. Place: Visakhapatnam Date: Surya Prakash

ACKNOWLEDGEMENT

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“Any worthwhile Endeavour is the result of the efforts put in by more than one individual” I acknowledge my indebtedness to all those who helped me in the preparation of this project report. I express my deed sense of gratitude and sincere and sincere thanks to Mr. K.V.R Murthi, Sales Manager of Metlife India, for giving me opportunity to undertake the project “CUSTOMER BEHAVIOUR TOWARDS INSURANCE PRODUCTS” in his esteemed organization under his able guidance. I thank the other organization members for supporting me with timely information. I extend my whole hearted thanks to our beloved Prof. Hari Krishana for his timely advice and unstinted cooperation and devout encouragement throughout the project work. I also thank the faculty members of SUN INSTITUTE OF TECHNOLOGY AND MANAGEMENT, and all my friends for imparting me with theoretical inputs and guiding me for the successful completion of the project.

Surya Prakash

CONTENTS

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SL.NO. Topic 1. Introduction 2. Profile of the origination 3. Discussions on training 4. Study of Selected Research Problems 5. Summary, Conclusions & Bibliography

Pg. No. 3-11 12-25 26-31 32-52

52-57

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CHAPTER-1 INTRODUCTION

INTRODUCTION

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In recent times, there has been growing awareness about life insurance products and the various benefits they offer to individuals. Offerings like unit linked insurance plans (ULIPs) have done their bit to draw individuals towards the insurance segment. Also tax benefits, presently under Section 80C of the Income Tax Act, have contributed to their allure and helped in popularizing insurance products. Conversely, there are products like medical insurance or mediclaim as it is commonly referred to, which can add value to an individual’s insurance portfolio, but are relatively lesser known. Let’s start off with why people need Life Insurance in the first place. An insurance policy is primarily meant to protect the income of the family’s breadwinners. The idea is if any one or both die, their dependents may hereto continue to live comfortably. The circle of life begins at birth, followed by education, marriage and eventually, after a lifetime of work, we look forward to a life of retirement. Our finances too tend to change as we go through the various phases of our life. In the first twenty years of our life, we are financially and emotionally dependent on our parents and there are no financial commitments to be met. In the next twenty years, we gain financial independence and provide for our families. This is also the stage when our income may be insufficient to meet the growing expenses of a young household. In the following twenty years, as our children grow and become financially independent, we see our savings grow, a nest egg put away for life after retirement. The final twenty years of life, post retirement is the time to reap the rewards of our hard work. It is important to remember that with time, our needs and aspirations tend to change and we have to ensure that we have a suitably dynamic financial plan WHY LIFE INSURANCE? Very often it is said that before you let the worry get into your head, buy Life Insurance. Why? Life Insurance provides protection to your family - your family gets a specified sum in a lump sum when they need it the most i.e. when you are not around. While the emotional loss cannot be mitigated, the lump sum received from an insurance company can help take care of your family’s financial future. Life Insurance policies also offer tax benefits though tax saving should not be the primary reason an individual should look at a Life Insurance policy. The most important question is what is the value of your life? Heard of this Yaksha question: What is the greatest mystery on earth? Yudhisthir answers, “Every one has to die. But no one thinks that for himself. This is the greatest mystery. That is the paradox that makes people avoid life insurance! That also makes agents take the wrong line of selling Insurance as a tax saving and/or Investment product (ULIP). So what should we do? Start with calculating the Human Life Value (HLV). A very simple way of looking at it is as following: Imagine a monthly income of Rs 10000 and the net income provided

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to the family is Rs./- 8000 after deducting Rs 2000 for personal expenses. Thus the annual income provided to your family is Rs 96000. The amount of money that will earn Rs 96000 p.a. at 8% interest rate is Rs 12,00,000. This is only a representation of the value of HLV. It is not the exact way of calculating your HLV. The future income growth, your income generating assets, liabilities, spouse income, children’s education, etc are also to be factored in. Various private insurers like Bajaj Allianz, Met Life etc. have placed on their websites the HLV calculators to make you understand the HLV and your life insurance needs better. Indian consumers have bought life insurance for reasons of tax saving rather than the core need of providing for one’s family in case of death of breadwinner. With largest number of life insurance policies in force in the world, Insurance happens to be a mega opportunity in India. It is a business growing at the rate of 15-20 percent annually and presently is of the order of Rs 450 billion. Together with banking services, it adds about 7 per cent to the country’s GDP. Gross premium collection is nearly 2 per cent of GDP and funds available with LIC for investments are 8 per cent of GDP. MYTHS ABOUT LIFE INSURANCE Nearly 80 per cent of Indian population is without life insurance cover while health insurance and non-life insurance continue to be below international standards. And this part of the population is also subject to weak social security and pension systems with hardly any old age income security. This itself is an indicator that growth potential for the insurance sector is immense. Life insurance is not bought in India. General insurance is often bought because there are compulsions under the law (motor vehicles, public liability, workmen etc.) or from the financiers asking for insurance as collateral security. In the case of life insurance, there is very little compulsion. The tendency is to defer the decision. The possibility of death is either ignored or not considered imminent. Most people never do believe that they can succumb to destiny and they think, they will live a long and healthy life. Sadly, that is not always true. A prudent financial plan needs to build in the risk of dying too early to ensure that our family’s financial future is protected. There are financial tools that help us determine the “risk of dying early” leading to the quantum of Life Insurance required. While the algorithms may be different, conceptually, all that these tools try and determine is the present value of your future earnings keeping in mind your future goals and aspirations. It is important that Bimaquest - Vol. VIII Issue I, January 2008 q 43 Life Insurance Industry-Past, Present & the Future each one of us put some thought into the potential exposure of our family to the risk of the primary wage earners risk of dying too early and arrive at the level of protection required. Before we get into the recommended approach to Life Insurance, let us delve on some of the myths surrounding Life Insurance in India. These myths will help explain why the

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number of individuals insured and the average amount of insurance cover per individual is so low in our country. Life insurance protects you and your loved ones in the event that you meet with an untimely demise. You are accustomed to a certain standard of living, and you would like to sustain the same standard of living for your wife in your absence. Maybe you would like your grandchildren to receive some money from you as well, even in your absence. Life insurance can help you achieve such goals. TAX SAVING CONCEPT The question that we should ask ourselves is - do we believe that destiny will announce its arrival in our lives? Will destiny always allow you to complete your tax planning for the year and then strike? The answer is a resounding ‘no’. However, lack of education has made customers believe that insurance is a tax-planning tool and the protection element is only a marketing strategy. Sad, but true; this is the way Life Insurance has been largely sold in this country. Individuals buy “enough” Life Insurance to get tax breaks just before the financial year ends. The moot question is - are we buying Life Insurance to save taxes or are we buying it to protect our family’s financial future? Since people believe that nothing ever can happen to them, the decision on quantum of insurance cover and timing is made just before the financial year ends. There is a large potential in rural India. As stipulated by the Insurance Regulatory Development Authority, five per cent of our new business must cover rural India and the figure must reach 15 per cent by the fifth year. All of this is very encouraging for the life insurance sector. Innovative products, smart marketing and aggressive distribution, that’s the triple whammy combination that has enabled fledgling private insurance companies to sign up Indian customers faster than anyone ever expected. Indians, who have always seen life insurance as a tax saving device, are now suddenly turning to the private sector and snapping up the new innovative products on offer. GUARANTEED RETURNS The question we need to ask is - how much is the guaranteed return that a Life Insurance contract can give. The answer is, “I do not know.” Unfortunately, individuals expect life insurance companies to give “high guaranteed” returns. What most individuals fail to understand is that life insurance contracts are long-term contracts. The way in which the contract works is that the premium that each of us pays gets invested after deducting for the cost of mortality44 q Bimaquest - Vol. VIII Issue I, January 2008 Life Insurance Industry-Past, Present & the Future and other administrative expenses of the insurance company. Since the premium is paid over a period of time, the investment return that the insurance company can generate on

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our savings depends upon the prevailing investment opportunities at the time when the premium is paid. With volatility in interest rates and capital markets, the level of investment return that an insurance company can generate can vary substantially. In such a scenario, where is the scope for the insurance company to offer a fixed return to their policyholders but have an earning stream that is highly volatile and variable? Interest rates on Government of India securities have fallen by over three hundred basis points in the last three years. Given such an economic environment, it is foolhardy to expect that the “high guaranteed return” policies can continue for very long. The classic example is Japan where with interest rates at sub zero levels, insurance companies that offered guaranteed return policies to their policyholders are going down. Again, if you are buying Life Insurance for the “high guaranteed return” the policy offers, please examine the company and the product again. Your insurance company may not be able to pay you the promised return when your family needs the money most. SELECTION OF RIGHT PRODUCT Almost all the insurance companies offer what is called an “illustration” to customers the illustration is designed to help the customer understand the policy values better. From a customer point of view, it is imperative that each customer understands and is able to determine the benefits of the product. Given the long-term nature of the Life Insurance contract, it is important to look at the profile of the life insurance company that is underwriting the risk. Given that all the private sector insurance players are new to the business, it would help to look at the past record of the foreign partner in the joint venture and the ability of the Indian partner to continue to infuse capital, given the capital-intensive nature of the business. Again, it is very simple to compare the product with other company products because almost all insurers have their web portals with their product details. Even cost comparisons can be made through premium calculators. What is needed most is the guaranteed return and wider risk coverage. Riders are very economical and one should always choose the desired riders along with the basic life insurance policy. THE STIFF COMPETITION The competition is stiff and, besides, there’s a behemoth to contend with. Private players realize what they are up against and are, consequently, tailoring their strategy to suit the circumstances. Unlike the non-life segment, selling life insurance requires a more personal touch, which is why good agents are important in this business. In life insurance, policies are ‘sold’ not ‘bought’. As of now about 60 per cent of the agents work on a part-time basis, but the ratio will come down to 50 per cent by the end of their 10th year in operation. All insurance agents’ earnings are

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commission-based. They make a 40 per cent commission in the first year on new business and 7.5 per cent in the next two years on renewable business. The commission rate declines to 5 per cent in the fourth year. All insurers are careful about selecting and training their agents. They want them to remain committed. Insurers know that there is enough business for everybody. Even if an insurer gets 1 to 2 per cent of the 250 to 300 million insurable Indians, it would have covered a lot of ground. The growing popularity of the private insurers shows in other ways. They are coining money in new niches that they have introduced. The state owned company still dominates segments like endowments and money back policies. But in the annuity or pension products business, the private insurers have already wrested over 33 percent of the market. And in the popular unit-linked insurance schemes, they have a virtual monopoly with over 90 percent of the customers. FEW PROMINENT REASONS OF FAILURE 1. Beneficiary: The most prominent feature of a life insurance policy is the beneficiary clause, which facilitates the easy transfer of your money to your successors. However, you need to be aware of the different kinds of beneficiaries in life insurance. You can have your children as multiple beneficiaries. All you have to do is to indicate the names of these recipients and the amount of proceeds that they are going to get. Naming a contingent beneficiary is always practical. Suppose that your first beneficiary dies near the time of your own death. In that case, your children will qualify for your insurance money if you nominate them as contingent or secondary beneficiaries. A contingent beneficiary can get life insurance proceeds if the primary beneficiary dies before he or she can receive the assets. If you have named your minor child as a beneficiary, you will have to appoint a guardian/appointee who will administer the insurance proceeds upon your death. As revocable beneficiary, the recipient can be changed any time during the policy. While in irrevocable beneficiary clause as in the case of absolute assignments, you cannot change your assignee’s name unless they consent to it. With an irrevocable assignee, creditors cannot touch the policy proceeds, as these monies are not considered to be a part of your assets. 2. Lapsation of policy: It can happen that due to certain circumstances you forget to pay your premiums, even in the specified grace period. Unfortunately, because you have missed the deadline your policy will lapse. Consequently, your insurance company can stop covering you or may provide you reduced insurance coverage equivalent to the total premiums paid formerly (also called paid-up policies). Nonetheless, a lapsed46 q Bimaquest - Vol. VIII Issue I, January 2008 Life Insurance Industry-Past, Present & the Future policy may be renewed in some plans,

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although the exact renewal procedure varies among different insurers. Revival of policy is not simple. Other than payment of interest the life insured has to undergo the medical examination and accordingly the policy terms may be revised. 3. Cash Surrender Value: Permanent life insurance policies like universal life insurance, whole life insurance and variable life insurance are more attractive because of the presence of built-in cash value. Term life insurance policies do not offer cash values. The interesting aspect of these policies is that you can surrender your policy and get the accrued cash value in your hands provided you have a substantial amount of cash value. Cash Value is a part of your premium is put in savings or another investment account according to the type of policy you purchase. As a result, the ongoing interest you receive from your investment account gradually increases your cash value. 4. Non-Forfeiture Options: In permanent life insurance policies, if you fail to pay the premiums in the grace period, you won’t lose your life insurance - your accumulated cash value will come to your rescue with the following options. The above nonforfeiture options may differ from one insurance company to another. 5. Surrender: It is always easy to terminate (surrender) your policy and get the entire cash surrender value, which will solve your liquidity problems. However, you need to consider many factors before surrendering your policy, such as the increase in the cash surrender value if your policy is maintained for the full term. Consult your insurance advisor to about the full consequences of these issues before deciding whether the policy should be cashed or kept. 6. Policy Loan: Another positive characteristic of a life insurance policy is that you can take out a policy loan against your policy to cater to your emergency needs. The interest is relatively low and the policy loan can be repaid in a lump sum or installments. If you are incapable of repaying your policy loan, your insurance company will use your cash value to settle the loan. 7. Dividends: Dividends are the earnings paid out by the insurer to its shareholders and/ or policyholders. You are entitled to enjoy the fruits of your insurance company’s labor, for example, dividends if you own a participating policy. THE INDIAN PSYCHE Traditionally, the psyche of the Indian insurance seeker has been such that they have been averse to term insurance plans. Term plans require regular premium payments to be made throughout the tenure of the policy; the sum assured is paid only upon the unfortunate death Bimaquest - Vol. VIII Issue I, January 2008 q 47 Life Insurance Industry-Past, Present & the Future of the policyholder during the

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policy tenure. If the policyholder survives the tenure, he is paid nothing; in other words, there are no survival benefits. The absence of survival benefits makes these plans rather unpopular among policyholders, as they like to receive a return as a reward for investing. They fail to appreciate that insurance is about ‘insuring’ and not ‘investing’, so typically there should not be any expectations of a return. A medical claim policy or car insurance or home insurance or factory/warehouse insurance doesn’t offer returns. Similarly, there are no returns from a term plan. To worsen matters, insurance advisors weren’t interested in educating insurance seekers about why term plans are a must-have for every individual regardless of age. This gave a fillip to endowment plans not only because they pay the sum assured on the unfortunate death of the policyholder during the policy term, but also because they pay a survival benefit if the policy holder survives the term. However, now some private players have introduced the ‘Term Plans’ where the proceeds are also paid on maturity of the policy if the insured survives.

POTENTIAL OF LIFE INSURANCE BUSINESS IN INDIA: India’s life insurance market has grown rapidly over the past six years, with new business premiums growing at over 40% per year. The premium income of India’s life insurance market is set to double by 2012 on better penetration and higher incomes. Insurance penetration in India is currently about 4% of its GDP, much lower than the developed market level of 6-9%. In several segments of the population, the penetration is lower than potential. For example, in urban areas, the penetration of life insurance in the mass market is about 65%, and it’s considerably less in the lowincome unbanked segment. In rural areas, life insurance penetration in the banked segment is estimated to be about 40%, while it is marginal at best in the unbanked segment. The total premium could go up to $80-100 billion by 2012 from the present $40 billion as higher per capita income increases per capita insurance intensity. The average household premium will rise to Rs 3,000-4,100 from the current Rs 1,300 as will penetration by the existing and new players. India’s ratio of life insurance premium to its GDP is around 4 per cent against 6-9 per cent in the developed world. It could rise to 5.1-6.2 by 2012 in tandem with the country’s demographic profile. India has 17 life insurers and the stateowned Life Insurance Corp. of India dominates the industry with over 70 percent market share, though private players have been growing aggressively. Considering the world’s largest population and an annual growth rate of nearly 7 per cent, India offers great opportunities for insurers. US based online insurance company ebix.com plans to enter the Indian market following

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deregulation of its insurance sector. Online insurer ebix.com’s expansion into India is a major step for the company to become a global supplier of internet-based insurance tools for consumers and insurance professionals. In a diverse country such as India it is imperative that a universal insurance infrastructure be created to maximize efficiency in the insurance industry. Online insurer ebix.com can offers the Indian market a business-to-consumer internet portal where consumers have more choice while purchasing insurance and an internet-based agency management system that will help agents work more efficiently with multiple carriers. Foreign holding in Indian insurance companies is limited to 26 per cent. The government wants to increase the cap to 49 percent, but its communist allies oppose such a move. The market is moving beyond single-premium policies and unit linked insurance products which are easier to sell. The agency model is the dominant sales channel accounting for more than 85 per cent of fresh premiums but overall inactivity and attrition is much higher at 50-55 per cent than the global average of 25 per cent. Opportunities include health insurance and pensions, the report said, adding only 1.5-2 percent of total healthcare expenditure in India was currently covered by insurance. A life insurance policy covers one’s personal self. Unlike with general insurance, it is not like insuring a vehicle. Having said that, if we consider that India’s population is over one billion and growing, we get a picture of the true potential of the life insurance sector in India. . PENETRATION- LOWER THAN POTENTIAL Management consultancy firm McKinsey has forecast that India’s life insurance industry will be double in the next five years from $40 billion to $80-100 billion in 2012. This growth would improve the level of insurance penetration from 5.1% of gross domestic product to 6.2% in 2010-2012. The Indian life insurance industry could witness a rise in the insurance sector premiums between 5.1% and 6.2% of GDP in 2012, from the current 4.1%. Total market premiums are likely to more than double during this period, from about $40 billion to $80-100 billion. This implies a higher annual growth in new business annual premium equivalent (APE) of 19% to 23% from 2007 to 2012. The large part of the growth would come from second- and third-tier cities and small towns. Based on MGI forecasts, 26 tier-II cities with population greater than one million and 33 tier-III towns with the population of more than 5 lakh will account for 25% of the middle class and newly bankable class in 2025. Over 5,000 tier-IV small towns will account for as much as 40% of these two classes in 2025. However, if an insurer decided to be a niche player and concentrated on metros and their suburbs, they will have a big market, since 60% of

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the very rich (annual income over Rs 10 lakh) would be concentrated in the top eight cities. Although these consumers will be highly accessible, players will have to reckon with intense competition that is only going to increase and extend to other segments as well. NEW JOINT VENTURE SET UPS Canara Bank, Oriental Bank of Commerce (OBC) and HSBC Insurance (AsiaPacific) Holdings Ltd have signed an agreement to jointly establish a life insurance company in the country. The company has been christened Canara HSBC Oriental Bank of Commerce Life Insurance Company Limited. Canara Bank would take a 51 per cent stake in the company, while HSBC and OBC will hold 26 per cent and 23 per cent stake respectively. The new life insurance company will be capitalised at Rs 325 crore, of which Canara Bank will contribute Rs 102 crore, HSBC Rs 177 crore and OBC Rs 46 crore. Under the terms of the agreement, HSBC would provide a range of management services, which would include nominating executives for certain senior roles. While both Canara Bank and OBC offer an extensive client base, complementary distribution networks and broad local market knowledge, HSBC brings to the partnership its considerable insurance experience, product range and proven banc assurance capabilities. IRDA gave clearance to a joint venture between Kishore Biyani’s Pantaloon Retail India and Italian insurance firm The Generali Group to start insurance businesses. The joint venture, Future Generali India Life Insurance Company Ltd, would transact life insurance business. Besides, it also granted approval to Future Generali India Insurance Company to transact general insurance business. Generali is one of the largest insurance groups in the world, operating in 40 countries through 107 companies. It ranks 22 in the list of Fortune 500 companies and is the largest corporation in Italy with an asset base of over 300 billion euro.Bimaquest - Vol. VIII Issue I, January 2008 q 51 Life Insurance Industry-Past, Present & the Future. EYING ABROAD Although Japanese insurance companies account for one-fifth of the total life insurance premium in the world, they have been slow to expand internationally as most companies were going through a consolidation phase locally. The crash in interest rates to near-zero levels in Japan had made it difficult for insurance companies to generate surpluses to cover costs. Financial sector juggernaut LIC of India is now on the look out for a potential buy abroad. The company is planning to use its massive cash reserve to finance the acquisition of a company in the New Zealand and Australia markets. If approved, LIC would become the second public sector financial institution, after State Bank of India, to acquire a company abroad.

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For LIC, a buyout of an insurance company Down Under could make sense, as it has already established its presence in some of the Oceania markets, like Fiji. The plan would, however, require prior passage of the amendments to the LIC Act, to enable the company to raise its paid-up capital from Rs 5 crore to Rs 100 crore, at par with private insurers. The government plans to amend the Act passed in 1956 to give more flexibility to the largest insurance company to expand its footprint. LIC commands a 77% market share. Its premium income soared to 182.26% during the period against the industry average of 177.44%. Its new premium grew 191% to Rs10,381.57 crore as in August ’06. It has offices in the UK, Nepal, Bahrain, Kenya and Mauritius other than Fiji. But its UK operations have not been able to grow at the expected rate. While the insurance industry in the UK is growing at 10- 12%. AGENTS Life insurance agents from India are moving fast into the realm of global insurance. The total number of Indian agents registering with the Million Dollar Round Table, a prestigious international trade association of insurance agents, has more than tripled to 1,931 agents for 2007 compared with 532 in 2006. The MDRT has a total of 35,781 qualifiers. Which is 1% of the total insurance agents or advisors in the world. Within the MDRT, there are three levels such as the basic MDRT, the Court of Table (CoT) and Top of Table ( ToT). To qualify for tht MDRT, an Indian insurance agent has to get a premium of Rs. 23.92 lakh to his insurance company or earn a commission of Rs. 5.98 lakh. For the agent to qualify for the CoT, he has to do thrice the MDRT business, while to qualify for the TOT, insurance agent has to do six times the business required for the MDRT. On the other hand IRDA has taken the first step to crack the whip on agents misleading customers on unit-linked insurance plans. To start with, it has tightened the norms for sale of actuarial-funded unit-linked products which are on their way out. The Regulator intends asking customers and agents to sign illustrations on the entire gamut of ULIP products offered by insurers. While the features of ULIPs vary from product to product, the onus will be on agents to indicate the explanation that customers have been given on the nature of investment. Agents will also have to give a break-up of the money spent on various expenses. The objective is to enlarge the scope of disclosures made by agents and such transparency will be in the interest of the entire insurance sector. IRDA appears to be taking the UK route to tackle mis-selling of policies. In the UK, if an agent is accused of mis-selling, the onus is upon the insurer to prove that the policy was explained. Similarly, insurers in India will now have to retain documentary evidence to prove that the policy was properly explained to the insured. In the UK, the experience has been the complaints of miss-selling emerge after a period when policyholders discover that their investments were performing far worse than they

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were told to expect. Actuarial-funded products have a complex structure, where the insurance company Bimaquest - Vol. VIII Issue I, January 2008 q 53 Life Insurance Industry-Past, Present & the Future allocates significant sums to the policyholder’s account in the first year. However, these initial allocations are notional i.e. in the form of actuarial units, which convert into real money only in the future. The downside of such products is that there is not much balance in the policyholder’s account in the initial years.

CHAPTER-2 PROFILE OF THE ORGANISATION

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ORIGIN OF METLIFE INDIA MetLife, Inc. is the holding corporation for the Metropolitan Life Insurance Company, commonly known as MetLife. The firm was founded on March 24, 1868. For most of its life the company was a mutual organization, but it went public in 2000. MetLife is the largest life insurer in the United States, with more than $3.3 trillion of life insurance in force. A leader in savings and retirement products and services for individuals, small business, and large institutions, MetLife serves 90 of the largest Fortune 100 companies. The company is headquartered at 1095 Avenue of the Americas in Midtown Manhattan, New York City, though it retains some executive offices and its board room in the MetLife Building, which it sold in 2005.

19th century

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The Metropolitan Life Insurance Company Tower, which served as company headquarters and was featured in its advertising for many years 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. 1868 March 25, one day after the Company opened its books, the first policy carrying the name of the Metropolitan Life Insurance Company was issued. Dr. James R. Dow, a retired physician from Brooklyn, NY, was named Metropolitan Life’s first President. He held this position until 1871. The Company’s office consisted of two and a half rooms; it was located at 243 Broadway in Lower Manhattan. By the close of business in 1868, the Company had issued 1,477 policies for $4,340,000. In 1869 Metropolitan moved its office to the 3rd floor of 319 Broadway. 1870 By the end of the year, Metropolitan had on its books in excess of $13,000,000 of insurance, an increase of 93 percent over the previous year. The Company’s Field Force numbered approximately 80 agents. 1871 Joseph F. Knapp was named Metropolitan Life’s second President. He held this position until 1891. The Company began a series of health and safety messages in Company periodicals for distribution to its employees and policyholders. 1873 Despite a depression, Metropolitan issued 12,242 policies for $17,753,000. These figures placed it third in number of policies and fifth in aggregate of insurance for that year. 1875 The company purchased its first home of its own. Located at Park Place and Church Street in Manhattan, it was occupied early the following year. 1877 Two Metropolitan firsts: a female clerk was hired, and the Company used its first typewriter. In 1879, MetLife President Joseph F. Knapp turned his attention to Britain, where "industrial" or "workingmen's" insurance programs were widely successful. By importing British agents to train an American agency force, MetLife quickly transferred successful British methods for use in the United States. By 1880, the

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company was signing up 700 new industrial policies a day. Rapidly increasing volume quickly drove down distribution costs, and the new program proved immediately successful. 1880 A total of 213,878 industrial policies were written, with a value of more than $9,000,000

20th century

MetLife Building, served as MetLife's headquarters from the late 1980s through 2005 and today retains the MetLife logo on its exterior At the turn of the century, Metropolitan and other large insurers reaped the bulk of their profits from industrial life insurance, or insurance generally sold house-to-house by solicitors in poor urban areas. Industrial workers paid double what others paid for ordinary life insurance, and due to high lapse rates, as few as 1 in 12 policies reached maturity. The rest lost their entire investment. Prominent lawyer and future Supreme Court Justice Louis Brandeis helped pass a 1907 Massachusetts law to protect workers by allowing savings banks to sell life insurance at lower rates. 1902 The Parker Building was acquired by the Metropolitan Life Insurance Company in 1902. The acquisition was brokered by Frank E. Smith through John F. Hollingsworth. The latter accepted the Westminster Hotel, at Irving Place, as partial payment. In 1907, the company commissioned the Metropolitan Life Insurance Company Tower to serve as its headquarters in Lower Manhattan; completed two years later,

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the building was the world's tallest until 1913 and remained the company's headquarters until 2005. For many years, an illustration of the building (with light emanating from the tip of its spire and the slogan, "The Light That Never Fails") featured prominently in MetLife advertising. Beginning in the 1930s, the company broadened its tradition of public service from promoting individual health to fostering national social and economic goals. In 1930, MetLife was the undisputed leader of the insurance industry, insuring every fifth man, woman, and child in the United States and Canada. On the way it supported the country and the community in many ways. For example,
? ? ?

In 1931 MetLife provided the outside capital to build Rockefeller Center. The company lent money to construct the Empire State Building in 1929. During World War II, the company placed more than 51 percent of its total assets in war bonds, and was the largest single private contributor to the Allied cause.

Metropolitan Life logo, ca. 1970

In 1980, the company completed the largest single building purchase (of the Pan Am Building) in history. Since the 1980s Snoopy has been the mascot taken from the Peanuts cartoons, apparently as a MetLife rep. Many other characters from the Peanuts cartoons have also been featured in MetLife television commercials. In 1998, the board of directors authorized demutualization. In 1998, The MetLife Headquarters building was featured in Godzilla and half of it was destroyed when The Monster walked through it.

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21st century In 2000, Metropolitan Life Insurance Company (MetLife) launched the seventh largest IPO ever held in the United States. 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.

The Metlife 'Snoopy Two' blimp In 2001, immediately after the September 11th terrorist attacks, MetLife invested $1 billion in the US stock marketThe MetLife Headquarters building was featured in Spider-Man: The Movie (game), released in 2002. In 2006, MetLife appointed C. Robert (Rob) Henrikson chairman of the board of directors, president and chief executive officer of MetLife, Inc. Henrikson was appointed CEO on March 1, 2006 and chairman of the board on April 25, 2006. In 2008, MetLife Bank, N.A., a division of MetLife Inc., purchased the residential mortgage business of Memphis-based First Horizon National Corporation. The purchase included the home loan unit ofFirst Tennessee Bank National Association (outside Tennessee), with 230 offices in the US. The same year, MetLife also purchased the Reverse Mortgage division of Florida-based Everbank Financial Corp. Both transactions were successfully completed in a bid to expand the company's stake in the US housing market.In 2010, Working Mother magazine honored MetLife by again naming the company one of the "100 Best Companies for Working Mothers," for the twelfth consecutive year. In 2010, MetLife was also again named to the National Association for Female Executives’ annual list of Top 30 Companies for Executive Women. On 8 March 2010, Met Life Announced the acquisition of the international leader life-insurance business, American Life Insurance Company (Alico), from American International Group (AIG). MetLife [MET] will pay approximately $15.5 billion, including $6.8 billion in cash and the remainder in equity

23

securities. On Nov 03, 2010, MetLife [MET] completed its acquisition of American Life Insurance Company for $16.2 billion.

Services MetLife serves group benefit products and Individual benefit products. International segment serves these products to groups and individual in the Asia/Pacific region, Europe, and Latin America. The company's reinsurance business operates as Reinsurance Group of America, but serves customers around the world. The reinsurance business was spun off in 2008-2009 in a limited IPO for RGA.

MetLife Hall of Records, Yonkers, New York

Products •
•

Met Bhavishaya Met Monthly Income Plan Met Suvidha (Par) Met Suvidha (Non-Par) Met Suraksha

• • •

24

• • •

Met Pension Plan Met One Met Endowment Plan

Life Insurance is the fastest growing sector in India since 2000 as Government allowed Private players and FDI up to 26%. Life Insurance in India was nationalised by incorporating Life Insurance Corporation (LIC) in 1956. All private life insurance companies at that time were taken over by LIC. In 1993 the Government of Republic of India appointed RN Malhotra Committee to lay down a road map for privatisation of the life insurance sector. While the committee submitted its report in 1994, it took another six years before the enabling legislation was passed in the year 2000, legislation amending the Insurance Act of 1938 and legislating the Insurance Regulatory and Development Authority Act of 2000. The same year that the newly appointed insurance regulator - Insurance Regulatory and Development Authority IRDA -started issuing licenses to private life insurers. As per the current (Mar 06) FDI norms, foreign participation in an Indian insurance company is restricted to 26.0% of its equity / ordinary share capital. The Insurance Regulator has stipulated that foreign investment in Indian Insurance companies be limited to 26% of total equity issued (FDI limit) with the balance being funded by Indian promoter entities. The limit to foreign investment includes both direct and indirect investment and has been a cause of significant lobbying by foreign insurance companies for a change in regulations to increase the FDI limit to 49% of equity issued. The Indian government has supported an increase in the FDI limit, which requires a change in the Insurance Act. The Union Budget for fiscal 2005 had recommended that the ceiling on foreign holding be increased to 49.0%. A change in the Insurance Act requires a passage of the bill in both houses of Parliament. The Indian government has tabled the bill in the Upper House of Parliament in August 2010. Initial Public Offer (IPO) rules for Indian Life Insurance Companies A key piece of legislation impacting on the Life Insurance industries capital raising abilities is the lock-in period of 10 years for investment to be limited to promoter group equity investments. Under the Insurance Guidelines, Indian Life Insurance

25

companies can opt for a public issue of equity through an Initial Public Offer (IPO) after 10 years of operations. In October 2010, the securities market regulator, Securities and Exchange Board of India (SEBI), issued disclosure norms for Indian Life Insurance Companies seeking to make an initial public offer for sale of equity shares to the public.

Commission / intermediation fees
?

The maximum commission limits as per statutory provisions are:

Agency commission for retail life insurance business: 7- 90% for 1st year premium if the premium paying term is more than 20 years
?

7- 10% for 1st year premium if the premium paying term is more than 15 years
?

7- 10% for 1st year premium if the premium paying term is less than 10 years
?

7% - yr 2 and 3rd year and 3.5% - thereafter for all premium paying terms.
?

In case of Mutual fund related - Unit linked policies it varies between 1.5% to6% on the premium paid. • • • • Agency commission for retail pension policies 7.5% for 1st year premium and 2.5% thereafter Maximum broker commission - 30% Referral fees to banks – Max 55% for regular premium and 10% for single premium. However in any case this fee cannot be more than the agency commission as filed under the product. However, the above commission may be further subject to the product wise limits specified by IRDA while approving the product.

•

Effective marketing strategies

26

Now the Indian consumer is knowledgeable and sensitive. Consumers are increasingly more aware and are actively managing their financial affairs. People are increasingly looking not just at products, but at integrated financial solutions that can offer stability of returns along with total protection. In view of this, the insurance managers need to understand more about the details that go into the introduction of insurance products to make it attractive in this competitive market. So now days an insurance manager requires leadership, commitment, creativity, and flexibility. "Every family in every village in the country should feel safe and secure". This vision alone will help to bring the new ideas to the insurance manager. Financial, marketing and human resource polices of the corporations influence the unit mangers to make decisions. Performance of insurance company depends on the effectiveness of such policies. Insurance corporations formulate and revise these policies from time to time to ensure that the performance of the managers is best for the organization. In the competitive market, insurance companies are being forced to adopt a strictly professional approach in marketing. The insurance companies face the challenge of changing the uninspiring public image of the industry. Some of the important marketing elements are• Marketing mix. • The importance of relationship. • Positioning. • Value addition. • Segmentation. • Branding.

27

• Insuring service quality. • Effective pricing. • Customer satisfaction research.

ORGANIZATION FORM AND STRUCTURE

CEO CMO Channel Head Regional Head Branch Head SalesC MEOanager Advisors/Agents Customers

DEPARTMENT

They are providing following areas or departments: 1) Retail Sales 2) Under Writing 3) Actuarial 4) Insurance Operations 5) Customer Service 6) Quality and Processes 7) Human Resources

28

CHAPTER-3 DISCUSSIONS ON TRAINING

29

DISCUSSIONS ON TRAINING WORK PROFILE: I studied the profile of the organization by undergoing training with the help of training manger Mr. K.V.R.Murthi . In training i learned about the products of Metlife India. After the training we were assigned with the task of examining the behaviour of customer towards life insurance product. In Metlife India I learned about 8 products in training programme given by Mr. K.V.R Murthi. Met Suraksha Plan overview MetLife offers Met Suraksha - Term Assurance (TA), a non participating term assurance plan which provides you life cover at a nominal cost. To put it simply, it is a life insurance plan that gives you complete protection to enjoy life to the fullest. You can further customize your plan with two riders – Accidental Death Benefit and Critical Illness. Minimum Entry Age Maximum Entry Age Maximum Maturity Age Minimum Sum Assured Maximum Sum Assured Policy Term 18 years 60 years 65 years Rs. 50,000 No Limit 5, 10, 15, 20, 25 years and Term to age 60 Single Pay, Limited Pay (3 years), Regular Pay

Premium Paying Terms Death Benefit In the event of death of the Person Insured, the Sum Assured is payable. Maturity Benefit There are no Maturity benefits available under this plan. Advantages 1. Low cost, low risk insurance plan. 2. Option of different premium paying modes to suit various income cycles.

30

3. *Tax Benefits as applicable.

Met Suraksha TROP Plan overview MetLife offers Met Suraksha - Term with Return of Premium (TROP), a non participating term assurance plan which provides you life cover at a nominal cost. To put it simply, it is a life insurance plan that gives you complete protection to enjoy life to the fullest. You can further customize your plan with two riders – Accidental Death Benefit and Critical Illness. What’s more, it also gives you the option of getting back all the premiums paid at maturity. Minimum Entry Age 18 years Maximum Entry Age 50 years Maximum Maturity 65 years Age Minimum Sum Rs. 2,00,000 Assured Maximum Sum No Limit Assured Policy Term 15 & 20 years Premium Paying Single Pay, Limited Pay (3 years), Terms Regular Pay Death Benefit In the event of death of the Person Insured, the Sum Assured is payable. Maturity Benefit On maturity of the policy, you receive the total of all premiums plus the Guaranteed Additions. The Guaranteed Additions are equal to 10% of premiums (including policy fee) paid (and excluding extra premiums and rider premiums if any). Advantages 1. Low cost, low risk insurance plan. 2. Choice of a level term plan with or without return of premium. 3. Guaranteed returns of 10% of premium (including policy fee) paid (excluding extra premiums and rider premiums, if any) along with return of premium option of Met Suraksha.

31

4. Option of different premium paying modes to suit various income cycles. 5. *Tax Benefits as applicable. Met Bhavishya MetLife offers 'Met Bhavishya' - a guaranteed money back plan that pays out funds to help you meet the education and career milestones of your children. With this plan, the Life Insured is that of the parent. The plan also has inbuilt guaranteed additions to add value to the policy over its term. 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 is suitable for parents with children between the ages 0-12 and parents in the age group of 20-50 years old. Coverage Term Option A Minimum Entry Age of 0 years the Child Maximum Entry Age of 8 years the Child Minimum Entry Age of 20 years the parent Maximum Entry Age of 50 years the Parent Policy Term 21 years - Age at Entry Minimum Sum Assured Rs 1,00,000 Maximum Sum Assured No Limit

Option B 0 years 12 years 20 years 50 years 25 years - Age at Entry Rs 1,00,000 No Limit

Death Benefit In the event of death of the Person Insured (the parent), the family will receive a lump sum payment of Sum Assured. The fixed term payment and maturity benefits will continue irrespective of the death of the Life Insured and all future premiums on the policy would be waived. Maturity Benefit On maturity of the policy, the plan offers Guaranteed Periodic Additions and Terminal Additions: 1. Guaranteed Periodic Additions of 5% of the Sum Assured for every completed year. 2. Terminal additions of 20% of the total Guaranteed Periodic Additions. Guaranteed Payouts Option A: Policy matures at age 21 of the child.

32

Age of the Child 15 years 17 years 20 years 21 years

Percentage of Payout 20% of Sum Assured 30% of Sum Assured 50% of Sum Assured Guaranteed Additions

Assumed Milestone Class X Class XII College Higher Education

Option B: Policy matures at age 25 of the child. Age of the Child 17 years 21 years 23 years 25 years Percentage of Payout 20% of Sum Assured 30% of Sum Assured 50% of Sum Assured Guaranteed Additions life. 2. Guarantee of policy continuance in case of the untimely demise of parent. 3. Guaranteed payouts of 250%* of the chosen Sum Assured. 4. *Tax Benefits as applicable. Assumed Milestone Class XII College Higher Education Wedding

1. Guaranteed payouts at critical milestones of the child’s

Met Monthly Income Plan
MetLife offers 'Met Monthly Income Plan' a participating plan which guarantees you a monthly regular income for you and your family when you are there and even if you are not there for 15 years or till end of the policy term. Moreover you choose the monthly income that you want and we guarantee you that amount. A plan which provides for your retirement needs and helps you achieve financial freedom - 'Guaranteed'. Entry Age (Last Birthday) Maximum Maturity Age Minimum Monthly Income Sum Assured (fixed) Premium Payment Term Policy Term Riders Min – 18 years Max – 60 years 85 years Rs. 1,000 p.m. 180 times the Monthly Income 5 years/10 years 20 years/25 years

Death Benefit

33
In the unfortunate event of your death your nominee/beneficiary will receive:1. During the Premium Payment Term - 25% of the Base Sum Assured plus all accrued simple reversionary bonuses is payable immediately. The monthly regular income also starts from the first monthly anniversary falling after the date of death and continues to be paid to the nominee/beneficiary for the next 15 years. At the end of 15 years from the date of first monthly regular income payment, the policy ceases with payment of "Terminal Bonus", if any. 2. After the Premium Payment Term - 25% of the Base Sum Assured plus all accrued simple reversionary bonuses is payable immediately. The monthly regular income to the nominee/beneficiary continues for the remaining term till maturity. At the maturity date as chosen at inception, the policy ceases with payment of "Terminal Bonus", if any. NOTE: In case of death of the beneficiary/nominee during these guaranteed monthly regular income payments period, the same will be made to the legal heir.

Survival Benefits
You get a monthly regular income that you have chosen at the inception of the policy for 15 years after the end of the Premium Payment Term. The monthly regular income commences from the monthly anniversary date that immediately succeeds the completion of the Premium Payment Term.

Maturity Benefit
On attaining the maturity age you will receive the accrued Simple Reversionary Bonuses along with the Terminal Bonus, if any. A word about Bonuses

Simple Reversionary Bonus
The policy will participate for Simple Reversionary Bonuses on completion of three years and the declared bonus will be credited on each policy anniversary occurring immediately after the date of declaration of bonus provided all the due premiums have been paid. Simple Reversionary Bonus is declared by the Company starting from year 3 onwards based on the Company's experience and this is not guaranteed. Simple Reversionary Bonus is payable on death of the life insured or on maturity whichever is earlier. The Simple Reversionary Bonus will not accrue once the death claim is settled and for the lapsed policies.

Terminal Bonus
The Company may also declare a Terminal Bonus as a percentage of the accrued Simple Reversionary Bonus. The Terminal Bonus is payable only after payment of last monthly regular income payment and the same is not guaranteed.

Advantages
1.
Guaranteed monthly regular income that you choose at inception payable for 15 years i.e. 180 months. 2. In case of unfortunate death during the term of the policy, your family will immediately get an amount equal to 25% of the Base Sum Assured (45 times monthly regular income). 3. Guaranteed payment of monthly regular income even after the death of the Person Insured - If the monthly regular income has already commenced, the balance monthly income installments will be paid to the nominee as and when they are due. If the monthly regular income has not commenced, the same will be commenced starting from the first monthly anniversary following the date of death and shall be paid for the next 15 years to the nominee. 4. Payment of an additional Sum Assured in case of accidental death if Accidental Death Benefit Rider has been opted by you at inception. 5. Tax benefits* on both the amount invested and the benefits received under Section 80 C and Section 10 10D.

Met Suvidha

34

Plan Overview
Met Suvidha is a Flexible Endowment Plan that combines savings and security. In addition to providing you protection till the maturity of the plan, it helps you save for your specific long term financial objectives. This long term savings-cumprotection plan comes to you at affordable premiums.

Met Suvidha is available in both participating (UIN:117N017V01) as well as non-participating versions (UIN:117N018V01).

Minimum Entry Age Term Premium Paying Terms Minimum Annual Premium Amount Minimum Sum Assured Maximum Sum Assured

Par: 15 years - 60 years Non-Par: 15 years - 70 years Par: - 15 years - 30 years Non-Par: 5 years - 30 years Single Pay, Limited Pay (5 or 10) & Regular Pay Rs. 2,500 Rs. 75,000 No Limit

Death Benefit Met Suvidha - Par
In the event of death during the term of the policy, the beneficiary will receive the base Sum Assured, the accrued reversionary bonus and terminal bonus, if any.

Met Suvidha - Non Par
In the event of death during the term of the policy, the beneficiary will receive the base Sum Assured.

Maturity Benefit Met Suvidha - Par
On maturity of the policy, you will receive the base Sum Assured, the accrued reversionary bonus and terminal bonus, if any.

Met Suvidha - Non Par
On maturity of the policy, you will receive the base Sum Assured.

Bonuses
Bonuses are available only on participating policies. The bonuses are not guaranteed as they are based on the Company’s actual investment returns, persistency and expense experience. No bonus is payable for the first 2 years of the policy.

Advantages
1. It is an Endowment plan that offers both savings and life insurance.

2. Different premium paying options to suit various income cycles.

3. A plan which participates in the bonuses declared by the company.

4. Customization possible with Accident Death Benefit, Critical Illness, Term, Waiver of Premium riders for comprehensive protection.

35

5. *Tax Benefits as applicable.

My study is also based upon some objective and these are as follows. 1.To understand the insurance business and products of Metlife India. 2.To find out the people’s perception about life insurance. 3.To find out whether people were really aware of life insurance. 4.To find out how people think about private life insurance. 5.To find out what respondents expectfrom life insurance. 6.To understand Consumer buying behavior

36

CHAPTER-4 STUDY OF SELECTED RESEARCH PROBLEM

37

4.1 RESEARCH METHODOLOGY

OBJECTIVES OF STUDY 1) To get some good market exposure by dealing with the prospects face to face. 2) To improve our ability to sell a financial product like life insurance. 3) To know the perception of the consumer about life insurance. 4) To get a deep knowledge of the financial product like insurance. 5) To get some information about the market share of Reliance Life Insurance as compared to the giants like LIC and to know the standing of the company in the market. RESEARCH DESIGN Research design is the plan, structure to answer whom, when, where and how the subject is under investigation. In my project I started research on customer behaviour towards Metlife India insurance products. Here plan is an outline of the research scheme & which the researcher has to work. The structure of the research is a more specific outline and the strategy out, specifying the methods to be used in the connection & analysis of the data.

Descriptive Research Design The type of research design used in this study is the descriptive research. The main characteristics of this method is that the researcher has no control over the variables and he can only report what has happened or what is happening. This study based on the customers behaviour towards Metlife India life insurance products. Hence, this research study is categorized as Descriptive Research Method

DATA COLLECTION

38

In my project The main source of information for this study is based on the data collection. Data collected are both primary and secondary in nature.

? Primary Data Primary data have been directly collected from the clients of Metlife india by survey method through undisguised structured questionnaire. Questions like open ended, close ended, multiple choice, dichotomous and ranking type have been used for the purpose of data collection.

? Secondary Data Secondary data have been collected from official website of Metlife India and also from other official websites related to life insurance industry.

TYPES OF QUESTIONS

? Open ended question Open ended question are the type of question used to get suggestion from the respondent in order to give feed back to the organization.

? Close ended question Close ended question are the type of questions with a clear declined set of alternatives that confine the respondents to choose one of them. ? Multiple choice question It consists of multiple choices in which the respondents can choose more than one

39

SAMPLING Convenience sampling is been used in the study. This type of sampling is basically used when you simply stop anybody in the street who is prepared to stop, or when you wander round a business, a shop, a restaurant, a theatre or whatever, asking people you meet whether they will answer your questions. In other words, the sample comprises subjects who are simply available in a convenient way to the researcher. There is no randomness and the likelihood of bias is high. You can't draw any meaningful conclusions from the results you obtain. However, this method is often the only feasible one, particularly for students or others with restricted time and resources, and can legitimately be used provided its limitations are clearly understood and stated. SAMPLE SIZE Sample size is the total number of samples selected for the study from the sampling population. Sample size for the study was arrived at 120 by using the formula: n = z2 * p * q e2 n = 1.962 * 0.9143 * .086 0.052 = 120 METHODS / TOOLS OF ANALYSIS Tools used for analysis are:
• •

Chi-square test Weighted average method

40
• • • • •

Interval estimation Karl Pearson’s coefficient of correlation H-test Graph Percentage

1. CHI-SQUARE TEST There may be situation in which it is not possible to make any rigid assumption about distribution of the population from which samples being drawn. This limitation has led to the development of a group of alternative techniques known as non-parametric tests. Chi-square describes the magnitude of the discrepancy between theory and observation.

n ?² = ? [(Oi – Ei) 2] with n-1 degrees of freedom i =1 Ei

2. WEIGHTED AVERAGE METHOD

This method is widely used in finding the weightage given to different attributed by respondents. The respondents assign different weightage to the different ranking and weighted average percentage is found and graphs are plotted. Net score = (weight for column * no. of respondents) Total weight

Net score in %age = net score in row Total net score*100

3. INTERVAL ESTIMATION METHOD An estimation of a population parameter given by 2 numbers between when the parameter

41

may be considered to lie is called interval estimation of the parameter.

( p - z ?pq ; p + z ?pq ) n n

p = sample proportion of success q = sample proportion of failure z = standard variance of the confidence level n = no. of sample size

3. KARL PEARSON’S COEFFICIENT OF CORRELATION Correlation analysis helps us in determining the degree of relationship between 2 or more variables. The value of the coefficient of correlation as obtained by the below formula shall always lie between +1 and -1. When r = +1, it means there is perfect positive correlation between the variables. When r = -1, there is perfect negative correlation between the variables and when r = 0, there is no relationship between the two variables. ? xy r = -------------------??x2 - ? y2 __ __

x = (X - X) ; y = (Y - Y) 4. H-TEST When more than two random samples are given, H-test is used. It is used to test the null hypothesis that several independent samples come from the same population.

42

H = [12 / (N (N+1)) * (R12/ n1 + R22 / n2 + R32 / n3 + R42 / n4 + R52 / n5)] – 3 (n + 1) Ri = Sum of ranks of sample i

5. PERCENTAGE ANALYSIS Percentage analysis shows the entire population in terms of percentages.

Percentage = No. of respondents *100 Total respondents

6. GRAPHS Graphical method was used in order to represent the factor in various graphical methods like pie-chart, bar diagram and cylinder.

43

5. ANALYSIS

44

ANALYSIS OF DATA
6.5 ANALYSIS OF QUESTIONNAIRE Here I have formed a questionnaire to study why people go for life Insurance and customers behaviour towards Metlife India insurance products. What is people’s major motive behind investing in life insurance? Do they decide upon their own or they take guidance of an agent? What is their perception about Metlife India? ? Target Population:I had conducted this survey among 500 people, and the target group was a mix of people from the society. I asked the questions to Doctors, Professionals, Professors, Advocates, Engineers, and general public. ? Analysis:I have used graphs, and some other statistical measures to analyze the questions.
3.2.1 TABLE SHOWING AGE OF RESPONDENTS S.No 1 2 3 4 5 Age Less than 25 yrs 25-35 35-45 45-55 Above 55 yrs Total No. Of Respondents 43 32 20 12 13 120 Percentage (%) 35.83 26.67 16.67 10 10.83 100

Findings: The above table shows that 35.83% of the respondents belong to the age group of less than 25 years, 26.67% fall under the category of 25-35 years, 16.67% belong to the age group of 35-45 years, 10% belong to the age group of 45-55 years and the rest 10.83% above 55 years Inference: It is inferred that there is a higher percentage (i.e. 35.83%) of respondents in the age group of less than 25 years and comparatively very lower percentage (i.e. 10%) of respondents in the age group of 45-55 years 3.2.1 CHART SHOWING AGE OF RESPONDENTS

45

40 35 30 25 No. of 20 respondents 15 10 5 0

35.83 26.67 16.67 10 10.83

Less 25-35 than 25 yrs

35-45

45-55

Above 55 yrs

Age in years

3.2.3 TABLE SHOWING OCCUPATION OF RESPONDENTS S.No 1 2 3 4 5 Occupation Service Govt. employee Business Professional Others Total No. Of Respondents 25 16 23 19 37 120 Percentage (%) 20.83 13.33 19.17 15.83 30.83 100

Findings: The above table shows that 20.83% of respondents belong to the category of services, 13.33% are government employees, 19.17% belong to the category of business, 15.83% are professional and the rest 30.83% belong to other category, which comprises of private sector employee Inference: It is inferred that there is a higher percentage (i.e.30.83%) of respondents in the category comprising private sector employees.

3.2.3 CHART SHOWING OCCUPATION OF RESPONDENTS

46

35 No. of respondents 30 25 20 15 10 5 0 Service Govt. employee Business occupation Professional 20.83 13.33 19.17 15.83

30.83

Others

3.2.5 TABLE SHOWING ANNUAL INCOME OF RESPONDENTS

S.No 1 2 3 4 5

Annual income Less than Rs.2 lakhs Rs.2-5 lakhs Rs.5 -10 lakhs Rs.10-20 lakhs Above Rs.20 lakhs Total

No. Of Respondents 31 51 20 9 9 120

Percentage (%) 25.83 42.5 16.67 7.5 7.5 100

Findings: The above table shows that 25.83% of respondents fall under the income category of less than 2 lakhs, 42.5% fall under the category of 2-5 lakhs, 16.67% fall under the income category of 5-10 lakhs, 7.5% in the category of 10-20 lakhs and the rest 7.5% in the income category above 20 lakhs Inference: It is inferred that there is a higher percentage (42.5%) of respondents in the income category of 2-5 lakhs and comparatively a very lower percentage (7.5%) of respondents in the income category of 10-20 lakhs and above 20 lakhs 3.2.5 CHART SHOWING ANNUAL INCOME OF RESPONDENTS

47

45 40 No. of respondents 35 30 25 20 15 10 5 0 25.83

42.5

16.67 7.5 7.5

Less than Rs.2-5 lakhs Rs.2 lakhs

Rs.5 -10 lakhs

Rs.10-20 lakhs

Above Rs.20 lakhs

Annual Income

3.2.13 CHART SHOWING THE RESPONDENT’S COMMENT ON THE SERVICE OF Metlife India

48

60 50 No. of respondents 40 30 20 11.67 10 0 Excellent Very good Moderate 0 Poor 0 Very poor 38.33 50

SUMMERY OF FINDINGS

49 ? It is found that there is a higher percentage (i.e. 35.83%) of respondents in the age group of less than 25 years and comparatively very lower percentage (i.e. 10%) of respondent belongs to the age group of 45-55 years.

?

There is a higher percentage (i.e. 67.5%) of male respondents among the respondents who has taken general insurance cover.

?

Majority of the respondents (i.e.30.83%), who has taken Life insurance cover are private sector employees.

?

It is found that a higher percentage (75.83%) of respondents have 2-4 members in their family.

?

It is inferred that there is a higher percentage (42.5%) of respondents in the income category of 2-5 lakhs and comparatively a very lower percentage (7.5%) of respondents in the income category of 10-20 lakhs and above 20 lakhs

?

It is implied that all the respondents surveyed have stated that it is necessary to have a life insurance cover.

?

It is evident from the study conducted that majority (51.67%) of the respondents holds at least 1 life insurance policy.

?

The study discloses that 55% of respondents hold life insurance policy with the same company and the rest 45% of respondents hold it in various other companies.

?

From the analysis made it is inferred that the percentage of respondents who have taken policies from the same company lies between 46.1% and 63.9%.

50 ? It is inferred that a higher percentage of respondents (79.63%) are policy holders in at least 2 companies, while18.52% of respondents are policy holders in 2-5 companies and the rest 1.85% of respondents are policy holders in more than 5 companies.

?

It is inferred that higher reputation amidst customers is enjoyed by Metlife India with 39.17% of respondents stating it.

?

Majority of respondents (i.e., 75%), who are policy holders with Metlife India have stated that they are aware of various insurance schemes offered by the company.

?

It is found that the percentage of respondents aware of various insurance schemes offered by Metlife India lies between 64.02% and 85.98%

?

Majority of respondents (i.e., 80%), who are policy holders with Metlife India have agreed that Metlife India is well known for offering customer centric products.

?

It is inferred that a higher percentage (50%) of respondents have indicated that the service rendered by Metlife India as very good, while 38.33% of respondents have indicated the service of Metlife India as excellent, and the rest 11.67% of them have indicated it as moderate.

?

The study implies that a higher percentage (41.67%) of respondents has indicated friends and relatives, while 35% of respondents have indicated advertisement and the rest 23.33% of them have stated insurance agents as means by which they came to know about Metlife India.

?

Among the respondents, who has taken general insurance cover it is inferred that a higher percentage (50.83%) of respondents holds annual policy.

?

Among the respondents, who are holding life insurance cover it is found that a higher percentage of respondents (48.3%) have been paying yearly insurance premium between Rs.5000-15000

51

?

With the application of Karl Pearson’s Correlation Coefficient it is found that the variables annual income and premium amount paid are positively correlated.

?

Among the policy holders of Metlife India, 65% of them feel that the premium being paid is high and among the policy holders of other companies only 20% have stated it as high.

?

According to the chi – square test conducted, it is found that there is no significant difference between premium and period of general insurance policy.

?

It is found that there is a significant difference between yearly premium paid and satisfactory level towards general insurance policy taken, as per the chi-square test conducted.

?

The study conducted reveals that a higher percentage (51.67%) of policy holders among both Metlife India and other companies has insurance agents.

?

It is found that the percentage of respondents having insurance agents lies between 42.72% and 60.6%, according to the analysis conducted

?

It is found that a higher percentage of respondents from both Metlife India (64.5%) and from other companies (51.6%) have indicated that the guidance rendered by their insurance agent is very good.

?

It is inferred that all the respondents, who are policy holders with Metlife India as well with other companies have indicated that their claims were not rejected by the insurance companies.

?

It is found that while selecting a particular insurance company to take a policy, majority of the respondents look out for reputation of the company first, secondly they

52 look out for excellent service/responsiveness of the company, thirdly proper claim settlement of the company followed by good schemes, low premium rates, others good experience, and easy accessibility.

?

According to the result of the H-test, it is found that the respondent’s satisfaction level towards all the attributes of life insurance cover taken is the same.

?

Majority of respondents (36.67%) have stated insurance agents as the most preferred source to know about an insurance company and its products.

53

6.SUMMARY AND CONCLUSIONS

SUGGESTIONS

? The present scenario demands almost all the customers to have a life insurance cover in
order to protect from future uncertainty. The company always has an opportunity to grow

54 and expand its operations in the life insurance segment. Hence, the company can seize this opportunity and pay attention to introduce more insurance covers to cater to the needs of various classes of people.

?

Majority of the respondents, who are policy holders with Metlife India have felt that the premium being paid is comparatively higher with the premium rates of other insurance companies. Hence, amendments can be made in this regard by offering insurance cover at reasonable premium rates to the customers.

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The promptness of claim settlement procedure can be maintained as it is one of the important aspects which would enhance the reputation of the company, as well as build trust in the minds of the customers. Also, it helps to retain existing customers and attract new customers.

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The company can create more awareness about its products among potential customers by means of advertisements and efficient insurance agents, which in turn will help in increasing its customer base.

CONCLUSIONS
The study was conducted to understand the customers behaviour towards insurance products of Metlife India.. The company may highly be benefited by the outcome of this study. The outcome of the study has proved that the performance of the company is outstanding in comparison with other competitors in the life insurance segment and that the company has a higher reputation among customers. The study has been able to accomplish its objectives,

55 by thoroughly analyzing and identifying the competitive position of Metlife India, strengths and weaknesses of various insurance covers among the clients of various insurance companies, customer’s awareness and perception about the company and its products. It is concluded that the company could initiate various steps based on the recommendations given in this report. The company by adopting some of the recommendations, if not all, can further improve its performance in the life insurance market in future years to come.

? Questionnaire NAME: ___________________________________________ Q.1 What is your main motive behind investing in life insurance? (a) Tax Benefit (b) Savings (c) Risk Cover (d) Return/Yield Q.2 Rank the above motives according to your preference

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MOTIVE OF INVESTMENT (a) TAX BENEFIT (b) SAVINGS (c) RISK COVER (d) RETURN/YIELD

Q.3 How do you decide about investing in life insurance? (a) On my own (b) family decision (c) Employer decides (d) as per the guidance of agent Q.4. Which life insurance policy would you prefer to buy? (a) Term Assurance (b) Whole Life (c) Endowment (d) Combination of Whole Life and Endowment (e) Unit Linked Q.5 Would you prefer Metlife India or LIC for buying the life insurance policy ? (a) Metlife India (b) LIC (c) ) Reliance Life Insurance

PERSONAL DETAILS
1) Age (a) 18 to 30 (b) 31 to 50 (c) 51 to 65 2) Occupation (a) Service (b) Business (c) Profession (d) Housewife (e) Retired 3) Income (a) 50,000 to 1,00,000 (b) 1,00,000 to 5,00,000

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(c) More than 5,00,000 4) Family members (a) 2 (b) 3 (c) 4 (d) More than 4

BIBLIOGRAPHY AND REFERENCES

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? www.metlife.com ? www.indiainfoline.com ? www.google.com ? Life Time Magazine of Metlife India ? Broachers of Metlife India



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