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CHAPTER-1

INTRODUCTION

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1.1 Overview of Industry
THE INSURANCE INDUSTRY

The insurance sector has gone through a number of phases and changes. Insurance inIndia
used to be tightly regulated and monopolized by state-run insurers. Following the
movetowards economic reform in the early 1990s, various plans to revamp the sector finally
resultedin the passage of the Insurance Regulatory and Development Authority (IRDA) Act
of 1999.Significantly, the insurance business was opened on two fronts. Firstly, domestic
private-sectorcompanies were permitted to enter both life and non-life insurance business.
Secondly, foreigncompanies were allowed to participate, albeit with a cap on shareholding at
26%. With theintroduction of the 1999 IRDA Act, the insurance sector joined a set of other
economic sectorson the growth march. During the 2003 financial year, life insurance
premiums increased by an estimated 12.3%in real terms to INR 650 billion (USD 14 billion)
while non-life insurance premiums rose 12.2%to INR 178 billion (USD 3.8 billion). Growth
in insurance premiums has been averaging at11.3% in real terms over the last decade. There
are strong arguments in favor of sustained rapidinsurance business growth in the coming
years, including Indias robust economic growthprospects and the nations high savings rates.

BRIEF HISTORY OF INSURANCE SECTOR IN INDIA

In India, insurance has a deep-rooted history. It finds mention in the writings of Manu
(Manusmrithi), Yagnavalkya (Dharmasastra) and Kautilya (Arthasastra). The writings talk in
terms of pooling of resources that could be re-distributed in times of calamities such as fire,
floods, epidemics and famine. This was probably a pre-cursor to modern day insurance.
Ancient Indian history has preserved the earliest traces of insurance in the form of marine
trade loans and carriers contracts. Insurance in India has evolved over time heavily drawing
from other countries, England in particular.

1818 saw the advent of life insurance business in India with the establishment of the Oriental
Life Insurance Company in Calcutta. This Company however failed in 1834. In 1829, the
Madras Equitable had begun transacting life insurance business in the Madras Presidency.
1870 saw the enactment of the British Insurance Act and in the last three decades of the
nineteenth century, the Bombay Mutual (1871), Oriental (1874) and Empire of India (1897)
were started in the Bombay Residency. This era, however, was dominated by foreign
insurance offices which did good business in India, namely Albert Life Assurance, Royal
Insurance, Liverpool and London Globe Insurance and the Indian offices were up for hard
competition from the foreign companies.

In 1914, the Government of India started publishing returns of Insurance Companies in India.
The Indian Life Assurance Companies Act, 1912 was the first statutory measure to regulate
life business. In 1928, the Indian Insurance Companies Act was enacted to enable the
Government to collect statistical information about both life and non-life business transacted
in India by Indian and foreign insurers including provident insurance societies.

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In 1938, with a view to protecting the interest of the Insurance public, the earlier legislation
was consolidated and amended by the Insurance Act, 1938 with comprehensive provisions
for effective control over the activities of insurers. 4 The Insurance Amendment Act of 1950
abolished Principal Agencies. However, there were a large number of insurance companies
and the level of competition was high.

INDIAN INSURANCE MARKET

India's life insurance sector is the biggest in the world with about 36 Crore policies which are
expected to increase at a compound annual growth rate (CAGR) of 12-15 per cent over the
next five years. The insurance industry plans to hike penetration levels to five per cent by
2020, and could top the US$ 1 trillion mark in the next seven years. The total market size of
India's insurance sector is projected to touch US$ 350-400 billion by 2020 from US$ 66.4
billion in FY13. The general insurance business in India is currently at Rs 77,000 Crore (US$
12.41 billion) premium per annum industry and is growing at a healthy rate of 17 per cent.
The Rs 12,606 Crore (US$ 2.03 billion) domestic health insurance business accounts for
about a quarter of the total non-life insurance business in the country. Investment corpus in
India's pension sector is anticipated to cross US$ 1 trillion by 2025, following the passage of
the Pension Fund Regulatory and Development Authority (PFRDA) Act 2013, according to a
joint report by CII-EY on Pensions Business in India. Indian insurance companies are
expected to spend Rs 117 billion (US$ 1.88 billion) on IT products and services in 2014, an
increase of five per cent from 2013, as per Gartner Inc. Also, insurance companies in the
country could spend Rs 4.1 billion (US$ 66.11 million) on mobile devices in 2014, a rise of
35 per cent from 2013. Increasing life expectancy, favourable savings and greater
employment in the private sector will fuel demand for pension plans. Strong growth in the
automotive industry over the next decade will be a key driver of motor insurance.

CHART - 1

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INDUSTRY DYNAMICS

Factors that influence consistent growth in insurance sectors are:

Threat of New Entrants: The insurance industry has been budding with new entrants every
other day. Therefore the companies should carve out niche areas such that the threat of new
entrants might not be a hindrance. There is also a chance that the big players might squeeze
the small new entrants.

Power of Suppliers: Those who are supplying the capital are not that big a threat. For
instance, if someone as a very talented insurance underwriter is presently working for a small
insurance company, there exists a chance that any big player willing to enter the insurance
industry might entice that person off.

Power of Buyers: No individual is a big threat to the insurance industry and big corporate
houses have a lot more negotiating capability with the insurance companies. Big corporate
clients like airlines and pharmaceutical companies pay millions of dollars every year in
premiums.

Availability of Substitutes: There exist a lot of substitutes in the insurance industry.


Majorly, the large insurance companies provide similar kinds of services be it auto, home,
commercial, health or life insurance.

TYPES OF INSURANCES

Insurance business is divided into four classes:

1. Life insurance
2. Fire
3. Health insurance
4. Miscellaneous

Life insurers undertake the life insurance business; general insurers handle the rest. The
business of insurance essentially means defraying risks attached to an activity (including life)
and sharing the risks between various entities, both persons and organisations. Insurance
companies are important players in financial markets as they collect and invest large amounts
of premium in various investment instruments.

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1.2 About the Organisation

1.2.1 Profile of the Organization


IDBI Federal Life Insurance is one of Indias growing life insurance companies and offers a
diverse range of wealth management, protection and retirement solutions to individual and
corporate customers.

IDBI Federal Life Insurance Co Ltd is a joint-venture of IDBI Bank, Indias premier
development and commercial bank, Federal Bank, one of Indias leading private sector banks
and Ageas, a multinational insurance giant based out of Europe.

Having commenced operations in 2008, IDBI Federal was able to achieve breakeven within
just 5 years; the Companys passion for innovation and growth helped it achieve this feat.

Through a nationwide network of 2, 964 branches of IDBI Bank and Federal Bank, and a
sizeable network of advisors and partners, IDBI Federal Life Insurance has achieved presence
across the length and breadth of the country. As on March 31, 2015, the company has issued
nearly 7.88 Lakhs policies with a sum assured of over Rs. 41,856 Crore. IDBI Federal Life
Insurance has total assets under management of 4,087 Crore and a robust capital base of over
800 Crores, as on March 31, 2015.

ABOUT THE SPONSORS OF IDBI FEDERAL LIFE INSURANCE CO LTD

IDBI BANK LTD. continues to be, since its inception, Indias premier industrial
development bank. It came into being as on July 01, 1964 to support Indias industrial
backbone. Today, it is amongst Indias foremost commercial banks, with a wide range of
innovative products and services, serving retail and corporate customers in all corners of the
country from 1717 branches and 3000 ATMs. The Bank offers its customers an extensive
range of diversified services including project finance, term lending, working capital
facilities, lease finance, venture capital, loan syndication, corporate advisory services and
legal and technical advisory services to its corporate clients as well as mortgages and
personal loans to its retail clients. As part of its development activities, IDBI Bank has been
instrumental in sponsoring the development of key institutions involved in Indias financial
sector National Stock Exchange of India Limited (NSE) and National Securities Depository
Ltd, SHCIL (Stock Holding Corporation of India Ltd), CARE (Credit Analysis and Research
Ltd).

FEDERAL BANK is one of Indias leading private sector banks, with a dominant presence
in the state of Kerala. It has a strong network of over 1,247 branches and 1,485 ATMs spread
across India. The bank provides over four million retail customers with a wide variety of
financial products. Federal Bank is one of the first large Indian banks to have an entirely
automated and interconnected branch network. In addition to interconnected branches and
ATMs, the Bank has a wide range of services like Internet Banking, Mobile Banking, Tele
Banking, Any Where Banking, debit cards, online bill payment and call centre facilities to

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offer round the clock banking convenience to its customers. The Bank has been a pioneer in
providing innovative technological solutions to its customers and the Bank has won several
awards and recommendations.

AGEAS is an international insurance group with a heritage spanning 190 years. Ranked
among the top 20 insurance companies in Europe, Ageas has chosen to concentrate its
business activities in Europe and Asia, which together make up the largest share of the global
insurance market. These are grouped around four segments: Belgium, United Kingdom,
Continental Europe and Asia and served through a combination of wholly owned subsidiaries
and partnerships with strong financial institutions and key distributors around the world.
Ageas operates successful partnerships in Belgium, the UK, Luxembourg, Italy, Portugal,
Turkey, China, Malaysia, India and Thailand and has subsidiaries in France, Hong Kong and
the UK. Ageas is the market leader in Belgium for individual life and employee benefits, as
well as a leading Non-Life player through AG Insurance. In the UK, Ageas is the sixth largest
Non-Life insurer with a number 3 position in cars insured and has a strong presence in the
over 50s market. Ageas employs more than 13,000 people in the consolidated entities and
over 30,000 in the non-consolidated partnerships, and has annual inflows of more than EUR
23 billion.

COMPANYS VISION, MISSION AND VALUES

VISION

To be the leading provider of wealth management, protection and retirement solutions that
meets the needs of our customers and adds value to their lives.

MISSION

To continually strive to enhance customer experience through innovative product offerings,


dedicated relationship management and superior service delivery while striving to interact
with our customers in the most convenient and cost effective manner.

To be transparent in the way we deal with our customers and to act with integrity. To invest
in and build quality human capital in order to achieve our mission.

VALUES

Transparency: Crystal Clear communication to our partners and stakeholders. Value to


Customers: A product and service offering in which customers perceive value.

Rock Solid and Delivery on Promise: This translates into being financially strong,
operationally robust and having clarity in claims.

Customer-friendly: Advice and support in working with customers and partners.

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EXCELLENCE

In every aspect of work ranging from the in-house training instate to the detailed personal
insurance plan. IDBI Federal is focused on achieving the highest standards of quality in every
aspect of their business.

HONESTY

Is the heart of the life insurance business? IDBI Federal believes that above all, Life
insurance is based on trust. Transparency, dependability and integrity will form the
cornerstones of the IDBI Federal experience.

KNOWLEDGE

Is what makes experts? IDBI Federal is focused on the life insurance business. Perfectly
combining global expertise with local knowledge, IDBI Federal is the Indian life insurance
specialist.

CARING

For the customer IDBI Federal is redefining the life insurance paradigm to focus on the
needs of the customers. The IDBI Federal service process is responsive, personalised humane
and empathetic.

CULTURE

Our in house culture recipe has some of the finest ingredients going into its making. Some
of the more prominent aspects of our culture are started below:

1. Customer comes first


2. Do it right the first time
3. Bias for result oriented action
4. Financial strength and discipline
5. Clarity of purpose
6. International quality standards
7. Inclusive meritocracy
8. Learning opportunities
9. Fun at work

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PRODUCTS OFFERED

IDBI Federal Childsurance Savings Protection Insurance Plan: A savings plan designed
to help you ensure that your childs future financial needs are fulfilled. This plan is designed
to give you guaranteed annual payouts to aid the crucial milestones in your childs life.
Whats more, this plan also provides financial protection to your childs future by ensuring
that the plan continues even in your absence.

IDBI Federal Incomesurance Guaranteed Money Back Insurance Plan: At IDBI Federal,
we understand this need and bring to you IDBI Federal Incomesurance Guaranteed Money
Back Insurance Plan (referred to as Incomesurance hence). This plan gives you a real
guarantee - what you see is what you get!

IDBI Federal Lifesurance Savings Insurance Plan: A fixed term non-linked participating
endowment plan that provides you with the twin benefits of long-term savings and life cover.
With IDBI Federal Lifesurance Savings Insurance Plan (referred to as Lifesurance hence),
your small investments will grow to big savings that will help you realise the dreams that you
have for yourself and your family. This plan also offers you the benefit of life cover that will
provide financial security to your family in your absence.

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1.2.2 Competitive Status

There are currently, a total of 24 life insurance companies in India. Of these, Life Insurance
Corporation of India (LIC) is the only public sector insurance company. All others are private
insurance companies. Many of these are joint ventures between public/private sector banks
and national/international insurance-financial companies.

Private life insurance companies in India got access to the life insurance sector in the year
2000. Most private players have tied up with international insurance giants for their life
insurance foray.

Formed in 2008 IDBI Federal Life Insurance is a joint venture between IDBI Bank, Federal
Bank and Ageas a European Insurance Company. With a partnered network of 2137 branches
over the country the company offers a wide range of capital management solution,protection
and retirement to the corporate customers as well as individual. The bank also offers
ingenious technological solution to its customers. To be eligible for IDBI Federal Life
Insurance one should have a minimum age limit of 18 years to maximum age limit of 55
years. The company has a record of maximum grievances over a short period of time and
provide a claim settlement ratio of 84.79% for a year.

CHART - 2

Market share of major companies

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COMPETITORS OF IDBI FEDERAL LIFE INSURANCE

1. Life Insurance Corporation of India

2. Metlife India Life Insurance

3. ICICI Prudential Life Insurance

4. Bajaj Allianz Life

5. Max New York Life Insurance

6. Sahara Life Insurance

7. Tata AIG Life

8. HDFC Standard Life

9. Birla Sunlife

10. Kotak Life Insurance

11. SBI Life Insurance

12. Reliance Life Insurance Company Limited - Formerly known as AMP Sanmar LIC

13. ING Vysya Life Insurance

14. Shriram Life Insurance

15. Bharti AXA Life Insurance Co Ltd

16. Future Generali Life Insurance Co Ltd

17. IDBI Fortis Life Insurance

18. AEGON Religare Life Insurance

19. DLF Pramerica Life Insurance

20. CANARA HSBC Oriental Bank of Commerce LIFE INSURANCE

21. India First Life insurance company limited

22. Star Union Dia-ichi Life Insurance Co. Ltd

23. Aviva Life Insurance

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1.2.3 SWOT Analysis of the Organization

Strength:

* Alliance between IDBI and Federal Bank giving a strong brand backing.

* Huge basket of product range which are suitable to all age and income groups.

* Superior customer service.

* Strong and well spread network of qualified intermediaries and sales person.

Weakness:

* Lack of awareness about insurance among people.

* Less penetration in rural areas.

* Low customer confidence on private players.

* Low brand awareness due to lack of advertisement.

Opportunities:

* Fast growing economy and increasing per capita income in India.

* Growing rural and semi-urban markets.

* Insurable population.

* Inflow of managerial and financial expertise from the foreign company.

Threats:

* Changing government regulations and financial crisis like recessions.

* Increase in insurance frauds.

* Stiff competition in the market.

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1.3 About the Topic
The term "Marketing-Mix" is a business tool used in marketing and by marketers. It refers to
the set of actions, or tactics, that a company uses to promote its brand or product in the
market. The 7Ps make up a typical marketing mix - Product, Price, Place, Promotion,
People, Process and Physical Distribution. It is still used today to make important decisions
that lead to the execution of a marketing plan. The various approaches that are used have
evolved over time, especially with the increased use of technology. However, nowadays, the
marketing mix increasingly includes several other Ps like Packaging, Positioning, People and
even Politics as vital mix elements.

It's simple! You just need to create a product that a particular group of people want, put it on
sale some place that those same people visit regularly, and price it at a level which matches
the value they feel they get out of it; and do all that at a time they want to buy. Then you've
got it made!

There's a lot of truth in this idea. However, a lot of hard work needs to go into finding out
what customers want, and identifying where they do their shopping. Then you need to figure
out how to produce the item at a price that represents value to them, and get it all to come
together at the critical time.

But if you get just one element wrong, it can spell disaster. You could be left promoting a car
with amazing fuel-economy in a country where fuel is very cheap; or publishing a textbook
after the start of the new school year, or selling an item at a price that's too high or too low
to attract the people you're targeting.

The marketing mix is a good place to start when you are thinking through your plans for a
product or service, and it helps you avoid these kinds of mistakes.

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MARKETING MIX IN INSURANCE INDUSTRY

The marketing mix is the combination of marketing activities that an organisation engages in
so as to best meet the needs of its targeted market. The Insurance business deals in selling
services and therefore due weight age in the formation of marketing mix for the Insurance
business is needed. The marketing mix includes sub-mixes of the 7 Ps of marketing i.e. the
product, its price, place, promotion, people, process & physical attraction. The above
mentioned 7 Ps can be used for marketing of Insurance products, in the following manner:

1. PRODUCT:

A product means what we produce. If we produce goods, it means tangible product and when
we produce or generate services, it means intangible service product. A product is both what
a seller has to sell and a buyer has to buy. Thus, an Insurance company sells services and
therefore services are their product.

In India, the Life Insurance Corporation of India (LIC) and the General Insurance
Corporation (GIC) are the two leading companies offering insurance services to the users.
Apart from offering life insurance policies, they also offer underwriting and consulting
services.

When a person or an organisation buys an Insurance policy from the insurance company, he
not only buys a policy, but along with it the assistance and advice of the agent, the prestige of
the insurance company and the facilities of claims and compensation.

It is natural that the users expect a reasonable return for their investment and the insurance
companies want to maximize their profitability. Hence, while deciding the product portfolio
or the product-mix, the services or the schemes should be motivational. The Group Insurance
scheme is required to be promoted, the Crop Insurance is required to be expanded and the
new schemes and policies for the villagers or the rural population are to be included.

The Life Insurance Corporation has intensified efforts to promote urban savings, but as far as
rural savings are concerned, it is not that impressive. The introduction of Rural Career Agents
Scheme has been found instrumental in inducing the rural prospects but the process is at
infant stage and requires more professional excellence. The policy makers are required to
activate the efforts. It would be prudent that the LIC is allowed to pursue a policy of direct
investment for rural development.

Investment in Government securities should be stopped and the investment should be


channelized in private sector for maximizing profits. In short, the formulation of product-mix
should be in the face of innovative product strategy.

2. PRICING:

In the insurance business the pricing decisions are concerned with:

The premium charged against the policies,

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Interest charged for defaulting the payment of premium and credit facility, and

Commission charged for underwriting and consultancy activities.

With a view of influencing the target market or prospects the formulation of pricing strategy
becomes significant. In a developing country like India where the disposable income in the
hands of prospects is low, the pricing decision also governs the transformation of potential
policyholders into actual policyholders.

The strategies may be high or low pricing keeping in view the level or standard of customers
or the policyholders.

The pricing in insurance is in the form of premium rates. The three main factors used for
determining the premium rates under a life insurance plan are mortality, expense and interest.
The premium rates are revised if there are any significant changes in any of these factors.

Mortality (deaths in a particular area): When deciding upon the pricing strategy the average
rate of mortality is one of the main considerations. In a country like South Africa the threat to
life is very important as it is played by host of diseases.

Expenses: The cost of processing, commission to agents, reinsurance companies as well as


registration are all incorporated into the cost of instalments and premium sum and forms the
integral part of the pricing strategy.

Interest: The rate of interest is one of the major factors which determine peoples
willingness to invest in insurance. People would not be willing to put their funds to invest in
insurance business if the interest rates provided by the banks or other financial instruments
are much greater than the perceived returns from the insurance premiums.

3. PLACE:

This component of the marketing mix is related to two important facets

i) Managing the insurance personnel, and

ii) Locating a branch.

The management of agents and insurance personnel is found significant with the viewpoint of
maintaining the norms for offering the services. This is also to process the services to the end
user in such a way that a gap between the services- promised and services offered is
bridged over. In a majority of the service generating organizations, such a gap is found
existent which has been instrumental in making worse the image problem.

The transformation of potential policyholders to the actual policyholders is a difficult task


that depends upon the professional excellence of the personnel. The agents and the rural
career agents acting as a link, lack professionalism. The front-line staff and the branch
managers also are found not assigning due weight age to the degeneration process. The
insurance personnel if not managed properly would make all efforts insensitive. Even if the

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policy makers make provision for the quality upgradation, the promised services hardly reach
to the end users.

It is also essential that they have rural orientation and are well aware of the lifestyles of the
prospects or users. They are required to be given adequate incentives to show their
excellence. While recruiting agents, the branch managers need to prefer local persons and
provide them training and conduct seminars. In addition to the agents, the front-line staffs
also need an intensive training programme to focus mainly on behavioural management.

Another important dimension to the Place Mix is related to the location of the insurance
branches. While locating branches, the branch manager needs to consider a number of
factors, such as smooth accessibility, availability of infrastructural facilities and the
management of branch offices and premises. In addition it is also significant to provide safety
measures and also factors like office furnishing, civic amenities and facilities, parking
facilities and interior office decoration should be given proper attention.

Thus the place management of insurance branch offices needs a new vision, distinct approach
and an innovative style. This is essential to make the work place conducive, attractive and
proactive for the generation of efficiency among employees. The branch managers need
professional excellence to make place decisions productive.

4. PROMOTION:

The insurance services depend on effective promotional measures. In a country like India, the
rate of illiteracy is very high and the rural economy has dominance in the national economy.
It is essential to have both personal and impersonal promotion strategies. In promoting
insurance business, the agents and the rural career agents play an important role. Due
attention should be given in selecting the promotional tools for agents and rural career agents
and even for the branch managers and front line staff. They also have to be given proper
training in order to create impulse buying.

Advertising and Publicity, organisation of conferences and seminars, incentive to


policyholders are impersonal communication. Arranging Kirtans, exhibitions, participation in
fairs and festivals, rural wall paintings and publicity drive through the mobile publicity van
units would be effective in creating the impulse buying and the rural prospects would be
easily transformed into actual policyholders.

5. PEOPLE:

Understanding the customer better allows designing appropriate products. Being a service
industry which involves a high level of people interaction, it is very important to use this
resource efficiently in order to satisfy customers. Training, development and strong
relationships with intermediaries are the key areas to be kept under consideration. Training
the employees, use of IT for efficiency, both at the staff and agent level, is one of the
important areas to look into.

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6. PROCESS:

The process should be customer friendly in insurance industry. The speed and accuracy of
payment is of great importance. The processing method should be easy and convenient to the
customers. Instalment schemes should be streamlined to cater to the ever growing demands of
the customers. IT & Data Warehousing will smoothen the process flow.

IT will help in servicing large no. of customers efficiently and bring down overheads.
Technology can either complement or supplement the channels of distribution cost
effectively. It can also help to improve customer service levels. The use of data warehousing
management and mining will help to find out the profitability and potential of various
customers product segments.

7. PHYSICAL DISTRIBUTION:

Distribution is a key determinant of success for all insurance companies. Today, the
nationalized insurers have a large reach and presence in India. Building a distribution
network is very expensive and time consuming. If the insurers are willing to take advantage
of Indias large population and reach a profitable mass of customers, then new distribution
avenues and alliances will be necessary.

Initially insurance was looked upon as a complex product with a high advice and service
component. Buyers prefer a face-to-face interaction and they place a high premium on brand
names and reliability. As the awareness increases, the product becomes simpler and they
become off-the-shelf commodity products. Today, various intermediaries, not necessarily
insurance companies, are selling insurance. For example, in UK, retailer like Marks &
Spencer sells insurance products.

The financial services industries have successfully used remote distribution channels such as
telephone or internet so as to reach more customers, avoid intermediaries, bring down
overheads and increase profitability. A good example is UK insurer Direct Line. It relied on
telephone sales and low pricing. Today, it is one of the largest motor insurance operators.

Technology will not replace a distribution network though it will offer advantages like better
customer service. Finance companies and banks can emerge as an attractive distribution
channel for insurance in India. In Netherlands, financial services firms provide an entire
range of products including bank accounts, motor, home and life insurance and pensions. In
France, half of the life insurance sales are made through banks.

In India also, banks hope to maximize expensive existing networks by selling a range of
products. It is anticipated that rather than formal ownership arrangements, a loose network of
alliance between insurers and banks will emerge, popularly known as bancassurance.

Another innovative distribution channel that could be used are the non-financial
organisations. For an example, insurance for consumer items like fridge and TV can be
offered at the point of sale.

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CHAPTER-2
RESEARCH
METHODOLOGY

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2.1 OBJECTIVES OF THE STUDY
The various objectives in doing this study are as follows:

To find how effectively advertisements influence a person to buy the life insurance
products.
The find whether insurance companys like IDBI federal needs brand ambassador to
reach the customer effectively.
Identifying the role of advertisements for life insurance products
To measure the satisfaction level of the customers.
To know the efficiency and purity of products.
To know how the company tackles its competitors actions.
To find out the reasons for dissatisfaction of the customers.

2.2 SCOPE OF THE STUDY


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 consumer behaviour we need to refer to all that which forms part
of consumer behaviour. Consumer 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. 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
consumer behaviour. Here, we shall dwell on these constituents of the framework only briefly
as they are explained in detail in the following units.

2.3 PURPOSE OF THE STUDY


IDBI Federal life insurance co ltd is a joint venture company between three financial
companies IDBI Bank, federal Bank and European Insurer Ageas. With effective utilization
of digital marketing tools IDBI federal life insurance are able to reach potential customers.
IDBI in-house technology for customer inquiries and query resolution are deeply entrenched
in terms of processes and call to action with respective customer. Though such technologies
for the customer retention are prevailed there are some drawbacks in it. Premium collection
of the insurance company fell down by 34% during April December 2015. I wanted to know
the relinquishment level of IDBI federal life insurance corporation limited and the ways that
could make the customer retain.

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2.4 METHODOLOGY

2.4.1 TYPE OF RESEARCH

This research is Quantitative research. Quantitative research typically uses surveys and
questionnaires to obtain information that will help to understand the needs of individuals
about certain topics. When the questions are administered by a researcher, the survey is called
a structured interview and when the questions are administered by the respondent, the survey
is referred to as a questionnaire. So in this Questionnaire is used for this Research.

2.4.2 RESEARCH DESIGN

The method applied in descriptive research is cross sectional studies field work and survey.
My study concerned with the specific prediction of distribution of insurance policy.

2.4.3 SOURCES OF DATA COLLECTION

Primary Data

Primary data are those which are collected fresh and for the first time and thus happen to
beoriginal in chapters. I have collected my data through phone calling and through directcom
munication with respondents in one form or another or through personal interviews.

Secondary Data

Secondary data are those data which are being already collected by someone else and which
have already been passed through the statistical process. I have collected my published date
form of the companies and Internet and the books, magazines and newspapers.

2.4.4 SAMPLE DESIGN AND SAMPLE SIZE

Sampling Area

My working area was some parts of North East Delhi. I have collected my data in these areas.
As we know that those person will invest in insurance sector who is salaries or professional. I
have targeted those people who age is equal or more than 25-50 years.

Sampling Unit

Sampling units are the persons, who have purchased the insurance plan in Delhi (North East
Delhi).

Sample Size

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Number of people surveyed. Generally large Sample more reliable result than small sample.
The sample Consist of 100 respondents.

2.4.5 TOOL OF PRIMARY DATA COLLECTION

I have collected my data form field survey, internet, through phone calling and questionnaire.
As I was doing the work of meeting the persons and explaining them about the
different insurance plans of the IDBI Federal Life Insurance and other companies,
people were filling my questionnaire.

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CHAPTER-3
FINDINGS
AND
DATA ANALYSIS

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DATA ANALYSIS

Respondent Profile: -

Respondent profile has been analyzed: -

1. OCCUPATION

S. No. Particulars Response


A Businessman 45
B Professional 35
C Student 15
D Housewife 5
Total Respondents 100

TABLE 3.1

CHART 3.1

INTERPRETATION:

In this chart, we can see that the major respondents are from business and
professional sector of the society. Out of 100 respondents there are 45% respondents are from
business sector, 35% respondents are from professionals, 15% are students and 5% are
housewives.

Most of the businessmen are aware from the insurance policy and they know the value of
insurance in their life rather than profession, students and housewives.

2. Do you have Insurance? If yes of which company?


S. No. Particular Response
A Yes 88
B No 12
Total Respondents 100

TABLE 3.2

22
INTERPRETATION:

In this chart, out of 100 respondents 88% people have insurance policy and 12% people are
not interested in it.

CHART 3.2

Which Company?

S. No. Particulars Response


LIFE INSURANCE
A 52
COMPANY
ICICI Prudential Life
B 12
Insurance Co. Limited
HDFC standard life
C 16
insurance Ltd
Reliance General Insurance
D 8
Co. Limited
Non- insurance policy
E 12
holders
Total Respondents 100

TABLE 3.3

INTERPRETATION:

Out of 100 respondents around 26% respondents are aware about the brand IDBI Federal life
insurance which is below average. About 74% are totally aware about the brand.

The price of the policy of IDBI Federal is higher than other companies. That is why 74% of
respondents are taken insurance policy from other companies.

23
3. Awareness of IDBI Life Insurance Company?

S. No. Particulars Response


A Print Media 25
B Electronic Media 30
C Agents 35
D Others 10
Total Respondents 100

TABLE 3.4

CHART 3.3

INTERPRETATION:

There are many media through which advertising of IDBI Federal Life Insurance appears.
Among 100 respondents 15 give all correct option while other not aware of all advertising
media.

24
4. Do you know about Unit Linked Insurance Plans (ULIP)?

S. No. Particulars Response


A Yes 60
B No 40
Total Respondents 100

TABLE 3.5

CHART 3.4

INTERPRETATION:

Out of 100 respondents there were 60 respondents that think about investment while 40 were
not think to invest in insurance. That show highly opportunity for insurance industry.

ULIPS are ideal for those investors who wish to avail the benefit of market linked growth
without actually participating in the stock market, with the added benefit of risk-cover.

25
5. Which factor attract you more to invest in IDBI Federal Life Insurance

Honesty Trust Leadership Service Quality Scheme

S. No. Response
A Honesty 29
B Leadership 20
C Quality service 26
D Trust 20
E Scheme 5
Total Respondents 100

TABLE - 3.6

CHART 3.5

INTERPRETATION:

Out of 100 respondents results show that 29% respondents consider IDBI Federal Life
Insurance as honest brand which provide quality service to its customers. As well as
leadership in marketing is also one of the factors considered by investor to invest in IDBI
Federal.

26
6. Main consideration that a customer looks at while purchasing an
Insurance policy?

S. No. Particulars Response


A Tax 10
B Saving 29
C Protection 53
D Pension 3
E Investment 5
Total Respondents 100

TABLE 3.7

CHART 3.6

INTERPRETATION:

Out of 100 respondents there 53 respondents that think it secure life from risks that is real
fact of insurance while others also right answers. Among all 5 options is right and there are
large amount of were aware about insurance.

Hence IDBI Federal should increase the number of ads taking into consideration the above
mentioned reasons not ignoring any of them. This is critical because it has to take them into
consideration when they plan for an ad and request an agency to design the ad.

27
7. What a respondent see while purchasing Insurance from the company?

S. No. Particulars Percentage


Standing and goodwill of the
A 35
company
Product range and services of
B 17
the company
Advertisement being released
C by the company 13

Possession of companys
D policy by his relatives and 10
friends
Returns of bonus declared by
E the company 25

Total Respondents 100

TABLE 3.8

CHART 3.7

INTERPRETATION:

Out of 100 respondents of above analysis, we can say that people prefer the companies those
have very highly goodwill in the market. And apart from this while purchasing they also use
to give more weight age to return also.

In these times of economic uncertainty, almost every business is experiencing a downturn.


Not surprisingly, the only businesses that are still increasing their profits are the ones which
have a longstanding goodwill in business.

28
8. Plan that a respondent prefers to buy?

S. No. Particulars Percentage


A Protection Plan 47
B Investment Plan 19
C Children plan 24
D Pension plan 10
Total Respondents 100

TABLE - 3.9

CHART 3.8

INTERPRETATION:

Out of 100 respondents, the IDBI Federal dealing with first three options. IDBI Federal Life
Insurance Co. only provides first three products.

47% people take insurance policy for their and family protection, while 19% of people take
as investment purpose. The chart shows there were 46 who aware of all four products of IDBI
Federal Group while 54 were unaware.

29
9. Customers expectations from Life Insurance Companies?

S. No. Particulars Percentage


A Innovative products 5
B Attractive rider 2
C Reasonable premium 47
D Better customer service 24
E High risk coverage 22
Total Respondents 100

TABLE 3.10

CHART 3.9

INTERPRETATION:

Out of 100 respondents of above analysis, Return on investment (ROI) is the benefit to the
investor resulting from an investment of some resource. A high ROI means the investment
gains compare favourably to investment cost. As a performance measure, ROI is used to
evaluate the efficiency of an investment or to compare the efficiency of a number of different
investments. In purely economic terms, it is one way of considering profits in relation
to capital invested.

We can say that people expect better customer service from the insurance companies &
reasonable premium on their investment. People mainly go for the plan which will provide
him sufficient returns by giving reasonable premium.

30
FINDINGS
After analysis it is found that,

1. Television for entertainment and gaining information. So it is the best media for
promotion.
2. People dont give more importance for the advertisements while compared to brand,
tax benefit, death benefit, security and low premium.
3. It is found that people are least bothered about the celebrity endorsements.
4. The message and creativity is important for insurance product.
5. The promotional efforts and word of mouth is most influencing while compared to
internet.
6. Advertisements play a major role in influencing a person to buy an insurance policy.
7. Insurance companies dont need a brand ambassador to endorse the product.

After the analysis it is found that advertisements help the insurance companies to reach the
end users easily. But still the advertisements must be more clear and creative because there is
heavy competition in the market. The companys must use other promotion strategies like
conducting more events and experience, publicity etc. that would help in reaching the end
users effectively.

31
CHAPTER-4
LIMITATIONS
OF
THE STUDY

32
LIMITATIONS OF THE STUDY

1. The scope of the project is limited to conceptual and marketing aspects of Life
Insurance Companies and doesnt include Claim Settlement and the underwriting part
of the operations which are equally important aspect of learning.

2. Project is limited to IDBI Federal Life Insurance. Priority Circle branch, Delhi, which
is branch dedicated to High Net-worth Individual .It excludes the analysis of low
premium paying segment of the people.

3. The major limitation was in terms of collecting the right information from the various
insurance players, as the insurance players resist in revealing their marketing
strategies, etc.

4. Lack of knowledge about the insurance plans is a barrier during conversation withcust
omers of the local market.

33
CHAPTER-5
CONCLUSION
AND
RECOMMENDATON

34
CONCLUSION
Insurance sector was opened for private players with the starting of the 20th century, after
economic reforms in 1991, economy was liberalized. Since then there has been a rampant and
dynamic growth in the field of insurance. The insurance sector has intensified and companies
are formulating survival strategies due to immense competition in a de-tariff scenario. This
study was focussed on the role and impact of advertisement in the promotional strategies of
various products adopted by Insurance sectors. The study reveals the advertisements are the
major strategy that helps the insurance companies to promote their products.

On the basis of my study, I conclude that, both the companies are providing very good
facilities to their customers. IDBI Federal Life Insurance is the one that is providing wavier
of premium to its customer in case of maturity and in case of death of the life assured,
whereas HDFC standard life insurance company is not providing this facility to its
customers. But due to some reasons the market share of the HDFC standard life insurance
company is more than IDBI Federal may be because of brand image and reliability.

Both the companies have same lock in period i.e. 3 years. Surrender charges of these
companies are different from each other. On maturity, both the companies provide the
different amount with reference to market conditions. Charges taken to manage the fund are
different in both the companies.

RECOMMENDATION
Advertisement should be done on television and especially Posters and Banners. This
will greatly help in raising awareness level.

IDBI Federal Life Insurance Company should show more commitment with the
customers.

Private companies give better services to the customers as compared to public


companies.

The IDBI Federal Life Insurance Company should create good relations and
communication.

IDBI Federal Life Insurance Company should collaborate to spread awareness


regarding the benefits of insurance plans provided by the other companies.

Agents have got maximum influence on customers. They are the one who introduces
the prospect to different policies. So agents should be given full-fledged training and
the training should be strict

35
APPENDIX

36
BIBLIOGRAPHY:

Ashwathapa K . (2010). Production And Operation Management.Edition 2nd Delhi:


Himalaya Publication. Pg. 258

Prof. Sandhir Sharma & Prof. Gautam Bansal (2009).Edition 3rd Principle Of
Management. New Delhi: Surya Publication. Pg. 144

Google Retrieved August 25, 2017, from www.google.com/marketing mix

IDBI Federal. Retrieved August 20, 2017, from www.idbi federal.com

Kothari C.R. (2003). Research Methodology.Edition 9th New Delhi: Wishwa Prakashan,
New Delhi.

Sarma Sarmistha. (2008). Marketing Research & Business Statistics.Edition 3rd New
Delhi: Sun India publications.

Scribd Retrieved September 2, 2017, from www.scribd.com

37
QUESTIONNAIRE
AGE:

SEX:

( ) Mal ( ) Female

OCCUPATION:

ANNUAL INCOME:

( ) Up to 1.5 lakh p.a ( ) 1.5 lakh-3 lakh p.a

( ) 3 lakh-5 lakh p.a ( ) 5 lakh or above p.a

1. Have you ever heard about the company IDBI Federal life insurance in the insurance
sector?

( ) Yes ( ) No

2. If yes, then mention the source from where you have heard?

( ) TV ad ( ) Newspaper/Magazine

( ) Internet ( ) Personal E-mail/ SMS

( ) Word of mouth ( ) From IDBI Federals salesperson

( ) Others

3. Do you plan to invest in any insurance policy in the near future?

( ) Yes ( ) No

4. If yes what options do you have in your mind?

( ) IDBI FEDRAL ( ) LIC

( ) SBI LIFE INSURANCE ( ) HDFC Life INSURANCE

( ) ICICI PRUDENTIAL ( ) Others

5. Reasons behind taking an insurance policy?

( ) Risk Coverage ( ) Investment purpose

( ) Pension schemes ( ) Tax Benefit

( ) Any other

38
6. Which of the following IDBI Federal product have you heard of?

( ) Incomesurance ( ) Termsurance

( ) Lifesurance ( ) Wealthsurance

( ) Childsurance

7. Which factors attract you more to invest in IDBI Federal Life Insurance?

( ) Honesty ( ) Leadership

( ) Quality Service ( ) Trust

( ) Scheme

8. Does your company provide you with insurance?

( ) Yes ( ) No

9. Which mode of advertisement attracts you most?

( ) Newspaper ( ) Television

( ) magazine ( ) Online advertisements

( ) Hoardings/posters ( ) Others

10. How often did you see IDBI Federal advertisement in Television in last week?

()0 ( ) 1-3

( ) 4-7 ( ) More than 7

11. How did you describe the advertisement? (If you have seen any advertisement of IDBI
Federal, then only answer this question)

( ) Convincing ( ) Just for the purpose of sale

( ) Building relationship between company & consumer

( ) satisfying your needs

39