Академический Документы
Профессиональный Документы
Культура Документы
On
Consumer Perception Towards
Insurance Sector
SUMITTED TO: -
SUBMITTED BY: -
Amit Kumar
CERTIFICATION
This is to certify that Amit Kumar student of BBA 4th semester has prepared his market
survey report under my guidance for the fulfillment of degree of Bachelor of Business
Administration (BBA) from M.J.P. Rohilkhand University.
Signature
Mr. Harpreet Singh
(Asst. Professor SIMT)
ACKNOWLEDGEMENT
I acknowledge with gratitude and appreciation, my indebtedness to my mentor & guide,
Mr. Harpreet Singh (Assistant Professor) for allowing me to work on a very intrinsic
topic, Consumer Perception Towards Life Insurance With Special Reference to
ICICI Prudential. I also thank her for the ideas and basic concepts they delivered and
shared with me, as he helped me a lot in accomplishing this project of mine. It gave me
enormous gratification to articulate my thankfulness heart full sense of indebtedness to
my dearest friend, Shubham Pr. Singh.
I also put forward my heartiest thanks to Mr. Pankaj Bhargava (Director SIMT) for his
great support in completion of this project.
(Amit Kumar)
Preface
The Business of Insurance is related to the protection of the economic values of the
assets. Every human being has the tendency to save to protect him from risks or events
of future. Insurance is one form of savings where in people try to assure themselves
against risks or uncertainties of future. It is assurance against risks or events or losses.
People can save their earnings either in the form gold, fixed assets like property or in
banking and insurances. All the savings of people of a country account for gross domestic
savings. In India, although savings rate is high but people prefer to invest either in gold or
fixed assets so that they can make money out of it. Hence insurance sector is still
untapped in India. Insurance is a tool by which fatalities of a small number are
compensated out of funds (premium payment) collected from plenteous. Insurance is a
safeguard against uncertain events that may occur in the future.
It is an arrangement where the losses experienced by a few are extended over
several who are exposed to similar risks. It is a protection against financial loss arising on
the happening of an unexpected event. Insurance companies collect premium to provide
security for the purpose. Loss is paid out of the premium collected from people and the
insurance companies act as trustees to the amount so collected. These companies have
proposal forms which are filled to give details of insurance required. Depending upon the
answers in the proposal form insurance companies assess the risk and decide on the
premium.
TABLE OF CONTENTS
S.No
TOPIC
PAGE. NO.
CHAPTER 1: INTRODUCTION
6-34
1.1
Industry Profile
7-18
1.2
Company Profile
19-30
1.3
Product Profile
31-34
35-44
2.1
36
2.2
37
2.3
38
2.4
39-40
2.5
Review of Literature
41-44
Research Methodology
Analysis & Interpretation
Findings
Suggestions
Conclusion
45-100
46-48
49-96
97-98
99
100
APPENDIX
Bibliography
Questionnaire
101-105
101
102-105
Chapter-1
Introduction
2. NATURE OF INSURANCE
a) Risk sharing and risk transfer: Insurance is used to share the financial losses that
might occur to an individual or his family on the happening of specified events. The loss
arising from such events are shared by all the insured in the form of premium.
Example: suppose in a village, there are 250 houses, each valued at Rs.200000.Every
year one house gets burnt, resulting into a total loss of Rs 200000.If all the 250 owners
come together and contribute Rs.800 each, the common fund would be Rs200000.This is
enough to pay to the owner whose house gets burnt. Thus the risk of one owner is spread
over 250 house owners of the village.
b) Risk assessment in advance: Insurance companies are risk bearers. They assess the
risk before insuring to charge the amount of premium.
c) Its not gambling or charity: The uncertainty is changed to certainty by insuring
property and life because the insurer promises to pay a definite sum at damage or death.
Insurance is antithesis of gambling. Failure of insurance amounts to gambling because
the uncertainty of loss is always looming. Moreover insurance is not possible without
premium. So it is different from charity because charity is given without consideration.
d) Huge number of insured people: It is essential to insure larger number of people or
property to make cost of insurance less consequently premium would also be less.
e) Assists in capital formation: Insurance provides capital to society. Accumulative
funds are invested in productive channels.
3. SEMANTICS
1. Risk: It is defined as an uncertainty of a financial loss. It is the unintentional
decline in or disappearance of value arising from contingency.
2. Policy: It is the document which embodies the insurance contract
3. Whole life policy: It is the policy under which the amount of policy will be paid
only on death of the insured. Premiums may be payable throughout the life or for
a limited period.
4. Endowment policy: Endowment policies entitle the insured to receive the
amount of the policy on his reaching a certain age and premiums also stops. If
death occurs earlier, amount of the policy will be paid at that time and payment of
premium will also stop at that time.
5. Claim: It is the amount which an insurer has to pay against a policy.
6. Reinsurance: It refers to placing a part of the risk by an insurer with another
insurer. The object is to reduce the possible loss to be borne by the original
insurer, who pays premiums at the ordinary rates to the reinsurer. Reinsure must
pay commission to the original insurer.
7. Premium: A periodic payment made on an insurance policy.
8. Insurance penetration: It is defined as insurance premium as a share of gross
domestic product.
9. Insurance density: Insurance density is defined as per capita expenditure on
insurance premium i.e. premium per capita.
10. Actuary: The actuary is a specialist who combines an understanding of risks and
mathematical technique to develop financial products to manage these risks, price
these products. He helps in designing insurance plans and then evaluates the
financial risk of the company which it takes while selling an insurance policy.
4. TYPES OF INSURANCE
Insurance is broadly divided in two segments, based on the nature of insurance, those are:
1. Life Insurance &
2. Non-Life Insurance or General Insurance. It can be again subdivided into the
following categories:
a) Fire Insurance.
b) Marine Insurance.
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insurance means, in ancient times the ship owners obtained loans from investors to
finance their trading expeditions. In case, if a ship was lost, the owners were not
responsible to pay back the loans to the investors. The risk to the lenders was covered by
the interest paid by numerous ship owners, since many ships returned safely.
By the middle of the 14th century, marine insurance was one of the most popular
types of insurance among nations of Europe. Things changed dramatically in the 17th
century in Europe. In 1666, the Great Fire of London bought the need for fire
insurance .The Great Fire of London burned for four days and nights. It destroyed 436
acres, 13,200 houses, 89 churches (including Saint Paul's Cathedral), the Custom House,
the Royal Exchange and dozens of other public buildings. Only six people were victims
in the flames, but hundreds died from shock and exposure.
By 1688, Edward Lloyd was running a coffeehouse in London. Where, London
merchants and bankers met informally to do business. There financiers who offered
insurance contracts to seafarers wrote their names under the specific amount of risk that
they would accept in exchange for a certain payment, called premium. These insurers
came to be known as underwriters. Finally, in 1769, Lloyd's became a formal group of
underwriters that in time grew as an insurance company.
The concept of insurance developed at a fast pace with the growth of British
commerce in the 17th and 18th century. The first stock companies to engage in insurance
were chartered in England in the year 1720.
In 1735, the first insurance company in the American colonies was founded at
Charleston. Later in the year 1787, fire insurance corporations were formed in New York.
Then later in the year 1759, the life insurance corporation was started in Philadelphia,
America.
The New York fire which occurred in the year 1835 was the main reason to draw
attention to create reserves to meet unexpected losses. In the year 1837, Massachusetts
was the first state to require companies by law to maintain such reserves. After 1840, life
insurance entered a boom period.
The Workmen's Compensation Act of 1897 in Britain required employers to
insure their employees against industrial accidents. Public liability insurance, fostered by
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legislation, made its appearance in the 1880s.It attained major importance with the advent
of the automobile.
Until the 1950s, most insurance companies in the United States were restricted to
provide only one type of insurance, but then legislation was passed to permit fire and
casualty companies to underwrite several classes of insurance. Many firms have since
expanded and also were responsible for many mergers.
From this brief accounting of history we can see how insurance came into
existence. Fortunately for us we no longer have to sell ourselves into slavery if our car is
stolen nor we have to be scared of losses due to absence of reserves. However we can be
confident that we will be compensated for our loss. Without people wanting to secure
their investments and great tragedies throughout history we may not have insurance as we
know it today resulting in peace of mind.
6. HISTORY OF INSURANCE INDUSTRY IN INDIA
The insurance industry in India over the past century has gone through big
changes. In India this industry reveals the 360 degree turn. 360 degree turn means that it
started in India from being an open competitive market to nationalization and back to a
liberalized market again.
Insurance industry in India started as a fully private system with no restriction on
foreign participation in the Nineteenth Century. Before independence, a few British
insurance companies dominated the Market. Life insurance was first set up in India
through a British company called the Oriental Life Insurance Company in 1818, followed
by the Bombay Assurance Company in 1823 and the Madras Equitable Life Insurance
Society in 1829.All of these companies operated in India but did not insure the lives of
Indians. They were there insuring the lives of Europeans living in India. Some of the
companies that started later did provide insurance for Indians. But, they were treated as
"substandard" and therefore had to pay an extra premium of 20% or more. The first
company that had policies that could be bought by Indians with "fair value" was the
Bombay Mutual Life Assurance Society starting in 1871.
The first general insurance company, Triton Insurance Company Ltd., was
established in 1850. It was owned and operated by the British. The first general insurance
12
company was the Indian Mercantile Insurance Company Limited set up in Bombay in
1907.By 1938; the insurance market in India had nearly 176 companies (both life and
non-life).
After the independence, the industry went to the other extreme. It became a stateowned monopoly. The industry started to witness a problem like fraud. Hence many
regulations were put in place to reduce and control the problems in the industry. After
which Insurance was nationalized. In 1956, the then finance minister S. D. Deshmukh
announced nationalization of the life insurance business and then the general insurance
business was nationalized in 1972. Only in 1999 private insurance companies have been
allowed back into the business of insurance with a maximum of 26% of foreign holding.
7. INDIAN SCENARIO
INDIAN
INSURANCE INDUSTRY
LIFE
INSURANCE
Public
Sector (1)
NON LIFE
INSURANCE
Private
Sector (15)
Public
Sector (4)
13
Private
Sector (9)
8. LIFE INSURANCE
After the entry of new players and increase in the penetration levels, could see the
insurance sector cross the Rs 2,00,000-core mark in business by 2010.The current size of
the sector is estimated to be at Rs 50,000 crore, which has seen a compound annual
growth rate (CAGR) of around 175 percent in the last few years.
The insurance sector, both life and non life, is likely to grow by over 200 percent,
and private insurers are expected to achieve a growth rate of 140 percent as a result of
aggressive marketing technique. It added that state owned insurance companies are likely
to be 35-40 percent.
On account of intense marketing strategies adopted by the private insurance
players, the market share of state-owned insurance companies like GIC, LIC and others
has come down to 70 percent in last 4-5 years from over 97 percent. Despite regulation,
the private players are offering 35 percent rate of return to is policy holders against 20
percent by public-sector insurers.
The industry body also noted that Indias life insurance premium is 1.8 percent as
a percentage of GDP whereas it is 5.2 percent in the US, 6.5 percent in the South Korea.
The services sector offers immense opportunities for expansion opportunities for
expansion opportunities and the rural market, also, offers tremendous growth
opportunities for insurance companies.
9. GENERAL INSURANCE
General insurance in India has been expecting growth except in some portfolios
like motor insurance, fire and engineering. These portfolios are still under tariff- this
means that premium depends on a fixed predetermined rate structure.
In India, GDS as a proportion of GDP at current prices increased from 26.1% in
2002-03 to 28.1% in 2003-04.house hold sector continued to be the major contributor to
GDS at 24.3% in 2003-04.this can be attributed to soft interest rates prevailing in housing
sector. General Insurance has low market penetration. It is 1.95% and ranks 51st.
However in collection of premium it is ranked 23rd. The ratio of the premium collected to
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that of GDP is 0.58. The main reason for the general insurance industry to perform very
poorly was because of the slow settlement of claims. Moreover the rates of claim in India
were highest in the world. It was 70 percent compared to 40 percent internationally. This
meant that out of 100 people who had insured their commodities 70 claimed for a loss or
damage. The main reason for the lack of demand for general insurance is that people
consider it as an unnecessary expenditure. However it must be noted that the general
insurance has been earning consistent profits and has an efficient dividend paying record
accompanied by a steady growth in its financial resources. The industry is recognized as
one of the largest financial Institutions in the country. Some of the private players in this
sector are- ICICI Lombard, Reliance, Royal-Sundaram, Chholamandalam etc.
COMPANY INDIAN
PROMOTER/PARTNER
FOREIGN
TOTAL
FDI FOREIGN
INSURER
CAPITAL (%)
CAPITAL
(RS MN.)
0
AMP
RELIANCE
None
(RS MN.)
2,170
SANMAR
Aviva Life
GROUP(ADAG)
Dabur
Aviva (UK)
4,590
26
1193.4
Bajaj-
Bajaj Auto
Allianz
3680
26
960
Allianz
Birla
Sun Aditya Birla Group
(Germany)
SunLife (Canada)
4,000
26
1,040
Life
HDFC
HDFC
StandardLife
2,500
18.9 470
ICICI Bank
(UK)
Prudential (UK)
10,850
26
Standard
ICICI
Prudential
15
2,820
ING Vysya
Vysya Bank
ING
Ins. 4,400
26
680
Kotak
(Netherlands)
OldMutual (South 2,600
26
680
Mahindra
Africa)
Old Mutual
Max
Max India
NewYorkLife
5,000
26
1,300
Newyork
Met Life
J&K Bank
(US)
Met Life (US)
3,550
26
920
Sahara Life
Sahara India
None
1,000
Ins. I
SBI Life
SBI
Cardiff (France)
3,500
26
910
TATA AIG
TATA Group
AIG (US)
3,810
26
990
Shriram
Shriram
Bharti AXA
Bharti Group
AXA(Australia)
Some of the new companies who are waiting to come in to the life insurance sector are:
a. IDBI-FORTIS.
b. Syndicate Bank
16
17
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Malaysia, Russia, Singapore, South Africa, Sri Lanka, Thailand, UK, USA and Quatar.
ICICI Groups expertise spans a vast range of financial services, including banking,
broking, mutual funds, insurance, home loans, venture funds and much more. The
Group is the largest consumer credit provider and the biggest private sector, life and
general insurer in India. Expertise across a vast range of products. All blended to bring
you seamless financial solutions that ensure you have the advantage in every financial
decision. Wherever you may be in the world.
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INNOVATION
We believe that the cornerstone of success in todays competitive environment is
Innovation. We seek newer opportunities constantly, to fulfill your emerging needs and
wants.
4. ICICI BANK
ICICI Bank is India's second-largest bank with total assets of Rs. 3,767.00 billion
(US$ 96 billion) at December 31, 2007 and profit after tax of Rs. 30.08 billion for the
nine months ended December 31, 2007. ICICI Bank is second amongst all the companies
listed on the Indian stock exchanges in terms of free float market capitalization*. The
Bank has a network of about 955 branches and 3,687 ATMs in India and presence in 18
countries. ICICI Bank offers a wide range of banking products and financial services to
corporate and retail customers through a variety of delivery channels and through its
specialised subsidiaries and affiliates in the areas of investment banking, life and non-life
insurance, venture capital and asset management. The Bank currently has subsidiaries in
the United Kingdom, Russia and Canada, branches in Unites States, Singapore, Bahrain,
Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre and representative
offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia
and Indonesia. Our UK subsidiary has established branches in Belgium.
ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the
National Stock Exchange of India Limited and its
5. COMPANIES UNDER ICICI BANK
A) ICICI PRUDENTIAL AMC AND TRUST:
ICICI Prudential Asset Management Company enjoys the strong parentage of
prudential plc, one of UK's largest players in the insurance & fund management sectors
and ICICI Bank, a well-known and trusted name in financial services in India. ICICI
Prudential Asset Management Company, in a span of just over eight years, has forged a
position of pre-eminence in the Indian Mutual Fund industry as one of the largest asset
management companies in the country with assets under management of Rs. 37,906.24
21
crore (as of March 31, 2007). The Company manages a comprehensive range of schemes
to meet the varying investment needs of its investors spread across 68 cities in the
country.
Key Indicator:
During the year march 1998 Asset Under Management was Rs160 cores with only
two funds managed, as on February 29, 2008 now it raised up to Rs 62,008.95 cores with
35 funds.
B) ICICI SECURITIES INDIAS LEADING INVESTMENT BANK
A subsidiary of ICICI Bank - the largest and most recognized private bank in
India ICICI Securities Ltd is premier Indian Investment Bank, with a dominant position
in its core segments of its operations - Corporate Finance including Equity Capital
Markets Advisory Services, Institutional Equities, Retail and Financial Product
Distribution With a full-service portfolio, a roster of blue-chip clients and performance
second to none, we have a formidable reputation within the industry.
The Corporate Finance team regularly ranks highest among the leading capital
markets league tables and recently topped the Prime Database League tables for funds
mobilized through equity instruments in the first half of CY 07.
ICICI Securities Inc., the step down wholly owned US subsidiary of the company
is a member of the National Association of Securities Dealers, Inc. (NASD). As a result
of this membership, ICICI Securities Inc. can engage in permitted activities in the U.S.
securities markets. These activities include Dealing in Securities and Corporate Advisory
Services in the United States and providing research and investment advice to US
investors.
ICICI Securities Inc. is also registered with the Financial Services Authority, UK
(FSA) and the Monetary Authority of Singapore (MAS) to carry out Corporate Advisory
Services and Dealing in Securities.
22
C) ICICI VENTURE
ICICI Venture is one of the largest and most successful private equity firms in
India with funds under management in excess of USD 2 billion.
ICICI Venture, over the years has built an enviable portfolio of companies across sectors
including pharmaceuticals, Information Technology, media, manufacturing, logistics,
textiles, real estate etc thereby building sustainable value.
It has several firsts to its credit in the Indian Private Equity industry. Amongst them are
Indias first leveraged buyout (Infomedia), the first real estate investment ( Cyber
Gateway), the first mezzanine financing for a acquisition (Arch Pharmalabs) and the first
royalty-based structured deal in Pharma Research & Development (Dr Reddys).
ICICI Venture is a subsidiary of ICICI Bank, the largest private sector financial services
group in India.
D) ICICI LOMBARD GENERAL INSURANCE COMPANY LIMITED
ICICI Lombard General Insurance Company Limited is a 74:26 joint venture
between ICICI Bank Limited and the Canada based $ 26 billion Fairfax Financial
Holdings Limited. ICICI Bank is India's second largest bank, while Fairfax Financial
Holdings is a diversified financial corporate engaged in general insurance, reinsurance,
insurance claims management and investment management.
Lombard Canada Ltd, a group company of Fairfax Financial Holdings Limited, is
one of Canada's oldest property and casualty insurers. ICICI Lombard General Insurance
Company received regulatory approvals to commence general insurance business in
August 2001.
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a) VISION
To be the dominant Life, Health and Pensions player built on trust by world-class
people and service.
This we hope to achieve by:
Understanding the needs of customers and offering them superior products and
service
The success of the company will be founded in its unflinching commitment to 5 core
values ,Integrity, Customer First, Boundaryless, Ownership and Passion. Each of the
values describe what the company stands for, the qualities of our people and the way we
work.
b) VALUES
Every member of the ICICI Prudential team is committed to 5 core values:
Integrity, Customer First, Boundary less, Ownership, and Passion. These values shine
forth in all we do, and have become the keystones of our success.
25
c)
DEPARTMENTS AND
BRANCHES
OF ICICI
PRUDENTIAL LIFE
26
formulating strategies to make their products known to the common people and to
promote the same in a easy and cost effective way.
b) Sales Department: This department mainly deals with the sales part of the
Insurance Company; the department includes designations like Sales Manager and
Financial Advisor who personally contacts with people for performing the task of
sales of various products.
c) Accounts/ Financial Department: This department has the task of keeping track
of the various expenses incurred by the various other departments of the
organization and also performs the task of allocating various funds to different
departments according to their requirements.
d) Human Resource Department: This department is handled by the Human
Resource manager of the company. The function of this department involves the
well being of the employees of the company, I,e, to see whether there is employee
grievance in the organization or not and if it is there what are the possible causes
for that and also try to find out solutions for the same if possible.
e) Investment Department: This department deals with the task of investing the
money of the policy holders in such way that will ensure both safety of the money
and also a steady return on the same. The task of this department is very difficult
as it deals with the money given by the policy holders, so it requires lot of
thinking on the part of the personnel of this department before deciding where to
invest the money.
f) Actuarial Department: This department is under the supervision of an Actuary
who decides the premiums and charges to be taken from the policy holder on the
basis of certain informations (like Age, Annual Income etc.) provided by the
prospective customer. The task also involves the calculation of mortality charges
which requires high statistical knowledge from ones point of view. So, this
department involves in the calculation of various amounts to be charged from the
prospective customers.
27
LifeTime Gold & LifeTime Plus are unit-linked plans that offer customers the
flexibility and control to customize the policy to meet the changing needs at
different life stages. Each offer 6 fund options - Preserver, Protector, Balancer,
Maximiser, Flexi Growth and Flexi Balanced.
LifeLink Super is a single premium unit linked insurance plan which combines
life insurance cover with the opportunity to stay invested in the stock market.
Premier Life Gold is a limited premium paying plan specially structured for
long-term wealth creation.
InvestShield Life New is a unit linked plan that provides premium guarantee on
the invested premiums and ensures that the customer receives only the benefits of
fund appreciation without any of the risks of depreciation.
28
Protection Solutions
LifeGuard is a protection plan, which offers life cover at low cost. It is available
in 3 options - level term assurance, level term assurance with return of premium
& single premium.
Retirement Solutions
LifeTime Super Pension is a regular premium unit linked pension plan that helps
one accumulate over the long term and offers 5 annuity options (life annuity, life
annuity with return of purchase price, joint life last survivor annuity with return of
purchase price, life annuity guaranteed for 5, 10 and 15 years & for life thereafter,
joint life, last survivor annuity without return of purchase price) at the time of
retirement.
Health Solutions
29
Health Assure Plus: Health Assure is a regular premium plan which provides
long term cover against 6 critical illnesses by providing policyholder with
financial assistance, irrespective of the actual medical expenses. Health Assure
Plus offers the added advantage of an equivalent life insurance cover.
Cancer Care: is a regular premium plan that pays cash benefit on the diagnosis
as well as at different stages in the treatment of various cancer conditions.
Cancer Care Plus: is a wellness plan that includes all the benefits of Cancer Care
and also provides an additional benefit of free periodical cancer screenings.
Hospital Care: is a fixed benefit plan covering various stages of treatment hospitalisation, ICU, procedures & recuperating allowance. It covers a range of
medical conditions (900 surgeries) and has a long term guaranteed coverage upto
20 years.
30
31
32
Traders Shield
It is an attractive policy that provides shopkeepers with a basic insurance package and a
further range of optional covers.
35
CHAPTER-2
DEVELOPMENT OF
MAIN THEME
36
37
SECONDARY OBJECTIVES
To find out the strengths and weaknesses of the companys insurance schemes
To identify the customers perception about the company and its products.
To find out the important criteria that people think about before investing in a
life insurance policy.
To find out whether gender bias involved in investing life insurance or not.
To find out the awareness of ICICI Prudential Life Insurance among the people.
38
The result of this research would help the company to have a better understanding
about the consumers perception towards life insurance.
The study helps the company by creating awareness about the consumers of
different ages and income levels.
The study also enables the company to focus the consumers preferences and
expectations on the product which they offer.
39
Objectives and the purposes of the study and the questions had to be explained to
the respondents and their responses may be biased.
Only limited sample size had been considered for the study and therefore, the
conclusions drawn based on this may not be a reflection of the entire population.The
sample size chosen for the questionnaire was only 100 and that may not
represent the true picture of the consumer perception about the Life Insurance sector.
a) Nearly 98% of the respondent belonged to the age group of 20-50 years
and only 2% were above 50 years. So, the responses and the opinions of
the experienced and aged were not available. So, the findings may not be
correct when we think about the opinion of the elderly people about the
life insurance.
b) The selection of people for the questionnaire was done on the basis of
convenient random sampling, so, there were certain cases in which the
people selected did not have any life insurance policy, so they could not
give any positive feedback regarding the important criteria to be
40
considered before taking an life insurance policy. So, this further reduced
the actual number of respondents to 76 from 100.
c) The product offered by different companies had different options and
names in them, so at the time of comparison it became very difficult. The
parameters for comparison were also different in the selected companies.
d) One of the important criteria that was selected by the respondents which
they consider before taking an insurance policy was Company Image,
but there was no parameter available to compare criteria like this between
the companies.
41
42
Finally, rising demand for insurance is likely to be met by increased capacity as foreign
insurers look to access this growing market.
As per the recent research by Moodys ICRA Global Insurance, the following facts
relating to the performance of both private and public sector general insurance companies
were made.
Private Sectors Growing Influence
The private sector has been steadily growing market share despite the fact that public
sector companies have been around for a lot longer. The private insurers enjoy
considerable operational flexibility, whereas the public sector companies have been
constrained by their traditions and inability to innovate.
Market Share Redistribution
Due to the effectiveness of private marketing strategies, the market share of public
insurers has consistently declined. Given a faster growth rate, the market share of the
private sector is catching that of the public sector and the two will likely converge over
the medium term.
The private sector share of third party motor business was much lower in the past than
that for public firms as the former did not pursue this market because of its negative
underwriting margins. However, with the formation of the common third party motor
pool, the situation has changed. The losses related to this segment now get shared among
all the players, leaving little incentive to avoid this segment.
Fire and engineering now broadly contribute a similar proportion of overall business for
the private and public sectors. In terms of overall business, the focus has shifted towards
the retail segments of motor and health, where good growth is expected.
Operational Flexibility
The public entities lack the operational flexibility enjoyed by the private players. Their
limited capacity to innovate has impacted their ability to tailor and aggressively price
43
products for large corporations. The private players by contrast have focused on accountlevel profitability for large corporations and have expanded their shares by crosssubsidizing tariffed products.
Client Servicing
The public insurers have also been hampered in claims servicing by their process oriented
approach and limited operational flexibility. They have been unable to expedite claim
settlements through out-of-court negotiations since a large proportion of their claims
pertain to the third party motor segment, which is subject to adjudication by the Motor
Accident Claim Tribunal. The result is a time-consuming and involved process.
Strong Infrastructure and Systems
Private players are not hindered by their charters or legacy systems and have constructed
technologically advanced infrastructure. They started with large investments in
technology, which helped them to build robust data management systems. This
characteristic enables in turn quick and effective decision-making for pricing and claims
settlements, attributes vital to building franchises.
On the other hand, public entities have only recently upgraded their systems and have to
grapple with transition issues, such as moving from paper to paper-less systems. They are
encumbered by legacy systems and fragmented databases, and have not fully used their
past claim experiences, something which could give them a strong pricing edge in a detariffed environment.
Focused Underwriting Strategy
The private players, especially during their initial years, have selectively targeted the
more profitable lines of the public sector companies for growth. They benefit from the
experiences of the public sector as well as their international joint-venture partners. They
have drawn talent from public sector companies.
44
45
CHAPTER -3
ANALYSIS &
INTERPRETATION
46
- Descriptive research
Data source
-Questionnaires
Sampling universe
-Shahjahanpur
Sample size
-100
SAMPLE DESIGN
The target population of the study consists of various respondents of various
places. This survey was done by collecting the data from the respondents.
SAMPLE SIZE
After due consultation with the company supervisor as well as with the college
guide, also keeping in mind the requirements of the company for the research, the sample
size that was found to be appropriate for the study was 100.
SAMPLING TECHNIQUE
The sampling technique that adapted to conduct the survey was Convenient
Random Sampling and the area of the research was concentrated in the city of Erode
only. The survey was conducted by visiting different places like colleges, corporate
offices, respondents home etc...
47
DATA SOURCE
The task of data collection begins after a research problem has been defined. In
this study data was collected through both primary and secondary data source.
A. PRIMARY DATA
A primary data is a data, which is collected for gathering information first time
and to analyze the problem. In this study the primary data was collected among the
consumers using questionnaire.
B. SECONDARY DATA
Secondary data consist of information that already exits somewhere, having been
collected for some other purpose. In this study secondary data was collected from
company websites, magazines and brochures.
STATISTICAL TOOLS
Simple percentage analysis, ranking method and chi square analysis are the main
statistical tool used for the study.
SIMPLE PERCENTAGE ANALYSIS
Percentage refers o a special king of ratio in making comparison between two or
more data and to describe relationships. Percentage can also be used to compare the
relation terms between two or more sources of data.
Percentage of respondents =
Number of respondents
Total respondents
48
* 100
49
Market share in
percentage
28.44
LIC
71.56
Total
100
Interpretation:
LIC market share continued to decline in the period up to June 2007, it declined to
71.56% from 78.23% in the same period last year. On the other hand the market share of
the private players is continuously growing up; it increased to 28.44% from 21.77% in
terms of insurance premium.
50
Market share in
percentage
ICICI Prudential
29
Market share
change in
percentage
4
Bajaj Allianz
21
SBI Life
10
HDFC Standard
Reliance Life
Birla Sunlife
9
5
0
-1
Kotak Mahindra
Old Mutual
Met Life
Aviva
Tata AIG
-4
ING Vysya
-1
Sahara Life
Shriram Life
-1
Private total
100
Interpretation:
ICICI PRUDENTIAL BECOMES THE MARKET LEADER AMONG PRIVATE
PLAYERS:
ICICI Prudential strengthens its position at the top of the heap by increasing its market
share by 4% in the month of Jan 2008, followed by Bajaj Allianze with 21% market
share. These two private players contribute 50% of the total insurance market among the
private players.
51
52
Bajaj Allianz
105
SBI Life
138
HDFC Standard
88
Reliance Life
335
Birla Sunlife
152
Kotak Mahindra
Old Mutual
Met Life
121
Aviva
60
Tata AIG
100
40
ING Vysya
74
362
Sahara Life
238
Shriram Life
91
Private total
119
125
Interpretation:
Private sector sales continued to be robust at 119% year to year (YoY), up from 118%
YoY last month. The month also saw LIC make up some lost ground by growing faster
than the system at 133% YoY. Among the larger players, Reliance, SBI Life and Birla
Sun Life continued to be the rising stars with the fastest YoY growth rates.
53
54
Investment
Alternatives
Total
score
Rank
Bank Deposits
6.75
Insurance
6.46
II
Post office
5.57
III
5.33
IV
Real Estate
5.07
Mutual fund
4.83
VI
Equity/Shares
3.84
VII
Public Provident
Fund(PPF)
3.78
VIII
1.74
IX
Interpretation:
From the above table-2.5 it can be seen that ranks for theses investment alternatives
where analyzed by weighted average method. From this analyze we found Bank
Deposits is the most preferred investment alternative among the people with the
average of 6.75, secondly Insurance with the average of 6.46, followed by other
investment alternatives like Post Office (5.57), Gold and Silver (5.33), Real Estate
(5.07), Mutual Fund (4.83), Equity (3.84), PPF (3.78) and least preferred alternative
is that Bond and Debenture (1.74).we understood from this analyze that people prefer
the safe and secure investment alternatives like bank deposits, insurance, real estates,
55
than risky investment alternatives like bonds, equities etc.. The reason that can be
attributed for the liking of people towards bank deposit is that people expect safety
for their money they deposit even though there is less appreciation on their deposit.
Secondly insurance, may be because that insurance provides both life cover as well as
security to the holder of the policy and also to the family members of the insurance
holders. Now a days insurance is also providing option to invest in the markets
through plans like ULIP, which gives the holder both the life cover as well as an
opportunity to earn income at the market rate. Then recently real estate is the major
investment alternative among the people particularly among Erode, this is mainly due
to the increase in land value and also good long term investment preference. Gold and
silver also good investment alternative among people due to the frequent appreciation
in the values of gold, next is that mutual fund which is also the preferable investment
alternative due to low risk on their investment, and other alternatives which are not
much preferred were equities, bonds etc. mainly due to the risk involved in it.
56
Age Group
Age Group
Percentage
Below 30 Yrs
31-40 Yrs
41-50 Yrs
51-60
Above 60 Yrs
No of
Respondent
50
32
16
2
0
Total
100
100
50
32
16
2
0
Interpretation:
From this table-2.6 we can see that 50% of the respondent belonged to the age group of
below 30 years, followed by 32% who belonged to the age group between 31-40 years,
then 16% of respondents belong to 41-50 years and only 2% from the respondents belong
to 51-60 years but there is no respondent from the age group above 60.
57
Age Group
No of
Respondent
Percentage
Below 1 Lakh
1.01-3 Lakh
3.01-5 Lakh
Above 5 Lakh
33
60
4
3
33
60
4
3
Total
100
100
Interpretations:
From the above table-2.7 we can see that 33% of the respondents belonged to a group
which has an annual income of below 1 lakh, followed by highly 60% who belonged to
the group of annual income between 1-3 lakh, then 4% who have an annual income
between 3-5 lakh and 3% of respondent who have an annual income above 5 lakh.
58
No of
Respondent
Percentage
Yes
76
76
No
24
24
Total
100
100
Interpretation:
Among the 100 respondents that were taken as a sample size, 76 of them had life
insurance policy that was either taken by him/her self or it was taken by their parents on
their name, while 24 of them did not have any kind of Life insurance policy from any
company.
59
60
Premium
Rating
No of
Respondent
Percentage
5
4
3
2
1
39
31
3
3
_
51.4
40.8
3.9
3.9
_
Total Insurance
holders
Total non users
Total
76
100
24
100
Premium
Interpretation:
Now if we consider one of the criteria we can see that 51.4% of the respondent has rated
premium as the highly important thing that they consider before taking any insurance
policy from any company, and no body has rated it as the not important criterion. So, it
61
can be clearly interpreted that premium that the policy holder has to pay to continue
his/her policy plays a very important role before selecting the terms and conditions of the
policy and also the company from which the policy is to be taken.
Policy Term
Rating
No of
Percentage
Respondent
5
4
3
2
1
Total Insurance
holders
Total non users
Total
29
36
10
1
_
38.1
47.4
13.2
1.3
_
76
100
24
100
Interpretation:
The tenure of the policy i.e. the policy term depends on the policy holder but sometimes
the insurer can also influence the policy term by giving some additional benefits on
policies taken for a longer period of time or vice versa. In the study that was conducted
by us, we found out that nearly 48% of the respondents think that policy term offered by
the company is the important thing that one should consider before taking any life
insurance policy while 38.1% of the respondents think that it is the highly important thing
that one should consider before taking any life insurance policy.
62
Policy Term
Rider Benefits
Rating
No of
Respondent
Percentage
5
4
3
2
1
18
32
21
5
_
23.7
42.1
27.6
6.6
_
Total Insurance
holders
Total non users
Total
76
100
24
100
Interpretation:
Rider benefits are the additional benefits that the insurer company provides to its
customers for attracting them. Things like accidental benefit, critical illness benefit, and
63
permanent disablement benefit are provided as a rider with the original policy with a
payment of some additional premium from the point of view of the customers. According
to the study nearly 42% of the respondents think that it is an important criterion before
selecting an insurance policy. On the other hand 27.8% and 23.7% of the respondent feel
it neutrally and the most important criterion, which indicates that people are not much
interested in additional benefits.
Rider Benefits
64
No of
Respondent
Percentage
5
4
3
2
1
40
24
8
2
2
52.6
31.6
10.6
2.6
2.6
76
100
Total Insurance
holders
Total non users
Total
24
100
Interpretation:
Bonus and interest are paid by the companies to the policy holder for the policies which
are with profit policy i.e. if a person takes a with profit policy, he/she also becomes liable
to get a certain percentage of the profit that the company makes in a certain financial
year. 53% of the respondents consider it as the highly important criterion before taking a
life insurance policy and only 2.6% of respondents considered it to not important.
65
No of
Respondent
26
35
11
2
2
Percentage
76
100
34.3
46.0
14.5
2.6
2.6
24
100
Interpretation:
While conducting the study we have met many respondents who think that many of the
companies provide them satisfactory services only till the policy is being taken by the
respondent, but after that if there is any requirement from the point of view of the
customer, the company does not pay the same attention to them as they had paid earlier.
So, nearly 34% of the respondents feel that services (both pre and post sales) provided by
the company is highly important to consider before undertaking any kind of life insurance
policy.
66
Accessibility
Rating
No of
Respondent
Percentage
5
4
3
2
1
21
47
6
2
_
27.6
61.8
8.0
2.6
_
76
100
Total Insurance
holders
Total non users
Total
24
100
67
Interpretation:
The term accessibility here refers to the easy availability of the facilities that the company
provides to its customers. The facilities may be regarding information about the company
and the various products offered by them, it can be made available through internet and
other media. According to the study nearly 62% of the respondents think it is highly
important, while 2.6% of them feel that it is the least important and no respondent
considers that it is not important that one may consider before taking any life insurance
policy.
Accessibility
68
Company Image
Rating
No of
Respondent
Percentage
5
4
3
2
1
41
24
10
1
_
54
31.6
13.1
1.3
_
76
100
Total Insurance
holders
Total non users
Total
24
100
Interpretation:
Company image also plays an very important role in influencing the decision of a
prospective customer while taking the final decision. From the study it has been found
out that nearly 54% and 32% of the people feel that it is the highly and most important
thing, which has higher influence than any other criterion that influences ones decision
regarding taking of life insurance policy, while for 1.3% of people it does not provide any
significant importance in their decision making.
69
Company Image
So, to conclude from the above chart-2.18, it can be said that the company image that
the policy holder has to pay for taking any life insurance policy, plays a highly
important role in influencing their decision, followed by the factors like premium,
bonus and interest paid by the company, policy term and so on. So, those companies
who are having brand image or name as well as providing all other complementary
services, have a better chance of succeeding in the life insurance sector in comparison
to other companies who are in the same field.
70
To further analyze the perception of the respondents about what they think as the
important criteria before taking an insurance policy, I have taken two independent
parameters, namely:
a) Age of the People.
b) Annual Income of the People.
After taking these two independent parameters, the analysis is being made to see which
age group people think what criterion is important or what is the difference in perception
among the people who have annual income which are significantly different from each
other. The number of respondents taken here is only 76 as those people who are not
having any life insurance policy have been excluded from the purview of the study and
these 76 respondents were allowed to rate the criteria according to their importance.
(Rating 5 represents highly important,4 represents only important,3 represents neutrally
important,2 represents least important and 1 represents not important).
71
Total
Respondent
Below 30
Yrs
20
(58.8%)
11
(32.4)
2
(5.9)
1
(2.9)
34
(100%)
31-40 Yrs
14
(53.8%)
10
(38.6%)
1
(3.8%)
1
(3.8%)
26
(100%)
41-50 Yrs
7
(46.7%)
7
(46.7%)
1
(6.6%)
15
(100%)
51-60 Yrs
1
(100%)
1
(100%)
Above 60
Yrs
Total
Respondent
41
(54%)
29
(38.2)
3
(3.9)
3
(3.0)
76
(100%)
Interpretation:
Now, from the above table-2.20 we can see that nearly 59% of the people who belong to
the age group of less than 30 consider premium as the highly important criterion in
comparison to only 54% of the people who belong to an age group of 30-40. So, people
who have started their professional life consider more about the money that has to be
spent on the insurance policy in comparison to the people who are working for a
relatively longer period of time. Again, if we consider those people 41-50 years who have
come to the important stage of their working life, we can see that these people also thing
that the expense regarding the premium to be paid is the highly important criteria for
them because they likely to spend or save their money on medical, education etc..
72
73
Below 30
Yrs
31-40 Yrs
5
(14.8%)
4
(15.4%)
8
(53.4%)
_
7
(20.5%)
3
(11.5%)
2
(13.3%)
_
1
(3.8%)
_
22
(64.7%)
18
(69.3%)
5
(33.3%)
1
(100%)
_
17
(22.4%)
46
(60.5%)
12
(15.8%)
1
(1.3%)
41-50 Yrs
51-60 Yrs
Above 60
Yrs
Total
Respondent
Total
Respondent
34
(100%)
26
(100%)
15
(100%)
1
(100%)
_
76
(100%)
Interpretation:
Now, if we consider the different charges (like Fund management charges, administration
charges etc.) that the companies take from their policy holders, we can see that people
who are having age less than 30 years and those who belong to the group of 30-40 years
think in the same way in this matter. Nearly 15% of both the groups consider these
charges are highly important, but not as much as they consider the cost relating to the
premium they have to pay to the company.
74
Below 30
Yrs
10
(29.4%)
14
(41.2%)
9
(26.5)
1
(2.9%)
75
Total
Respondent
34
(100%)
31-40 Yrs
41-50 Yrs
51-60 Yrs
Above 60
Yrs
Total
Respondent
10
(38.5%)
8
(53.3%)
1
(100%)
_
15
(57.7%)
7
(46.7%)
_
1
(3.8)
_
29
(38.2%)
36
(47.4%)
10
(13.1%)
1
(1.3%)
26
(100%)
15
(100%)
1
(100%)
_
1
(100%)
Interpretation:
The policy term mainly depends on the wishes of the policy holder, so here we can see
that only 29% and 41% of the people whose age is below 30 years, think this is highly
important criterion, but people who a little bit more experienced know that insurer
companies sometime provide extra benefits for longer policies in comparison to policies
which have a shorter span of life, thats why nearly 39% and 58% of people belonging to
the age group of 31-40 years think that it is a highly important criterion which affects the
decision regarding insurance.
76
77
Below 30
Yrs
31-40 Yrs
6
(17.6)
6
(23%)
5
(33.3%)
1
(100%)
_
15
(44.2%)
10
(38.5%)
7
(46.7%)
_
8
(23.5%)
10
(38.5%)
3
(20%)
_
5
(14.7%)
_
18
(23.7%)
32
(42.1%)
21
(27.6%)
5
(6.6%)
41-50 Yrs
51-60 Yrs
Above 60
Yrs
Total
Respondent
Total
Respondent
34
(100%)
26
(100%)
15
(100%)
1
(100%)
_
76
(100%)
Interpretation:
Mostly all the respondents of different age group are not interested in rider benefits,
nearly 42% of the age group below 30, 31-40 and 41-50 years think that it is
important ,where as only 23% of all age group think that it is highly important. So,
most of them think that rider benefits are not so important and it does not influence
their decision in a broad way.
78
Below 30
Yrs
31-40 Yrs
17
(50%)
12
(46.2%)
10
(66.7%)
1
(100%)
_
8
(23.5%)
13
(50%)
3
(20%)
_
5
(14.7%)
1
(3.8%)
2
(13.3%)
_
2
(5.9%)
_
2
(5.9%)
_
Total
Respondent
34
(100%)
26
(100%)
15
(100%)
1
(100%)
_
40
(52.6%)
24
(31.6%)
8
(10.5%)
2
(2.6%)
2
(2.6%)
76
(100%)
41-50 Yrs
51-60 Yrs
Above 60
Yrs
Total
Respondent
79
Interpretation:
In this scenario we can see that the thinking of the people belonging to different age
group is quite similar, as nearly 53% of the respondents belonging to three different
age groups, namely: <30, 30 40 and 40 50, think that it is a highly important
criterion which influences the decision regarding life insurance policy and none of the
total respondent think that it is the least important criterion among all.
80
Total
Respondent
Below 30
Yrs
11
(32.4%)
15
(44.2%)
5
(14.7%)
2
(5.8%)
1
(2.9%)
34
(100%)
31-40 Yrs
6
(23.1%)
13
(50%)
6
(23.1%)
1
(3.8%)
26
(100%)
41-50 Yrs
9
(60%)
6
(40%)
15
(100%)
51-60 Yrs
1
(100%)
1
(100%)
Above 60
Yrs
Total
Respondent
26
(34.2%)
35
(46.1%)
11
(14.5%)
2
(2.6%)
2
(2.6%)
76
(100%)
Interpretation:
In this case, we can see that the people who belong to the age group of less than 30 years
and may be taking an life insurance policy for the first time, give much importance on
services in comparison to the people belonging to the age group of 3040, who put more
emphasize on the other benefits than services provided by the company, the percentage is
almost 23 but which is 33% for age below 30 years and they think that it is highly
important criterion.
81
Below 30
Yrs
31-40 Yrs
5
(14.7%)
6
(23.1%)
10
(66.7%)
_
2
(5.9%)
4
(15.4%)
_
2
(5.9%)
_
25
(73,5%)
16
(61.5%)
5
(33.3%)
1
(100%)
_
21
(27.6%)
47
(61.8%)
6
(7.9%)
2
(2.7%)
41-50 Yrs
51-60 Yrs
Above 60
Yrs
Total
Respondent
82
Total
Respondent
34
(100%)
26
(100%)
15
(100%)
1
(100%)
_
76
(100%)
Interpretation:
Here, we can see that not much importance is given to the accessibility criteria by the
respondents belonging to below 30 and 31-40 years, But only respondent belonging to
41-50 years nearly 67% of them consider that it is highly important, because of their long
period of working age they like to get easy availability of the products offered. So only
the age groups 41-50 years consider accessibility as an criterion for decision to take an
life insurance policy.
83
Total
Respondent
Below 30
Yrs
17
(50%)
12
(35.3%)
5
(19.2%)
34
(100%)
31-40 Yrs
12
(46.2%)
9
(34.6%)
5
(19.2%)
26
(100%)
41-50 Yrs
12
(80%)
2
(13.3%)
1
(6.7%)
15
(100%)
51-60 Yrs
1
(100%)
1
(100%)
Above 60
Yrs
Total
Respondent
41
(53.9%)
24
(31.6%)
10
(13.2%)
1
(1.3%)
76
(100%)
Interpretation:
In the case of company image also, we see most of the respondents nearly 41 with
average percentage of nearly 54% consider company image as a highly important
criterion this is mainly because people feel secure and comfortable of their money which
they spend on the company which has a brand name or image. So, that company image
has greater influence among the people before they take up life insurance.
84
So, to conclude it can be said that the thinking of people belonging to different
age group are quite different in most of the aspects whole it comes to decide the
important criterion regarding life insurance, it may be due to the fact that they have
started their career, so they worry about the money they have to spend on insurance or it
may be related to the fact that for many of the newcomers it is the first time that they are
taking a life insurance policy on their own, so they do not have experience when it
comes to life insurance in comparison to others who are having their own policy or those
who are working for a longer span of time and are quite settled in their respective area of
operation.
85
Total
13
(44.8%)
25
(59.5%)
1
(50%)
_
13
(44.8%)
16
(38.1%)
1
(50%)
1
(33.3%)
31
(40.8%)
2
(6.9%)
_
1
(3.5)
1
1
(33.3%)
3
(3.9%)
1
(33.4%)
3
(3.9%)
29
(100%)
42
(100%)
2
(100%)
3
(100%)
76
(100%)
39
(51.4%)
Interpretation:
In this scenario mostly the respondents of all the annual income groups think that
premium to be paid in a policy is the most important criterion (nearly 54%), even though
the income increases it is considered to be the highly important. So, people of all income
groups put more emphasize on the money to be spent.
86
Total
10
(34.5%)
6
(14.3%)
_
11
(37.9%)
32
(76.2%)
2
(100%)
1
(33.3%)
46
(60.5%)
8
(27.6%)
4
(9.5%)
_
1
(33.4%)
12
(15.8%)
1
(1.3%)
29
(100%)
42
(100%)
2
(100%)
3
(100%)
76
(100%)
1
(33.3%)
17
(22.4%)
Interpretation:
As the charges taken by the companies is very less as compared to the premium they take,
so here we can see that people pay less importance to it. But, here also we can see that
87
nearly 35% of the people who are having annual income of less than 1 lakh, think this is
highly important criterion, On the other hand people who are having income between
1.01 3 lakh, think that it is just an important criterion (nearly76%), but dont think at all
that this is the highly important criterion (nearly 14%). So, here also difference in income
generates difference in opinion.
88
Total
9
(31%)
15
(35.7%)
2
(100%)
3
(100%)
29
(38.1%)
15
(51.7%)
21
(50%)
_
5
(17.3%)
5
(11.9%)
_
1
(2.4%)
_
36
(47.4%)
10
(13.2%)
1
(1.3%)
29
(100%)
42
(100%)
2
(100%)
3
(100%)
76
(100%)
Interpretation:
In case of policy term we can see that there is no such difference in opinion among the
people who belong to different income groups. As nearly 54% of the total respondents
think it is highly important criterion and on the other hand 31.6% of the respondents think
it is only important. The reason for the same can be that, people who are having less
income now, may have a feeling that as the time goes on their income will increase, so
they dont put so much emphasis on policy term as compared to the other criteria.
89
Total
5
(17.3%)
9
(21.4%)
1
(50%)
3
(100%)
18
(23.7%)
13
(44.8%)
19
(45.3%)
_
1
(3.4%)
4
(9.5%)
_
10
(34.5%)
10
(23.8%)
1
(50%)
_
32
(42.1%)
21
(27.6%)
5
(6.6%)
29
(100%)
42
(100%)
2
(100%)
3
(100%)
76
(100%)
_
_
Interpretation:
Here, we can see that all respondents who are having income above 6 lakh think that rider
benefits are highly important criterion in comparison to people who are having less
90
income. The reason for the same may be as the income of a person increases he/ she will
be liable to get more rider benefits in comparison to people who are having lesser
income, so they put less importance on rider benefits. But, one thing is clear that very few
people from all income class think that rider benefits do not carry any importance.
91
Total
13
(44.9%)
23
(54.8%)
1
(50%)
3
(100%)
40
(52.6%)
8
(27.6%)
15
(35.6%)
1
(50%)
_
6
(20.7%)
2
(4.8%)
_
2
(6.8%)
_
2
(4.8%)
_
24
(31.6%)
8
(10.6%)
2
(2.6%)
2
(2.6%)
29
(100%)
42
(100%)
2
(100%)
3
(100%)
76
(100%)
Interpretation:
In case of bonus and interest paid by the insurer company, we can see that people who
belong to the income groups of 1.01 3 lakh, 3.0 5 lakh and above 6 lakh put more
emphasis on this in comparison to the people who have income less than 1 lakh. The
reason for the same may be due to the fact, that people who belong to the range of 1- 6
lakh as annual income, have an tendency to earn more than what they are earning and
thats why they think it as highly important criterion, On the other hand people who have
income less than 1 lakh, do not have such income to invest in the company ( more
emphasis is given by them on the safety of the money) and that is why they dont put so
much importance on bonus and interest paid by the company.
92
Total
12
(41.4%)
11
(37.9%)
4
(13.8%)
2
(6.9%)
29
(100%)
12
(28.6%)
_
21
(50%)
2
(100%)
1
(33.3%)
35
(46.1%)
7
(16.6%)
_
2
(4.8%)
_
11
(14.5%)
2
(2.6%)
2
(2.6%)
42
(100%)
2
(100%)
3
(100%)
3
(100%)
2
(66.7%)
26
(34.2%)
93
Interpretation:
Now if we consider the services provided by the company we can see that the people
who are having less income put more emphasis on this criterion (41.4%) because
people are more conscious about their money than the people who belong to 1-3 lakh.
So, they expect better services for their money even though It is less and among all
respondents above 6 Lakh who have more job responsibility think service as a highly
important criterion for decision making.
94
Total
9
(31%)
19
(65.5%)
1
(3.5%)
29
(100%)
10
(23.8%)
1
(50%)
1
(33.3%)
21
(27.6%)
25
(59.5%)
1
(50%)
2
(66.7%)
47
(61.8%)
6
(14.3%)
_
1
(2.4%)
_
42
(100%)
2
6
(7.9%)
2
(2.7%)
3
(100%)
76
(100%)
Interpretation:
If we consider the accessibility as one of the criterion for taking insurance policy, we can
see that as the income of the person increases, they put less importance on the
accessibility criterion (31.0% of people having income less than 1 lakh, 23.8% for 1.01
3 lakh, one respondent for 3.01 5 lakh and one respondent for more than 5 lakh). The
same trend can be seen when they consider it as the only important criteria in taking a
decision regarding life insurance. So, most of the people think it as a criterion which is
not so important while taking their decision.
95
Total
Below 1
Lakh
1.01-3
Lakh
16
(55.2%)
23
(54.8%)
9
(31%)
13
(30.9%)
3
(10.4%)
6
(14.3%)
1
(3.4%)
_
29
(100%)
42
(100%)
3.01-5
Lakh
Above 5
Lakh
1
(50%)
1
(33.3%)
1
(50%)
2
(66.7%)
Total
41
(53.9%)
24
(31.6%)
10
(13.2%)
1
(1.3%)
96
2
(100%)
3
(100%)
76
(100%)
Interpretation:
The above table shows 41 respondents of all the income level with average of 54%
consider company image as highly important criterion. When we compare company
image among different age groups and annual income groups we find similar opinion,
considering that it is highly important for decision making. This mainly because people
feel safe and secure with the company they invest.
So, to conclude it can be said that in most of the aspects, the opinion of the
people belonging to different income groups differ from each other. The reason for the
same can be the importance that they give on the sum they invest in taking a life
insurance policy i.e. a person who is having income of less than 1 lakh will put more
emphasis on a sum of Rs, 10000, in comparison to a person who is having an income of
more than 5 lakh. So, the difference in income does show difference in opinion also.
97
Male
Female
Total
Having
insurance
Not having
insurance
Total
47(44.84)
29(31.16)
76
12(14.16)
12(9.84)
24
41
59
100
Level of
significance
5%
Degree of
freedom
1
Table value
Chi square
3.84
1.059
Result:
Chi square is less than the table value.
Hence accept the null hypothesis (Ho)
We can conclude that gender bias doesnt influence for investing in life insurance.
98
3.3 FINDINGS
The findings that can be drawn from the survey conducted by us can be summarized in
the following way:
a) Bank Deposits are the most preferred investment alternative which is available to
people followed by alternatives such as Insurance, Real Estate, Gold and Silver,
Mutual etc.
b) It was found that 61 respondents were willing to take a life insurance under LIC
and 33 respondents under ICICI Prudential Life Insurance.
c) Among the 76 insurance holders 63 have policy of LIC whereas only 11
respondents have policy of ICICI Prudential Life Insurance.
d) Only 47% of the total respondents are aware of the joint venture between ICICI
bank with Prudential of UK to form a company called ICICI Prudential Life
Insurance in the year 2000. 22 respondents are interested to invest in ICICI
because of the companys growth potential and brand image that ICICI has.
e) The scheme mostly preferred by insurance holders was life protection schemes
like death benefits followed by money growth plans like wealth creation and high
return plans.
f) It was found that nearly 50% of the respondents usually save less than 15% and
the kind of investment mostly preferred by the respondents were both long and
short term.
g) According to the survey safety is the most important criterion which is excepted
among all the respondents towards their investment alternatives followed by
Return, Brand Name, Tax Benefits, Liquidity and Capital Growth.
h) According to the study company image is to be the highly important criteria
which we consider before taking up a life insurance this is mainly because people
expect safety and security for their money which they invest, followed by the
factor Premium which we pay to the insurer and then Bonus and Interest paid by
the company, services etc.
99
i) People who belong to different age groups have different perception regarding the
most important criteria before taking the decision on a life insurance policy.
j) People who belong to different income groups also have different perception
regarding the important criteria concerned with the life insurance.
100
3.4 SUGGESTIONS
1. Consumer should be aware of companys profile and returns associated with
insurance.
2. The Financial advisor should be right enough to serve the consumers. The consumer
should also be aware of the advisor or others who is looking after their investments.
3. Company should publish their performance by comparing it with their competitors.
4. Company should adopt strategies to explore that private insurance companies are
safer and securer than public insurance company like LIC.
5. Middle income people suggest that premium can be collected on monthly basis instead
of twice a year.
6. Companys reputation is more important because bad impression on image or
brand name is considered while decision making among consumers.
101
3.5 CONCLUSION
Insurance is a tool by which fatalities of a small number are compensated out of
funds collected from plenteous. Insurance is a safeguard against uncertain events that
may occur in the future. Over the last 5 to 6 years, the ICICI Prudential life insurance
company have tripled investors money than the other competent, this progress leads to
increase the company image and makes a way to lead the total insurance market.
Thus the study also comprise company image is the highly important criteria that
consumers consider before taking up a life insurance. This is mainly because people
expect safety and secure for their money which they invest, followed by the factor
Premium which we pay to the insurer and then Bonus and Interest paid by the company,
services etc.
102
Bibliography
Websites
http://www.google.co.in/
http://www.en.wikipedia.org/
http://www.rbi.org/
http://www.ekikrat.in/
http://www.seminarprojects.com/
http://www.scribd.com/
http://www.indiatimes.com/
http://www.wikianswers.com/
http://www.slideshare.net/
103
APPENDIX
A Study of Consumers Perception Towards Insurance Sector
Questionnaire
Dear respondent,
This questionnaire is aimed at understanding your perception about life insurance .Your
response will be dealt with strict confidentiality and it will be used only for academic
purpose. Thank you for spending your valuable time to fill this questionnaire.
1. Name:
Gender: Male
Female
Contact No:
2. Age Group:
Below 30
31-40
41-50
51-60
Above 60
3. Educational Qualification:
Under Graduate
Post Graduate
Diploma
Others (Specify).
4. Occupation:
Student
Employed
Self-Employed
1.01-3 Lakh
3.01-5 Lakh
Others (Specify).
20-25%
Short Term
Investment Alternatives
Rank
1.
2.
Equity/Shares
3.
Mutual Fund
4.
5.
Post Office
6.
Insurance
7.
Bank Deposits
8.
Real Estate
9.
10.
Other (specify).
105
Both
Highly
important
Important
Neutral
Least
important
Not
important
Safety
Capital Growth
Liquidity
Return
Tax Benefit
Company Profile &
Brand Name
10. Do you have life Insurance Policy? ( If NO then please go to question no. 14)
Yes
No
Bajaj Allianz
HDFC Standard
106
Reliance life
Others (Specify)..
Retirement plan
Others (Specify).
13. What parameters do you look into before you take up a life insurance Policy?
And tick the following parameter according to your importance.
Parameters
considered before
insurance policy
Highly
Important
Neutral
Important
Least
Important
Not
Important
Premium
Charges
Policy Term
Rider Benefits
Bonus & Interest
Services (Pre &
Post Sales)
Accessibility
Company Image
Birla Sunlife
TATA- AIG
Max New York
Max New York
Aviva Dabur
AXA-Bharti