Introduction To The Insurance Industry In India Commerce Essay

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During my project with Max New York Life Insurance, Initially I studied their products and marketing department. I carried out a survey on customer's satisfaction level and their expectations from the company. This project was carried out by on the basis of questionnaire about various factors related to the company from its existing customer. A survey was conducted were in I need to go to each & every customer, and get the opinion from the customers about what they feel about product and services.

I had to visit those people who mainly are customers and take their services. The data was collected through personal visits by distributing questioners and telephone by asking the questions present in the questioner with a sample size of 100. After receiving the necessary feedback from the respondents, I came up with my findings and identified the problem faced by the company and after analyzing the problem came up with the necessary recommendations which Max New York Life Insurance can utilize in the future

Insurance may be described as a social device to ensure protection of economic value of life and other assets. Under the plan of insurance, a large number of people associate themselves by sharing risks attached to individuals. The risks, which can be insured against, include fire, the perils of sea, death and accidents and burglary. Any risk contingent upon these, may be insured against at a premium commensurate with the risk involved. Thus collective bearing of risk is insurance.

Insurance is a contract whereby, in return for the payment of premium by the insured, the insurers pay the financial losses suffered by the insured as a result of the occurrence of unforeseen events. The term "risk" is used to describe the possibility of adverse results flowing from any occurrence or the accidental happenings, which produce a monetary loss.

Insurance is a pool in which a large number of people exposed to a similar risk make contributions to a common fund out of which the losses suffered by the unfortunate few, due to accidental events, are made good. The sharing of risk among large groups of people is the basis of insurance. The losses of an individual are distributed over a group of individuals.


General definition:

In the words of John Magee, "Insurance is a plan by themselves which large number of people associate and transfer to the shoulders of all, risks that attach to individuals."

Fundamental definition:  

In the words of D.S. Hansell, "Insurance accumulated contributions of all parties participating in the scheme."

Contractual definition: In the words of justice Tindall, " Insurance is a contract in which a sum of money is paid to the assured as consideration of insurer's incurring the risk of paying a large sum upon a given contingency."

Characteristics of insurance

Sharing of risks

Cooperative device

Evaluation of risk

Payment on happening of a special event

The amount of payment depends on the nature of losses incurred.

The success of insurance business depends on the large number of people insured against similar risk.

Insurance is a plan, which spreads the risk and losses of few people among a large number of people.

The insurance is a plan in which the insured transfers his risk on the insurer.

Insurance is a legal contract which is based upon certain principles of insurance which includes, utmost good faith, insurable interest, contribution, indemnity, causas proxima, subrogation, etc.

The scope of insurance is much wider and extensive.

Functions of insurance:

Primary functions:

Provide protection:- Insurance cannot check the happening of the risk, but can provide for the losses of risk.

Collective bearing of risk: - Insurance is a device to share the financial losses of few among many others.

Assessment of risk: - Insurance determines the probable volume of risk by evaluating various factors that give rise to risk.

Provide certainty: - Insurance is a device, which helps to change from uncertainty to certainty.

Secondary functions:

Prevention of losses: - Insurance cautions businessman and individuals to adopt suitable device to prevent unfortunate consequences of risk by observing safety instructions.

Small capital to cover large risks: - Insurance relives the businessman from security investment, by paying small amount of insurance against larger risks and uncertainty.

Contributes towards development of larger industries.  

Other Function:

Means of savings and investment:

Insurance companies are business houses. The product they sell is financial protection. To succeed and survive, they must cover their costs, which include payments to cover the losses of policyholders, as well as sales and administrative expenses, taxes and dividends.

Insurance companies have two sources of income for covering these costs: premiums and investment income. The premiums are collected on a regular basis and invested in Government Bonds, Gilt, stocks, mutual funds, real estates and other conservative avenues. However, investment income depends on market conditions, interest rates, economy etc. and varies from year to year. Because of the uncertainty associated with the investment income, insurance companies must generate enough income from premiums to cover the bulk of their expenses.

The risk becomes insurable if the following requirements are complied with:

The insured must suffer financial loss if the risk operates.

The loss must be measurable in money,

The object of the insurance contract must be legal.

The insurer should have sufficient knowledge about the risks he accepts.


Max New York Life Insurance Company Ltd. is a joint venture between Max India Limited, one of India's leading multi-business corporations and New York Life International, the international arm of New York Life, a Fortune 100 company. The company has positioned itself on the quality platform. In line with its vision to be the most admired life insurance company in India, it has developed a strong corporate governance model based on the core values of excellence, honesty, knowledge, caring, integrity and teamwork.

Incorporated in 2000, Max New York Life (MNYL) started commercial operation in 2001. In line with its values of financial responsibility, Max New York Life has adopted prudent financial practices to ensure safety of policyholder's funds. The Company's paid up capital as on 30th April, 2009 is Rs 1782 crore.

MNYL has multi-channel distribution spread across the country. Agency distribution is the primary channel complemented by partnership distribution, banc assurance, alliance marketing and dedicated distribution for emerging markets. The Company places a lot of emphasis on its selection process for agent advisors, which comprises four stages - screening, psychometric test, career seminar and final interview. The agent advisors are trained in-house to ensure optimal control on quality of training. The company currently has around 92,760 agent advisors at 710 offices across 385 cities. The company also has 36 referral tie-ups with banks, 24 partnership distribution and alliance marketing relationships each. Max New York Life has put in place a unique hub and spoke model of distribution to deepen our rural penetration. The company has 133 offices dedicated to rural areas.

MNYL offers a suite of flexible products. It now has 43 life insurance products and 8 riders that can be customized to over 800 combinations enabling customers to choose the policy that best fits their need. The company currently has more than 13,923 employees.

New York Life International, INC., a Fortune 100 company, decided to select JOINT VENTURE as a medium to enter into the market of India. It has chosen MAX INDIA LTD., one of the India's leading multi-business corporations. Through its wide network of highly competent wide network of highly competent agent advisors and flexible product solutions, MYNL is creating a partnership for life with its customers in INDIA to meet their life stage needs.

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


To become one of the most admired life insurance Company of India.

Strong Corporate Governance Model


Become one of the top quartile life insurance companies in India 

Be a national player

Be the brand of first choice

Be the employer of choice

Become principal of choice for agents



Knowledge leads to expertise; and our expertise is in helping people protect themselves. Perfectly combining global expertise with local knowledge, we are India's life insurance specialist. MNYL believes that for knowledge to be of value it must be focused, current, tested and shared.


MNYL is redefining the life insurance paradigm by focusing on customers first. The service process is responsive, personalized, humane and empathetic. Every individual who represents the company is for us our brand champion.


Honesty is the heart of the life insurance business. It is all about trust. Transparency, integrity and dependability form the cornerstones of the MNYL experience. The company ensures that everyone who represents the brand carries a promise: we care - in word as well as deed.


Excellence at MNYL implies the ability to perform at a consistently high level. Focused on the value of continuous improvement in people, processes and the organization, the company strives for the highest standards of quality in every aspect of its business


1. Life Insurance Corporation of India

Private Players

2. Tata AIG Life Insurance Company Ltd

3. Kotak Mahindra Old Mutual Life Insurance Ltd

4. Birla Sun Life Insurance

5. ICICI Prudential Life Insurance

6. Aviva Life Insurance

7. Allianz Bajaj

8. Bharti Axa Life Insurance

9. SBI Life Insurance

10. Reliance Life Insurance

11. ING Vysya Life Insurance

12. Sahara India Life Insurance

13. HDFC Standard Life Insurance

14. Shriram Group

Market Share of Indian Insurance Players

Market Share of public sector and Private sector Insurance Companies


LIC has the highest market share of 74% (public sector)

And 26% market share belong to the other players in the market

MYNL shares a market share of 5.9% in the life insurance sector.



Protection Plans:

• Whole Life

• Level Term

• Five Year Term R & C

• Life Partner Plus


o Life Gain Endowment

o Life Pay Money Back

o Life Gain Plus 20

o Life Gain Plus 25

o 20-Year Endowment

Unit Linked:

o Life Maker Premium

o Life Maker Gold

o Life Maker Platinum

o Life Maker Pension

o Life Invest


o Group Term Life

o Group Gratuity

o Employee Deposit Linked Insurance

o Credit Shield

o Unit Linked Group Gratuity

o Unit Linked Group Superannuation


o Max Suraksha

o Easy Term

o Max Mangal Endowment

o Max Vriksha Money Back


o Max Assure Bonus Builder

o Max Assure Business Builder

o Max Assure Money Back

o Max Assure Future Builder

o Max Assure Secure Returns Builder


• Life Maker Investment Plan

• Life Maker Pension Plan

• Life Maker Premium

• Smart Steps

• Group Gratuity

• Group Superannuation

• Max Amsure Secure Returns Builder


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

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

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

Sanjeev Mago, executive vice president, Customer Operations and Service Delivery, Max New York Life Insurance, said, "This initiative is yet another step towards improving customer satisfaction by enhancing their ease of resolving pre and post policy issues. At Max New York Life, we lay emphasis in interacting with our customers and distributors in their choice of language."In order to improve its customer relationship management, MNYL has maintained internal records and marketing intelligence systems to maintain a database of profile and contact information of the customers.


The research was done to analyze the various factors that determine customer satisfaction which automatically leads to retention of customers. As customers are currently not completely satisfied with the services provided by Max New York Life Insurance It was basically to focus on gaining new customers and retaining old customers.

Besides this the factors determined will also help in understanding the various threat possessed by the organization to survive in the market and the market conditions and come up with suitable solution. In comparison with other firms Max New York Life Insurance will be mainly able to determine where its services stand, as the consumers will state their preferences as to why they also prefer other Firms. With the view the customers in comparison, it can determine its weakness and strengths and use it as a strategy in retention of customers mainly not only in monetary terms but also by increasing customer relationship management strategies which will increase customer welfare.

Limitations of study

Due to the following unavoidable and uncontrollable factors the factors, the result might not be accurate. Some of the problems faced while conducting the survey are as follows:-

Time and cost constraints were also there.

Chances of some biasness could not be eliminated.

A Samples size of twenty has been use due to time limitations.

A majority of respondents show lack of cooperation and are biased towards their own opinions.

Behavior of the customer keeps on changing as they are continuously in linked with the external environmental happening.

Market is more heterogeneous so the survey is not too flexible.

Consumer taste and preferences are hard to judge so it can change frequently.

Difficulties occurred while approaching respondents

Many customers neglected the questionnaires giving the reason that they don't have time

Many customers refused to fill the questionnaires as they felt it would be risky and time consuming.

Many customers neglected the questioner saying it was lengthy

Pilot survey

Customer needs

Mainly advisory services should be efficient or confident when informing or intimating a client for long term as well as short term investment.

Short term investments should be done in proper manner as to where to invest and how much to invest.

The maintainance charges should be affordable

Problem solving should be efficient

Customers are more interested in the speed of the services


Customers tend to switch if they are not given due importance

Customer care is bad

Online facilities were in efficient

Responsiveness is bad

Advisory service is not that efficient

Decision making is bad.

The agents does not give individual attention to their clients

No quick follow up is done

Major parameters considered by the customers to determine their satisfaction

Customer care

Quality of service

Investment solutions

Fir price


Service ability

Speed of service and problem solving

Advisory services




As indicated in the above pilot survey findings, there were many customers who invested in a Max New York Life Insurance for many varied reasons. As receiving quality services was the main motive, besides this they expected other services which would really satisfy their criteria for investment in this industry.

To sustain in the market or to capture a huge market share, customer satisfaction is the main aspect in which Max New York Life Insurance is lacking in. A Marine solution strives to guarantee quality and Hassel free service. For this reason Max New York Life Insurance should study all the aspects or the major aspects which satisfies a customer

As on now Max New York Life Insurance has been in the market for a long time, it is very necessary that it does not lose out its market share in the coming future. The following research below will basically find out the various expectations of the customer and even determine the loopholes. The research will basically show customer preferences and depending on it make certain changes in the system.

Analysis of the survey conducted on customer satisfaction at max New York life insurance



Educational profile

Age profile

Analysis:- From above table we can find that the 35% respondents are of age group between 20-30 and 45% people are of 31-40. Rest 20% are of 40 and above.

Inference:- From above table and analysis we can see the maximum no. of respondents are of age between 31to40.


Analysis: - From above table we can find that 20% respondents belong to income group of below 10000. 45% belongs to income group of 10000-20000, 15% of20000-30000, 10% belongs to income group of 30000-50000 and 10% of above 50,000.

Inference:- From above table and analysis we can infer that maximum no. of respondents are belongs to income group of 10000-20000.

From where did you get the information on Max New York life Insurance?

Analysis:- From above table we can see that 30% respondents get information about new policies through TV and news paper. Through radio 5%, through friends and family 20%, 10% respondents always wanted to invest here, and 5% through other ways.

Inference:-From above table and findings we can infer that TV and news paper are the main medium of information about insurance plan.

Purpose of your life insurance

From above table we can see that 10% people invest for Provide life income for the spouse

10% people invest for pay off a mortgage

30% people invest for children education

25% people invest for proving funds after retirement

10% people invest for Provide an income for the policyholder's spouse to give the family time to readjust to a new standard of living

10% people invest for Draw interest to provide funds for some special purpose

5% people invest for Provide a monthly income until the children are grown and out of schoo

Inference:- From above table and analysis we can infer that majority of people are investing in order to pay for children education

For how long are you a customer of Max New York life Insurance

Your opinion on being a part and customer of Max New York life Insurance

15% says they are highly satisfactory

40% they have a Good experience as a customer

15% said that they were satisfied

25%Not satisfactory

5% says they had a poor experience

Inference:- From above table and analysis we can infer that majority of people have a Good experience as a customer of Max New York Life Insurance.

Do you agree as a customer your needs are taken care of and all your activities are done on time by Max New York life Insurance

15% of the clients Strongly agree that all the needs are taken care of and all your activities are done on time by Marina India

Whereas 40 %Agree

20% are just satisfied with this service

Whereas 10% of the customers Disagree that all the needs are taken care of and all your activities are done on time by Marina India

10 %person Strongly disagree

Inference: - From above table and analysis we can infer that majority of people agree that the needs are taken care of, and all the activities are done on time by Max New York life Insurance

What do you think about Max new York life Insurance products

15% says they are highly satisfactory

50% they have a Good experience as a customer

25% said that they were satisfied

5%Not satisfactory

5% says they had a poor experience

Inference: - From above table and analysis we can infer that majority of people feel that the products of Max New York life Insurance are good.

What do you think about the following services provided to you by Max New York Life Insurance?

Majority of clients claim that the priority service is good and they can be attended without waiting for much long.

More number of the clients claim that their advisory services is good

Majority of the customers has rated as good and claim the customer care is good

Customers have rated Individual attention as good and average.

As per the ratings the responsiveness and follow ups are averagely performed by Max New York Life Insurance

Customization and access is rated good

Most of the respondents has rated good for the quality of services been provided by Max New York Life Insurance

Most of the respondents are fare with the pricing and says that the prices are fare.

Respondents says that the customer complaints are nicely handled by Max New York Life Insurance

Most of the clients of Max New York Life Insurance say that the online facilities are good and excellent.

what do you think about the schemes been provided to you by Max new York life Insurance

20% says that they have a very good schemes

35% they have a Good schemes

20% said that they had a average schemes

10% schemes were below average

10% says they schemes had were poor

Inference: - From above table and analysis we can infer that majority of people feel that the schemes provided by Max New York life Insurance are good.


About how long you had to wait before speaking How long did you have to wait to get

in person at the reception to get the queries solved? Through on the phone while speaking to

Acquire the service?

Here we can see that most of the customers are not satisfied with the responsiveness of Max New York life insurance.

Important reasons you feel max New York life insurance really good or strong at?

27% says that Facilities are very good

18% says that Max New York life insurance is faster than other insurance companies

20% says the like max new York because of the friendliness of the employes

12% say that they are with MNYL because of their affordability of maintainance charges

and location

11% like it because of its location

Inference: - From above table and analysis we can infer that majority of people feel that the Max New York life Insurance is good at its facilities and courtesy of the employees.

Service ability

Did the representative or the agent handled your problem effectives as expected

As per the respondent

35% of its agents Appeared knowledgeable and competition

40% of its agents Handled the issues with courtesy and professionalism

25% of its agents Staff pay attention to your concerns and understand the problems u faced

Are the services efficiently provided to you?

As per the above table we can conclude that majority of the respondents feel that the services are efficiently provided to them.

Are the maintainace charges and fees affordable?

55% said that there maintainace charges and fees are affordable

30% said that they maintainace charges and fees are not affordable

15% felt that the maintainace charges and fees are affordable only sometimes

Inference: - From above table and analysis we can infer that majority of people feel that at Max New York life Insurance maintainace charges and fees are affordable

Are your financial needs been satisfied by the policy?

55% said that financial needs been satisfied by the policy

25% said that financial needs are not been satisfied by the policy

20% said they financial needs been satisfied by the policy only sometimes

Inference: - From above table and analysis we can infer that majority of people feel that at Max New York life Insurance the financial needs of the customer are been satisfied by the policy

Speed of service & problem Solving

About how long did it take to get the problem resolved after speaking to the front offices representative?

20% said that it was immediately resolved

35% said that less than a day

35% said that it was between a day and two

10% said that the problem is left un- resolved

Inference: - From above table and analysis we can infer that majority of people feel that Max New York life Insurance should improve on the service of problem solving

Which other companies would you like to invest in?

Analysis:- From above table we can see that 50% respondents would you like to invest in LIC, 15% with ICICI "PRU", 10% with HDFC,20% with Bajaj Allianz AND 5% with others.

Inference:- From above table and analysis we can infer that majority of people are associated with LIC which is a public sector in life insurance

Would you like to take another policy

Inference: - From above table and analysis we can infer that equal number of resonance would like to and wouldn't like to take another policy in the same company again.


Mainly all the customers today are service and benefits driven. As it is the consumer's market it mainly necessary for the company to be secure and to be preferred in every situation in the eyes of the consumer.

The observations made mainly showed that a majority of customers are not that satisfied with the services of Max New York Life Insurance. In a situation where market is down and even when volatile changes occur in the market, the consumers must be dealt with in such a way that profit is not only their objective but brand loyalty and relations with the company should be made their first preference. Quality of service does make a big difference today. Either most organization fails to appreciate its importance or they do not know how to go about it.

The above situation clearly shows that a major portion of the customers have certain expectations which of Max New York Life Insurance is not being fulfilled to some extent.

Of Max New York Life Insurance also faces problems with regards to effective services. Therefore they should pay more attention to their customer care or go in for new technology that enables certain problems on their own.

In terms of services, of Max New York Life Insurance consider its position to be amongst top 5 in the private sector market but the views of the customers are not matched to the same.



Well managed operations and services all over India.

It has over US billion in assets under management and over 30,000 agents and employees worldwide.

Have a national presence with a network of 57 offices in 37 cities across India.

The Human Resource Policies are strict as compared to Public Insurance Company.


Private Insurance Company due to which the level of trust is very low among people.

Low awareness among people that affects the sales of the company

Human Resource is very less in Goa as compared to other Insurance Companies.


Certain locations in Goa like Vasco (as per the survey), are untapped by MNYL.

More innovative products should be designed.

Awareness could be taken into consideration.

Customers are buying products based on their true needs.

IT is a growing sector in India.

Health insurance products.

Publicity of the company.


As there are more players in the market, the market will be tapped faster by other companies.

Company will not get an opportunity to capture the Market.

Competitors can compete with the service factor, if not with product.

Competitors can bring in some innovative products.

Problem identification

Research findings

Around 45% of the customers are not satisfied as being a part of Max New York Life Insurance in Goa.

Should try and target people of high income groups because these people generally invest more which is an advantage to the company

40% of the people says that either their needs are satisfactorily taken care of or disagree to the fact that their needs are taken care of by Max New York Life Insurance

The services such as responsiveness and follow-ups are not done properly by Max New York Life Insurance

Many customers face the problem while using the online facilities

When it comes to individual attention more than 50% of the respondents are not happy with this service

Customers are also not satisfied with the responsiveness of the staff of Max New York Life Insurance

In the survey we can see that some of the people say that their problems are solved between a day and two, which is average and some people also say that their problems are left unsolved

50% of the respondent says that they are not interested to take another policy and this is a major threat to the company.


In order to maintain total quality management and to maintain the goodwill forever in the market, the company should improve its customer-client relationship.

The company must take care on attending the complaints.

In future company may face the problems of competitors, keeping this in mind, the management should take sufficient measures in Advertisements.

People have less knowledge about current Insurance plan, so company should advertise it more through Television, Radio and Newspaper because these mediums are easily accessible to them.

The return in insurance plan should be hiked because people are ready to take risks.

Government should withdraw its umbrella from LIC, it make healthier competition among insurance companies.

The companies should come up with new policies that can cover the entire family in one policy.

Target the poor

The companies should extend its cover to poor people, because it is known fact that merely 22% people are insured out of 100%

The companies have some plan about poor sector but it is not implemented properly they are remain untouched.

The companies should venture their policies in remote areas of our country.

The company should make intensive plan and target the rural and backward areas.

The insurance companies should now try to identify the gap between current level of customer service and customer expectations. Some of the strategies being recommended are as follows:

Product Differentiation: Offering a product that is distinctly different from other products available in the market.

Innovativeness: Identifying means of a delightful customer experience.

Riders: These are additional offerings along with the main product.

Flexibility: The companies should make their products flexible for the convenience of their customer.

Hassle Free Service: All bureaucracy in customer interactions should be eliminated.

Proper Policy Documentation: Wrong interpretations/ non-awareness of policy document by the customer may have serious implications in the long term and the possibility of the same should be alleviated by the insurance companies.

Other observations

They prefer to be with those companies which take experience with them as their services are extremely good and, those companies pay more attention to their customers.

Customers are much more relying upon LIC.

People don't rely upon private insurance sector.

All products are not attractive to the customers so that kind of products are very hard to sale.

Less number of traditional plans that's why people who really need traditional plans are still not satisfied.

Majority of the customers are satisfied with the beneficial schemes the company.

Majority of the customers are satisfied with the service of the company

The age group between 26-35 is more conscious about the insurance and they avail the policies. People get insured for safety purpose but some people have different thoughts like investment or tax saving.

Professionals are the highly insured group and following are service class as well as businessmen.

Agent or Advisors are the big sources of information about a new plan of insurance company.

Due to credibility of that company people buy a insurance plan.

People are now thinking the private insurance companies are doing a good job and it is easily accessible.

ULIP is the popular plan among the insure because it has a higher return


Working with Max New York life insurance was a very nice and a good learning experience. It has helped me a lot learning about different kinds of investments and the pros-corns of its. It has also helped me to know about how works in a corporate world is done, as well as the most advisable and trust worthy players in the market, the competition faced by various other new entrants as well as well as the existing players.

The market survey carried out for Max New York life insurance was feedback surveys for Max New York life insurance by their customers. This helped me to analyze the problem faced by the company with regard to the services and facilities. Suitable suggestions was suggested to the company after analyzing the customer behavior, hoping it could be of help to increase their sales revenue and after sales services