A STUDY ON THE MARKETING OF SERVICES

BY LIFE INSURANCE CORPORATION INDIA IN

THANJAVURDIVISIONAL DISTRICT

INTRODUCTION

Life insurance deals with the hazards of life

in contract to general insurance which deals with
hazard to Property. To general insurance Property
is the tangible or intangible thing which is
created by the persons who is a living being.
Insurance is a system by which the losses
suffered by a few are spread over many, exposed
to similar risks. Insurance is a protection against
financial loss arising on the happening of an
unexpected event. Insurance companies collect
premium to offer security for the purpose.
Nevertheless, if premium is not paid there is no
insurance cover. The LIC and GIC own a total
fund of more than Rs.1,75,000 core together and
invest a combined Rs.30,000 core in the social
security and development . The formal Humble
finance minister C.D. Deshmukh said On January
19, 1956 insurance is an

Essential service which is a welfare state must

make available to its people.
According to Kailash Chandra
Misra and Simita Mishra Life Insurance has
become an integral component of an average
familys investment portfolio. Life Insurance is
universally acknowledged as an institution which
eliminates risk, substitutes certainly and comes
to the time said of the family. Insurance is
defined in economic behavioural terms as an
exchange of money now for money payable
contingent on the occurrence of certain events.
Risks and trust are major thrust of the insurance
industry
The Indian Insurance industry is poised
for interesting and demanding times .The
transition of the industry from public monopoly to
a competitive environment now offers very
interesting opportunities, both to the new players
and to the customers .In the era of falling
interests rates, insurance besides offering live
cover had evolved as a favourable investment
option as well.
Insurance industry lost its credulity due to
misappropriation of share, funds are claims in the
late 1950.Therefore, life and general to make it
further effective the IRDA made an extensive

study and though that is the main drawback in

lack of customer service is due to insurance of
insurance knowledge.
General insurance market is
changing rapidly with the liberalisation and
globalisation the market has becomes need base.
The private players area launching their parallel
brands at competitive rates with added
benefits .Insurance salesmanship is difficult and
could be frustrating. The resistance to the
purchase of insurance cover is not enough. It
should be supported by the ability to create a
desire in the mind of the client to purchase the
insurance cover. Conceptually the mechanism of
insurance is very simple which brings the people
under one single umbrella of security and self
esteem.
All the rural insurance schemes,
operated on a commercial basis are designed
ultimately to provide security to the rural
families. The crop insurance scheme is a measure
with considerable social significance. Apart from
this support to government schemes, the
insurance industry offers some social security
policies on commercial basis. When the very
object of these policies is t provided social
security the insurers need to gear up their after

sales service machinery to ensure that the object

is achieved and the purpose is not thwarted.
Insurance may be defined as a system of
collective security under which any member who
suffers is paid compensation for loss, from a fund
jointly contributed by the members.
Life insurance business in India was being
transacted by private companies will 1956.The
president of India promulgated on the 19th
January 1956the Life Insurance ordinance by
which management and control of the insurance
business in India of 245 India act came into being
on the 1st September 1956, described as the
Appointed Day in the LIC Act.
The nationalization of Life Insurance will
be another milestone on the road the country has
chosen in order to reach its goal of a socialistic
pattern of society. In the implementation of the
second five year plan, it is bound to give
material assistance into the lives of millions is the
rural
Area; it will introduce a new sense of awareness
of building for the future in the spirit of calm
confidence, which Insurance alone can give.
It is a measure conceived in a genuine
spirit of service to the people. It will be for the
people to respond, confound the doubters and

make it a resounding success, observed Sri C,

D, Deshmukh from his broadcast to the nation on
the eve of the promulgation of the life Insurance
(Emergency provision) ordinance, 1956.

LIFE INSURANCE CORPORATION

Life Insurance Corporation (L.I.C) was
nationalised in 1956 in order to safeguard and
use the savings of insuring public in the best
interest of the nation .The provision of LIC Act
1956 applies to regulate the working of the LIC
and Chapter V comprising section 18to23 provide
for the establishment of the Central office at
Mumbai and Zonal branch office at Mumbai.
Kolkata and Chennai and of as many divisions
and branch officers in each zone as the zonal
manager think fit and so on .There are now 41
divisions and cover 650 branches.

Importance of the study

A sound insurance system is a sine quo
non for accelerating the process of economic
development of a country .Insurance
organizations occupy a key position in the
economic development of a country .They
constitute the core of country ,s financial

structure and money supply. The insurance

companies are lending, investing money on other
activities, which facilitate the process of
production, distribution and consumption. The
insurance companies encourage investments and
help capital formation by mobilizing savings and
also cover the life of the public.
Indian Insurance system has
achieved steady progress during the post
independence period. Insurance companies have
helped the nation for prospective and progress at
the macro level.
Dr. Manmohan Singh (2005)1, Prime Minister
of India says ,The financial system of a country
has a crucial role to play in the mobilization of
savings and their allocation to the most
productive uses if it is serve as an essential
adjustment to economic is to mobilize resources
and contribute to the social uplift and economic
progress of the population in rural areas as well
as the urban areas.
Insurance companies perform the role of
financial controller to mobilize and deploy huge
amount of resources, maintain financial discipline
in funds utilization and improve the managerial
practices.

Insurance companies services by

mobilizing savings and facilitates financial
resources for the economic development
programs. They participate in promoting most of
the economic development programs of the
country; facilitate an accelerated growth of
capital by the direct participation and promote
public confidence in the capital market brokers.
The Life Insurance Companies have
emerged the growth of financial stability in the
country as well as uplifted the wealth of the
insurers according to the changes in the financial
market by introducing the systematic
investments plans and unit linked insurance
plans etc.
Statement of the Problem
Life Insurance is essentially servicedoriented industry and it has to sustain itself on its
service. The survival and growth of Life insurance
companies do not depend on its size of funds.
Rather, they depend on their ability to provide
quantitative service and marketing strategies to
their customers on a sustained basis. In the long
run, life insurance companies build long-term
mutually beneficial relationship with their
customers.
Scope of the study

Marketing occupies a very significant

place. Traditionally it was felt that the customers
would accept whatever product or service is
offered to them. The producer\service provider
was concerned about his profit and no attention
has been given to the customers to choose any
product \service but, now with all-round
awakening, the focus has shifted for the producer
to the customers. The producer cannot afford to
produce or introduce according to his likings. He
has to keep in mind the needs of the customers.
Even now, many people in India are not having
any single life policy. The reason is that, the life
insurance companies do not properly educate
them. Hence, this study will give the birds eye
view on various aspects relating to the origin of
Insurance concept to the modern trends in the
Insurance sector. Moreover an attempt has been
made to analyze the various services provided by
the life insurance companies in detail.
Objectives of the study
1.To document the dimensions of the life
insurance marketing.
2.To trace the trends in performance of LIC of
India for the past 9 years.
3.To assess the existence of Insurance services
from the point of view of LIC of India officials

4. To measure the level of satisfaction of LC of

India in relation to the services as perceived
by sample customers
5. To identify various special service rendered
by LIC of India.
6. To offer suggestions for overall
improvements in Insurance services in India
to satisfy customers.
Methodology:
Primary data are collected by the
investigator among numerous policy holder in
Thanjavur divisional district, a sample of 300
respondents are interviewed. The respondents
are interviewed either at the gate or in their
residence .Most of the interviews are conducted
in a relaxed manner. Since, this research is a
normative-survey research, the researcher tried
to take stock of present position of LIC of India in
application of marketing techniques and
weaknesses. It is felt that primary data alone was
not enough to analyze the topic. So the
investigator went for secondary data to equip
him in the area .Secondary data were collected
from books, journals, periodicals like , RBI
monthly Bulletin, Business today, India Today,
Business Line, The Hindu, The Economic Times,
Times of India, The Business Line, The Hindu, The
Financial Express, and The Indian Express and

Websites. The investigator has also taken the

secondary information relating to the
performance of LIC of India for the past 10 years
to the Official of Indian are prepared and
circulated. Observation method and informal
meeting with the mangers of branches are also
undertaken to make the study more reliable. The
investigator prepared the interview schedule with
the help of officials and financial and financial
experts working in the various branches of LIC of
India. So, primary data, secondary data,
observation method, press materials have helped
the investigator to make the sources of data
more reliable.
Selection of Sample
The Universe of the study included all the
policy holders having policies in the branches of
LIC of India in Tan ore Divisional District area.
Banks are stratified as public sector and Private
Sector and Private Sector banks. Equal
importance has been given for collection of
information from the sample customers.
Before conducting the tentative
interview the investigator conducted a pilot
study. For the purpose of pilot study, fifty
respondents are interviewed with the help of
Interview schedule. These respondents are

excluded for the purpose of data collection. Some

corrections were made on the basis of findings of
pilot study. With the help of pilot study
investigator was able to order to get good
response. The order of some questions is
changed to have systemic sequence.
There are 30 branches of LIC of India in
Thanjavur Divisional District .All these are
selected at random giving weight age to all areas
namely urban, semi urban and rural areas i.e.14
branches from urban area, 12 branches from
semi urban and the remaining four branches
from rural area are considered. From each branch
10 customers are selected. Hence the sample
size of the customers is 300.
Period of Study
The performance of LIC of India divisional district
is analysed for 9 years i.e.2000-01 to 2008-09 for
the purpose of which the selected branches in
Thanjavur Decisional District is taken.
FINIDINGS
1. Urban LIC officials agree with statement
quick services provided. Anova reveals
that locations of sample customers dose
not significantly vary with the opinion on
quick services provided. Majority of LIC

officials in the age group of above 50

agree with the statement quick services
provided. Z test reveals that opinion on
quick services provided.
2. Urban sample LIC officials who are
majority in number have strongly agreed
with the courtesy extended. Enova reveals
that Area of sample LIC officials does not
significantly vary with their opinion on
courtesy provided. Majority of LIC officials
in the age group of above 50 have agreed
with statement courtesy extended.
3. LIC officials from urban area have strongly
agreed with the statement customer
friendly approach of the LIC. Anova reveals
that There is no significant relationship
between Area of LIC officials and their
opinion on customer friendly, approach of
the LIC.
4.Majority of urban LIC officials have strongly
agreed with the Goodwill of the LIC and
services provide .Anova reveals that There
is no significant relationship between area
wise classification of the LIC and services
provided. Majority of sample LIC officials
belonging to above 50 years have agreed
with goodwill of the LIC and services
provided.

5.Majority of urban LIC officials either

strongly agree or agree with the statement
that the location of branches and
collection canters are nearer to the
customers. The Anova reveals that there is
n significant relation between sample LIC
officials and their opinion about location of
branches and collection canters nearer to
the customers.
6.Urban LIC officials are always facing
hindrance due to overcrowding,. Anova
reveals that there is no significant relation
between area wise classification of LIC
officials and their opinion towards
hindrance due to overcrowding. Majority f
LIC officials in the age group of above 50
always have hindrance due to
overcrowding.
7.Majority of urban LIC officials have
hindrance always due to rigid
formalitys .Anova reveals that there is a
significant relation between area wise
classification of LIC officials and their
opinion on existence of hindrance due to
rigid formalities. Majority of LIC officials in
the age group of above 50 years have
always faced hindrance due to rigid
formalities.

8.Majority of LIC officials from urban area

feel that non-availability of Physicals
Infrastructure is a hindrance for rendering
the service in time. The Anova reveals that
there is no significant relation between
area wise classification of LIC officials and
their opinion on Non availability of
Infrastructure as a hindrance for rending
the service in time. Majority of sample LIC
officials in the age group of 50 feel that
non-availability of physical infrastructure
as a hindrance.
9.Majority of sample customers are male and
majority of them are from urban area. Chisquare test revels that sex of sample
customers does not significantly vary in
relation to their area of residence. Majority
of male sample customers are in the age
group of 30to40.Z test reveals that the age
of sample customers does not significant
varies among male and female customers
is accepted.
SUGGESTIONS
1.LIC officials from semi urban and rural
area must concentrate on providing
quick services to the valuable
customers by using modern means of

communication such as Internet,

electronic devises and services etc.
2.LIC staff in the age group of 40to60
must be given proper training to
equip themselves to the latest means
of compunction in order to provide
quick services to customers. LIC
employees from rural area and semi
urban area must be given proper
guidance in extending courtesy to the
customers.
3.Employees of the LIC in the age
group of above 50 are to be equipped
themselves to provided variety of
service for better service, LIC staff
from semi urban area is advised to
equip themselves for simplifying
official formalities in dealing with
customers.
4.Proper training must be given to rural
area officials for improving good will
of the LIC .Semi and rural area
officials are dissatisfied with the slow
service, provided to customers.
Hence, efforts must be taken to
speed up the customers services in
this area.
5.Rural and semi urban area officials
are to be given more staff to manage

over crowing in the black.

Recruitment of officials is to be made
frequently.
6.The rigid formalities in the LIC are to
be simplified and transport. This will
help the officials to do their work
effectively and efficiently. Non
availability of infrastructure in urban,
semi urban and rural area is to be
solved by providing the necessary
furniture and equipment to satisfy the
customer.
Channels of distribution, public sector
monopoly and low incentives. This
article offers strategies to move
agriculture insurance beyond crop
segment .In the concluding remark,
thither discloses that the agriculture
rural market is still virgin territories to
a great extent and exciting
opportunities for insurance
companies.
Prathiba J. Sharma (2004) in her article
contemplates on the increased competition which
has given rise to a need for persons we; trained
skilled and experienced amenable to various
facts of insurance. The object of this article is to
regurgitate the persons facilitating the growth of

the insurance industry. Greater emphasis is laid

on fully fledged training. The author suggests
measures for evaluating the training process.
Nalini Prava Tripathy (2006) in her paper
identifies the five major factors that influence the
consumers more. It also offers porches division
and suggests some measures to managers to
design future products. The author has effectively
employed factor analysis with the objective of
examining the customers preferences and
priorities to the types of insurance products. She
also is examining the key features of insurance
products and service attributes that are essential
in purchase decision of the customers.