MODULE-4

• The various constituents of the insurance market:

Operations of insurance companies - operations of
intermediaries – specialist Insurance companies-
insurance specialists – Marketing of General Insurance-
Life Insurance Marketing- Channels of Sales.
Management of insurance companies, challenges of
globalisation and business process re-engineering;
Methodology of outsourcing. Application of IT in
insurance business, system controls, application of ERP
for insurance companies, Customer relation
management.
Insurance market:
• As per Business Insider Lexicon, the insurance
market is essentially the "purchasing and
selling of insurance."
• Insurance for risk management is purchased
by individuals or groups from insurers that
provide coverage for specific risks.
 Constituents of the insurance market:

• The insurance industry has progressed from the

first motor insurance policy to the
different types of life insurance policies that are
available today.
• Property/liability insurers, life insurers, and
health insurers are all part of the insurance
sector.
• Each of these sorts of insurers has its own set of
rules that govern the insurance that they offer.
• Depending on the type of insurance provided,
insurers are subject to a combination of state
and federal rules.
• Common ownership
• Mutual insurance companies
• Health insurance
• Stock insurance companies
• Properties and casualty
Common ownership
Mutual insurance company

• A mutual insurance company is a corporation

owned exclusively by the policyholders who
are "contractual creditors" with a right to vote
on the board of directors.
• Generally, companies are managed and assets
(insurance reserves, surplus, contingency
funds, dividends) are held for the benefit and
protection of the policyholders and their
beneficiaries.
Stock insurance company
• A stock insurance company is a corporation owned
by its stockholders or shareholders, and its
objective is to make a profit for them.
• Policyholders do not directly share in the profits or
losses of the company.
• To operate as a stock corporation, an insurer must
have a minimum of capital and surplus on hand
before receiving approval from state regulators.
• Other requirements must also be met if the
company's shares are publicly traded.
• Some well-known American stock insurers include
Allstate, MetLife, and Prudential.
 Property and casualty companies

• Property and casualty companies insure

against accidents of non-physical harm.
• This can include lawsuits, damage to personal
assets, car crashes and more.
• Large property and casualty insurers include
State Farm, Nationwide and Allstate.
 INSURANCE COMPANY OPERATIONS
The most important insurance company operations
consist of the following:
• Ratemaking
• Underwriting
• Production
• Claim settlement
• Reinsurance
Insurers also engage in other operations, such as
accounting, legal services, loss control, and information
systems.
RATING AND RATEMAKING
• Ratemaking refers to the pricing of insurance and the
calculation of insurance premiums .
• A rate is the price per unit of insurance.
• An exposure unit is the unit of measurement used in
insurance pricing, which varies by line of insurance.
• The person who determines rates and premiums is known
as an actuary .
• An actuary is a highly skilled mathematician who is
involved in all phases of insurance company operations,
including planning, pricing, and research.
UNDERWRITING
• Underwriting refers to the process of selecting,
classifying, and pricing applicants for insurance .
• The underwriter is the person who decides to
accept or reject an application.
• Statement of Underwriting Policy: Underwriting
starts with a clear statement of underwriting policy.
• An insurer must establish an underwriting policy
that is consistent with company objectives.
PRODUCTION
• The term production refers to the sales and marketing
activities of insurers.
• Agents who sell insurance are frequently referred to as
producers .
• Life insurers have an agency or sales department. This
department is responsible for recruiting and training new
agents and for the supervision of general agents, branch office
managers, and local agents.
• Property and casualty insurers have marketing departments.
To assist agents in the field, special agents may also be
appointed.
• A special agent is a highly specialized technician who provides
local agents in the field with technical help and assistance
with their marketing problems.
CLAIMS SETTLEMENT
• Every insurance company has a claims division or
department for adjusting claims.
• This section of the chapter examines the basic objectives
in adjusting claims, the different types of claim adjustors,
and the various steps in the claim-settlement process.
Basic Objectives in Claims Settlement:
• Verification of a covered loss
• Fair and prompt payment of claims
• Personal assistance to the insured
REINSURANCE
• Reinsurance is an arrangement by which the primary insurer
that initially writes the insurance transfers to another insurer
(called the reinsurer) part or all of the potential losses
associated with such insurance .
• The primary insurer that initially writes the insurance is called
the ceding company .
• The insurer that accepts part or all of the insurance from the
ceding company is called the reinsurer .
• The amount of insurance retained by the ceding company for
its own account is called the retention limit or net retention .
• The amount of insurance ceded to the reinsurer is known as
the cession.
Insurance intermediaries
Distribution of insurance is handled in a number of ways.
• The most common is through the use of insurance
intermediaries.
• Insurance intermediaries serve as the critical link
between insurance companies seeking to place
insurance policies and consumers seeking to procure
insurance coverage.
• Intermediaries, traditionally called “brokers” or
“agents” or “producers,” offer advice, information and
other services in connection with the solicitation,
negotiation and sale of insurance.
Insurance Intermediaries
• Insurance intermediaries facilitate the placement and
purchase of insurance, and provide services to
insurance companies and consumers that
complement the insurance placement process.
• Traditionally, insurance intermediaries have been
categorized as either insurance agents or insurance
brokers.
• The distinction between the two relates to the
manner in which they function in the marketplace.
Insurance Agents
• Insurance agents are, in general, licensed to conduct
business on behalf of insurance companies.
• Agents represent the insurer in the insurance process and
usually operate under the terms of an agency agreement
with the insurer.
• The insurer-agent relationship can take a number of
different forms.
• In some markets, agents are “independent” and work
with more than one insurance company (usually a small
number of companies);
• In others, agents operate exclusively – either
representing a single insurance company in
one geographic area or selling a single line of
business for each of several companies.
• Agents can operate in many different forms –
independent, exclusive, insurer-employed and
self-employed.
Insurance Brokers
• Insurance brokers typically work for the policyholder
in the insurance process and act independently in
relation to insurers.
• Brokers assist clients in the choice of their insurance by
presenting them with alternatives in terms of insurers
and products.
• Acting as “agent” for the buyer, brokers usually work
with multiple companies to place coverage for their
clients.
• Brokers obtain quotes from various insurers and guide
clients in determining the adequate policy from a range
of products
• In some markets, there are distinctions among
brokers depending upon the types of insurance they
are authorized (licensed) to intermediate – all lines
of insurance, property and casualty or life/health
coverage.
• While most, if not all, brokers are active in commercial
lines, some also intermediate personal lines policies.
• There are also distinctions between “retail brokers,”
who negotiate insurance contracts directly with
consumers, and
• “wholesale brokers,” who negotiate insurance
contracts with retail brokers and agents, but not
directly with consumers.
The Role of Insurance Intermediaries
• Innovative marketing- deepens and broadens
insurance markets by increasing consumers’
awareness of the protections offered by insurance
• Dissemination of information to consumers-
Intermediaries provide customers with the
necessary information required to make educated
purchases/ informed decisions. Intermediaries can
explain what a consumer needs, and what the
options are in terms of insurers, policies and
prices.
• Dissemination of information to the marketplace-
Intermediaries gather and evaluate information
regarding placements, premiums and claims
experience.
When such knowledge is combined with an
intermediary’s understanding of the needs of its
clients, the intermediary is well-positioned to
encourage and assist in the development of new
and innovative insurance products and to create
markets where none have existed
• Sound competition-Increased consumer knowledge
ultimately helps increase the demand for insurance and
improve insurance take-up rates.
• Spread insurers’ risks-Quality of business is important
to all insurers for a number of reasons including
profitability, regulatory compliance, and, ultimately,
financial survival. Insurance companies need to make
sure the risks they cover are insurable – and spread
these risks appropriately – so they are not susceptible to
catastrophic losses
• Reducing costs-By helping to reduce costs for insurers,
broker services also reduce the insurance costs of all
undertakings in a country or economy
Insurance specialist

• An insurance specialist is a professional responsible for

interpreting insurance plans and providing risk management
advice to clients and wealth managers.
• Insurance specialists must have a full understanding of risk
management to craft a comprehensive solution that
integrates well with the client's portfolio.
• They need to manage their clients' accounts and should
maintain contact with clients after the application process.
• Insurance specialists must ensure that government insurance
programs comply with federal laws, regulations, and contracts
within the healthcare industry.
Marketing System in Insurance

Marketing systems refer to the various

methods for selling and marketing insurance
products. These methods of selling are also
called distribution systems .

An efficient distribution system is essential

to an insurance company’s survival.
 Life /General- Insurance Marketing
Distribution systems for the sale of life
insurance have changed dramatically over
time.
Major life insurance distribution systems: -

1. Personal selling systems

2. Financial institution distribution systems
3. Direct response system
4. Other distribution systems
1 . Personal Selling Systems

The majority of life insurance policies and

annuities sold today are through personal
selling distribution systems
1.1 Career agents are full-time agents who
usually represent one insurer and are paid on a
commission basis.
1.2 Multiple Line Exclusive Agency System,
Under this system, agents who sell primarily
property and casualty insurance also sell
individual life and health insurance products.
1.3 Independent property and casualty
agents are independent contractors who
represent several insurers and sell
primarily property and casualty insurance.

1.4 A personal-producing general agent

(PPGA) is an independent agent who
receives special financial consideration for
meeting minimum sales requirements.
1.5 Brokers are independent agents who
do not have an exclusive contract with
any single insurer or an obligation to sell
the insurance products of a single insurer.
2. Financial Institution Distribution Systems

Many insurers today use commercial banks

and other financial institutions as a
distribution system to market life insurance
and annuity products.
3. Direct Response System:
It is a marketing system by which life and
health insurance products are sold directly
to consumers without a face-to-face
meeting with an agent.
Potential customers are solicited by
television, radio, mail, newspapers,
Internet.
4. Other Distribution Systems:
4.a Worksite Marketing.
Individual sales interviews on site with
employees interested in purchasing life
insurance products
4.b Stock brokers are licensed to sell life
insurance products.
4.c Financial Planners provide advice to
clients on investments, estate planning,
taxation, wealth management, and
insurance.
Property and Casualty Insurance Marketing

1. Independent agency system

2. Exclusive agency system
3. Direct writer
4. Direct response system
5. Multiple distribution systems
1. Independent agency system
It is a business firm that usually represents
several unrelated insurers .
It owns the expirations or renewal rights to
the business .
It is compensated by commissions that vary
by line of insurance .
In addition to selling, independent agents
perform other functions like adjust small
claims, loss control services, bill the
policyholders and collect the premiums
2. Exclusive Agency System

It represents only one insurer or a group

of insurers under common ownership.

They do not usually own the expirations

or renewal rights to the policies but
independent agency systems have
complete ownership of the expirations.
They generally pay a lower commission
rate on renewal business than on new
business but independent agency system
typically pay the same commission rate
on new and renewal business.

They provide strong support services to

new agents.
3. Direct Writer
Technically, a direct writer is an insurer in
which the salesperson is an employee of
the insurer, not an independent
contractor.
4.Direct Response System
Sells directly to the public by television,
telephone, mail, newspapers and other
media
5. Multiple Distribution Systems:(new
ways to sell )
To increase profits, many property and
casualty insurers use more than one
distribution system to sell insurance.
These systems are referred to as multiple
distribution systems .
GROUP INSURANCE MARKETING
Many insurers use group marketing
methods to sell individual insurance
policies to members of a group like
employers, labor unions, trade
associations.
Life insurers typically sell and service
group life insurance products through
group representatives
MARKETING STRATEGY

Marketing is the primary links between

companies and their customers.

Therefore, marketing positions and market

mixes should be seriously considered by
managers .
Market positions :In order to access to the
most profitable customer group,
companies adopt the STP process to
choose its target customers.
The STP process includes three steps:
1)Segmentation : categorize the potential
customers
2)Targeting: choose the target customers to
serve and 3) Positioning: implement
marketing plan to reach the target group.
The marketing mix is the combination of
marketing activities that an organization
engages in so as to best meet the needs of
its targeted market.

The marketing mix includes the 7 P‘s of

marketing i.e. the product, its price, place,
promotion, people, process & physical
attraction
PRODUCT
A product means what we produce. An
Insurance company sells services and
therefore services are their product.
PRICING
The cost for consumers to receive the goods
or service.
In the insurance business the pricing
decisions are concerned with:-
1-The premium charged against the policies.
2-Interest charged for defaulting the payment
of premium and credit facility .
3-Commission charged for underwriting and
consultancy activities.
PROMOTION
The activities a market could utilize to
provide information about their products
and service to attract consumption and
increase sales.
The insurance services depend on effective
promotional measures.
Advertising and Publicity, organization of
conferences and seminars, incentive to
policyholders are impersonal
communication.
PHYSICAL DISTRIBUTION( place)

Activities that make the product available

to target consumers.

Distribution is a key determinant of success

for all insurance companies.
 Channels Of Sale or Distribution channels
I. Traditional channel of distribution

1. Agents- Most of the life insurance

companies in India follow the traditional route
of marketing through agents. In case of private
insurance companies they are called insurance
advisors/planners. LIC employs 6,51000 agents.
In case of non life also much of the distribution
work is done by agents or development officers.
2. Brokers
• Insurance brokers are professionals who
assess risk and advises a client.
• Unlike insurance agents who are retained by
the insurance companies brokers are retained
by the insured therefore their primary
responsibility towards the insured.
II. New channels of distribution

1. Direct Marketing
Company owned sales team concept is now
employed by a majority of the new players
and has proved effective customer creation.

2. Brokers/corporate agents
Authorized by IRDA to sell products on behalf
of Insurance companies.
3. Independent financial advisors
Authorized agents of insurance companies
having tie ups may be with more than one
company.

4. Telemarketing

Marketing through telephone and forwarding

the leads to the main sales team of the
company.
5. Work site Marketing
Under this strategy the seller sends his team to
the target group and explains the product and
services suitable to them.

HDFC, ICICI, Kotak Mahindra are using this

strategy effectively.
6. Retail chains
Cross selling of products at retail outlets

7. Internet Marketing
Internet based product offerings
8. Bancassurance
Bancassurance denotes a partnership
between life insurance company and a
banking institution.
 Marketing Differentiation
• Level of Competition
• Customer Focus
• Products and Services
• Size
• Geographic Area
• Distribution System
Challenges in Insurance Sector

• Cut Threat Competition:

• Liberalization will create acute
competition in the insurance market.
• Fierce competition to increase volume
and market share will continue as more
and more players join the race for the
greater Indian insurance.
IMPACTS OF GLOBALIZATION ON INSURANCE MARKETS

• Competition in the Insurance Markets

• First and foremost, local insurance companies
started facing more widespread competition –
not only from within the country, but also
from the region and from international
conglomerates.
• Growth in Opportunities
• The thing about globalization is that it has caused
other industries to expand as well. This has resulted
in a plethora of opportunities for insurance
companies.
• Today, a standard insurance firm doesn’t have to
limit itself to a limited number of products or
services.
• With globalization, consumers’ demands change
and their needs become more varied
• New Industry Trends in Insurance
• Insurance companies are also beginning to
experience centralization processes, thanks to
partnerships with banks and reinsurance
companies, and mergers with smaller or larger
competitors.
• There’s a growth in the type of insurance
services and products as well.
• Increased Consumer Demand for Insurance
• As more and more foreign insurance
companies enter a local insurance market,
customers’ awareness tends to grow.
• Their knowledge of possible insurance and
investment plans becomes richer.
• Needless to say, this creates a demand for
more products.
• Increased Customer Satisfaction
• With globalization, there’s a renewed focus on
customer satisfaction and trust.
• As customers get savvier and educated about insurance
products, the need to gain their trust and build strong
relationships becomes imperative to the top line.
• In the name of competition, insurance firms are putting
in extra effort to provide better products and clearer
communications driven towards meeting the
expectations of both local and international customers.
Business Process Reengineering (BPR)

It is a management approach aiming at

improvements by means of elevating
efficiency and effectiveness of the
processes that exist within and across the
organization.
To improve business process through
employee orientation we may initiate .

1. 360 degree Performance evaluation;

2. Creation of self-introspection forum;

3. Re-inventing Study circle.

Impact of BPR in Insurance:-

The main areas of BPR in Insurance field

relates to:

1.Underwriting Solutions;
2.Business Intelligence and Data Analytics;

3.Claims Processing Solutions;

4.Re-insurance Solutions;
5.Insurance Work-flow Interface Solutions.
1. Underwriting Solutions
The insurance industry is grappling with
issues like automating the underwriting
process, better analysis of risk and
improved decision making. These issues
lead to reduced profits and less efficient
business performance during this de-
tariffed regime.
The BPR Process may help in the
underwriting area of the insurers to-

Maintenance and Support of legacy

systems and applications

Migration from proprietary systems to

open platforms

New application development

Customization of standard software
packages.

Modernization of legacy applications

through development of E-commerce and
Web based applications.
2.Business Intelligence and Data Analytics

The Insurance industry handles huge

volumes of data. Solutions that help
organize, structure and integrate data
across the enterprise are valuable.

These forays into data analytics help the

insurance company provide better service
to their customers.
The process of Business Process
Engineering implemented through
efficient consultants help the spread of
knowledge and expertise to help insurance
companies with their data warehousing
needs.
Data Modeling
Data Mining
Data Transformation
Data Scrubbing and Cleansing
Population of Data Warehouses
Migration of data across platforms
Develop Decision Support Applications
Development of Intelligent User Interface
The concept of data warehousing engagements has
delivered valuable benefits to the insurers which
include:-

Improved efficiency in data processing by almost 20%

Reduced transaction processing costs by up to

around 30%

Improved decision making leading to increased

profits by approximately12%
 Methodology of outsourcing
What is insurance business process outsourcing?
• In insurance business process outsourcing, an
insurance agency outsources certain business
functions to third-party service providers.
• With an insurance BPO, companies can concentrate
on core competencies after handing over back
office services like:
• Data entry.
• Claims processing.
• New business service.
• Commission management.
• The insurance BPO industry is booming due to
the growing digitalization and increased demand
for high-quality services at a lower cost.
• In fact, the global insurance business process
outsourcing market is projected to grow at a
Compound Annual Growth Rate (CAGR) of 8.5%
during the 2021 to 2028 forecast period.
• And claims management is expected to account
for the largest market share.
• Which insurance processes can you outsource?
Here are some services that the insurance business process
outsourcing companies offer:
1. Data processing
• Data processing in insurance companies involves collecting and
managing customer information from various sources.
• Depending on the type of insurance plan you’re handling, data
processing can include:
• For motor vehicle insurance: Vehicle registration number, model,
mileage, etc.
• For property insurance: Amount insured, insured object details,
insured object value, etc.
• For household insurance: Number of rooms, ownership, the value of
household contents, etc.
2. Data mining
• Data mining in the insurance industry is the process of finding
customer behavior patterns.
• It can help you determine which customer group is more likely
to accept an increase in the insurance rate and who is likely to
look around for another provider.
• You can then make business decisions based on these
observations.
• Similarly, an insurance company can identify possible insurance
fraud using data mining. The agency can use data mining
techniques, and data from past insurance claims to discover
patterns that indicate high chances of fraud.
3. IT services
• State-of-the-art IT services enable insurance companies
to connect with customers effortlessly. It also automates
tasks and reduces the amount of paperwork associated
with insurance claims, simplifying tasks.
• For example, you can employ a company specializing in
IT security to provide end-user security training to your
team and educate them on protecting sensitive
customer data. Such training can help your organization
avoid data breaches and cyberattacks.
4. Call center
• Call center outsourcing will reinforce your customer
retention efforts and help you avoid the costs associated
with hiring in-house customer support or sales team.
• An outbound call center can help you enter new markets
by approaching potential customers.
• For example, your outsourced customer service team
can make outbound calls to potential customers and
introduce new insurance plans. This way, you can gain
new customers.
• Similarly, an inbound call center team can
enhance customer experience by guiding
customers on insurance plans and services.
They can even help upsell or cross sell to
existing customers, boosting your sales.
5. Underwriting
• Underwriters assess insurance proposals to determine their
feasibility and risks with services such as process management
and analytics.
• For example, an insurer who gives motor vehicle loans will
need to calculate customer premiums. They can do this by
combining behavioral analysis and external factors like road
and neighborhood safety to determine the likelihood of an
accident or theft.
• Instead of hiring an in-house professional to handle this,
insurers can outsource this specialized work for a competitive
advantage.
6. Finance and accounting
• An insurance company manages customer risk in
return for money. This means that as the company
grows, so will the volume of its finance and
accounting tasks.
• A good insurance BPO service provider can
develop financial strategies to guide investment
decisions. It can also streamline end-to-end
processes of billing, collections, reconciliation, and
application.
Information Technology in Insurance Business
• The purpose of insurance technology is to
dramatically reduce the amount of
paperwork dealing with policies and
proposals,
• and effectively meet the needs of clients in
much less time than traditionally expected.
• Insurance technology eliminates a great
deal of paper handling and travel cost once
required by insurance agencies
• Policy Management has provisions for policy
acceptance, client interaction window and
policy printing.
• They should be able to store policies and the
system should allow immediate access to a
client portfolio.
• The policy management system generally
has provisions for dealing directly through a
broker or an agent or branch office
• The software designed to handle
reinsurance and claims.
• Reinsurance modules produce separators for
each person’s obligations.
• Front Office System helps in recording,
monitoring and progressing claims.
• The claims system provides all the facilities
required to manage reserves, payments,
recovery, accounting, claims history
recording, statistics and various kinds of
ratios.
• The accounting is generally integrated to
policy management system and
automatically produces debit/credit notes,
renewals notices, cover notes, reminders,
statements, etc.
• The system is able to handle taxes duties,
reporting requirements as well as
automatic calculation of midterm
adjustments.
• The statistics technology allows
production of comprehensive statistical,
analytical and management information.
• Reports can be in any different formats
and should include detailed audits,
performance reports for management.
• As technology improves, the life insurance
industry evolves and benefits from new
systems and methods of communicating
information about applicants.
• Information technology increases the
speed and efficiency with which
underwriters evaluate new applicants and
analyze aspects of their lives affecting the
carrier's proposed financial risk.
• The use of technology in insurance improves
every aspect of an agency's data
management system and processes.
• Insurance agents can quickly respond to the
needs of customers, using state-of-the-art
technology that can instantly provide
accurate information to clients regarding
insurance issues.
• Insurance agents can generate more
insurance policies, proposals and
applications for new customers, thereby
creating opportunities for faster purchasing.
• Digital life insurance forms reduce the
number of errors and omissions, and
entirely eliminate problems with poor or
illegible handwriting.
• Life insurance agents who use digital
applications can capture client signatures
on portable imaging devices.
• Small digital signature pads connected to
laptop computers allow applicants to sign
forms presented on computer screens,
entirely eliminating the need to print
documents.
• Digital information technology allows
carriers to obtain and review criminal
records quickly and efficiently.
• Applicants with undesirable criminal pasts
get rejected immediately, reducing wasted
time, effort and money on other analyses
that would have otherwise been
conducted while waiting for paper
documents to arrive in the mail.
• To achieve growth, insurance firms will
focus on a few key business drivers,
including customer relationships, distributor
relationships, new products, and
mergers/acquisitions.
• Leveraging existing systems can help
companies in two ways: it saves on
spending while allowing growth and
affording new opportunities.
• Mining the enormous amount of data that
insurance companies have on hand can lead
to new relationships and company success.
 ERP

Enterprise Resource Planning (ERP) is a boon to

organizations which help in integrating all
company to integrate the data of all the
departments under one common database &
hence it’s easy for searching transactional
details & Inventory Data of the company and
the particular branch easily.
ERP Solutions are the best for any Insurance
Company as it will help them for appropriate
backup of data, tracking customer’s
credentials & taking care of the legal
agreements with the help of Updated modules
& Reports in ERP.
• For the betterment and interest of the
business ERP has facilitated coordination
between the insurer and agents by solving the
problems of both the fields.
• ERP has provided the insurer and the agent a
common platform.
• By this, it has become possible to keep a track
on sales of the agents along with ease in sales
forecasting.
• After implementing an ERP for Insurance
Industry, the company can focus on
streamlining their processes especially the
complaint management and Claim processing
part.
• This will help in a better turnaround time for
the company and increasing the customer
loyalty.
• ERP solutions for Insurance Agency helps in a
smooth assessing of damages, settling claims,
difference between insured value and loss in
time besides litigations.
 ERP features and functions/Products in
insurance industry

• Client Database with customers’ contact

information and the services they have used
sorted.
• Purchasing Data Management that gives
access to the history of deals, description of
existing products and sales plans on each of
them what allows control all sales processes.
• Finance Management which simplifies
financial planning and improves the level of
finance data accuracy thus strengthening
budgeting capabilities of the insurance
company.
• Human Resource Management that provides
hr-managers with a comprehensive set of
tools which facilitate efficient personnel
control covering attendance, bonuses and
other necessary HR functions.
Billing Management that provides accurate
control of financial accounting for customers
and improves the processes of working out
pricing models for insurance products.

Cash Management with the integration of

which one gets full control over its cash flow
having at one’s disposal accurately processed
and analyzed data on the transactions made.
Receivables and Credit Management that
stores in one place the whole information
concerning debtors and creditors, their
contact data and the history of collaborative
engagement with the company.
Benefits of ERP

• Cut down the level of reserve stocks and

increase the efficiency of working processes

• Optimize business-processes in the company

by decreasing finance and time expenses

• Improve the efficiency of pricing processes

and budgeting
• Regulate the production processes according
to customer demand changes

• Control the quality of one’s insurance services

in real time

• Make an available database with all the

necessary documents sorted there.

• Data Analysis, Integration , sales tracking

&Customer services
• Customer Relationship Management
Customer behavior will be influenced by
environmental factors as well as intrinsic
personal aspirations. The environmental
factors are socio economic and
demographic factors, inputs of insurance
advisors, the company’s efforts to
manage customer satisfaction and
experience.
• Distribution of Products:
Segmentation of markets, selling segment
oriented products, focusing on fuller
satisfaction of customer’s aspiration
misstates multiple distribution net works.
• While the traditional channel of tied up
agents or advisors would be the most
important distribution channel, insurers
should innovate and find new methods of
delivering products to Customers.
• Risk Management: With the environment
changes in the economic scenario of the
country the risk landscape has undergone
significant changes.
• With the opening up of economy and the
entry of MNC in almost all sectors, there
has been a surge in the income levels,
especially in the middle class. The
globalization has also resulted in cultural
exchanges more than in the past.
• Untapped Market Segments: It is important
to increase the customer base in semi-
urban and rural areas which offer a huge
potential. The fact that a major chunk of
business for LIC comes from these areas
stand as a testimony to this indisputable
fact. There are difficulties in approaching
this segment which will take us back issues
of customer education.
• Relationship Management: The
relationship management of insurance
companies is mainly trapped by individuals
as well as corporate agent. The relationship
of the clients should be ever maintained,
but the mistakes of the agent are the major
causes in the relationship management.
• Human Resource Management: The
insurance market is now filled with
players, who are mature, globally
prominent and big players in the Trans-
Nationally competitive global
competitive insurance market. Each of
them has ability to influence the market.
The human resource competency will be
another big challenge.
• Managing the Regulatory Authority:
As the competition acute, the customer
becomes more vulnerable to the vagaries
on market environment. The regulators
have a duel responsibility. They has to
ensure that the insure adhere to sound
insurance principles and practices as well
as maintain adequate financial resources
to meet their liabilities.