“Customer Value Management At ICICI Lombard

General Insurance Bangalore”

END SEMESTER PROJECT

UNDER THE GUIDELINES OF

Mrs. Sumithra S.
(PROFESSOR, MPBIM)

SUBMITTED IN PARTIAL FULLFILLMENT

FOR THE AWARD OF DEGREE OF MASTERS OF
BUSINESS ADMINISTRATION

BY
Bhagawati Lal Somani
M.B.A
SEMESTER- 4

M.P BIRLA INSTITUTE OF MANAGEMENT

BANGALORE
(2005-2007)
 DECLARATION

I hereby declare that the research work embodied in this dissertation entitled
“CUSTOMER VALUE MANAGEMENT AT ICICI LOMBARD IN
BANGALORE CITY”, has been carried out by me under the guidance and
supervision of Prof. Sumithra S, Resident Professor, M.P.Birla Institute of
Management, Bangalore (Internal Guide).
I also declare that this dissertation has not been submitted to any
University/Institution for the award of any Degree/Diploma.

Place: Bangalore Bhagawati Lal Somani

Date: Reg. No. 05XQCM6014

1
 GUIDE’S CERTIFICATE

I hereby declare that the research work embodied in this dissertation entitled
“CUSTOMER VALUE MANAGEMENT AT ICICI LOMBARD IN
BANGALORE CITY”, has been undertaken and completed by Mr.
Bhagawati Lal Somani under my guidance and supervision.
I also certify that he has fulfilled all the requirements under the covenant
governing the submission of dissertation to the Bangalore University for the
award of MBA degree.

Place: Bangalore (Sumithra S.)

Prof. MPBIM
Date:

2
 ACKNOWLEDGEMENT

Preparing a project report of this nature is an arduous task and I am fortunate

enough to get support from a large number of persons to whom I shall always
remain grateful.

Firstly, I would like to thank Prof. Sumithra S. for her kind support and giving me
the opportunity to present this project.

I am very thankful to my guide Prof. Sumithra S. M. P. Birla Institute of

Management. for the valuable advice, guidance, precious time and support who
motivated and supported me a lot in carrying out this project.

Last but not the least, I would like to thank all the respondents for giving me their
precious time and relevant information and experience I required without which
this project would have been a different story.

Bhagawati Lal Somani

3
 Contents

¾ Executive Summary 6
¾ INTRODUCTION

1) Conceptual Framework of CVM 7-9

2) Problem Statement 10

3) Need and Significance of the study 11-12

4) Objectives of the research 13

¾ Insurance
1) Types of Insurance 15-17

2) Types of General Insurance 18-22

¾ REVIEW OF LITERATURE

1) Purpose 24-31

2) Methodology of review 32

3) Benefits 32

¾ RESEARCH METHODOLOGY
1) Scope of the study 34
2) Type of research 34
3) Data Collection 34
4) Sampling Technique 35

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¾ DATA ANALYSIS AND INTERPRETATION

1) Statement of Hypotheses 37
2) Testing of Hypotheses 38-47
3) Inferences from the analysis 48-52

¾ Interpretations and findings 53

¾ Conclusion 54
¾ Suggestion 55
¾ Bibliography

5
Executive Summary

This project is done for ICICI Lombard General Insurance Company Ltd. In today’s
environment the customers have become sovereign authorities. They constitute the focal
point for any business. The effectiveness of Customer Value Management helps a
business enterprise to create and sustain differentiating value, which has been focused in
this study. Customer Value Management represents the best practices used today by
companies worldwide to attain their visions of finding out what customers want and
giving it to them. Customer Value Management provides a rational set of technology;
methods and strategies to weave needs and wants of customers into key process designs
and management activities of a company. Customer Value Management is a vehicle to
understand what the customers want from the Company and how it can go about aligning
its business to deliver the same consistently. Every Company has perspectives about
Finance, Customers, and Internal Business & Growth. Customer Value Management
deals with the ‘Customer Perspective’ which along with the other perspectives is aligned
with the strategic intent and posture of the company. The Customer Value Map will be
designed to assess where the company’s service stands against competitors on the relative
quality versus price matrix.

This Study is based on certain objectives and the research on Customer Value
Management has been developed based on these objectives. The objectives are as
follows:

To identify the route to provide superior delivered value to customers

To unzip the direct link between customer value and the market share
To determine whether the ‘Customer Value Map’ can assess the position of the
Company’s service against its competitors on the relative quality – price matrix

The Company can use this information to reengineer their business capabilities with a
focus on customer envisioned value.

6
INTRODUCTION
1) Conceptual Framework of CVM

2) Problem Statement

3) Need and Significance of the study

4) Objectives of the research

7
CONCEPTUAL FRAMEWORK OF CVM
The concept of Customer Value Management was developed by Dr.John Henderson of
Boston University together with an IBM consultant to enable management teams to get
an actionable customer view and take actions resulting in increased customer satisfaction,
loyalty and market share.

Customer Value Management (CVM) represents the very best practices used by
companies worldwide to attain their visions of finding out what customers want and
giving it to them. It has become a leading approach to attract market share. It is a means,
by which a company can balance the demand for service and products with an
infrastructure that is customer centric, delivers increased productivity & benefits the
customer’s product line. Customer Value Management is a way to build customer loyalty
and improve value for the company. It provides a way to understand customers’ values
and then leverage that knowledge to prevent customer dissatisfaction or to influence
buyer behavior. It creates an alignment between customer’s dynamic vision of ideal value
delivery and business capability to deliver that value. The company should focus on
specific capabilities and infrastructure to deliver value and also reengineer business
capabilities with a focus on customer envisioned value.

Customer Value Management is a very powerful tool to make the company truly
customer oriented, attain top of the line growth and bottom line results. It is a formal,
systematic approach to compete and grow, based on delivering customer value. CVM is
also fast emerging as the ‘Ruling Currency’ to the growth of the company. In
implementing CVM, how a customer perceives the company and obtains value should be
identified and managed. If employed correctly it can help a business enterprise create and
sustain differentiating value.

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CVM helps a company in the following ways:
a) Develop and implement a business vision to become customer centered i.e. be
Number one in the eyes of their customers
b) Implement strategy to differentiate and compete on service and value to customers, not
merely on products and price
c) Understand what drives customers’ loyalty and give it to them

The implementation of CVM begins with the company identifying the needs/wants of
their customers and building on specific capabilities and business practices to fulfill these
needs/wants. CVM is thus a top down approach.
Customer Value Management is a methodical approach that enables a company to fulfill
its vision of becoming a premier service provider to its target customers. This can be
applied at the level of an individual service or on an organization wide basis. CVM is an
ongoing process that includes:

a) Monitor changing needs of target segment

b) Monitor changing customer perceptions of company’s performance
c) Input business improvements
d) Monitor and measure results.

Customer Value management is a way of thinking and running an organization. It helps

the company to provide high value experience to customers and thus forms a winning
strategy for customer loyalty and growth.

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PROBLEM STATEMENT
To meet the challenges faced in the General Insurance Industry, ICICI Lombard General
Insurance Company Ltd. has to gear up itself. Customer Value Management is a leading
Approach to attract market share. It can emerge as the ‘ruling currency’ to the growth of
the company.

The emphasis is on how ICICI Lombard General Insurance Company Ltd. can arrest the
value migration of their customers and capture new value of the customers by modifying
their business design.
Specifically, the problem statement is – “How can ICICI Lombard ensure customer
equity through an effective Customer Value Management Program?” The study will
focus on the three aspects of Customer Value Management i.e.
a) Being customer centric
b) Delivering increased productivity
c) Benefits provided to the consumer’s product line

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NEED AND SIGNIFICANCE OF STUDY

Customer Value Management is a relatively new concept. It is now as an emerging art

and science that is proving its worth in increased market share and shareholder value for
the companies that practice it. Virtually every company has a vision and a strategy to
achieve it. But missing element from all of these companies is the very presence of the
word ‘Customer’. Incorporating the word customer into the vision statement has been a
fairly recent phenomenon. In today’s environment the customers have become monarchs.
They have taken on new importance as the focal point for business. Today’s management
philosophy is to find out what the customers want and give it to them. This helps
company to stay head of competition.

There are key issues for major companies that need to be addressed. These can be
summarised as follows :

Just having a clear vision and strategy to achieve that vision is not enough. Even when
a strategic vision is in place it might have little impact on the goals of the company.
Hence this strategic vision has to be tied to the customer’s expectations from the
company.
To remain successful today, the theme for a business’s vision and strategy must change
from, “Where do we want to be in five years?” to “Where do our customers want us to
be, and how do we get there?”
Another thing shared by many companies is a marked absence of an approach to put a
customer-focused vision into real action. The company’s ability to develop a vision has
often exceeded its grasp in terms of being able to implement the realities of the required
changes down to their organizational level.
For every given customer desired outcome, the full value chain relating to how a
customer perceives and obtains value from the company must be identified and managed
having the customer as the focal point.

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Customer Value Management helps address all the above issues. It helps to leverage
customer value to drive business performance. Organizations can successfully employ
customer value management system to know their customers precisely. They can also
know their competitors’ customers. Effective customer value management allows
organizations to assess which products and services meet customer’ needs and
appropriately define their value proposition relative to their competitors.

According to a research conducted by Dr.John Henderson of Boston University and an

IBM consultant, it was concluded that “Companies that fully lever the potential of
Customer Value Management will become ideally customer centered and attain its vision
to become the superior provider to its customers. Customer Value Management acts as a
source of sustainable competitive advantage and a driver of customer value creation.
The need for the study stems from the fact that the Management at ICICI Lombard
General Insurance Company Ltd. has to observe the effectiveness of Customer Value
Management. This study will help the company to understand as to how it can arrest
value migration, protect existing value of customers and capture new value by modifying
their business design.

The significance of the study is that the company would benefit by knowing how
effective the perspective of Customer Value Management presently is. The policyholders
and the employees of the company have been involved in this study to give the company
an in depth picture of the views of both of these two categories of people. The areas of
improvement (recommendations) will be highlighted in the study, which will immensely
benefit the company.

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OBJECTIVES OF THE RESEARCH
The General Insurance industry currently is characterized by speed, quality, customer
satisfaction, innovativeness etc. Also all the General Insurance companies are vying with
each other to increase their market share and profitability. This highlights the significance
for General Insurance companies to develop new ways of keeping their customers
satisfied and hence minimize the risk of losing customers. The most relevant objective is
to develop and examine the market perceived quality profile and also customer value.

Specifically the following objectives have been set for our research investigation:
To identify the route to provide superior delivered value to customers
To unzip the direct link between customer value and the market share
To determine whether the ‘Customer Value Map’ can assess the position of the
Company’s service against its competitors on the relative quality – price matrix

13
 Insurance

• Types of Insurance
• Types of General Insurance

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Insurance

Insurance, in law and economics, is a form of risk management primarily used to hedge
against the risk of a contingent loss. Insurance is defined as the equitable transfer of the
risk of a potential loss, from one entity to another, in exchange for a premium. Insurer, in
economics, is the company that sells the insurance. Insurance rate is a factor used to
determine the amount, called the premium, to be charged for a certain amount of
insurance coverage. Risk management, the practice of appraising and controlling risk, has
evolved as a discrete field of study and practice.

Insurance companies may be classified as

• Life insurance companies, which sell life insurance, annuities and pensions
products.
• Non-life or general insurance companies, which sell other types of insurance.

In most countries, life and non-life insurers are subject to different regulatory regimes
and different tax and accounting rules. The main reason for the distinction between the
two types of company is that life, annuity, and pension business is very long-term in
nature — coverage for life assurance or a pension can cover risks over many decades. By
contrast, non-life insurance cover usually covers a shorter period, such as one year.

Insurance companies are generally classified as either mutual or stock companies. This is
more of a traditional distinction as true mutual companies are becoming rare. Mutual
companies are owned by the policyholders, while stockholders (who may or may not own
policies) own stock insurance companies. Other possible forms for an insurance company
include reciprocals, in which policyholders 'reciprocate' in sharing risks and Lloyds
organizations.

Insurance companies are rated by various agencies such as A.M. Best. The ratings
include the company's financial strength, which measures its ability to pay claims. It also
rates financial instruments issued by the insurance company, such as bonds, notes, and
securitization products.

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Reinsurance companies are insurance companies that sell policies to other insurance
companies, allowing them to reduce their risks and protect themselves from very large
losses. The reinsurance market is dominated by a few very large companies, with huge
reserves. A rein surer may also be a direct writer of insurance risks as well.

Captive insurance companies may be defined as limited-purpose insurance companies

established with the specific objective of financing risks emanating from their parent
group or groups. This definition can sometimes be extended to include some of the risks
of the parent company's customers. In short, it is an in-house self-insurance vehicle.
Captives may take the form of a "pure" entity (which is a 100% subsidiary of the self-
insured parent company); of a "mutual" captive (which insures the collective risks of
members of an industry); and of an "association" captive (which self-insures individual
risks of the members of a professional, commercial or industrial association). Captives
represent commercial, economic and tax advantages to their sponsors because of the
reductions in costs they help create and for the ease of insurance risk management and
the flexibility for cash flows they generate. Additionally, they may provide coverage of
risks which is neither available nor offered in the traditional insurance market at
reasonable prices.

The types of risk that a captive can underwrite for their parents include property damage,
public and products liability, professional indemnity, employee benefits, employers
liability, motor and medical aid expenses. The captive's exposure to such risks may be
limited by the use of reinsurance.

Captives are becoming an increasingly important component of the risk management and
risk financing strategy of their parent. This can be understood against the following
background:

• heavy and increasing premium costs in almost every line of coverage;

• difficulties in insuring certain types of fortuitous risk;
• differential coverage standards in various parts of the world;

16
 • rating structures which reflect market trends rather than individual loss
experience;
• Insufficient credit for deductibles and/or loss control efforts.

There are also companies known as 'insurance consultants'. Like a mortgage broker, these
companies are paid a fee by the customer to shop around for the best insurance policy
amongst many companies.

Similar to an insurance consultant, an 'insurance broker' also shops around for the best
insurance policy amongst many companies. However, with insurance brokers, the fee is
usually paid in the form of commission from the insurer that is selected rather than
directly from the client.

Neither insurance consultants nor insurance brokers are insurance companies and no risks
are transferred to them in insurance transactions.

Third party administrators are a company that perform underwriting and sometimes
claims handling services for insurance companies. These companies often have special
expertise that the insurance companies do not have.

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Types of Insurance & Company Profile
ICICI Lombard General Insurance Company Limited is a 74:26 joint venture between
ICICI Bank Limited and the US-based $26 billion Fairfax Financial Holdings Limited.
ICICI Bank is India's second largest bank; while Fairfax Financial Holdings is a
diversified financial corporate engaged in general insurance, reinsurance, insurance
claims management and investment management.

Lombard Canada Ltd, a group company of Fairfax Financial Holdings Limited, is one of
Canada's oldest property and casualty insurers. ICICI Lombard General Insurance
Company received regulatory approvals to commence general insurance business in
August 2001.

About ICICI Bank

ICICI Bank (formerly Industrial Credit and Investment Corporation of India) is
India's largest private sector bank and second largest overall. ICICI Bank has total assets
of about USD 56 Billion (end-Mar 2006), a network of over 619 branches and offices,
and about 2400 ATMs. ICICI Bank offers a wide range of banking products and financial
services to corporate and retail customers through a variety of delivery channels and
through its specialized subsidiaries and affiliates in the areas of investment banking, life
and non-life insurance, venture capital and asset management. ICICI Bank's equity shares
are listed in India on stock exchanges at Kolkata and Vadodara, the Stock Exchange,
Mumbai and the National Stock Exchange of India Limited and its ADRs are listed on
the New York Stock Exchange (NYSE). During the year 2005 ICICI bank was involved
as a defendant in cases of alleged criminal practices in its debt collection operations and
alleged fraudulent tactics to sell its products.

ICICI was established by the Government of India in the 1960s as a Financial Institution
(FI, other such institutions were IDBI and SIDBI) with the objective to finance large
industrial projects. ICICI was not a bank - it could not take retail deposits; and nor was it
required to comply with Indian banking requirements for liquid reserves. ICICI borrowed

18
funds from many multilateral agencies (such as the World Bank), often at concessional
rates. These funds were deployed in large corporate loans.

All this changed in 1990s. ICICI founded a separate legal entity - ICICI Bank which
undertook normal banking operations - taking deposits, credit cards, car loans etc. The
experiment was so successful that ICICI merged into ICICI Bank ("reverse merger") in
2002.

At the time of the reverse merger, there were rumors that ICICI had large proportions of
Non Performing Loans ("NPA", as they are known in India) on its books - in particular to
the steel industry. Since 2002, there has been a general revival in Indian industry (and
metal based industry in particular). It is widely believed that the proportion of NPAs has
come down to prudent levels (even if it were high earlier).

ICICI Bank now has the largest market share among all banks in retail or consumer
financing. ICICI Bank is the largest issuer of credit cards in India. It was the first bank to
offer a wide network of ATM's and had the largest network of ATM's till 2005, before
SBI caught up with it.

ICICI bank now has the largest market value of all banks in India, and is widely seen as a
sophisticated bank able to take on many global banks in the Indian market.

The bank is expanding in overseas markets. It has operations in the UK, Hong Kong,
Singapore and Canada. It acquired a small bank in Russia recently. It has tie-ups with
major banks in the US and China. The bank is aggressively targeting the NRI (Non
Resident Indian) population for expanding its business.

About Fairfax Financial Holdings

It is a Toronto, Ontario based financial services holding company which, through its
subsidiaries, is engaged in property, casualty and life insurance and reinsurance,
investment management and insurance claims management.

Segments

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Retail Segment
ICICI Lombard's Retail Segment consists of personal insurance products - Health, Home,
Motor and Travel insurances.

Health Insurance

ICICI Lombard offers the following kinds of health policies to suit different needs which
can be bought online.

• 10 K Tax Saver Health Plan - This policy has a fixed premium and enables
customers to save up to Rs.3,366 under Section 80 D of the Indian Income Tax
Act.
• Family Floater Health Plan - A single policy that takes care of the hospitalization
expenses of an entire family.
• Critical Care Plan – Critical Care plan offers a lump-sum benefit on diagnosis of
critical illness such as a heart attack, stroke, life-threatening cancer, and paralysis
or kidney failure. It comes with an additional cover against Personal Accident and
Permanent Total Disablement (PTD).
• Personal Accident Plan - This policy provides cover against accidental death,
permanent partial disablement (PPD) and permanent total disablement (PTD) on
account of an accident with a choice of continuous coverage for 3 or 5 years.

Home Insurance

ICICI Lombard Home Insurance comes in two sub sections; one covering the building
and the other the contents. Unlike other policies, however, it also covers loss of cash,
public liability, temporary resettlement, alternative accommodation and baggage
insurance.

Motor Insurance

ICICI Lombard offers Car Insurance, a package policy for four-wheelers covering Third
Party Liability (TPL), and Two Wheeler Insurance covering two wheeler vehicles.

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Apart from these, ICICI Lombard also offers Overseas Travel insurance and Student
Travel insurance.

NRI Services

ICICI Lombard has developed insurance policies for Non Resident Indians that can be
bought, renewed and tracked online.

Parents' Health Insurance covers hospitalization and medical expenses incurred by

parents of the policyholder in India. For parents' traveling outside India, ICICI Lombard
offers a Parents' Overseas Travel Insurance policy.

An NRI can insure his children/ dependents traveling abroad to study, under the Student
Medical Insurance plan. Likewise, the Home Insurance and Car Insurance schemes
enable an NRI to secure his assets in India.

Channels

Channel is the term used for the various approaches a company uses to tap its customers.
ICICI Lombard uses a multi channel approach to ensure the sales, service and other allied
activities are carried out in the most effective manner.

The channels used by ICICI Lombard can be broadly stated as under:

Retail

The Retail channel consists of sales executives, sales officers, brokers and agents. They
are the one who are in direct contact with the customers and bring the innovative
insurance solutions to their doorsteps.

Online

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ICICI Lombard has developed a web-based system to meet all the pre and post-policy
transaction. One can get quotes, buy, renew and track their policies online through the
website [www.icicilombard.com]. With the do-it-yourself architecture, the online channel
is fast, convenient, and easy to understand and operate.

Banc assurance

Banc assurance is the distribution of insurance products through a bank’s network. ICICI
Lombard has a tie-up with various banks to reach its customers efficiently. With a
dedicated team of product managers, sales managers and sales executives, the company
has been using this channel to sell, cross-sell and up sell its products.

Buying Insurance Online

ICICI Lombard was among the first companies to make their insurance products
available online in India. ICICI Lombard has web-based systems to meet all pre and post-
policy transactional needs of its customers. One can compare plans, get quotes, buy,
renew and keep a track of their insurance policies online. The company also uses this web
integration process with its channel partners to streamline its sales process.

The Telecalling problem

ICICI Lombard was the first general insurance company in India to start telesales
operations due to its inherent profitability. However in recent times, public outburst
against pushy and intrusive telecalling by ICICI and other organizations in general has
led to a reduction in cold calling and the introduction of 'do-not-call' (opt-out) lists
similar to the US 'Do Not Call Registry'.

22
REVIEW OF LITERATURE
1) Purpose
2) Methodology of review
3) Benefits

23
Purpose of the Review of Literature

• To identify the problem statement

• To understand the secondary data that has been gathered in the field of the study
• To attempt to make new findings on the problem statement without reinventing

What has already been done in this field of study?

If CRM is the "pipes" of a system for two-way communication with customers, then
CVM is the human factor. Businesses that know what customers value, know how to
deliver this value better than the competition, and know when it's important to
communicate with customers so that they perceive the true value delivered achieve
competitive advantage, better business results and shareholder value. The challenge for
business is to turn this understanding into practical action that delivers measurable
results. The idea that business success comes from focusing on customers is not new, and
vision and mission statements are full of aspirational language about creating value for
customers. Yet some of the most metrics-driven companies would be hard pressed to
explain how they are measuring and managing customer value. There is now an emerging
art and science of customer value management that is proving its worth in increased
market share and shareholder value for the companies that practice it. Companies that
capture and use customer data with the same kind of discipline, passion and
understanding they give to operational and financial data are learning that this business
practice is well worth the time and money invested. By focusing on winning in the
customer market, they also win in attracting and retaining talented people and in the
financial market. Customer value management is about:

Choosing value: Asking customers in the target market what they value, finding out how
They rate the value that is delivered compared to the competition, and using this
understanding to focus priorities and then decide what value proposition to take to
market.

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Delivering value: Making sure that the business processes are aligned with the value
Proposition and determining what business improvements will deliver the greatest value
to customers.

Communicating value: Educating the market on the value proposition and how the
company is focusing investment to deliver greater value than the competition.

1. Customer Value Management

Customer Value Management (CVM) helps leverage customer value to drive the
company’s business performance. Organizations successfully employing a customer
value management system know their customers. They also know their competitors’
customers. Effective customer value management allows organizations to assess which
products and services their customer’s demand and need, and appropriately define their
value proposition relative to their competitors.
Focus Areas are:
Internal/External CVM Assessments
Competitive Analysis
Strategic CVM Business Plans
Customer Relationship Management System
Implementation Plans/Staff Training

CVM integrates a range of strategies that allow your organization to be more valuable to
your current and future customers:

Implement innovative methodologies to manage customer transactions and

engagements and improve the efficiency of customer service delivery.
Develop systematic ways to teach, encourage, and support your staff with consultative
customer solution skills and techniques.
Add value to customers through a disciplined approach to listening to the marketplace
and understanding their business better than the competition.

25
 Improve your capability to strategically assemble enterprise-wide expertise and
experience to empower each staff member to become more valuable and responsive to
customers.
Maximize the future value of products and services by strategically directing research
and development investment dollars to those areas generating the optimal value to the
customers.

The process of developing and implementing effective CVM strategies can be done by
tools and techniques like:
Internal CVM Review
Map of customer acquisition, service and delivery processes
Employee perceptions of where and how they add customer value

Review Consolidated Findings

Identify major business processes and products/services valued highest by customers.
 Present gaps between employee and customer value perceptions.
Identify strategic market segments and competitive positioning of your
products/services.
CVM Plan Implementation
Phase-in required organizational alignment changes.
Conduct Customer Relationship Management (CRM) and CVM employee training.
Implement customer business process and product/service improvements.
Launch customer marketing and communication program advancements.
Implement CRM and CVM performance tracking systems.

Benefits of Customer Value Management are

Know and understand your customers needs
Increase customer loyalty
Assess product and service lines to align with client needs

26
2. Leveraging Customer Value Management

How companies in the insurance industry can improve financial performance?

The general insurance industry, long considered a rock of stability, is now facing major
challenges brought about by several factors like increased competition, new technologies,
pricing pressures, declining industry profitability & increased customer demand for better
service, timely claim settlement, and dispute resolution. How insurance firms respond to
these challenges affects not only short-term profitability, but also long-term survival.
Many companies will be forced out of specific market segments or whole markets
because of poorly defined customer management & customer service strategies. The need
has never been greater for solutions based on an improved understanding of customer
behavior and customer lifetime value. An integrated view of behavioral data contributes
to an improved understanding of customer potential value.

The benefits of proactive view of customer value:

General insurance companies have made significant IT investments and are increasing
their adoption rate of CRM technologies. The industry lags others in leveraging this
information to improve customer profitability and gain competitive advantage in the
market. Customer Value Management (CVM) views data as a strategic resource that
enables the organization to make better and more informed decisions. Its focus is
prediction and explanation - the identification, quantification, and prioritization of factors
having an impact on the value chain and customers' current and potential value. Being
able to accurately identify and rank order customer characteristics and behaviors having
the highest impact on risk, premium and servicing costs can yield immediate, bottom-line
benefits to insurance companies. With this insurance company can more quickly identify
which factors are significant to improve pricing and refocus sales and marketing
programs?

27
The result of this proactive CVM approach to insurance is:

Risk segments: Groups of customers and policy claims having similar risk profiles and
identification of key risk factors and value differentiators across segments.
Propensity-to-claim scores: Predictive models that quantify the likelihood of submitting
claims, size of claim, fraud propensities.
Loss elasticity’s: Quantification of the potential revenue loss due to unit changes among
the risk factors.
Prioritized Market Test pilots: Recommended list of potential pilots to test in the
market.
The CVM approach expands the scope of information by supplementing it with external
Relationship-based customer data. This relationship view of customer lifetime value is
what we call the next evolution in management. It helps insurance companies realize the
many benefits from positioning their products and services to meet customers evolving
security and financial needs. CVM enables insurance companies to achieve significant
improvements in its profitability and increase the effectiveness of their customer
management, product design and sales management strategies.

3. The Second Deadly Sin of CVM - Ignoring the Customer Life Cycle

Customers rarely stand still – their preferences, behavior, lifestyle and buying habits
invariably change over time. And while marketing executives recognize the dynamic
nature of customer behavior and customer relationships, many miss the opportunity to
create new value because of organizational inertia that prevents many enterprises from
keeping pace with customers’ changing needs. Companies aren’t clear about what, when
and how of meeting customers evolving needs and preferences. This uncertainty and lack
of knowledge translates into lost revenues and missed opportunities to cement profitable,
long-term customer relationships. A customer-centric life insurance company should
deeply understand the needs of its highly focused segments and services them
accordingly. It doesn’t take a major effort to achieve impressive results – adding two
columns to a customer file the first identifies the value of a customer, second identifies

28
the appropriate offer to present to that customer. This simple redesign makes it possible
to provide customer service reps with important details about a customer’s value and
preferences. Companies can garner 20 to 30 percent increases in terms of the percentage
of customers adding at least one additional product to their portfolios. They can increase
sales yield 10 to 20 percent by improving their ability to match product recommendations
to customers’ profiles. And by carefully targeting product recommendations in response
to incoming customer calls; sales rate improvements of 10 to 25 percent are not
uncommon. The net profits from CVM can be reinvested into additional incremental
improvements, creating a cascade of successful results that ripple throughout the
organization.

4. Customer Value Management: Turning Customer Insight into More Profitable

Relationships

CVM helps to understand how line of business, marketing, sales managers and
executives in the insurance business can:

• Improve customer retention

• Increase revenue
• Drive down cost in their businesses

Customer Value Management approach can be used for more accurate cost projection,
and to better measure actual value contribution by customers. Customer Service-Products
and prices in an Insurance industry can be easily duplicated. Thus service becomes the
only differentiator which will provide the competitive advantage in the long run.
Insurance companies should have a cell for customer management, which caters to the
customer needs and complaints. The Insurance agents are the interface between the
customer and the Insurance Company. The agents should be able to accomplish the
following to improve service.
Assessing and analyzing the client’s risk profile
Finding the best product or products available in the market

29
 Negotiating the best deal available
Continuity of service throughout the period of Insurance
Claims advisory service

5. CRM: Moving Toward Customer Value Management

Changes in technologies, business processes, organization models and customers

themselves have fundamentally affected the marketing, sales and service continuum.
CRM’s evolution is temporarily slowed, but a new round of more dramatic change is on
its way and new customer strategies will be built on a platform of new technology
capabilities. Looking into the future, CRM will be more about consistently managing and
exceeding customer expectations. Improved measurement and greater financial rigor will
move customer management from CRM’s relationship -focused approach to a more
financially driven value-based approach, which we call customer value management. The
focus on the customer will remain, but businesses will simultaneously step up their
efforts to gain value for themselves.

Companies that aspire to serve their customers both well and profitably need to be aware
of five major trends that will play a role in the evolution of CRM into CVM – rising
customer expectations, viewing customers as assets, improving customer intelligence
quotients, developing new organization models and increasing financial rigor. It is
important to have a customer value measurement system, which often succeeds the
customer satisfaction measurement system. The customer value measurement systems
need to cater to many dimensions of the relationship including those of competitor
analysis. Sharing the customer value measures with the customer forms an integral part of
a metrics based customer relationship management system.

30
METHODOLOGY OF THE REVIEW OF LITERATURE
Review of the literature has been done with the help of the following sources:
• Company Literature
• Brochures
• The Internet
• ICICI Lombard – Quarterly Report
• Publications
• Articles on CVM
• A text book on Customer Value Management

BENEFITS OF REVIEW OF LITERATURE

The review of literature has been very informative, as it has thrown light on the research
and articles that have been written on Customer Value Management. Moreover it has
helped in identifying the degree of research that has been done already on this topic. It
has helped our study, as it constituted the basis of secondary data for our study.

31
RESEARCH METHODOLOGY
• Scope of the study
• Type of research
• Data Collection
• Sampling Technique

32
METHODOLOGY
Scope of the Study
This study is restricted to the Personal Life Insurance sector. Research is conducted at
Bangalore Metropolitan Area only.

Type of Research
Our research is a formal study with some elements of exploration involved. This research
is also aimed at recognising the areas of improvement for ICICI General Insurance
Company Ltd. in terms of their relationship with customers.

Data Collection
Data sources consisted of primary and secondary. Sources of primary data included the
policyholders of ICICI Lombard Life Insurance Company Ltd. and also its employees.
Sources of secondary data included the information provided by the organisation and
various text books, magazines, internet and company broucheres. A structured
questionnaire was developed and administered to generate the primary data.

Sampling Technique
Random Sampling
It is also called probability sampling or chance sampling. Under this sampling design
every item of the universe has an equal chance of inclusion in the sample. All choices are
independent of one another. It gives each possible sample combination an equal
probability of being chosen. I have therefore adopted this technique in my study.

Sample Size
The composition of my sample consisted of policyholders of ICICI General Insurance
Company Ltd., the employees and insurance advisors. The respondents whom I have
approached are 50 in number.

33
Sample Description

Age 20 – 30 30 - 40 40 - 50 50 - 60 Total
No 25 9 3 13 50

The respondents are concentrated in the age groups between 20 – 30 years. There are also
respondents in the age groups of 50 – 60 years.

Gender Male Female Total

No 35 15 50

Majority of the respondents are male (70%) and the remaining 30% of them are females.

Instrumentation Techniques
Structured Questionnaire : The primary data has been collected through structured
questionnaires, which were administered to the respondents.

Tools used for testing Hypotheses

The Chi-Square and z-test were used for testing the Hypotheses. Three hypotheses were
stated and the statistical testing of hypotheses was conducted by these tests. These
statistical tools were used keeping in mind the distribution of the population.

Limitations of the Study

Research investigation is beset with time and resource constraints. Research is limited to
Bangalore Metropolitan Area and hence the limitation of generalization becomes
obvious.

34
DATA ANALYSIS AND INTERPRETATION
• Statement of Hypotheses
• Testing of Hypotheses
• Inferences from the analysis

35
STATEMENT OF HYPOTHESES
The following three hypotheses which are appropriate to our study have been tested
1. Ho = There is not more than one route to provide superior delivered value to
Customers
H1 = There is more than one route to provide superior delivered value to customers

2. Ho = There is no direct link between Customer Value and Market Share H1 = There is
a direct link between Customer Value and Market Share

3. Ho = Customer Value Mapping cannot assess where the company’s services stand
Against competitors on the relative quality versus price matrix
H1 = Customer Value Mapping can assess where the company’s services stand Against
competitors on the relative quality versus price matrix

I (a) Ideas/Meanings associated with the General Insurance Policy of ICICI

Lombard

Meanings No. Percentage

Max Risk Cover 21 42%
Profitable Mode of Investment 26 52%
Tax Rebate 21 42%
Multiple Benefits 21 42%
Premium 4 8%
Pre/During/After Sales Service 12 24%
Total 105 -

36
Note: The respondents have more than one meaning associated with ICICI Lombard
Source: Field Investigation

30
25
20 No.
15
10 Percentage
5
0
Max Risk Cover

Pre/During/After
Profitable Mode

Tax Rebate

Multiple
Benefits

Premium

Sales Service
of Investment

Source: Field Investigation

Interpretation: The most important association of idea with General Insurance policy of
ICICI Lombardi’s as a profitable mode of investment (52%). The other associations with
the company are in terms of the maximum risk cover, tax rebate and multiple benefits
provided by the policies. Presales, during-sales and after-sales service is also another idea
association given by the respondents.

I (b) Ranking the above manifestations of value as associated with the General
Insurance policy of ICICI Lombard

Manifestations of Value (No. of respondents)

Max Risk Cover 38
Profitable Mode of Investment 34
Tax Rebate 29
Multiple Benefits 28
Premium 5
Pre/During/After Sales Service 7

Source (Ib): Field Investigation

37
40
35
30
25
20
15
10
5
0
Max Risk Profitable Tax Rebate Multiple Premium
Cover Mode of Benefits
Investment

Interpretation : We need to identify the most important value associated with Life
Insurance policy of ICICI Lombard. The most important values according to the
customers are providing maximum risk cover, profitable mode of investment, tax rebate
enjoyed by them, multiple benefits provided, pre-sales:during-sales:after-sales service
provided. Premium comes last in the order of ranking.

Hypothesis Testing I
Ho = There is not more than one route to provide superior delivered value to customers
H1 = There is more than one route to provide superior delivered value to customers
The statistical tool used to test this hypothesis is Chi-square test. This non-parametric
test is used keeping in mind the sample size. Chi-square = (Oij-Eij)²/Eij
Meanings associated with ICICI Lombard

Meaning associated with ICICI Lombard

Maximum Profitable Tax Multiple Premium Pre/During/After Total
Risk Investment Rebate Benifits Sales Service
Cover
No 21 26 21 21 4 12 105
Rank 38 34 29 28 7 5 141
Total 59 60 50 49 11 17 246

38
Chi- -Eij)²/Eij where Oij is the observed frequency in the i,jth cell and Eij
is the expected frequency in the i,jth cell.
We calculate chi-square as : Expected (E) is calculated as (21+26+21+21+4+12)/6
E = 17.5
Degrees of freedom is (c-1)(r-1) = (2-1)(6-1) = 5

E O (O-E)2/E
17.5 21 0.7
17.5 26 4.12
17.5 21 0.70
17.5 21 0.70
17.5 4 0.41
17.5 12 1.72
Chi-Square 18.37

Inference: At 5% level of significance and 5 degrees of freedom the table value of

chisquare is 11.07 and calculated value is 18.37 which is higher than the table value.
Hence we reject the null hypothesis and conclude that there is more than one route to
deliver superior delivered value to customers, the most important route being to provide
maximum risk cover to customers.

II (a) Preference of companies to buy a Geneal Insurance Policy

Preference No Percentage
ICICI Lombard 45 90%
Other Private Companies 5 10%
50 100%

Source : Field Investigation

39
Interpretation: We need to identify the preference of customers towards a particular
company to buy a Life Insurance policy. It is inferred from the table and graph that 90%
of the respondents prefer policies of ICICI Lombard and only 10% of them prefer buying
it from other Pvt. Life Insurance companies. Hence it is inferred that ICICI Lombard
forms the most preferred General Insurance company among the private players and
hence can gain a large market share.

I (b) Reasons for preferring ICICI Lombard

Reasons No. Percentage
Wide varieties of policies 8 18%
Satisfaction with policy 3 7%
features
Most popular brand 24 53%
Customer Loyalty 4 9%
Returns- Good & 4 9%
Consistent
Good servicing of policies 7 15%
Highly Professional 2 4%
Products of this company 4 9%
are better known to me
Policies are affordable & 1 2%
highly flexible
Simple process to obtain a 1 2%
policy
Total 58 -

Note : The respondents have more than one reason for preferring a policy from ICICI
Lombard. Hence the total is not additive.
Source : Field Investigation
Interpretation: This helps to know the reasons for preferring policies of ICICI Lombard

40
The most important reasons are the company’s well known brand name, wide varieties of
policies to choose from, good service provided to customers, good returns and also highly
affordable and flexible policies. Hence it can be inferred that this company’s policies are
preferred due to its brand name and other value additions provided by the company.

I (c) Reasons for preferring other Private Players

Reasons No Percentage
Depends whether an LI 5 100%
policy is available on hand
Total 5 100%

Source : Field Investigation

Note : The total represents only those respondents preferring policies from other private
Insurance Companies.
Interpretation : The respondents who prefer a Life Insurance policy from other private
Life Insurance companies do so depending on whether a suitable Life Insurance policy
product is offered by them and not because of the value provide by those companies.

Hypothesis Testing II
Ho = There is no direct link between Customer Value and Market Share
H1 = There is a direct link between Customer Value and Market Share
The statistical tool used to test this hypothesis is z - test.
The formula is given as
Z = p1 – p2
P = n1p1 +n2p2 and Q = 1 - P
n1 +n2
(a) Market share of ICICI Lombard = 90%
(b) Reasons for preferring ICICI Lombard

41
Reasons No. Percentage
Wide varieties of policies 8 18%
Satisfaction with policy 3 7%
features
Most popular brand 24 53%
Customer Loyalty 4 9%
Returns- Good & 4 9%
Consistent
Good servicing of policies 7 15%
Highly Professional 2 4%
Better known products 4 9%
Policies are affordable 1 2%
Simple process to obtain a 1 2%
policy
Total 58

Considering the first two reasons with the highest percentage, we use the z-test as
follows :

p1 = 0.53 and p2 = 0.18 (sample proportions)

n1 = 58 and n2 = 58 (sample size)
P = n1p1 +n2p2 = 58 (0.53) +58 (0.18) = 0.355
n1 +n2 58 + 58
Q = 1 – P = 1-0.355 = 0.645
Z = 0.53 – 0.18 = 3.93

24365_798,:_;<365=7 >@?@;A3 B"C_:,DFE(BGC_:,DH;

Inference: Critical value of Z at 5% level of significance is 1.96. As the calculated value
of Z is greater than the critical value, we reject the null hypothesis and conclude that
there is a direct link between customer value and market share.

42
III (a) Quality of ICICI in terms of its value

Quality No. Percent

High 35 70%
Medium 15 30%
Low 0 0%
Source : Field Investigation

Interpretation: This is to find out the quality of ICICI Lombard in terms of its value. The
quality of the company is found to be high with majority of the respondents i.e. 70% and
only 30% of them feel that the quality of the company in terms of its value is medium.
This shows that the quality of ICICI Lombard in terms of the value provided to customers
is high.

II (b) Price of premium policy of ICICI Lombard

Price No Percent
High 5 13%
Low 1 3%
Affordable 31 84%
Total 37 100%
Source: Field Investigation
Interpretation: We need to identify the customer’s opinion about the price of premium
policies of ICICI Lombard. It is evident from the graph and the table that 84% of the
respondents stated that the policy is affordable while only a small percentage of them
13% stated that the price is high. The price of the policy of ICICI Lombard seems to be
affordable.

Hypothesis Testing III

Ho = Customer Value Mapping cannot assess where the company’s services stand against
competitors on the relative quality versus price matrix

43
 H1 = Customer Value Mapping can assess where the company’s services stand against
competitors on the relative quality versus price matrix

Higher Fair Value

Lower

Lower Higher

X – axis : Relative Quality (in %)

Y – axis : Relative Price (in %)
Inference : This map helps us to assess where the company’s service stands against
competitors. The position of the ICICI Lombard is to the right and below the fair value
line. This is indicated by the black dot as shown above. Hence ICICI Lombard is in a
gain sharing position. Hence we reject the null hypothesis and conclude that Customer
Value Mapping can assess where the company’s services stands against competitors on
the relative quality versus price matrix.

INFERENCES
Gender
It is inferred from the Field Survey that 70% of the respondents are male and 30% of
them are females.
Age
It is seen from the table that majority of the respondents 56% are from potential insurable

44
age bracket of 20 to 30 years.
Do you have a General Insurance Policy?
This project is based on certain objectives and seeks to find out as to how many
respondents have a General Insurance Policy at present. It is noted that 92% of them have
a policy and the rest of them indicate potential customers for the company.

Name of Life Insurance Company from which the policy is bought

The data indicates that majority of the respondents who have a General insurance policy
have purchased it from ICICI Lombard –80%. A small percentage of them have
purchased the policy from Other Players.

Level of satisfaction for the policy service

The Survey indicates the satisfaction level of policyholders in terms of service provided
by the company. It is inferred that a high percentage of respondents – 63% have a high
level of satisfaction and 37% of them stated that the level of satisfaction for policy
service is medium.

If you don’t have a General Insurance policy, give reasons

50% of respondents have mentioned that: Do not feel the need for and the remaining 50%
feel that can’t afford to buy one at this stage.
Note: This total includes only those respondents without a policy.

Satisfaction with the existing features of General insurance policy

The data indicates that all respondents who have a life insurance policy are satisfied with
their policy features. This infers that existing policies are properly designed.

Benefits expected from the life insurance policy

Benefits No Percentage
Income Tax Rebate 37 74%
Property Risk Cover 35 76%
Loan facility 7 7%

45
Appreciation of capital 32 32%
invested

Note: The respondents expect more than one benefit

The table shows property risk cover is the main criterion with the majority of respondents
76%. At the same time the same respondents look for additional financial benefits by way
of income tax rebates. Also 64% of them buy a life insurance policy to appreciate the
capital invested. A very small percentage of the respondents think of availing themselves
of loans against their policies.

Are private General insurance companies more trustworthy?

The data shows that majority of the respondents 76% stated that private General
insurance companies are more trustworthy. A small percentage of them did not agree
with this. This infers that a majority of the respondents have faith in private general
insurance companies and hence have purchased policies from them.

Why private General insurance companies are not trustworthy?

This table indicates the reasons for the customers not having faith in private General
Insurance companies. 42% of the respondents stated that private general insurance
Companies are relatively new in India compared to Public Insurance Company of India
and 25% of them felt that private companies do not have a strong financial foundation.
The other reasons are fear of closure, risk involved and complicated procedures followed
by them.
Guidance regarding the best policy to suit my needs 16-32%, Policy features to be put
forth honestly without suppressing the facts 12-24%, Reminders regarding premium
payment falling due to be conveyed on time 8-16%, Whether switch over facility between
policies is available 2-4%.

Are you aware of ICICILombard?

This table shows the awareness level of ICICI Lombard among respondents. Data
shows that all respondents –100% are aware of ICICI Lombard.

46
Source of awareness of ICICI Lombard
The respondents have more than one source of awareness.The table indicates that
advertisements followed by life insurance agents form the main source of awareness for
ICICI Lombard. 20% of the respondents came to know about ICICI Lombard through
their friends, 18% of them are aware of ICICI Lombard as they are employed there. A
small number of respondents stated the personal internet as their source of awareness.

Reasons for preferring ICICI Lombard

The respondents have more than one reason for preferring ICICI Lombard. This shows
the reasons for preferring policies of ICICI Lombard. The most important reasons for this
seem to be well-known brand and most popular company among private players, wide
varieties of policies to choose from and also good service provided along with a host of
other reasons.

Reasons for preferring other private companies

This total represents only those respondents who prefer policies from other private
players. All the respondents who prefer policies from other private life insurance
companies do so as their choice depends on whether a suitable insurance policy is
offered.

Extra value added features in ICICILombard’s policies

Each respondent finds more than one value added feature in the policy This shows the
value-added features in policies of ICICI Lombard. Wide range of options 28%, multiple
benefits-26% and flexibility and good returns (20% each) seem to be the most important
value-added features. About 24% of the respondents are unable to identify extra value
added features provided by ICICI Lombard.

Ideas associated with the Life Insurance policy of ICICI Lombard.

Respondents have more than one meaning associated with ICICI Lombard. The General
Insurance e most important idea associated with insurance policy of ICICI Lombard

47
profitable mode of investment (52%). Maximum risk cover and tax rebate are the other
meanings associated. 24% of the respondents have the sales service as a meaning
associated with ICICI Lombard.

Rank the above manifestations of value in the order of merit

The table shows that the most important value associated with the General insurance
policy of ICICI Lombard is maximum risk cover. The other values in the order of merit
are profitable mode of investment, tax rebate, multiple benefits, pre/during/after sales
service and premium.
Note: The total is not additive as the respondents have more than one value associated
with ICICI Lombard.

What do you feel about the premium policy of ICICI Lombard?

The total represents respondents who have an ICICI Lombard policy
This shows the customer’s opinion about the premium policy of ICICI Lombard. It
indicates that 84% of the respondents felt that the policy is affordable. Only 13% of them
felt that the premium rate of policy is high.

Quality of ICICI Lombard in terms of its value

The table indicates the quality of ICICI Lombard in terms of its value. 70% of the
Respondents have rated the quality of ICICI Lombard as ‘High’ in terms of its value.
30% of them have rated the company’s quality as ‘Medium’. However no respondent felt
that the quality of the company is ‘Low’.

Satisfaction with ICICI Lombard in policy servicing

The total represents respondents who have a policy from ICICI Lombard. The Survey
shows the satisfaction of customers with ICICI Lombard in servicing of policies. All
respondents (100%) who have policies from ICICI Lombard have expressed satisfaction
with respect to servicing of their policies.

Comment on the promotional policy of ICICI Lombard

48
The respondents have more than one opinion
Data indicates that 78% of the respondents felt that the promotional policy of ICICI
Lombard is quite good in terms of its theme, logo and frequency. 18% of them stated that
advertisement frequency could be increased. 12% of them are of the view that the
contents of advertisement could be made simpler. A very small percentage of respondents
felt that the reach is to a limited audience.

ICICI Lombard becoming popular day by day?

This shows the popularity of ICICI Lombard growing day after day. 98% of the
respondents agreed about the growing popularity of ICICI Lombard while only 2% of
them disagreed.

Reasons for its popularity

The respondents have more than one reason for its popularity
The reasons that are most important for the popularity of ICICI Lombard are the
marketing strategies adopted, aggressive promotion, its wide network of advisors,
established brand name in the order of merit. The other reasons are quality of service,
superior product features and various other benefits provided by policies.

Do you recommend heavy dose of personnel selling for ICICI Lombard?

It is seen from the table that 60% of the respondents do not recommend a heavy dose of
personnel selling for ICICI Lombard while only 40% of them seem to be in favor of a
heavy dose of personnel selling.

Reasons for recommending personnel selling for ICICI Lombard

The respondents have more than one reason for its popularity 46
A majority of the respondents (50%) recommend personnel selling for ICICI Lombard so
as to increase its sales and profitability. 10% of them stated that personnel selling helps to
stay ahead of competition. 15% of them each recommend personnel selling to give
customers a more personal touch and to penetrate deeper into the life insurance market.

49
Have you visited ICICI Lombard anytime for transactions?
The total represents respondents who have a policy from ICICI Lombard
The data indicates that a majority of the respondents-68% who have a policy from ICICI
Lombard have not approached the company anytime for transactions. Only 32% of them
have approached the company for transactions.
If you have visited ICICI Lombard, comment on the behavior of frontline
employees
The respondents have more than one view about the behavior
This exhibits the behavior of frontline employees of ICICI Lombard. The behavior
pattern according to 67% of the respondents is ‘good’, 33% of them stated that the
frontline employees are very ‘helpful’, 17% of them felt that key personnel are very
‘friendly’ and ‘co -operative’.

Table-29 Do you have any complaints against ICICI Lombard

The total represents respondents who have a policy from ICICI Lombard
This shows the number of respondents having complaints against ICICI Lombard. A vast
majority (97%) of the respondents has no complaints and only one respondent (3%)
among the total number of respondents have a complaint against the company. This infers
that a majority of the policyholders are happy and satisfied with ICICI Lombard.

Please specify the complaint, if any

The settlement of the policy amount was delayed
Please suggest remedial measures
ICICI Lombard should speed up the process regarding the settlement amount
Image of ICICI Lombard
The opinion of all the respondents (100%) about the image of ICICI Lombard is
Positive. None of the respondents felt that the company’s image is negative.

Recommendations to enhance the value of ICICI Lombard

The respondents have more than one recommendation
This shows the ways and means of enhancing the value of life insurance policy of ICICI

50
Lombard. It is seen from the table that 27% of the respondents want the company to be
customer centric, 14% of them each felt that the company should introduce new policies
in accordance with the changing needs of customers and also allow to switch between
various options more than once a year. Other recommendations are to give guaranteed
returns to the customers and to reduce the premium amount of certain policies.

Future outlook visualized for ICICI Lombard

The respondents have more than one opinion about the future outlook 40% of the
respondents state that ICICI Lombard has a good future ahead. 32% of them stated that
the future of the company is quite bright, 12% of them hope that ICICI Lombard will
remain as the leading private life insurance company. The remaining respondents opined
that ICICI Lombard would emerge as a powerful brand. 2% of them stated that the future
is challenging.

51
Findings of study
_The most important reasons for buying a General Insurance Policy from ICICI Lombard
are brand name, wide varieties of policies to choose from and good servicing of policies.
_The most important value added features in ICICI Lombard’s policies are wide range of
options within the same policy, multiple benefits packed in a single policy, flexibility and
good returns.
_The manifestations of value of ICICI Lombard in order of ranking are – maximum risk
cover, profitable mode of investment, tax rebate, multiple benefits, presales/during-
sales/after the sales service and premium.

52
CONCLUSIONS
All the above articles are related to Customer Value Management and also implications
of adopting CVM in the Life Insurance industry. It therefore, becomes important for us to
understand as to how a Life Insurance company can increase value for its customers,
protect the existing customers, avoid migration of customers and also to add new value to
customers by way of modifying the business design. A research on Customer Value
Management in a Life Insurance company would help us to bring out the following
concepts

It will help to understand the intricate details of CVM in a General Insurance industry.
The role and importance of CVM in the services sector can also be understood. The
implications of adopting CVM on the business, the expected value of customers and the
capability of the company to deliver the same can be examined.

53
Recommendations
_The positive features already existing in policies should be highlighted. Thus the
Customers will find extra value in their policies.
_The settlement of policy amount should be expedited and never unduly delayed so that
the customer is not aggrieved. This will also help the company to avoid migration of its
customers.
_The value of ICICI Lombard can be enhanced by being customer centric, increasing
Awareness about the company among customers, introduce new policies according to
changing needs of customers, to provide switching between various options more than
once a year, give guaranteed returns, handle complaints effectively and provide value for
money for the customers.
_ Companies must be ‘customer creating’ and ‘customer satisfying’ organizations i.e.
they must do the things that induce customers to do business with them. We recommend
this strategy to ICICI Lombard.

54
 Bibliography

Websites
www.google.com
www.icicilombard.com
www.wikipedia.org.com
www.indiastat.com
www.gicfindia.in

55