Extension of CARAMEL Model by Customer Satisfaction Factor for Indian Private Life Insurance Companies in India

This paper explores the efficiency of private life insurance companies in India. The study employed the CARAMEL model to gauge the technical proficiency of Indian life insurance providers. However, the CARAMEL model has ignored the customer satisfaction factor, which is nowadays an essential factor for measuring efficiency. So, in this study, the CARAMEL model is extended by another factor: customer satisfaction. Customer satisfaction is measured by the persistency ratio, claim settlement ratio, and number of grievances reported. Compare the ranks of private life insurance companies according to the CARAMEL model without customer satisfaction score and with customer satisfaction score. Correlation coefficient and t-test was used to find out whether there is any significant association between the ranks according to the CARAMEL model without customer satisfaction and with the customer satisfaction factor. The data used in this study, which spans the last ten years from 2013-14 to 2022-23, was entirely secondary and was gathered from the IRDA official website. Ageas Federal Life Insurance Company ranked 1st according to CARAMEL model without customer satisfaction and ICICI Prudential Life Insurance Company ranked 1 with customer satisfaction factor. Spearman’s Rank correlation coefficient shows that there is an insignificant association between the CARAMEL model ranks with customer satisfaction and without customer satisfaction factors. When there is no significant association between ranking without customer satisfaction factors and with customer satisfaction factors, we extend the CARAMEL model by the customer satisfaction factor.