Life Insurance Marketing in India (C) The Changing Product & Pricing Norms

Background Note Contd...

The pension policies included products such as group superannuation, enabling a company to benefit from investment and the operational expertise of a specialist company to manage its funds. It was reported that in the individual insurance segment, investment products segment was growing rapidly as they provided long-term investment growth and insurance cover (Refer to Table II for the customer segments and products offered under them). Over the years, LIC catered to both individual and corporate segments.

Its individual insurance policies included Endowment Policies, Money Back Policies, Term Assurance Plans, Periodic Money Back Plans and Joint Life Plans. The corporate policies included group insurance schemes such as group gratuity schemes, group term insurance schemes, group savings linked insurance scheme and group leave encashment schemes (Refer to Exhibit II for the products offered by LIC and other major private insurers).

LIC provided a return of 7% on average on all its policies. Around 80% of LIC's premium income came from endowment and money back policies. However, according to some analysts, one of the major problems faced by the Indian insurance industry was the high premium rate charged by LIC over the decades.

They argued that, when life expectancy had increased substantially, LIC did not revise its mortality table and reduce the premium accordingly. Analysts also said that, due to poor customer service, more than 10% of LIC policies reportedly lapsed or were surrendered every year. LIC never paid attention to market research in order to understand customer preferences, while developing new products. It was pointed out that with no proper social security schemes implemented by the government of India, there was huge untapped potential in the pensions and annuities in India.

LIC offered only one pension policy, Jeevan Suraksha (Life Protection), the returns from which contributed significantly to its revenues. However, with the liberalization of the industry, not only were premiums expected to go down, but increased products, improvements in customer service and deeper insurance penetration were also expected.

Life Insurance Marketing in India (C) The Changing Product & Pricing Norms - Next Page >>>

Case Details

Case Code : MKTG028
Themes: Pricing
Case Length : 14 Pages
Period : 2000-2002
Organization : ICICI Prudential, Max New York Life, ETC
Pub Date : 2002
Teaching Note : Available
Countries : India
Industry : Insurance

Free Case Studies

Business Strategy
Finance
HRM
Insurance
IT and Systems
Marketing
Operations
Leadership
More Case Studies >>

Micro Case Studies

Business Environment
Business Ethics
Business Strategy
Human Resource Management
IT and Systems
Marketing
Operations
Micro Case Studies >>

Free Resources

Micro Case Studies
Free Case Studies
Articles
Interviews
Book Reviews
Glossary
Online Quiz
More Free Resources >>

Case Related Links

Best Selling Case Studies
Business Case Studies
Learning With Case Studies
Cases Used in Textbooks
Prize Winning Case Studies
More Case Studies >>

Case Studies and Management Resources