The study attempts to evaluate the performance of the private life insurance companies of Bangladesh, mainly I highlight the delta life insurance company. Insurance is a technical device of risk management. Risk taking is the sixth function of marketing and marketing is an important insurance function. It is a total system of business activities designed to plan, price promote and distribute want satisfying products, services and ideas to target markets in order to achieve organizational objectives. In the United States about 87% of the business is service oriented. In our country about 65% business activities are service oriented.
Development of Business depends on the degree of service provided by the companies. Retention of customer depends on the relationship and service of the companies. Customer Relationship management is the widely popular marketing term that has given tremendous impact among the modern customer. Delta Life insurance Co. Ltd. who is deals with insurance business has now turn into service oriented organization to meet the demand of the 21st century as the competition has got momentum. Insurance is one of the important sectors that are playing a vital role in the economic development of the country.
It is possible only by dint of high levels of professional skill, loyalty and service provided by the company employees of all grades and categories. Now that the company is diversifying into new areas, and volume and value of its business are fast growing the Board of Directors and the Management. As business people recognize that marketing is vitally important to the success of any organization, a new philosophy of doing business developed called the marketing concept, it emphasize a customer orientation and co-ordination of marketing activities to achieve the organization’s performance objectives.
As a business concern, Delta Life is performing both in the investment and in the marketing field as. Business activities follow the three fundamental beliefs: 1. All planning and operations should be customer oriented. That is, the organization and its employees should be focused on determining and satisfying customers’ needs. 2. All activities in an organization should be co-coordinated. In reality this belief means that marketing efforts should be combined in a coherent and consistent way and that one executive should have over all authority and responsibility for the complete set of marketing activities. . Customer oriented, coordinated marketing is essential to achieve the organization’s performance objectives. Moreover, Delta Life is the pioneer of micro insurance in the world. Considering the numerous vulnerable people, the company introduced micro insurance under Gono ; Grameen Bima Division. Mass people were awoke at the arrival of the micro insurance. Marketing is actually applicable to business ; nonprofit organizations. Of course objective may be fundamentally different depending on whether the organization is in the business or nonprofit sector.
A business firm objective unlike those of non- profit organizations ordinarily revolved around profit. Customer orientation and coordinated marketing activities are the means to achieve the end that is sought, namely achievement of the organization’s performance objectives. Sometimes the Marketing concept is simply stated, as “The customer is king. ” As helpful as it is to stern customer satisfactions, however, this motto must not be allowed to replace achievement of objectives as the fundamental rationale for the marketing concept. 1. 2. OBJECTIVES:
Delta Life Insurance Company Ltd. (DLIC) started its journey in 1986 with taking some social commitment towards the nation. In general every organization holds some objectives such as Survival, Growth and Social responsibilities. DLIC holds the following objectives: 1. Security of the vulnerable groups. 2. Increasing Standard of Leaving. 3. Creation of employment. 4. Social Responsibilities. In general, it is seen that the major portions of our people have no financial security. About 80% people of our country are deprived of financial security.
Considering their condition, company launched two Micro Insurance projects known as Gono Bima & Grameen Bima respectively besides the core one. Gono Bima deals in the urban area with the low-income groups while Grameen Bima works in the grass root level for the well being of the people. Besides this, another objectives of the company are to create new employment. At present the DLIC comprises about 900 official staff working in the head office and different servicing cell all over the country. DLIC has been providing service to policyholders through 15 servicing cells.
Another important goal of the company is to develop standard of living of policyholders. Company provides loan to the policyholders so that they can do something for uplift their living standard. DLIC is the listed company of the Security and Stock Exchange. By trading the share many unemployed youths are earning their living. DLIC, who is financially sound, possesses more than Tk. 400 crore which is invested in different portfolio as per Insurance Act 1938. This money is helping to strengthening the economy of the country. She is also helping to the entrepreneur in the real state sector.
Delta BRAC housing is a unique instances in its kind. 1. 3 Different aspect of Life Insurance: ? Payment of premium amount: Payment of premium depends on the policy amount payable to the life assured. Premium maybe payable yearly or half yearly depends on the amount. a. Conditions relations relating to commencement of risk: The letter of acceptance is not a cover note; it only intimates that the risk will commence when the first premium is offered to and accepted by the insurer. If premium was paid along with the proposal form the date of letter of acceptances will be the date of commencement of risk.
After acceptance of risk, policy is issued. b. Condition of premium: i) Payment of premium: The premium rate is calculated annually. But for the convenience of the assured, it can pay half yearly. ii) Grace period: Premium is paid at of before the due date. But for convenience of the policyholders, certain additional period called days of grace, is allowed to pay the premium. The insured can pay the premium within the days of grace and the policy would not lapse up to the days of grace. However, the policy lapse if the due date of the premium is not paid even within the grace period.
One calendar month put not less than 30 days of grace is allowed for payment of yearly and half yearly. The grace periods are to be counted exchange excluding the due date of the premium. When the days of grace expire or a Friday or a holiday observed by the office of the insurer where premiums are payable, the premium must be paid in the following working day to keep the in force. iii) Premium notice: The policyholders may not forfeit the benefit of his policy notice of the premiums falling due will be regularly sent to him. Kinds of Premium: In life insurance contract a sum of money is paid in consideration of the insurer’s incurring the risk of paying a large sum upon a given contingency. This sum is called premium. Premium is two types namely- 1. Net premium and 2. Gross premium or office premium. The net premium is based on the mentality and interest rates whereas the gross premium depends upon the mortality rate, the assumed rate. These two premiums are sub-divided into two parts, such as- 1. Single premium 2. Level premium.
Single premium is paid in one lump sum while level premium may be yearly, half yearly, quarterly or even monthly. The premium income of the company’s ordinary life was Tk. 28 corer in 2002. ? Claims condition: a. Settlement of claims: The policy amount becomes payable either on the assureds death during the term of insurance of on his surviving till the end of the term, i. e. on maturity. In case of maturity proof of title and age proof are required. Age proof is required only when the age was not admitted before the claims.
In maturity claim, policy holder is generally advised well before the actual date of maturity in order that the necessary paper may be the official Registrar of death, or certificate from employer identifying the deceased or if the deceased was not in service a certificate of identify from a responsible person acquainted with the deceased. In case of assignment and nomination or assured having the policy right, mo proof of title is required. In other cased, proof title is essential; the probate of will or succession certificate or Administration General’s certificate may be used as a proof of title. . Settlement options: Claim amount nay be paid in cash or in installment. The installment payment may be of different types. Payment of interest annually for a particular period up to a time may be paid. Annually may be purchased for life or for a particular period and life thereafter. ? Surplus: Valuation: Valuation is a process to value the net liabilities of a life insurer as on a particular date. It determines the total amount of reserve that an insurer must have to meet his obligations. It means that the valuation, firstly determines the total net liabilities with the funds.
Ultimately, it can be revealed whether the insurer has sufficient funds to meet his obligations or not. There are two main objectives of the valuation. Such as- 1. To determine the solvency of the insurer 2. To determine the distributable surplus amongst the participatory policyholders. i) Sources: i. Excess surplus ii. Savings from mortality iii. Saving from loading iv. Lapses and surrenders v. Bonus loading. ? Reserves: Reserve is that fund which, together with future premium and interest, will be sufficient to pay the future claims. This called prospective definition because here the future amounts are considered.
Another definition of the reserves the respective definition under which the reserve is considered as accumulation at interest of the difference between the net premiums received in the past and the claims paid out. ? Sources of Reserve: a) The first and the foremost source of reserve is premium. It should be noted that reserve is accumulated in level premium plan because the premium is more than the actual cost of insurance in the beginning. In other two methods of premium reserve cannot be accumulated. These are below: a) Assessment premium plan b) Natural premium plan ) Level premium plan b) The second source of reserve is interest because the accumulated fund is not remaining idle; it is invested. While calculating premium it was assumed that the insurer would earn a certain rate of interest. So to earn at least that much of amount, the accumulated funds have to be invested. The assured rate of interest is the source of reserve. c) Nature of policy: The reserve can be calculated only in those policies where payment is not certain, reserve is generally not requiring. Thus the amount of reserve depends upon the duration of the policy and nature of the policy. Surrender Value: When the assured is liable to revive his policy, he can surrender his policy and can get cash surrender value. With this payment the contract comes to an end and the assured will get the cash value without any liability to pay further premiums. The minimum surrender value allowable under this policy is equal 30% of total amount paid along with the increase in duration of premium payment because the amount of the surrender on any policy depends on its reserves value. Thus on such policies which don’t have any reserve. No surrender value is allowed People satisfy their needs and wants with product.
A product is anything that can be offered to satisfy need or want. Product can be termed as offering or solution. A product consists of as many as three components – physical goods, services and idea. DLIC deals with unsought goods which includes selling policy, post sale service and ideas includes the slogan Delta Life is better life. ? Continuation of policy: In order to protect the interest of the assured DLIC gives various facilities for the policyholders, such as in case of loss a duplicate copy after advertising the fact. ? Lapse of condition: Lapse conditions are of seven types. They are as follows: a.
Lapse of policies: The insurer shall remain liable for the payment of the claim if the assured continues to pay the premiums in due time. If the policyholder fail to pay any of the due premium within the fixed days. b. Revival of lapsed policies: If a policy lapsed by non-payment of premium within the days, it can revive within a period of five years from the due date of the first unpaid premium without evidence with giving interest rate. c. Special revival scheme: Special revival is possible only when all of the following conditions are fulfilled. a. The policy must not have acquired surrender value. b.
Period from the date of lapsed must not be less than 6 months and not over twenty years. c. Such a revival is not allowed more than once under the same policy. 1. 4. Marketing Strategy Of Delta Life Insurance Company Limited: ? Marketing Policy: Definition: Marketing concept holds that the key to achieving organizational goals consists of being more effective than competitors in integrating marketing activities toward determining and satisfying the needs and wants of target markets. – Philip Kotler We shall discuss the application of marketing concept in Delta Life Insurance Company as 4ps based on four pillars of marketing concept.
Four pillars of marketing concept are as follows: 1. Target market 2. Customer needs 3. Integrated Marketing 4. Profitability 1. Target Market or Market segmentation: No company can operates in every market and satisfy every need nor can it always do good job within one broad market. Considering this theory DLIC has segmented the total market in three categories. Ordinary Life operates in the middle class, Gono Bima operates in the urban area among the low-income group and Grameen Bima performs in the grass root level among low-income group.
It is noted that, Gono Bima and Grameen are two project of DLIC launched in 1989 and 1992 respectively with a view to provides Insurance benefit through micro insurance among the vulnerable group of the country. For the convenience of the policyholders, premium is charged low and received it monthly or even weekly. Delta Life is the pioneer in the field of micro credit. Delta has been rewarded by the world Insurance Body for acting pro-people activities. Providing very low premium the insured are getting financial security. Micro credit provides all kinds of insurance benefit like Ordinary Life except pension scheme.
Main activities are done through the Ordinary Life -the main body of the company. Ordinary Life deals with the middle and higher class. She deals with the following products. PRODUCT: A product consists of all the tangible and intangible characteristics provided in an exchange between a seller and a buyer. A product’ s characteristics include not only its physical aspects but also its function, brand name, image, packaging, warranty and price as well as the provider’s reputation and customer service policy. Product can be a good (an actual physical entity), a service and idea. As a life insurer, DLIC deals with service.
Company has different types of product or policy, which is discussed below: a. General Policy: 1. Term Insurance: In this policy sum assured is payable only in the event of death of the life assured occurring during the period. Term insurance polices are always without profits. These policies are cheapest policies. Term insurance is for a short period for one year. Yet the policy continue more than one year. Health certificate will be submitted also. Premium is determined according to age at the time of the policy renewal. In this policy premium is taken from the age ten fifty. 2.
Endowment Policy: Endowment is one kind of insurance, which includes a certain reasonable time. It’s magnitude from the 10 to 50 years. Different types of endowment are given below. 1. Pure endowment: The sum assured is payable on the life assured surviving the endowment term. In the event of his death within the term premium may be returnable. 1. Ordinary: Ordinary endowment policies are the combination term insurance and have pure endowment. 1. Joint Life endowment: This policy is suitable to partners of a firm because firm will not discontinue to the tremendous outflow of the funds at the death of a partner. . Double: Under this policy if the life assured during the endowment period, the is payable and if he survives to the end of the term double of sum assured is paid. 6. Fixed term: Under this plan the sum assured is payable only at the end of a stipulated periods, but the premium cases if death of the policy holders occurs earlier 7. Anticipated endowment policy: The policy is similar to endowment assurance except that a part of the sum assured is paid at certain interval before death within maturity. The payment of policy amount by the company is as follows. 1. /4 of the sum assured becomes payable in the first installment after Passing 1/3 of the required time. 2. Second installment becomes payable after passing 2/3 of the required time amounting to Tk. of the sum assured 2. Third and final installment becomes payable after passing maturity of the policy amount the rest. 4. Children protection: Parents or legal guardian or any near relatives on the life of a children or whose life risk will commence at the age of 18 completed can take the policy. 5. Pension Policy: It’s a lucrative policy for the private service holder.
Under this plan, the assured will get pension monthly at the end of the term. Pension begins at the age of 55 or 60 years. 6. Whole life policy: Whole life policy means that policy amount will be paid at the death of the life assured. It is a ling term policy. Policy amount will be paid at the death of the life assured. Under this plan premium is the lowest but facilities and policy amount is highest. b. Healthcare Benefits: As a market leader the company always seeks the needs of the company. Different Insurance companies have been doing insurance business in this area for many days.
Considering the necessity of the people DLIC started health care benefit since 1995. Every on likes to lead a peaceful, prosperous and healthy life. But population expansion and its accompanying health hazards like massive environment pollution, lack of safe drinking water and balanced diet, increasing incidences of accidental injuries, continuous psychological stress consequent upon deteriorating law and order situation, social & political unrest, financial crisis, rapid spread of existing and upcoming fatal diseases like dengue, hepatitis etc. leave no scope for us to remain healthy.
We are always at risk to become sick or meet an accident at any moment. Proper medical treatment, now a days is very expensive and in many cases may remain beyond our reach, unless arrangement are made in advance through proper health planning and here comes the scope for Health Insurance. Health Insurance is now the only means that fan brings the modern treatment facilities affordable to individuals from all socioeconomic classes of our society, especially the fixed income group. The scheme is suitable for a company, institution, organization or s group.
It is designed with several benefit levels to suit the requirements and financial set up of any group who earnestly desire to ensure proper and timely treatment of any ailment of its members to keep them active and in good health. Any employee or a member aged between 18 and 65 years is eligible to be included under the plan. Besides, spouse, dependent children from 3 months up to 25 years and parents up to age of 65 years residing with the employee or member may also be included in the scheme. To enjoy the benefits of Group Health Insurance, the total numbers of insured should not be less than 25 in a group.
Similar scheme is available for individuals, family or small groups consisting of less than 25 members. Delta health cares have the following attractive feature: 1. Affordable yearly premium 2. Treatment overages round the clock 3. Treatment at any renowned hospital or clinic 4. Treatment by consultant of own choice 5. Direct payment at designed hospitals 6. Scope for inclusion of spouse, children & parents. 7. Membership ID Card for each insured 8. Option for Overseas Treatment Facility 9. Substantial Group Discount depending on group size 10. Scope for Tailored Plan if desired 11. Full tax relief on payable premium 2. Option for Maternal Benefits of Pregnancy and Childbirth 13. No claim Discount on renewal Premium 14. Choice from five levels of benefit. Under health care plan company provides the following benefits to the policy plan. i. Master class- Company provides benefits up to Tk. 25000/=including hospital stay, Room Rent, Routine Investigation, Medicine, Surgery and Ancillary Services within a year under this provision. ii. Super Class- Company provides up to 45,000/= including the aforesaid benefit within a year. iii. Deluxe Class – Insured can get up to TK. 75,000/= as Medicare benefit under this plan. v. Exclusive Class – It is a lucrative plan for the insured. Under this plan any insured can be provided up to TK. 1,00,000/= as Hospitalization cost. v. Royal Class – Any insured under this plan can get TK. 1, 40,000/= Medicare benefit. Company takes into accounts the different needs while marketing activities are carried on. The company gives emphasize on four kinds of needs. They are stated needs, real needs, and unstated needs and delight needs respectively. These needs are discussed briefly- The company follows needs Stated strictly while marketing activities is carried out.
Company provides the expected financial security to the insured besides the minimum needs. Company provides the maximum security of the customers. Company gives savings benefits and takes risk the of insured. Company offers low and higher degree of risk side by side. Company health care benefit is offered to customers all over the world round the clock. Through 15 Service Centers, the company is providing better and quick service to the customer to the policy related matters. Company is using all types of modern equipment and technology to facilitate the service to the customers.
Company has several Agency office located at the grass root level to reduce the risk of the insured in depositing premium. Company collects the premium from the insured and deposit it to listed Banks and returns the documents to the insured. As a result the policyholder get all type of service from the near by agency office. Company’s revenue comes in two forms such as – Renewal Premium and First year Premium. Company’s ultimate objectives are to meet the needs of customer. Customer wants that company should take all responsibilities. In general most of the people of our company show reluctance to the insurance.
It is very difficult to convert them into policyholders. First of all company creates need and then make them as insured. 2. Customer Need: Considering the needs of the customer DLIC is throwing new plans from time to time with the consent of the inspector of the Insurance. Healthcare benefit is one of the unique instances of new plan. 3. Integrated Marketing and Marketing Activities: When all departments of a company work together to serve the customers’ interest, the result is integrated marketing. Integrated marketing takes place on two levels.
Various departments are functioning in Delta Life Insurance Company. Such as HRD, Development, Actuarial, Reinsurance, MIS, Investment, Information Technology, Accounts, Servicing, Capital Market Operation and Establishment etc. The Marketing staff is functioning under Development Department. Marketing forces are controlled and directed by the development department. The others department provides necessary assistance to the development. Marketing staff is of two types such as a. Commission basis b. Salaried. Marketing Hierarchy is just like pyramid. Managing Director is on the top position.
Decisions are made in the top level and are implemented by the marketing staffs or field staffs and supervised the lower level and mid level. From Marketing Associates to Assistant Controller is commission basis and from Deputy Controller to the Senior Vice President is salary basis subject to the fulfillment of the target. Marketing Staff is shown in the following way: Marketing Associates ——————– Agency Manager —————– Assistant Controller —————– Deputy Controller———— JAVP———— AVP——JVP—VP————JSVP——-SVP
Marketing staff faces barriers in selling insurance policy like other intangible products. Every person of the channel has certain target. In field level, Marketing associates work directly with the customers. If they can achieve the target they are promoted to higher position. In every case, the superior is liable for achieving the target. To achieve the goal company provides necessary benefits to the marketing staffs. Among others, we can cite the following benefit, such as- Mobile phone, loan, Performance bonus, production bonus etc. Besides this Motor Bike and car facilities are also provided from deputy controller to SVP.
Total activities are the result of the integrated or co-coordinated activities of different departments of the company. Actuarial department introduced new products, fix up premium rate based on the mortality table and calculate reserve. Accounts department provides necessary finance. Investment department invest invests the money as per insurance act 1934 and Human Resources provides necessary manpower to cope with the challenge. 1. 5. Sales Analysis Of the Company: With the inception of its journey, Delta Life has achieved a tremendous record in earning premium. At presents 18 Life Insurance companies are operating in
Bangladesh. They are playing an important role in economic development of the country. Delta has a significance role in its kind. Sales Trend, Life Fund and of Delta is shown diagrammatically in the below: a. Sales Trend (Five years): In its commencement year 1987, the total income was very poor about taka ten-lac only. With dynamic decision of the management and the hard working of the marketing people started moving the wheel o f the income. Hard felt effort of the employees’ leads the company’s position into the front line within very short time. The company did well in the consecutive years.
This trend is still going on. In a least development country like Bangladesh, maximum people have negative imperssion towards the insurances. Company’s motive is to overcome the Jiban Bima Corporation within very short period. In the past few years, income has got momentum. Income is increasing in the successive year. b. Life fund: Life fund is the total amount of money, which can be converted into cash, is calculated by deducting all depreciation from the assets. Fig: Life Fund PROMOTIONAL ACTIVITIES: As a modern marketing strategies company has some promotional tools.
She uses both electronic and printing media. All promotional activities are carried out through her Public Relation Department (PRD). In this context, PRD is engaged in communicating with the media. Sometimes different short films are prepared to give impression about the merits of life insurance in individual and group. Company has a budget to promote the mass people in taking life insurance policy. Delta Life is Prosperous life. To expose the functioning of the company before the market, DLIC publishes “Delta Barta”- the mouth peace of the company, is published quarterly.
In this publication, seminar on insurance, training activities, claim settlement and attainment remarkable achieving of any employees or receiving award is discussed in the magazine PROFITABILITY: Ultimate purpose of the company is to achieve the organizational goal. Main objectives of the company are to make welfare of the insured by earning profit through investing the collected premium from different groups. Earning profit is necessary to run the business smoothly. DLIC has a strong commitment to her shareholders. Company declared 45% dividend for her shareholders in 2002, which was the highest rate of return in the insurance sector.
DLIC is at present is one of financial solvent organization in the country. Social Responsibility: The company has a strong commitment to the society and the nation. DLIC has been patronizing in holding Women Hand Ball Competition for many years. Last year she held child art competition in different categories. Besides this, each year DLIC rewards “Noor Jahan Memorable Award”, after the name of Noor Jahan, a garment worker rapped and killed by a group of miscreants while returning from the job, to a journalist for courageous reporting regarding the women’s abuses, discrimination, coercion, killing, trafficking exploitation in the society.
The award comprises TK. 30,000. 00, a Crest and certificate. 1. 6. CONCLUSION: According to the study we can say that insurance is an important sector in the country. Development of the insurance is needed for the uplift of economic growth of the country. Business is key element that plays an important role in developing the standard of living. We have found some problems in applying of marketing concept in DLIC. Such problems are- 1. Marketing set up is too long 2. Bureaucratic attitude is observed in the activities of the different departments. 3. Field staffs are not well trained and have not sufficient knowledge. 4.
Lengthy process in decision-making. 5. Less control over the marketing staffs. To develop this condition more effective measure should be taken by company. We can suggest some tips in this regard to take possible measures as below. 1. Management should more dynamic 2. Field staffs should be trained up 3. Bureaucratic attitude should be changed. 4. Service to customer should be more developed than the existing one. 5. Close relation between the marketing people and policyholders is desirable. 6. Irregularities of marketing staff should be controlled with iron hand. In fine we can say that though DLIC is a service oriented organization, arketing concept in here is being applied efficiently. 2. EXECUTIVE SUMMARY: Marketing concept deals with the activities, which are practiced for the well being of the organization. DLIC is a service-oriented organization. Its ultimate objectives are to make financial security of the policyholders and stakeholders. Delta is playing an important role to grow the economy by the investing the accumulated money. In this paper we have discussed 4ps through 4 pillars of marketing concept. We have discussed different types of products of the company. As the price of product is subject to the matter confidential, we could not disclose it.
The other company might inform of the price. So it is strictly prohibited to disclose the rate of product. Health care benefit is discussed here for the convenient of making paper. The company is operating in the broad market segmenting it three-sub market. Three wings of the company are operating in the three-sub market. Ordinary life is operating in the middle ; upper class while Gono ; Grameen are operating in the urban and rural area among the low-income groups. About price, we can say it is competitive in comparison with the competitors. Some cases it is more lucrative than the competitors. Management hierarchy is just pyramid like.
Marketing set up is based on commission and salary basis. As an insurer DLIC tries to satisfy need of the customers. Company makes needs for security of the insured. After an agreement, company takes the full responsibilities of the insured. To enhance the marketing activities company have the provision of making publicity. In this context, company’s mouthpiece is published to give the real scenario of the company.