A Project Report

ON
“CUSTOMER PERCEPTION TOWARDS INSURANCE
PRODUCTS”
In partial fulfillment of award of the degree
Of
BACHELORS OF BUSINESS ADMINISTRATION
TO

MAHARSHI DAYANAND UNIVERSITY, ROHTAK

Supervised by: Submitted by:

Cheena Mittal
Department of Management Studies Roll no. 1100974058
BBA 6th SEM

SAT KABIR INSTITUTE OF TECHNOLOGY & MANAGEMENT

LADRAWAN, BAHADURGARH
SESSION 2017-2020
 CERTIFICATE OF GUIDE
This is to certify that the project entitled “CUSTOMER PERCEPTION TOWARDS
INSURANCE PRODUCTS” by Cheena Mittal, Roll No. 1100974058, submitted to Mr. Rajiv
Goyal for the Award of Bachelor of Business Administration (BBA Sem-6 th) is original research
work carried out by him/her/them under my supervision.
This report has not been submitted either partly or fully to any other University or Institute for award
of any degree or diploma.

Dr. Rajeev Goyal

Department Of Management Studies,
Sat Kabir Institute of Technology and Management

Date:

Place :
 DECLARATION

I hereby declare that the work incorporated in this report titled “CUSTOMER PERCEPTION
TOWARDS INSURANCE PRODUCTS” in partial fulfillment of the requirements for the award of
Bachelor of Business Administration (Sem- 6 th) is the outcome of original study undertaken by
Cheena Mittal and it has not been submitted earlier to any other University or Institution for the
award of any Degree or Diploma.

Date:

Place:

(Name &Sign of student)

 ACKNOWLEDGEMENT

Completing a task has never been a one man effort. Apart from the efforts from my side, the success
of this project depends largely on the encouragement of many other.

It gives me a great pleasure to express my deep sense of gratitude to every person who helped me in
coloring the mosaic of this project with the wealth of their knowledge and expertise.

I would like to acknowledge the support of my faculty guide, Sat Kabir Institute of Technology
and Management, Ladrawan, Bahadurgarh for her constant guidance in this project and for
providing necessary information whenever required.

Words are inadequate to express my gratitude for giving me an opportunity to undergo the practical
training in their company and extend me full cooperation, enabling me to successfully complete this
project report.

I am particularly grateful to insurance cooperation extended to me by providing necessary

information & timely help in providing a guidance for motivating me towards the Esteemed
organization, and Everyone should be motivated towards achieving their goal and purpose.
 EXECUTIVE SUMMARY

A Study on Customer Perception towards insurance products

CHEENA MITTAL

SAT KABIR INSTITUTE OF TECHNOLOGY AND MANAGEMENT, LADRAWAN,

BAHADURGARH

Influencing the ways that people act in their daily consumption lives is a concern for researchers in a
number of disciplinary areas, including customer behaviour psychology, sociology and marketing.

This project is focused on analyzing the Internal and the External factors which aim at determining
the customers buying behaviour towards insurance products. It is mainly focused in trying to
understand the various factors responsible for the buying decision. Understanding these factors is a
critical task. The purchase decision in general is prompt by number of factors viz. Psycho graphical,
Economical, Socio Political, Legal and Demographical. There are certain other factors which need to
be understood while keeping in mind the investment decisions made by customers, such as,
Customer Buying Behaviour, Customer Preferences and Perception, Brand Loyalty etc.
 CHAPTER 1-
INTRODUCTION
INTRODUCTION

Life is full of risk and uncertainties. Since we are social human beings, we have certain
responsibilities too. Indian customers have big influence of emotions and rationality on their buying
decisions. They believe in future rather than present and desire to have a better and secured future. In
this direction life insurance services have its own value in terms of minimizing risk and uncertainties.
Indian economy is developing and having huge middle class societal status and salaried persons.
Their money value for current needs and future desires generate the reasons behind holding a policy.
An attempt has been made in this report to study the buying behaviour of customers towards life
insurance services.

Analyzing customer behaviour is perceived as cornerstone of a successful marketing strategy.

Customer behaviour is a mental and emotional process and the observable behaviour of customers
during searching, purchasing and post consumption of a product and service. Similarly customer
behaviour is action and decision process of people who purchase goods and services for personal
consumption. Now if these defining criteria are closely observed, it is evident that analyzing
customers’ decision making process is the foundation of entire notion of customer behaviour.
Insurance is one of the major segments of financial market. The insurance business is unique in the
sense that it is rewarded for managing the risk of other parties. In India insurance sector is not only
playing a role within the financial system but also has a significant socio-economic function of
providing risk cover to the poor population. With the opening up of Indian insurance market,
competition has become intense. Every company is trying to woo customers to have large chunk of
the market share but barring a few companies most of the new insurance companies are struggling to
survive in the market. In spite of the importance of insurance it is still in nascent stage in India.
Nearly 80 percent of Indian population is without Life insurance cover and the Health insurance, the
penetration rates of health and other non-life insurances in India is also well below the international
level.
1.2 HISTORY OF INSURANCE

In some sense we can say that insurance appeared simultaneously with appearance of human society.
In earlier economies, we can see insurance in the form of people helping each other. For example, if
a house is burnt, the members of the community help build a new one. Should the same thing happen
to one’sneighbour, the other neighbours must come to help. Otherwise, neighbours will not receive
help in the future. Insurance in the modern sense, started as a methods of transferring or distributing
risk, were practiced by Chinese and Babylonian traders as long ago as the 3rd and 2nd millennia BC,
respectively. Chinese merchants travelling treacherous river rapids would redistribute theircargo
across many vessels to limit the loss due to any single vessel’s capsizing. The Babylonians developed
a system which was recorded in the famous Code of Hammurabi, c.1750 BC, and practiced by early
Mediterranean sailing merchants. If a merchant received a loan to fund his shipment, he would pay
the lender an additional sum in exchange for thelender’s guarantee to cancel the loan should the
shipment be stolen.

Greek monarchs were the first to insure their people and made it official by registering the insuring
process in governmental notary offices. They invented the concept of

the general average. Merchants whose goods were being shipped together would pay a
proportionallydivided premium which would be used to reimburse any merchant whose goods
were jettisoned during storm or sinking of the vessel in the sea. The Greeks and Romans introduced
the origins of health and life insurance c. 600 AD when

they organized guilds called ―benevolent societies which cared for the families and paid funeral
expenses of members upon death. Guilds in the middle Ages served a similar purpose.

Before insurance was established in the late 17th century, friendly societies existed inEngland, in
which people donated amounts of money to a general sum that could be used for emergencies.
Separate insurance contracts (i.e., insurance policies not bundled with loans or other kinds
of contracts) were invented in Greeks rulers in the 14th century, as were insurance pools backed by
pledges of landed estates. These new insurance contracts allowed insurance to be separated from
investment, a separation of roles that first proved useful in marine insurance. Insurance became far
more sophisticated in post-Renaissance Europe, and specialized varieties developed. Insurance as we
know it today can be traced to the Great Fire of London, which in 1666 A.D devoured 13,200 houses.
In the aftermath of this disaster, Nicholas Barbon opened an office to insure buildings. In 1680, he
established England‘s first fire insurance company, The Fire Office to insure brick and frame homes.

The first insurance company in the United States underwrote fire insurance and was formed in
Charles Town (modern-day Charleston), South Carolina, in 1732.
1.3 INDUSTRY BACKGROUND

Insurance may be described as a social device to reduce or eliminate risks to loss of life and property.
Insurance is defined as a cooperative device to spread the loss caused by a particular risk over a
number of persons who are exposed to it and who agree to ensure themselves against that risk. The
risk cannot be averted but loss occurring due to certain risk can be distributed amongst the agreed
persons. They share the loss by payment of premium, which is calculated on the probability of loss.
Insurance is a system of protection against financial loss in which risk is shifted to a professional risk
bearer (an insurance company), in exchange for a certain sum of money (the insurance premium).
The insurer agrees to pay the insured if loss occurs.

The earliest references of insurance have been found in Babylonia. By the middle of 14th century, as
evidenced by the earliest known insurance contract (Geneva, 1347), marine insurance was practically
universal among the maritime nations of the Europe. In London, Lloyd's coffee House was a place
where merchants, ship owners and underwriters met to transact business. By the end of the 18th
century, Lloyd's had progressed into one of the first modern insurance companies (Rajesham and
Rajender, 2006). In India, Manusmriti (200 BC) provides Indian version of primitive marine
insurance stipulating that "the trader should be made to pay (taxes or duties)" to the state for
providing Yogakshema (Risk and safety) taking into consideration the terms of purchase, sale, the
length of the journey, expenses and incidentals (Bodla et al, 2003). The insurance in its modern form
came to India from UK, with the establishment of the Oriental Life Insurance Corporation in 1818,
which failed in 1834. However, the success of Indian life insurance can be traced back roughly to the
second decade of the nineteenth century when the Madras Equitable began transacting life insurance
business in the Madras Presidency in 1829. After that, it was a rather dull phase with regard to the
growth in life insurance enterprise. The Indian life insurance company act 1912 was the first
statutory body that started to regulate the life insurance business in India. By 1956 about 154 Indian,
16 foreign and 75 provident firms were established in India. Then the central government took over
these companies and as a result the LIC was [Link] insurance industry of India consists of 51
insurance companies of which 24 are in life insurance business and 27 are non-life insurers. Among
the life insurers, Life Insurance Corporation (LIC) is the sole public sector company. Apart from that,
among the non-life
Insurers, there are six public sector insurers. In addition to these, there is sole national reinsurer,
namely, General Insurance Corporation of India. Other stakeholders in Indian Insurance market
include Agents (Individual and Corporate), Brokers, Surveyors and Third
Party Administrators servicing Health Insurance claims.
Out of 27 non-life insurance companies, 4 private sector insurers are registered to underwrite policies
exclusively in Health, Personal Accident and Travel insurance segments.
They are Star Health and Allied Insurance Company Ltd, Apollo Munich Health Insurance Company
Ltd, Max Bupa Health Insurance Company Ltd and Religare Health Insurance
Company Ltd. There are two more specialized insurers belonging to public sector, namely, Export
Credit Guarantee Corporation of India for Credit Insurance and Agriculture Insurance Company Ltd
for Crop Insurance.
Insurance penetration of India i.e. Premium collected by Indian insurers is 4.10% of GDP in FY
2011-12. Per capita premium underwritten i.e. insurance density in India during FY 2011-
12 is US$ 59.0.
The insurance sector in India has come to a full circle from being an open competitive market to
nationalization and back to a liberalized market again. Tracing the developments in the
Indian insurance sector reviles the 360-degre turn witnessed over a period of almost two centuries.
1.4 A BRIEF HISTORY OF INSURANCE SECTOR IN INDIA

The history of general Insurance dates back to the Industrial Revolution in the west and the
consequent growth of sea-faring trade and commerce in the 17th century. It came to India as a legacy
of British occupation. The General insurance business in India, can trace its roots to the Triton
Insurance Company Ltd., the first general insurance company established in the year 1850 in
Calcutta by the British. In 1957 General Insurance Council, a wing of the Insurance Association of
India, framed a code of conduct for ensuring fair conduct and sound business practices. In 1972 The
General Insurance Business (Nationalisation) Act, 1972 nationalised the general insurance business
in India with effect from January 1, 1973 and General Insurance Corporation of India (GIC) was
formed in pursuance of the Act. The existing 107 insurers were amalgamated and grouped into four
companies viz. the National Insurance Company Ltd., the

New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India
Insurance Company Ltd. These companies were formed as the fully owned subsidiary companies of
GIC. In 1999, regulatory body for insurance sector was formed with the name of Insurance
Regulatory and Development Authority (IRDA) and the market was opened for private players. With
the entry of private insurers, the GIC subsidiaries were delinked from the holding company in 2000,
and a separate body called General Insurers (Public Sector) Association (GIPSA) was created to
facilitate interaction among the four. The GIC was converted to function as the National Reinsurer.

Life Insurance in its modern form came to India from England in the year 1818. Oriental Life
Insurance Company started by Europeans in Calcutta was the first life insurance company on Indian
Soil. All the insurance companies established during that period were brought up with the purpose of
looking after the needs of European community and Indian natives were not being insured by these
companies. However, later with the efforts of eminent people like BabuMuttylal Seal, the foreign life
insurance companies started insuring Indian lives. But Indian lives were being treated as sub-
standard lives and heavy extra premiums were being charged on them. Bombay Mutual Life
Assurance Society heralded the birth of first Indian life insurance company in the year 1870, and
covered Indian lives at normal rates.
Insurance is an Rs 450 billion industry in India. The life insurance segment writes about 80% of the
overall market value. Indian Insurance market was at its all time high in 2003 with a growth of about
17.4% over the previous year. Since 2001 Insurance is growing at the rate of 15-20 % annually. The
growth in the insurance industry is affected by volatility in real estate rates, GDP rates and long term
interest rates. Fluctuations in exchange rates also affect the growth in this sector. The gross premium
as a percentage of the GDP has gone up from 2.3 in the year 2000 to 4.8 in 2006. The premium as
percentage of the country’s gross domestic product (GDP) has increased from 4.8 percent in 2006 to
5.2 percent in 2011. Together with banking services, it adds about 7% to the country’s GDP.
Some of the important milestones in the life insurance business in India are:

1818: Oriental Life Insurance Company, the first life insurance company on Indian soil started
functioning.
1870: Bombay Mutual Life Assurance Society, the first Indian life insurance company started its
business
1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life
insurance business.
1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical
information about both life and non-life insurance businesses.
1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of
protecting the interests of the insuring public.
1956: 245 Indian and foreign insurers and provident societies are taken over by the central
government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital
contribution of Rs. 5 crores from the Government of India.

Indian Insurance in 21st Century:

2000: IRDA starts giving licenses to private insurers: ICICI prudential and HDFC Standard Life
insurance first private insurers to sell a policy
2002: Banks allowed selling insurance plans. As TPAs enter the scene, insurers start setting non-life
claims in the cashless mode
2007: First Online Insurance portal, [Link] set up by an Indian Insurance Broker,
Bonsai Insurance Broking Pvt Ltd.
1.5 INSURANCE SECTOR REFORMS

Cap on ULIP charges and increase in lock in period:

 Restriction on high distribution partner payouts
 Reduction in overall contribution of ULIPs to new business premium
 Benefit derived by insurers on account of high lapse and hence more surrender penalty will
be significantly impacted due to the cap on surrender charges
 Insurers showing profits due to release of lapse reserves will not be able to sustain the same
in the future unless long term operational efficiencies are developed

Registration of Referral Agents:

 There have been a slew of regulations around turnover criteria to be a referral partner and
cap on referral fee income as well as share of income through referral business
 Training and tele-callers has been made mandatory
 Cost of compliance expected to increase and some referral partners who may have to apply
for Broking licence which could delay insurance distribution operations

Compulsory purchase of annuity in pension plans:

 Even in case the policy is surrendered, 2/3 rd of accumulated funds will be used to purchase
annuity
 Exit option being constrained may have significant negative implications for the product
segment

Guidelines around agents:

 Persistency norms- the regulation stipulates a min level of persistency to be achieved by each
licensed agent. This is expected to reduce the agency force in the industry
 License renewal- IRDA has mandated a min business requirement norm for licensing agent.
This is expected to reduce part-time agents thus improving customer service

1.6 INDIAN INSURANCE MARKET

The insurance sector which stood at a strong US$ 72 billion in 2012 has the potential to grow to US$
280 billion by 2020. This growth is driven by India’s favourable regulatory environment which
guarantees stability and fair play. This environment has given rise to an insurance market which
encourages foreign investors to tap into the sector’s massive potential. Ever since the Indian
government liberalised the insurance sector in 2000 and opened the doors for private participation,
the sector has gone from strength to strength. The resultant competition has provided the customer
with a never-before-seen range of products and providers, and also enhanced service levels
markedly. The health of the insurance sector reflects a country’s economy. This sector not only
generates long-term funds for infrastructure development, but also increases a country’s risk-taking
capacity. India’s economic growth since the turn of the century is viewed as a significant
development in the global economy. This view is helped in no small part by a booming insurance
industry.

Market Share of Insurance Companies

Industry Dynamics
Factors that influence consistent growth in insurance sector are:
  Effective distribution channels – The efficiency and cost of the various distribution strategies
used by companies are significant to their success in the insurance business. This particularly
holds true for the retail business.
 Focus on overall financial inclusion – As time evolves, so must the approach of the insurance
sector in India. The objective of the insurance sector should ideally be to offer a broader
range of activities to a wider populace.
 Customer needs and preferences – The growth of India’s insurance industry can be attributed
to product innovation, dynamic distribution channels, and vibrant publicity and promotional
campaigns run by insurance companies. Benefits attached to the products and the manner in
which they are delivered (through various marketing tie-ups) have helped bring customers
and insurance companies closer to each other and made the latter more relevant.

Types of Insurances products:

Personal Insurance

Personal insurance is essentially a plan availed by an individual to take care of various requirements
like health and coverage against death or injury by accident. There are several policies nowadays
where there is an option to cover the family members in an individual policy.

Medical Insurance

Medical or health insurance is taken to cover against the chances of medical costs. These plans are
created with estimates of healthcare expenses a person may face in future and the premiums are
determined on such approximations.

Accidental insurance

The accidental insurance policies cover both death and any sort of disability arising from an accident.
These plans cover a wide range of situations but not ones arising from using alcohol or drugs.

Property insurance
Property insurance provides coverage against risks to property arising from fire, weather damage, or
theft to name a few. This type of insurance can be further sub divided into fire insurance, earthquake
insurance, flood insurance, and boiler insurance for example. The Standard Fire & Special Perils
policy of SBI General Insurance is one of the major examples of such a policy.
Vehicle Insurance
Vehicle insurance is also referred to as auto insurance, car insurance, GAP insurance, and motor
insurance. It is primarily bought for securing road vehicles such as cars, motorcycles, and trucks
from physical damage from traffic accidents as well as any liability that may arise thereafter.

Rural insurance

Rural insurance is meant to cater to the requirements of rurally bases businesses or individuals. These
policies provide a wide range of coverage starting from life and health to protection against natural
disasters that can have a negative effect on business.

industrial insurance

The industrial insurance policies are availed by various companies to get protection for important
projects, construction, contracts, and equipment from situations like fire, theft and any form of
damage or loss.

Commercial insurance

Commercial insurance is availed in order to get security against theft, liability, and property damage.
These plans also help in cases of employee injuries and business interruption.

Term assurance plan-

In insurance language this is a “pure risk cover” and can bedescribed as an insurance or risk
management product in its purest and simplest [Link] case of your untimely death, your dependents
will receive the risk-cover amount or the ‘sum assured’. On the other hand, there is no survival
benefits if you survive thepolicy term, and you also do not get back the premiums paid.

Endowment assurance plans-

It is a traditional investment-cum-insurance [Link] other words, it provides both life cover (in the
event of death of life insured) or maturity benefits if he/she survives the policy term. Endowment
plans are typically front-loaded. Therefore it makes sense for you to remain in the policy for at least
12-15years.

Money-back policy-

It is a variant of the endowment assurance policy-thedifference is that you get the survival benefits
intermittently over the life of the [Link] taking care of his lump-sum monetary requirements to
enable him to meet hisfinancial goals and major commitments. The maturity benefit is the sum
assured valueless the survival benefits already paid under the policy, plus bonuses accrued, if any.
Incase of untimely death the nominee will receive the entire sum assured withoutconsidering the
payouts already made to you before the unfortunate death.

Whole life plan-

This policy provides the life assurance cover for almost the entirelife. Most of the insurance
companies provide protection up to the age of 100 years. Thesum assured is paid to you once you
reach this age, and the policy is terminated. In thispayment of premium is for whole life, and the sum
assured is paid to your nominee inthe event of your death. In other words, this is equivalent to a term
plan over your lifetime.

Pension plan-

A pension plan can be looked as more of an investment productoffered by insurers to cater to the
“golden” retirement years of an individual. Alsoreferred to as retirement plans, these are designed to
ensure that you are financiallyindependent during your retirement years. Most of the pension plans
also provide anoptional life assurance cover in them.

Child plan-
It basically aims at ensuring the achievement of life goals of your [Link] goal can be higher
education, financial help in establishing a business or profession, or even marriage. In a child plan,
the life assured can be the parent or thechild. The beneficiary for the policy, however, is the child. As
a child is a minor, the lifeinsurance contract is between the parent and the insurance company. In
case of earlydeath of the parent, the premium payment is waived off by the insurance company
andthe policy continues as originally planned.

Unit Linked Insurance Plan-

ULIPs have been the darling of insurancecompanies, intermediaries and the insured population alike
over the last five years. Themain reason for this popularity is the twin advantage of a pure life cover
(insurancecomponent) and a range of investment funds or options (savings component) to matchyour
risk profile. While the pure life cover provides the much needed financial securityto your dependents
in the event of your untimely death, the savings component allowsyou to participate in the capital
markets and build wealth over the long-term tenure of the policy.

Changing face of Indian insurance industry

Indian life-insurance market is the target market of all the companies who either want toextend or
diversify their business. To tap the Indian market there has been tie-upsbetween the major Indian
companies with other International insurance companiestostart up their business. The government of
India has set up rules that no foreigninsurance company can setup their business individually here
and they have to tie upwith an Indian company and this foreign insurance company can have an
investment of only 24% of the total start-up investment. Indian insurance industry can be featured by:

•Low market penetration.

•Ever growing middle class component in population.

•Growth of customer’s interest with an increasing demand for better insuranceproducts.

•Application of information technology for business.

•Rebate from government in the form of tax incentives to be insured

Today, the Indian life insurance industry has a dozen private players, each of which aremaking
strides in raising awareness levels, introducing innovative products andincreasing the penetration of
life insurance in the vastly underinsured country. Severalof private insurers have introduced
attractive products to meet the needs of their targetcustomers and in line with their business
objectives
CHAPTER 2-
REVIEW OF
LITERATURE
REVIEW OF LITERATURE

Review of literature reveals that very little research has been done on insurance industry in India.
Considering the fact that insurance is coming up in a big way in India, there is an emergent need for
doing research on various facets of insurance industry in India. The need and significance of the
study can be summarised as:

1. Pfeffer (1965) in this study makes an effort to measure the profit potential of the new life
insurance companies. The five types of strategies available to new companies are: grandfather
strategy; hit and run; captive; brokerage; and traditional strategy. Although the evaluation of
profit potential in case of new companies is practically impossible due to various reasons
such as paucity of useful published data about the actual performance, it is concluded that out
of many entrants, only a few are capable of doing business in the long run.

2. Peterson et al (1972) study the effect of marketing innovations in life insurance sector. The
results show that flow of innovation is a two-step flow i.e. it flows from innovator firms to
large firms in the industry and then to others. The relative advantage of innovating firms is
short lived when the offering in unprotectable. Therefore future research on diffusion of
competitive innovation among sellers must consider industry characteristics such as "ability
to protect innovations."

3. Meidan (1982) presents different marketing strategies for insurers, suggesting that the
selection of an appropriate strategy should be based on the internal conditions and external
forces facing the firm. The two broad categories of insurance marketing strategies exist:
growth strategies; and competitive marketing strategies. Due attention should be given to the
marketing organisational structure and its departmental responsibilities.
4. Fitzgerald (1987) develops a utility maximising model of a married couple choosing the
amount of life insurance it wants on each of its earners. Social security survivor benefits are
found to decrease the demand for life insurance on an earner, while social security benefits
that are conditional on the earner's survival increase the demand. Husband and wife's future
earnings are found to increase the demand for insurance on husband's life.

5. Browne and Kim (1993) identify the factors that lead to the variations in life insurance
demand across nations. Important factors found to be dependency ratio, national income,
social security provided by government, inflation, education level, average life expectancy,
price of insurance and religion. The findings that life insurance is positively correlated with
national income and negatively correlated with inflationary expectations, suggests that
economic development and economic stability greatly increase life insurance consumption.
Outreville (1996) presents some empirical tests of the relationship between financial
development and the development of the life insurance sector and provides empirical
evidence of the negative effects of a monopolistic market on life insurance growth. Skilled
human capital is a source of competitive advantage because industries in developing countries
suffer from a major handicap of shortage of skilled personnel.

6. Zimmerman (1999) in this study concentrates on the insurance industry and on insurance
firms' actions designed to cope with barriers to international trade. Thy find out that there are
26 barriers to insurance trade, which are discriminatory against foreign insurers. Respondents
feel that barriers can become a critical factor if they create prohibitive costs or difficulties for
the firm's entry. A new market entry decision model has been proposed based on the findings.
Saibaba et al (2002) study the perception and attitude of women towards life insurance
policies. Nowadays many insurance companies are trying hard to woo the female population.
The study finds that women feel that their lives are not as valuable as their husbands, they
perceive insurance as a tool for risk coverage and not as a tax saving device, there is also lack
of knowledge about suitable insurance plans.
7. Reddy (2005), in this article studies the customer perception towards life insurance
companies' policies. This study is limited to Bangalore city only. The results are that,
majority of respondents feel that policies offered by private companies are up to their
expectations but when compared with public companies' policies very few policies are better
alternatives. Sharma and Agarwal (2005) discuss the insurance sector in India in the pre-
nationalisation era, post nationalisation era, post liberalisation era and emerging

8. scenario. To be more competitive and responsive to the needs of the societies, the insurance
players would be required to concentrate on the various strategies viz. environmental
analysis, restructuring organisations, human resource development, efficient marketing
strategies, distribution channels and corporate governance.

9. Rajesham and Rajender (2006) also discuss the changing scenario of the Indian insurance
sector. They point out the challenges in the present scenario as increasing India's share in the
global insurance market, having qualified, skilled actuaries, penetration in rural markets,
developing customised policy for clients etc.
10. Rajagopalan (2006) does a comparative evaluation of the traditional insurance policies
available in the Indian market from a consumer perspective. He suggests that, it is better for
an individual to buy the cheapest term insurance for the required amount of death protection
and term. In case of endowment policy, instead of buying non participating endowment
policy, it is better to invest the extra premium in a PPF account.

11. Barkur et al (2007) study the influence of five critical factors on service quality in the
insurance sector and attempt to obtain a generic solution to enhance the quality of service.
The research is based on system dynamics methodology, which involves sequential phases.
The results of this research have indicated that the key parameters, e.g. past experience,
personal needs, external communication, word of mouth, and active clients have significant
influence on service quality of the insurance sector.
12. Outreville (2008) studies the international diversification of successful insurance companies.
The results of this study have important implications. First, the results indicate that location-
specific advantages such as size, education, regulatory barriers, competitiveness, and cultural
distance do provide an explication of the internationalisation of insurance firms in some
locations. Second, they show that good governance has a strong impact on the choice of
countries by insurance firms.

13. Ma and Pope (2008) investigate the relationship shared by foreign market characteristics and
the participation of international life insurers in those markets. The analysis reveals that the
characteristics that are found to be statistically significant with respect to international
participation include high levels of trade liberalisation and/or low insurer market share
concentration, high levels of national wealth, and high levels of government expenditure on
social security retirement benefits.

14. Zuasti (2008), in this article studies the interaction between insurance and dynamic financial
markets. This is demonstrated using a general equilibrium model, where agents not only buy
insurance but can also invest in shares of the companies that sell insurance. The central result
shows that in equilibrium, risk-averse agents purchase full insurance coverage, despite unfair
insurance prices. The three conditions that explain this result, are insurance contracts are
priced competitively; financial prices include a risk premium only for undiversifiable risk,
and financial markets are effectively complete.

15. Swan and Combs (1976) feel that it is seldom clear which general dimensions of product
performance are important to the consumer and how these dimensions are related to
satisfaction. This study examines one aspect of the relationship between expectations,
performance, and satisfaction. The main argument in this article is that satisfaction involves
the two processes: instrumental performance; and expressive performance. The authors
predict that instrumental performance is necessary, but not sufficient condition for
 satisfaction. Dissatisfactory items will involve primarily failures of instrumental performance
to meet expectations.

16. Muffatto and Panizzolo (1995), develop a framework for customer satisfaction and provide a
detailed description of the relationship structure between the different elements of the
organisational structure. The authors propose a framework for the analysis of the
organisational processes related to customer satisfaction. The framework has three sections;
planning processes, design processes and monitoring processes. This means using an
integrative and holistic approach, which optimises the interaction of primary processes and
activities. Hallowell (1996), in this paper illustrate the relationship of profitability to
intermediate, customer-related outcomes that managers can influence directly. The findings
support the theory that customer satisfaction is related to customer loyalty, which in turn is
related to profitability. This paper presents an empirical analysis of one retail bank. The
author posits that although customer satisfaction is related to profit, a bank should not
endeavour to satisfy every customer. Banks should target and serve only those customers
whose needs it can meet better than its competitors in a profitable manner.

17. Anderson et al (1997) examine the links between customer satisfaction and productivity. The
authors present a conceptual framework useful in resolving these contradictory viewpoints.
The findings indicate that the association between changes in customer satisfaction and
changes in productivity is positive for goods, but negative for services.

18. Krishnan et al (1999) study the drivers of customer satisfaction for financial services. The
contributions of this paper are both managerial and methodological. On the methodological
front, this paper introduces a new Bayesian approach for estimating customer satisfaction
models. On the managerial front, the analysis indicates that satisfaction with product
offerings is a primary driver of overall customer satisfaction. Satisfaction with the quality of
financial reports, branch services, and the quality of automated telephone service through call
 centers are also important, although their effects are substantially higher for specific types of
customers. Smith et al (1999), in this article develop a model of customer satisfaction with
service failure/ recovery encounters. The authors execute the research in the context of two
different service settings, restaurants and hotels. The results of this research provide
organisations with guidelines for developing service recovery. These guidelines can be used
to implement service delivery systems that include provisions for appropriate recovery
efforts, allocate recovery resources to maximise returns in terms of satisfaction, and train
employees to recognise failures and reduce their effects on customers.

19. Kanji and Wallace (2000) recognise customer as economic assets. When a customer
recognises quality, it is reflected in customer satisfaction. Customer satisfaction in turn, can
lead to increased revenue. But for a business to be successful in the long run, it must satisfy
customers at a profit. In this paper, the authors have used a condensed version of Kanji's
(1998) generic Business Excellence model to measure organisation with the help of 10
interrelated latent variables. These are; leadership, delight the customer, customer focus,
management by fact, process performance, people-based management, people performance,
continuous improvement, improvement culture, business excellence.

20. Bowen and Chen (2001) develop and implement a method for hotels to identify attributes that
will increase customer loyalty. Based on surveys from hotel guests, the results verify that
customer satisfaction does not equal customer loyalty. Managers should realise that having
satisfied customers is not good enough; they must have extremely satisfied customers. The
results of study also support the contentions that there is a positive correlation between loyal
customers and profitability.

21. Guo et al (2004) investigate the linkage between marketing metrics like customer satisfaction
and sales and financial metrics such as profitability and stock prices. However the authors
propose that there is a lagged effect between the two. In other words, past satisfaction has a
 positive effect on current profitability, and similarly, past profitability affects current
satisfaction. The results of the study confirm that satisfaction has a direct bearing on the
firm's financial well-being.

22. Bennett and Rundle-Thiele (2004), in this paper demonstrate that satisfaction is not the same
as attitudinal loyalty and that there are instances where satisfaction does not result in loyalty.
The results indicate that satisfaction and loyalty in a business services setting are different
constructs, and while the relationship is positive, high levels of satisfaction do not always
yield high levels of loyalty. Customers with low satisfaction and high attitudinal loyalty are
potentially vulnerable to competitors' offers that appear more satisfying.

23. Das and Samanta (2005) consider customer satisfaction as a business survival requirement.
The results identify eight factors which could reflect the customer satisfaction level. These
are productivity, quality of delivery, meeting delivery schedule, technical support,
communication, proactive or promptness in response, skill level and domain knowledge. The
authors propose a customer satisfaction index using principal component analysis.

24. Gilbert and Veloutsou (2006) write that satisfied customers are key to long term business
success. The industries included are banking and finance, retail, government, grocery stores,
hospitality/sports, and restaurants. The paper finds that customer satisfaction does differ
across industries, and that both the banking/finance and hospitality/sports industries seem to
please their customers more than the other industries analysed in this research undertaking.
Cugini et al (2007) propose and test a framework to analyse and manage the relationship
between company costs and customer satisfaction in service industries. This study makes a
contribution to the understanding of strategic cost management in service industries, through
the development of a model which allows establishing a direct link between sources of
efficiency in managing service costs and sources of effectiveness in generating customer
satisfaction.
25. Yu (2007), in this study examines the cross-sectional relation between customer satisfaction
and individual customers' purchase behavior as well economic contributions; and also
investigates how customer satisfaction affects future customer revenue, costs, and profits.
This finding reveals that higher customer satisfaction leads to higher customer revenue and
higher customer costs at the same time, and thus customer profits remain unaffected.

26. Meirovich and Bahnan (2008), study the links between quality and consumers' emotions and
eventually with their satisfaction. This study introduces two components of total quality
structure; quality of design and quality of conformance, for analysis of the link between
quality and customer emotions. The results show that there is a significant relationship
between possible combinations of two quality dimensions and customers' affective responses
in terms of both their valence and intensity. An interesting finding of this study suggests that
customers value quality of conformance higher than quality of design.

27. Frank and Enkawa (2009), in this article purport to find out how economic processes
influence customer satisfaction. The study examines the separate impacts of economic growth
and economic expectations on perceived value, quality expectations and customer
satisfaction. The analysis reveals that customer satisfaction is positively influenced by
economic growth and negatively by current economic expectations. The results show a strong
correlation between economic expectations and (overall and industry-specific) quality
expectations.

28. Pfeffer (1965) in this study makes an effort to measure the profit potential of the new life
insurance companies. The five types of strategies available to new companies are: grandfather
strategy; hit and run; captive; brokerage; and traditional strategy. Although the evaluation of
profit potential in case of new companies is practically impossible due to various reasons
such as paucity of useful published data about the actual performance, it is concluded that out
of many entrants, only a few are capable of doing business in the long run.
29. Peterson et al (1972) study the effect of marketing innovations in life insurance sector. The
results show that flow of innovation is a two-step flow i.e. it flows from innovator firms to
large firms in the industry and then to others. The relative advantage of innovating firms is
short lived when the offering in unprotectable. Therefore future research on diffusion of
competitive innovation among sellers must consider industry characteristics such as "ability
to protect innovations."

30. Meidan (1982) presents different marketing strategies for insurers, suggesting that the
selection of an appropriate strategy should be based on the internal conditions and external
forces facing the firm. The two broad categories of insurance marketing strategies exist:
growth strategies; and competitive marketing strategies. Due attention should be given to the
marketing organisational structure and its departmental responsibilities.

31. Fitzgerald (1987) develops a utility maximising model of a married couple choosing the
amount of life insurance it wants on each of its earners. Social security survivor benefits are
found to decrease the demand for life insurance on an earner, while social security benefits
that are conditional on the earner's survival increase the demand. Husband and wife's future
earnings are found to increase the demand for insurance on husband's life. Browne and Kim
(1993) identify the factors that lead to the variations in life insurance demand across nations.
Important factors found to be dependency ratio, national income, social security provided by
government, inflation, education level, average life expectancy, price of insurance and
religion. The findings that life insurance is positively correlated with national income and
negatively correlated with inflationary expectations, suggests that economic development and
economic stability greatly increase life insurance consumption. Outreville (1996) presents
some empirical tests of the relationship between financial development and the development
of the life insurance sector and provides empirical evidence of the negative effects of a
 monopolistic market on life insurance growth. Skilled human capital is a source of
competitive advantage because industries in developing countries suffer from a major
handicap of shortage of skilled personnel.

32. Zimmerman (1999) in this study concentrates on the insurance industry and on insurance
firms' actions designed to cope with barriers to international trade. Thy find out that there are
26 barriers to insurance trade, which are discriminatory against foreign insurers. Respondents
feel that barriers can become a critical factor if they create prohibitive costs or difficulties for
the firm's entry. A new market entry decision model has been proposed based on the findings.
Saibaba et al (2002) study the perception and attitude of women towards life insurance
policies. Nowadays many insurance companies are trying hard to woo the female population.
The study finds that women feel that their lives are not as valuable as their husbands, they
perceive insurance as a tool for risk coverage and not as a tax saving device, there is also lack
of knowledge about suitable insurance plans.

33. Reddy (2005), in this article studies the customer perception towards life insurance
companies' policies. This study is limited to Bangalore city only. The results are that,
majority of respondents feel that policies offered by private companies are up to their
expectations but when compared with public companies' policies very few policies are better
alternatives. Sharma and Agarwal (2005) discuss the insurance sector in India in the pre-
nationalisation era, post nationalisation era, post liberalisation era and emerging scenario. To
be more competitive and responsive to the needs of the societies, the insurance players would
be required to concentrate on the various strategies viz. environmental analysis, restructuring
organisations, human resource development, efficient marketing strategies, distribution
channels and corporate governance.

34. Abzare et al. (2010) performed an analytical descriptive study on “Factors influencing the
motivation of employees working in public and private hospitals in Isfahan”. The poplaution
under study included all employees working in major public and private hospitals in Isfahan
 in all job levels such as including medicine, paramedicine, nursing, and administrative-
logistic positions. The sample size was determined using limited sample size formula and 248
employees were selected through simple random sampling and included in the research
sample. The instrument used to collect the dat was a 52-item questionnaire with three scales
of material, spiritual, and organizational factors. The validity of the questionnaire was
confirmed by face validity and its reliability was estimated as equal to 0.82 by the Cronbach
alpha coefficient. The results indicated that there was a significant different between the mean
scores of occupational level, employment status, and education level. Employees in the public
and private hospital under study had different motivational priorities so that spiritual factors
were considered more impartant in the public hospitals than in the private hospitals.
35. Ostovar et al. (2003) conducted an analytical descriptive study on “Factors affecting
employee motivation in the Yasuj University of Medical Sciences in the view of university
staff and managers”. In this study, 50 staff managers and 131 employees were selected as the
participantsthroghmultisatage sampling and a 60 item questionnare each item with two
options was distributed among them. The collected data were analyzedusing SPSS and Chi-
sqauretes. The results indicated that the managers and the employees held consistent views
about the hierarchy of needs. In other words, there was no significant difference between
motivational factors in the views of the managers and the employees. Besides, it was noted
that the managers and the employees has significantly similar views about employees’ needs
and some factors such as level of education and job satisfaction.
36. Bakhshi Ali Abadi et al. (2004) performed a descriptive study on “Factors improving job
motivation among the faculty members of Rafsanjan University of Medical Sciences”. The
particpants were all 82 faculty members of Rafsanjan University of Medical Sciences who
completed a 40 item questionnaire developed by the researchers based on Herzberg’s two
factorial theory with an acceptable level of reliablity and validity. The data were
analyzedthrogh absolute and relative frequencies and Chi-square test using SPSS Software.
The results indicated that 81% of the participants regarded extenalfators and 72% considered
intrinsic factors as job motivational factors. The most important extrinsic factors affecting job
motivation were salary, job security, workplace conditions, the quality of communication
with others, supervision, and policies governing the workplace and the most significant
intrinsic factors were the nature of job, appreciating employees, job development, and job
 success, respectively. According to the participants, extrinsic (health) factors were more
important than intrinsic (motivational) factors in creating job motivation. This finding is not
consistent with Herzberg’s theories. It was also noted that salary and job security are the most
important predictors of job motivation.
37. Rezaie et al. (2009) conducted a servey study on “Factors affecting job motivation among
local promoters in Markazi Province”. The participants were 161 local promoters in Markazi
Province, Iran who were selected throgh cluster sampling. The data were collected throgh
questionnaires and were analyzed by SPSS (Version 10). The results of the correlation
analysis indicated that there is a positive significant relationship between age, farming
experience, ranching experience, promotion experience, the history of lving in a village,
income, the area of household fariming land, promoters’ social participation and their interest
in farming and ranching activites, and their job motivation. Besides, the results of t-test and
ANOVA suggested that there is a significant relationship between gender, marital status, the
promoters’ main job, and their job motivation. Age, participation in promotion activities,
interest in farming and ranching activities were entered into the regression equation in three
steps. It was noted that these three variables could explain on the whole 63% of variations in
the local promoters’ job motivation.

38. Amirkhani (2010) in vestigated the relationship between emplyee motivation and client
satisfaction in the branches of Tehran’s Social Security Organization. It was assumed that if
the employees’ health-motivational needs (e.g. physical conditions, effective leadership,
cooperation and synergy, reward, job security, salary, creativity, and innovation) are met, it
will lead to to the customer satisfaction. Accordingly, a total number of 150 employees and
50 customers available were serveyed using Herzberg’s two dimensional model (health-
motivational factors). The result suggested that the impact of motivational factors on
employees’ performance and customer satisfaction is greater than health related factors. The
results of regression analysis also indicated that if the motivational needs of the employees
are met, 16% of the customer satisfaction can be attributed to the fulfilment of the employees’
motivational needs. Finally, about 34% of the customer satisfaction variations can be
atttributed to employees’ motivation to improve their performance and to raise the quality of
service delivery to customers.
39. Vioasami et al. (2001) onducted a study on the factors influencing employee motivation and
explored the relationship of communication skills, crisis management, interpersonal relations,
decision making, conflict management, error managemnt, risk-taking, reward management,
trust, supervision, and guidance wirh the motivational climate in the organization in the
viewpoint of employees. The results suggested that employees’ motivation will be increased
by their participation in decision-making process. The following six components, in general,
have the highest impact on the public promotion employees’ motivation: progress,
dependance, attachment, development, expertise, and control.

40. Swan and Combs (1976) feel that it is seldom clear which general dimensions of product
performance are important to the consumer and how these dimensions are related to
satisfaction. This study examines one aspect of the relationship between expectations,
performance, and satisfaction. The main argument in this article is that satisfaction involves
the two processes: instrumental performance; and expressive performance. The authors
predict that instrumental performance is necessary, but not sufficient condition for
satisfaction. Dissatisfactory items will involve primarily failures of instrumental performance
to meet expectations.

41. Wangi et al. (1994) studied factors affecting employee motivation in Kenia and noted that the
quality of supervison and management, insurance, reward, and job experience affect
employee motivation. However, personal characteristics such as age, gender, marital status,
education level, and job experience are less associated with employee motivation.
42. Franco (2004) examined factors affecting employees’ health and concluded that the feeling of
proud, efficiency, honesty in management, and job security are among the most important
motivational factors. Similarly, factors such as finacial and nonfinancial rewards were also
found to be significant in this regarf. In another study done by Timreck (2002), participants
considered factors such as the feeling of success, recognition, responsibility, and getting
promotion as important motivational factors while feeling guity and threat were seen as
negative factors.
43. Hodgetts and Hegar (2008) as a group of processes that encourage a person to take action
towards a particular goal. They further assert that any study of motivation must focus on both
the why and the how of what influences peoples’ action. The how is covered by the incentive
that can entice an individual enough for them to perform a certain task. The why is not easy
to describe, and covers the needs, drives, wants and impulses that move a person to act.
44. Armstrong (2006) defines motivation as those factors that influence people to take specific
actions, and further states that if you motivate people, they will move in the direction that you
want them to in order to achieve certain goals. He says that people will most likely repeat
certain actions if the goals that were set to fulfil certain needs are achieved or accomplished.
Therefore companies need to figure out the needs/drives of individual employees as a basis to
understanding what will motivate them to take required actions. The more people are
motivated to achieve the goals set for them, the more they are likely to do their best at work
and this can even improve their motivation further (MTD Training, 2011).
45. Stringer et al. (2011) determine the relationship between motivation, job satisfaction, pay
satisfaction for the front line employees. Variables are Pay satisfaction, intrinsic motivation
extrinsic motivation, job satisfaction. Survey and open ended questions from employees are
used for collection of data. Correlation is used for analysis. This study concerns with the
seven retail stores. Intrinsic motivation increases the job satisfaction whereas extrinsic
motivation has negative relationship job satisfaction. Quantitative results indicate that
extrinsic motivation has no direct impact on job satisfaction. Some of the researchers found
the how the intrinsic rewards affects on full time and part time female employees.
46. Giannikis and Mihail (2011) to increase understanding of the motivation of female sales
employees. Variables are Greece, Motivation, Part time workers, Retailers, Women. A
structured questionnaire was used to collect data from 349 samples. Co variance and
hierarchical regression analyses are applied. The study applied on Greece female sales
employees. It found that part-time and full-time female employees are similar in designating
the job motivators that they find important in the workplace. Results indicated that female
part-timers are more optimistic about receiving intrinsic rewards the work status
(part-time/full-time) and the & individual characteristics of employees have an impact on the
reported importance of work motivators and on the expectations of receiving these rewards
most of the researchers have checked the moderating role.
47. Haines et al. (2008) describes the relationship between the intrinsic motivation and ability to
accept the international assignment. Variables that are contributing intrinsic motivation
willingness to accept the international assignment, difficulties, support, communicate. This
study used Questionnaire from 331 employees of business. Exploratory factor analysis is
used. The sample consisted of alumni of a highranking MBA program of a Canadian
university. Intrinsic motivation is great involvement of accepting the international
assignments. On global level it is necessary to consider the self-motivation for the
international assignments. The purpose of this article is to introduce a new method of
employee motivational fit which is Genos employee motivation assessment. Variables are
Role, management, team, organization and motivational fit. Data was collected within three
different organizations through web survey system. Pearson correlation analysis is applied.
With the context of Australian industrial company, Australian insurance company, UK utility
company. Findings shows that motivation fit has relatively average relation with specified
variables. A result shows that management and team has significant impact with predictive
validity (Gignac& Palmer, 2011). Some of the researchers found that performance is
depended on different pay schemes.

48. Rajesham and Rajender (2006) also discuss the changing scenario of the Indian insurance
sector. They point out the challenges in the present scenario as increasing India's share in the
global insurance market, having qualified, skilled actuaries, penetration in rural markets,
developing customised policy for clients etc.
49. Rajagopalan (2006) does a comparative evaluation of the traditional insurance policies
available in the Indian market from a consumer perspective. He suggests that, it is better for
an individual to buy the cheapest term insurance for the required amount of death protection
and term. In case of endowment policy, instead of buying non participating endowment
policy, it is better to invest the extra premium in a PPF account.
50. Barkur et al (2007) study the influence of five critical factors on service quality in the
insurance sector and attempt to obtain a generic solution to enhance the quality of service.
The research is based on system dynamics methodology, which involves sequential phases.
The results of this research have indicated that the key parameters, e.g. past experience,
personal needs, external communication, word of mouth, and active clients have significant
influence on service quality of the insurance sector.

51. Outreville (2008) studies the international diversification of successful insurance companies.
The results of this study have important implications. First, the results indicate that location-
specific advantages such as size, education, regulatory barriers, competitiveness, and cultural
distance do provide an explication of the internationalisation of insurance firms in some
locations. Second, they show that good governance has a strong impact on the choice of
countries by insurance firms.

52. Ma and Pope (2008) investigate the relationship shared by foreign market characteristics and
the participation of international life insurers in those markets. The analysis reveals that the
characteristics that are found to be statistically significant with respect to international
participation include high levels of trade liberalisation and/or low insurer market share
concentration, high levels of national wealth, and high levels of government expenditure on
social security retirement benefits.

53. Zuasti (2008), in this article studies the interaction between insurance and dynamic financial
markets. This is demonstrated using a general equilibrium model, where agents not only buy
insurance but can also invest in shares of the companies that sell insurance. The central result
shows that in equilibrium, risk-averse agents purchase full insurance coverage, despite unfair
insurance prices. The three conditions that explain this result, are insurance contracts are
priced competitively; financial prices include a risk premium only for undiversifiable risk,
and financial markets are effectively complete.
 CHAPTER 3-
RESEARCH
METHODOLOGY
RESEARCH METHODOLOGY

3.1 OBJECTIVE OF STUDY:

The main objective of this project is to study the customer behaviour and various reactions of
customers with reference to Insurance And suggest ways to improve its marketing efforts.

1. To study the trends in life insurance market

2. To study the profile of customers.
3. To study the investors’ behaviour towards Insurance.

SCOPE OF STUDY:

1. The scope of a subject refers to everything that is studied as part of that subject. When we
set out to explain the scope of customer behaviour we need to refer to all that which forms
part of customer behaviour.

2. Customer behaviour includes not only the actual buyer and his act of buying but also the
various roles played by different individuals and the influence they exert on the final purchase
decision.

3. To define the scope of a subject it is important to set parameters or a framework within

which it shall be studied.. This framework is made up of three main sections-the decision
process as represented by the inner-most circle, the individual determinants on the middle
Circle and the external environment which is represented by the outer circle. The study of all
these three sections constitutes the scope of customer behaviour. Here, we shall dwell on
these constituents of the framework only briefly as they are explained in detail in the
following units.

Significance of the study:-

1. This study helps to get to know about the Insurance products.
2. This study helps to show the customer buying behaviour towards insurance products.
3.2 RESEARECH DESIGN

Exploratory Research is research conducted for a problem that has not been studied more clearly,
establishes priorities, develops operational definitions and improve the final research design.
Exploratory research helps determine the best research design, data-collection method and
selection of subjects. It should draw definitive conclusions only with extreme caution. Given its
fundamental nature, exploratory research often concludes that a perceived problem does not
actually exist.

3.3 DATA COLLECTION

Type of Data
Primary Data:
Primarydataareintheformof“rawmaterial”towhichstatisticalmethodsare applied forthe
purpose ofanalysis and interpretations.
Theprimarysourcesarediscussionwithemployees,data’scollectedthrough questionnaire.
Secondary Data:

Secondarydata’sareintheformoffinishedproductsastheyhavealreadybeen treated
statisticallyin some form orother.
Thesecondary datamainly consistsofdataandinformationcollectedfromrecords,
companywebsitesandalsodiscussionwiththemanagementoftheorganization.
Secondarydata wasalso collected from journals,magazines and book
Data Collection Technique- questionnaire
Sampling Design
 Sampling technique: - Random
 Sample size: - 120 respondents responded to the pre-designed questionnaire.
 Sample area:- New Delhi
 Methodology:Questionnaire survey

STATISTICAL TOOLS

Questionnaire Pie chart Bar graph Tables

 CHAPTER -4
DATA ANALYSIS
 Gender
i. Ge
80
70 nd
60
er
50
40 of
30
20
10
0
Male Female
Respondent

Chart :- Gender of Respondent

ii. Age of Respondent

Age

70
60
50
Age
40
30
20
10
0
18-30 31-46 47-53 54-55
iii. Occupation

Occupation
40
35
30
25
Occupation
20
15
10
5
0
Students Professional(Engg./ Govt./Pvt. Sector Self Employed
Doc./Lawyer)

Chart :- Occupation

iv. How did you come to know about Insurance products?

Source
30
15
0 Source

Chart :- Source of knowledge

 v. Do you currently have an Insurance Policy?

Possession of Policy

73
80
70
60 Possession of Policy
50
40
16
30
20
10
0
YES NO

Chart :- Possession of Policy

vi. If NO, why not?

Returns are not

50% lucrative enough

25% Not affordable

Not interested in
25% buying it

Chart :-Reason for not possessing policy

vii. If YES, which company’s?

Company
8
4
LIC
6 TATA AIG
SBI LIFE
6
BAJAJ ALLIANZ
ICICI Prudential
54 MAX New York
8
Kotak Mahindra
IDBI Federal
6

12

Chart :- Company, whose Insurance products are purchased

viii. What prompted you to buy policy from that company?

Brand Image- 24

Marketing guys convinced

me- 12

Past record of
performance- 20

My friends/acquintances
have bought from there- 20

Chart :- Motivation to buy from that company

ix Clarity and accuracy of service procedures
35

30

25
Fully Satisfied
20 Satisfied to Certain Extent
Neutral
15
Unsatisfied
10 Utterly Unsatisfied

0
customer

x Easy of contact and communication with the Insurance Authority’s

Employees ( by phone and email)

4
3.5
3
2.5
2
1.5
1
0.5
0
d nt l d d
sfie x te u tra sfie sfie
Sa
ti E Ne sa
ti ati
in
Un ns
lly rta U
Fu Ce
er
ly
to Utt
d
sfie
ti
Sa
xi Satisfaction level towards services offered by insurance
3.5
3
2.5
2
1.5
1
0.5
0
ed nt ra
l ed ed
sfi x te ut sfi sfi
ti E e ti ti
Sa in N sa ns
a
lly rta Un U
Fu Ce
er
ly
to Utt
ed
tisfi
Sa

xii Rate your overall satisfaction with Insurance Policies

2.5

1.5

0.5

0
ed nt ra
l ed ed
sfi x te ut sfi sfi
ti E e ti ti
Sa in N sa ns
a
lly rta Un U
Fu Ce
er
ly
to Utt
ed
tisfi
Sa
xiii Agents inform and guide the customers at regular intervals as regards the policy status, due
date of premium, new products and services

Fully Satisfied
Satisfied to Certain Extent
Neutral
Unsatisfied
Utterly Unsatisfied

xiv Attractive and informative media, theme layout, and language of the advertisement

4
3.5
3
2.5
2
1.5
1
0.5
0
d nt l d d
sfie x te u tra sfie sfie
Sa
ti E Ne sa
ti ati
in
Un ns
lly rta U
Fu Ce
er
ly
to Utt
d
sfie
ti
Sa
xv Enhancement of technological capability (e.g. computerization, networking of operation,
etc.) to serve customers more effectively
4
3.5
3
2.5
2
1.5
1
0.5
0
ed nt l ed ed
sfi x te u tra sfi sfi
ti E ti ti
Sa in Ne sa ns
a
lly r ta Un U
Fu Ce er
ly
to Utt
ed
tisfi
Sa
CHAPTER 4-
FINDING AND
SUGGESTION
 FINDINGS

1. There is a good amount of people in the age group 18-30 who have not bothered to buy a life
insurance policy because they are very sure that nothing would happen to them as they are fit
and fine.
2. People prefer to buy a policy which has less years of premium payment term.
3. More than life insurance, people are interested in a savings scheme. The better savings plan
they get, the more is their tendency to buy the policy.
4. Very less people are interested in a pure life insurance policy.
5. Tax benefits are also a major factor why people like to buy a policy.
6. Customers are willing to pay through easy payment options such as ECS and online payment
so that their valuable time gets saved.
7. They are interested more in monthly premium payment options rather than annually or half
yearly.
8. Friends and family are major influencers on customers when it comes to the decision of
buying a life insurance policy.
9. LIC is still the market leader in life insurance sector.
10. Brand image and past record of performance are major stimuli in buying decision.
 SUGGESTIONS

1. We need to tap the young crowd in the age group 18-30 and convince them that buying a life
insurance policy is necessary because life is very unpredictable.
2. More plans should be made that involve less period of premium payment.
3. As friends and family members are major influencers of customers, our advertisements and
promotions should be family and friend-centred.
4. Group insurance policies like ‘full family insurance’ schemes should be made.
5. Our reach needs to be increased through social media (Facebook, Twitter, YouTube
campaigns), television, radio, newspapers etc.
6. Our insurance policies should have a range of premiums to suit every pocket size.
7. In terms of distribution, we should increase the number of marketers- more channels of
distribution and more intermediaries.
8. Our advertisements should cover the benefits of our policies and what differentiates our
policies from those of other companies, in brief.
9. Our company should have more offices at smaller towns and uncovered segments in the
cities.
10. Mobile Commerce is the next big thing! We can have a mobile app where our customers can
get all the information related to our products as well as pay their premiums.
 CHAPTER 5-
CONCLUSIONS
CONCLUSIONS

The project has helped me gain huge practical knowledge which can’t be gained only through books.
This experience gave me an opportunity to learn new things which provided me a peek into the
corporate culture. Being a fresher, I would never be exposed to a corporate environment if it were not
for this project. I thank my guide for giving me the chance to work with them, showing me the path
of knowledge and experience which will help me succeed in my career and enter into a bright future

Limitations of Study:

1. The study was conducted only in the delhincr areas; hence the results can be biased and
hence not exactly accurate.
2. The survey was to be conducted on 120 respondents but due to time constraint and
unavailability of large number of respondents, the survey was filled by 100 people only.
3. The survey includes more number of responses of people within the age group of 18-30.
Hence, the study may be biased, as, at that age, income is less and people take life
insurance lightly.
CONCLUSIONS ON CUSTOMER BEHAVIOUR

1. While the fresh air of competition in every sector of economy brings in major changes in
customer expectations, the insurance industry has experienced a few unique aspects, such as
regulation-inspired efforts to educate insurance buyers and a vast change of skills and
capabilities of the intermediaries involved in the distribution.
2. With respect to life insurance, potential buyers are drivers of buying a policy for one or more
of these 3 major reasons: security of the money invested, saving for one or more specific
purposes and the availability of tax benefits.
3. The challenge for the insurance companies is to address the motivating factors of customers
and come up with genuine solutions.
4. The potential buyer primarily expects that the saving should be a painless process and that the
money saved should be absolutely safe. The challenge is to provide not only convenient
payment options, but also mechanisms that could offer some measure of protection and relief
to the customer if he is forced to disrupt the payment arrangement for unforeseen reasons.
5. On the issue of customers’ perception of security of the money invested, there are 2 important
aspects. One is, how the features of the insurance contract are put across the buyer (whether it
is unit linked policy or endowment oriented); and the second is, how to address effectively,
the question about dependability of the new generation companies that potential new
insurance buyers raise during sales calls. Both, the insurance companies and the regulator
need to address this behavioural challenge very actively.
6. Customers in major cities Therefore companies need to gear themselves to provide high
service standards directly appreciate the need for higher level of insurance cover with
reference to their earning stage in working life.
7. Instances of customers requiring agents to arrange for loans against their policies, or change
nominations etc are rare.
8. One aspect of customer service for new age companies that remains to be tested widely is the
claim payment record.
9. The entry of Pvt players into insurance sector have expanded the product segment to meet
different level of requirements of customers. It has brought greater choice to customers.
 10. IRDA is also playing a very comprehensive role by regulating norms, mandatory to private
players, which increases confidence of customers in the private companies

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 QUESTIONNAIRE
1. GENDER:-
o Male
o Female
2. Age of Respondent:-
o 18-30
o 31-46
o 47-53
o 54-55
3. Occupation:-
o Professionals(engg/lawyer)
o Govt/pvt sector
o Self employed
o Student
4. How did you come to know about Insurance products:-
o Friends/family
o Internet
o TV
o Radio
o Newspaper
 o Agent
5. Do you currently have an insurance policy:-
o Yes
o No
6. If NO, why not:-
o Not interested in buying it
o Not affordable
o Returns are not lucrative enough

7. If yes, which company:-

o LIC
o TATA AIG
o SBI LIFE
o BAJAJ ALLIANCE
o ICICI Prudental
o MAX New York
o Kotak Mahindra
o IDBI federal

8. What prompted you to buy policy from that company?

o Brand image
o Marketing guys convinced me
o Past record of performance
o Friends
9. Clarity and accuracy of service procedures
o Fully Satisfied
o Satisfied to Certain Extent
o Neutral
o Unsatisfied
 o Utterly Unsatisfied

10. Easy of contact and communication with the Insurance Authority’s

Employees ( by phone and email)
o Fully Satisfied
o Satisfied to Certain Extent
o Neutral
o Unsatisfied
o Utterly Unsatisfied

11. Satisfaction level towards services offered by insurance

o Fully Satisfied
o Satisfied to Certain Extent
o Neutral
o Unsatisfied
o Utterly Unsatisfied
12. Rate your overall satisfaction with Insurance Policies
o Fully Satisfied
o Satisfied to Certain Extent
o Neutral
o Unsatisfied
o Utterly Unsatisfied
13. Agents inform and guide the customers at regular intervals as regards the policy status, due
date of premium, new products and services
o Fully Satisfied
o Satisfied to Certain Extent
o Neutral
o Unsatisfied
o Utterly Unsatisfied
14. Attractive and informative media, theme layout, and language of the advertisement
o Fully Satisfied
o Satisfied to Certain Extent
o Neutral
o Unsatisfied
15. Enhancement of technological capability (e.g. computerization, networking of operation,
etc.) to serve customers more effectively
o Fully Satisfied
o Satisfied to Certain Extent
o Neutral
o Unsatisfied
o Utterly Unsatisfied