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CHAPTER 1

INTRODUCTOIN
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INTRODUCTION TO THE STUDY

Everyone is exposed to various risks. Future is very uncertain, but there is way to protect
ones family and make ones childrens future safe. Life Insurance companies help us to
ensure that our familys future is not just secure but also prosperous.

Life Insurance is particularly important if you are the sole breadwinner for your family.
The loss of you and your income could devastate your family. Life insurance will ensure
that if anything happens to you, your loved ones will be able to manage financially.

This study titled Study of Consumers Perception about Life Insurance Policies enables
the Life Insurance Companies to understand how consumers perception differs from
person to person. How a consumer selects, organizes and interprets the service quality and
the product quality of different Life Insurance Policies, offered by various Life Insurance
Companies.

Insurance is a tool by which fatalities of a small number are compensated out of funds
(premium payment) collected from plenteous. Insurance companies pay back for financial
losses arising out of occurrence of insured events e.g. in personal accident policy death
due to accident, in fire policy the insured events are fire and other allied perils like riot and
strike, explosion etc. hence insurance safeguard against uncertainties. It provides financial
recompense for losses suffered due to incident of unanticipated events, insured with in
policy of insurance. Moreover, through a number of acts of parliament, specific types of
insurance are legally enforced in our country e.g. third party insurance under motor
vehicles Act, public liability insurance for handlers of hazardous substances under
environment protection Act. Etc.
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WHAT IS INSURANCE

It is a commonly acknowledged phenomenon that there are countless risks in every sphere
of life .for property, there are fire risk; for shipment of goods. There are perils of sea; for
human life there are risk of death or disability; and so on .the chances of occurrences of
the events causing losses are quite uncertain because these may or may not take place.
Therefore, with this view in mind, people facing common risks come together and make
their small contribution to the common fund. While it may not be possible to tell in
advance, which person will suffer the losses, it is possible to work out how many persons
on an average out of the group, may suffer losses. When risk occurs, the loss is made good
out of the common fund .in this way each and every one shares the risk .in fact they share
the loss by payment of premium, which is calculated on the likelihood of loss .in olden
time, the contribution make the above-stated notion of insurance
DEFINITION OF INSURANCE
Insurance has been defined to be that in, which a sum of money as a premium is paid by
the insured in consideration of the insurers bearings the risk of paying a large sum upon a
given contingency. The insurance thus is a contract whereby:

a. Certain sum, termed as premium, is charged in consideration,

b. Against the said consideration, a large amount is guaranteed to be paid by
the insurer who received the premium,
c. The compensation will be made in certain definite sum, i.e., the loss or the
policy amount which ever may be, and
d. The payment is made only upon a contingency

More specifically, insurance may be defined as a contact between two parties, wherein one
party (the insurer) agrees to pay to the other party (the insured) or the beneficiary, a
certain sum upon a given contingency (the risk) against which insurance is required.
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TYPES OF INSURANCE

Insurance occupies an important place in the modern world because of the risk, which can
be insured, in number and extent owing to the growing complexity of present day
economic system. The different type of insurance have come about by practice within
insurance companies, and by the influence of legislation controlling the transacting of
insurance business, broadly, insurance may be classified into the following categories:

1. Classification from business point of view

a) Life insurance, and
b) General insurance
2. Classification on the basis of nature of insurance

a) Life insurance
b) Fire insurance
c) Marine insurance
d) Social insurance, and
e) Miscellaneous insurance

3. Classification from risk point of view

a) Personal insurance
b) Property insurance
c) Liability insurance
d) Fidelity general insurance
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THE IMPORTANCE OF INSURANCE

Insurance benefits society by allowing individuals to share the risks faced by many
people. But it also serves many other important economic and societal functions. Because
insurance is available and affordable, banks can make loans with the assurance that the
loans collateral (property that can be taken as payment if a loan goes unpaid) is covered
against damage. This increased availability of credit helps people buy homes and cars.
Insurance also provides the capital that communities need to quickly rebuild and recover
economically from natural disasters, such as tornadoes or hurricanes.

Insurance itself has become a significant economic force in most industrialized countries.
Employers buy insurance to cover their employees against work-related injuries and
health problems. Businesses also insure their property, including technology used in
production, against damage and theft. Because it makes business operations safer,
insurance encourages businesses to make economic transactions, which benefits the
economies of countries. In addition, millions of people work for insurance companies and
related businesses. In 1996 more than 2.4 million people worked in the insurance industry
in the United States and Canada. Insurance as an investment that offers a lot more in terms
of returns, risk cover & as also that tax concessions & added bonuses

Not all effects of insurance are positive ones. The possibility of earning insurance
payments motivates some people to attempt to cause damage or losses. Without the
possibility of collecting insurance benefits, for instance, no one would think of arson, the
willful destruction of property by fire, as a potential source of money.
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THE INSURANCE INDUSTRY TODAY

Since the 1970s, the insurance business has grown dramatically and undergone
tremendous changes. As a result of the deregulation of financial services businesses
including insurance, banking, and securities tradingthe roles, products, and services of
these formerly distinct businesses have become blurred. For instance, citizens in the U.S.
state of California voted in 1988 to allow banks to sell insurance in that state. In Canada,
banks may also soon be allowed to sell insurance.

Advances in communications technology have also allowed traditionally distinct financial

businesses to keep instantaneous track of developments in other businesses and compete
for some of the same customers. Some insurance companies now offer deposit accounts
and mortgages. In the United States, life insurance companies now sell more pension plans
and other asset management services than they do conventional life insurance.

Developments in computer technology that have given insurance providers the ability to
quickly access and process information have allowed them to custom-design policies to fit
the needs of individual customers. But the increasing complexity of policies has also made
some aspects of buying and selling insurance more difficult.

In addition, improvements in geological and meteorological technology have the potential

to change the way property insurers calculate risks of damage. For example, as scientists
improve their abilities to predict severe weather patterns, such as hurricanes, and
geological disturbances, such as earthquakes, insurers may change how they provide
protection against losses from such events
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EVOLUTION OF INSURANCE IN INDIA

The marine insurance is the oldest form of insurance. If we trace Indian history there are
evidence that marine insurance was practiced here about three thousand years ago. The
code of Manu indicates that there was the practice of marine insurance carried out by the
traders in India with those of Srilanka, Egypt and Greece .it is wonderful to see that
Indians had even anticipated the doctrine of average and contribution. Fright was fixed
according to season and was then very much at the mercy of the wind and other elements.
Travelers by sea and land were very much exposed to the risk of losing their vessels and
merchandise because of piracy on open seas and highway robbery of caravans was very
common. The practice of insurance was very common during the rule of Akbar to
Aurangzeb, but the nature and coverage of the insurance in this period is not well known.
It was the British insurer who introduced general insurance in India in the modern form.
The Britishers opened general insurance in India around the year 1700 .the first company
known as the sun insurance office was set up in Calcutta in the year 1710. This was
followed by several insurance companies like London assurance and royal exchange
assurance (1720), Phoenix Assurance Company (1782). Etc. General insurance business in
the country was nationalized with effect from 1st January 1973 by the General Insurance
Business (Nationalization) Act, 1972. More than 100 non-life insurance companies
including branches of foreign companies operating within the country were amalgamated
and grouped into four companies, viz., the National Insurance Company Ltd., the New
India Assurance Company Ltd., the Oriental Insurance Company Ltd., and the United
India Insurance Company Ltd. with head offices at Calcutta, Bombay, New Delhi and
Madras, respectively.
Life insurance in the current form came in India from united kingdom with the
establishment of a British firm, oriental life assurance company in 1818 followed by
Bombay life assurance company in 1823, the madras equitable life insurance society in
1829 and oriental life assurance company in 1874.prior to 1871, Indian lives were treated
as sub standard and charged an extra premium of 15% to 20%. Bombay mutual life
assurance society, an Indian insurer that came in to existence in 1871, was the first to
cover Indian lives at normal rates. The Indian insurance company Act 1923 was enacted
inter alia, to enable the government to collect statistical information about life and non-
life insurance business transacted in India by Indian and foreign insurer, including the
provident insurance societies.
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EVOLUTION OF INSURANCE ORGANIZATION

With a view to serve the society, the insurance organizations have been developed in
different forms with innovation of insurance practice for social welfare and development;
some of these forms are outlined here.

a) Self-insurance
The arrangement in which an individual or concern sets up a private fund to meet the
future risk. If some losses happened in the future the firm meets the loss out of the fund.
While it may be called self insurance it is not a single matter of fact, insurance at all
because there is no hedge, no shifting, or distributing the burden of risk among larger
Persons. It is merely a provision to meeting the unforeseen event. Here the insured
become the insurer for the particular risk. But it can be effectively worked only when there
is wide distribution of risks subjected the same hazard.

b) Partnership
A partnership firm may also carry on the insurance business for the sake of profit. Since it
is not an entity distinct from the persons comprising it, the personal liability of partners in
respect to the partnership debts is unlimited. In case of huge loss the partners may have to
pay from their own personal funds and it will not be profitable to them to starts insurance
business .in the early period before the advent of joint stock companies many insurance
undertakings were partnership firms or unincorporated companies

c) Joint stock companies

The joint stock companies are those, which are organized by the shareholders who
subscribe the necessary capital to start the business. These are formed for earning profits
for the stockholders who are the real owners of the companies. The management of a
company is entrusted to a board of directors who is elected by the shareholders from
amongst themselves. The company can operate insurance business and policyholders
have nothing to do with the management of the concern. But in life insurance it is the
practice to share certain portion of profit among the certain policyholders.
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d) Mutual fund companies

The mutual fund companies are co- operative association formed for the purpose of
effecting insurance on the property of its members. The policyholders are themselves the
shareholders of the companies each member is insured as well as insured. They have
power to participate in management and in the profit sharing to the full extent. Whenever
the income is more than the expenses and claims, it is accumulated I the form of saving
and is entitled in reducing the rate of premium. Since the insured are insurers also, they
always try to reduce the management expenses and to keep the business at sound level.

e) Co-operative insurance organizations

Cooperative insurance organizations are those concerns, which are incorporated and
registered under Indian cooperative societies Act. The concerns are also called co
operative insurance societies these societies like mutual fund companies are non profit
organization .the aim is to provide insurance protection to its members at the lowest
reasonable net cost .the Indian insurance Act. 1938, has provided special provisions for
the co-operative insurance societies, but after nationalization the societies have ceased to
exist.

f) Lloyds Association

Lloyds association is one of the greatest insurance institutions in the world. Taking its
name from the coffee house Lloyd where underwriters assembled to transact business and
pick-up news. The organization traces its origins to the latter part of the seventeenth
century .so it is the oldest insurance organization in existing form in the world. In
1871,Lloyds Act was passed incorporating the members of the association into a single
corporate body with perpetual succession and a corporate seal .the powers of Lloyds
corporation were extended from the business of marine insurance to the other insurance
and guarantee business. The Lloyds Association also publishes, Lloyds list and register of
shipping for the information of insuring public and the insurers

g) State Insurance

The government of a nation, some times, owns the insurance and runs the business for the
benefit of the public. The sate insurance is defined as that insurance which is under public
sector. In Brazil, Japan and Mexico, the insurance are largely nationalized. Previously, the
state undertook only those insurances, which were regarded as vital for the national
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INSURANCE SECTOR REFORMS

Having looked at the insurance sector, the efforts made by the government to make the
industry more dynamic and customer friendly. To begin with, the Malhotra committee was
set up with the objective of suggesting changes that would achieve the much required
dynamism.

The Malhotra Committee Report

In 1993, Malhotra Committee, headed by former Finance Secretary and RBI Governor R.
N. Malhotra, was formed to evaluate the Indian insurance industry and recommend its
future direction. In 1994, the committee submitted the report and gave the following
recommendations:

Structure
Government stake in the insurance Companies to be brought down to 50% Government
should take over the holdings of GIC and its subsidiaries so that these subsidiaries can act
as independent corporations
All the insurance companies should be given greater freedom to operate

Competition
Private Companies with a minimum paid up capital of Rs.1bn should be allowed to enter
the industry
No Company should deal in both Life and General Insurance through a single entity
Foreign companies may be allowed to enter the industry in collaboration with the
domestic companies.
Postal Life Insurance should be allowed to operate in the rural market.
Only one State Level Life Insurance Company should be allowed to operate in each stat
Regulatory Body
The Insurance Act should be changed.
An Insurance Regulatory body should be set up.
Controller of Insurance (Currently a part from the Finance Ministry)
Investments
Mandatory Investments of LIC Life Fund in government securities to be reduced from
75% to 50%.
GIC and its subsidiaries are not to hold more than 5% in any company (There current
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holdings to be brought down to this level over a period of time).

Customer Service
LIC should pay interest on delays in payments beyond 30 days.
Insurance companies must be encouraged to set up unit linked pension plans.
Computerization of operations and updating of technology to be carried out in the
insurance industry.
Overall, the committee strongly felt that in order to improve the customer services and
increase the coverage of the insurance industry should be opened up to competition.
But at the same time, the committee felt the need to exercise caution as any failure on the
part of new players could ruin the public confidence in the industry

Few Life Insurance policies are:

Whole life policies - Cover the insured for life. The insured does not receive money while
he is alive; the nominee receives the sum assured plus bonus upon death of the insured.

Endowment policies - Cover the insured for a specific period. The insured receives
money on survival of the term and is not covered thereafter.

Money back policies - The nominee receives money immediately on death of the insured.
On survival the insured receives money at regular intervals during the term. These policies
cost more than endowment with profit policies.

Annuities / Children's policies - The nominee receives a guaranteed amount of money at

a pre-determined time and not immediately on death of the insured. On survival the
insured receives money at the same pre-determined time. These policies are best suited for
planning children's future education and marriage costs.

Pension schemes - are policies that provide benefits to the insured only upon retirement. If
the insured dies during the term of the policy, his nominee would receive the benefits
either as a lump sum or as a pension every month. Since a single policy cannot meet all
the insurance objectives, one should have a portfolio of policies covering all the needs

BACKGROUND OF THE STUDY

Life Insurance is a contract for payment of a sum of money to the person assured on the
happening of the event insured against. Usually the insurance contract provides for the
payment of an amount on the date of maturity or at specified dates at periodic intervals or
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at unfortunate death if it occurs earlier. Obviously, there is a price to be paid for this
benefit. Among other things the contracts also provides for the payment of premiums, by
the assured.
Life Insurance is universally acknowledged as a tool to eliminate risk, substitute certainty
for uncertainty and ensure timely aid for the family in the unfortunate event of the death of
the breadwinner. In other words, it is the civilized worlds partial solution to the problems
caused by death. Life insurance helps in two ways dealing with premature death, which
leaves dependent families to fend for themselves and old age without visible means of
support.
The most common types of life insurance are whole life insurance and term life
insurance. Whole life insurance provides a lifetime of protection as long as you pay the
premiums to keep the policy active. They also accrue a cash value and thus offer a savings
component. Term life insurance provides protection only during the term of the policy and
the policies are usually renewable at the end of the term

There are many Life Insurance Companies like

LIFE INSURANCE CORPORATION OF INDIA

BAJAJ ALLIANZ LIFE INSURANCE COMPANY

ICICI PRUDENTIAL LIFE INSURANCE COMPANY

HDFC STANDARD LIFE INSURANCE COMPANY

BIRLA SUN-LIFE INSURANCE COMPANY

ING VYSYA LIFE INSURANCE COMPANY

METLIFE INSURANCE COMPANY

TATA AIG LIFE INSURANCE COMPANY

MAX NEW YORK LIFE INSURANCE COMPANY

OM KOTAK MAHINDRA LIFE INSURANCE COMPANY

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CHAPTER 2

RESEARCH DESIGN
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RESEARCH DESIGN

STATEMENT OF THE PROBLEM

This Study will help us to understand the consumers perception about life insurance
companies. This study will help the companies to understand, how a consumer selects,
organizes and interprets the Quality of service and product offered by life insurance
companies.

SCOPE OF THE STUDY

This study is limited to the consumers within the limit of Bangalore city.
The study will be able to reveal the preferences, needs, perception of the customers
regarding the life insurance products, It also help the insurance companies to know
whether the existing products are really satisfying the customers needs .

NEED FOR THE STUDY

1) The deeper the understanding of consumers needs and perception, the earlier
the product is introduced ahead of competitors, the expected contribution margin will be
greater .Hence the study is very important.
2) Consumer markets and consumer buying behavior can be understood before
sound product and marketing plans are developed
3) This study will help companies to customize the service and product,
according to the consumers need.
4) This study will also help the companies to understand the experience and
expectations of the existing customers.
5) Apart from creating, manufacturing and distribution capabilities for life
insurance products, an in depth study of the consumers, their preferences and demand for
their product is very necessary for setting up an efficient marketing network.
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OBJECTIVE OF THE STUDY

o Ascertain the profile and characteristics of potential buyers.

o To have an insight into the attitudes and behaviors of customers.

o To find out the differences among perceived service and expected service
.
o To produce an executive service report to upgrade service characteristics of
life insurance companies.

o To access the degree of satisfaction of the consumers with their current brand
of Insurance products.

REVIEW OF LITERATURE:
The literature review section critically examine the recent or historically significant
studies, company data or industry reports that acts as a basis for proposed studies to begin
with the research discussion of the related literature and relevant secondary data from a
comprehensive prospective, moving to more specific studies, that are associate with
research problem. Basically the literature should be applied to the study, than the
researcher proposes. The literature may also explain the needs for the proposed work to
appraise the short comings and informational gaps in secondary data sources.
To carry the research work the researcher has gone through a few reports, books, journals
and websites. The details regarding Life Insurance Industry, history, origin and growth of
the industry is also taken from some books, magazines etc. The sources of this information
are as follows:
Catalogues and Broachers from various life insurance companies.
Articles from magazines and news paper.
Information from various websites.
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RESEARCH DESIGN:
A research design is a basic plan, which guides the researcher in the collection and
analysis of data required for practicing the research. Infect the research design is the
conceptual structure where the research is conducted. It constitutes the Blue Print for the
collection, measurement and analysis of the data. The study is carried out to understand
the Consumer Perception about life insurance companies in Bangalore city .For this
study the researcher used exploratory research design. This research covers 50 consumers
in Bangalore city, belonging to various age groups.

SAMPLE DESIGN:
The process of drawing a sample from a large population is called sampling. Population
refers to the total of items about which information is defined. Well-selected samples may
reflect fairly and accurately the characteristics of the population.
Sampling Unit:
The sample unit of this survey was the customers having life insurance policies in
Bangalore city.
Sample Size:
The sample size was 50 customers of different life insurance companies, from the various
parts of the Bangalore city.
Sampling Technique Adopted: Convenient sampling

SOURCES OF DATA:
After identifying and defining the research problem and determining specific information
required to solve the problem the researcher will look for the type and sources of data
which may yield the desired results, while deciding about the method of data collection to
be used for the study, there are two types of data.
Secondary Data:
Secondary data means data that are already available i.e. they refer to the data which have
been collected and analyzed by someone and can save both money and time of the
researcher. Secondary data may be available in the form of company records, trade
publications, libraries etc. Secondary data sources are as follows:
Company Reports Daily Newspaper Standard Textbook Various Websites

Primary Data:
Primary data are those, which are collected for the first time. Primary data is collected by
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framing questionnaires. The questionnaire contained questions, which are both open-
ended and closed-ended. Open-ended questions are questions requiring answers in the
responders own words. Closed-ended questions are those wherein the respondent has to
merely check the appropriate answer from a list of options available. Any doubts raised by
the respondents were clarified to get the perfect answers from the distributors. Open-
ended questions yielded more insightful information, whereas closed-Ended questions
were relatively simple to tabulate and analyze.

FIELD WORK:
An interview-schedule and well-structured questionnaire is administered to the target
respondents to collect primary data (Copy of questionnaire is attached in the appendix)
Open and close-ended questions are used in the questionnaire. The orders of the questions
are in such a manner that they begin with simple questions and lead on the questions that
needed more involvement from respondents.The secondary data are collected from
periodicals, magazines, journals and Internet.

OPERATIONAL DEFINITIONS OF THE STUDY

Marketing:
Marketing is a social and managerial process by which individuals and group obtain what
they need and want through creating, offering and exchanging products of value with
others

Marketing Management:
Marketing Management is the process of planning and executing the conception, pricing,
promotion and distribution of individual and organizational goals.

Marketing Research:
Marketing research is the systematic and objective search for, and analysis of information
relevant to the identification and solution of any problems in the field of marketing.

Consumer Research:
Consumer research is the methodology used to study consumer behaviour.

Consumer Behaviour:
Consumer behaviour is the study of how individuals make decisions to spend their
available resources [time, money, efforts] on consumption related items
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.
Market Segmentation:
Market segmentation is the process of dividing a market in the distinct subsets of
consumer with common needs or characteristics and selecting one or more segments to
target with distinct marketing mix.

Positioning:
Positioning is the act of designing the companys offering and image so that they occupy a
meaningful and distinct competitive position in the target consumers mind.
Perception:
Perception is the process by which an individual selects, organizes, and interprets
information input to create a meaningful picture of the world. For a marketer to influence
a motivated buyer to buy their products rather than competitors they must be careful to
take the perception process into account while designing their marketing campaigns.
Perception therefore influence what product consumer buys.

Attitude:
An attitude is a person enduring favorable or unfavorable evaluation, emotional feeling,
and action tendencies towards some object or idea.

Attributes:
Attributes are the strengths and weaknesses of a brand that create attitudes and are used by
consumers to choose between brands that are relatively similar or functionally equivalent.

Values:
A value is a concept of the desirable. An internalized standard of evaluation a person
possession. This standard determines or guide an individual evaluation of the many
objects encountered in everyday life.

Brand:
A brand is a name, term, sign, symbol, or design or a combination of them, used to
identify the goods or services of one seller or group of seller and the differentiate them
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LIMITATIONS OF THE STUDY

Although the study was carried out with extreme enthusiasm and careful planning there
are several limitations, which handicapped the research viz.

Time Constraints:
The time stipulated for the project to be completed is less and thus there are chances that
some information might have been left out, however due care is taken to include all the
relevant information needed.

Sample size:
Due to time constraints the sample size was relatively small and would definitely have
been more representative if I had collected information from more respondents
.
Accuracy:
It is difficult to know if all the respondents gave accurate information; some respondents
tend to give misleading information.
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CHAPTER 3

PROFILE OF THE INDUSTRY

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INDUSTRY PROFILE

History and Development of Life Insurance

Life Insurance, in its present form, came to India from the United Kingdom with
establishment of a British firm, Oriental Life Insurance Company in Calcutta in 1818,
followed by Bombay Life Assurance Company in 1823, the Madras Equitable Life
Insurance society in 1829 and Oriental Government security Assurance Company in 1874.
Prior to 1871, Indian Lives were treated as sub-standard and charged an extra premium of
15% to 20%. Bombay Mutual Life Assurance Society, a Indian insurer which came into
existence in 1871 was the first to cover Indian lives at normal rates.

The Indian life Assurance Companies Act, 1912 was the first statutory measure to regulate
life insurance business. Later, in 1928, the Indian Insurance Companies Act was enacted,
to enable the government to collect statistical information about both life and non-life
insurance business transacted in India by Indian and foreign insurers, including the
provident insurance societies. Comprehensive arrangements were, however, brought into
effect with the enactment of the Insurance Act, 1938.

By 1956, 154 Indian insurers, 16 non-Indian insurers and 15 provident societies were
carrying online insurance business in India. On 19th January 1956, the management of the
entire life insurance business of 229 Indian insurers and provident insurance societies and
the Indian life insurance business of 16 non-Indian Life insurance companies then
operating in India, was taken over by the central Government and then nationalized on 1 st
September 1956 when the Life Insurance Corporation came into existence.

With largest number of life insurance policies in force in the world, Insurance happens to
be a mega opportunity in India. Its a business growing at the rate of 15-20 per cent
annually and presently is of the order of Rs 450 billion. Together with banking services, it
adds about 7 per cent to the countrys GDP. Gross premium collection is nearly 2 per cent
of GDP and funds available with LIC for investments are 8 per cent of GDP.
Yet, nearly 80 per cent of Indian population is without life insurance cover while health
insurance and non-life insurance continues to be below international standards. And this
part of the population is also subject to weak social security and pension systems with
hardly any old age income security. This itself is an indicator that growth potential for the
insurance sector is immense.
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A well-developed and evolved insurance sector is needed for economic development as it

provides long-term funds for infrastructure development and at the same time strengthens
the risk taking ability. It is estimated that over the next ten years India would require
investments of the order of one trillion US dollar. The Insurance sector, to some extent,
can enable investments in infrastructure development to sustain economic growth of the
country.

INSURANCE AND BUSINESS ENVIRONMENT

Insurance is considered as one of the important segment of the economy for its growth and
development. This industry provides long term funds which are essential for the growth
and development of the nation .so the growth of insurance industry largely depends up on
the environment in which they exists. Here I would like to mention about Indian business
environment and their impact on insurance sector. There are two type of environment
which affect the business one is environment which is internal to the organization (internal
environment) and the other one which is external to the organization (external
environment). Internal environment includes management, technology, competitors,
employees, shareholders, policyholders, marketing intermediary etc. The external
environment of insurance business has been classified in four parts, namely legal,
economic, financial, and commercial. let us discus them in detail by taking one by one.
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THE INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY

(IRDA)
The Malhotra Committee felt the need to provide greater autonomy to insurance
companies in order to improve their performance and enable them to act as independent
companies with economic motives. For this purpose, it had proposed setting up an
independent regulatory body- The Insurance Regulatory and Development Authority.
Based on the Malhotra committee report in April 2000 IRDA was incorporated. Since
being set up as an independent statutory body the IRDA has put in a framework of
globally compatible regulations. Section 14 of the IRDA Act 1999, lays the duties, power
and functions of the authority .the authority shall have the duty to regulate, promote and
ensure orderly growth of the insurance business and reinsurance business.

Reforms and Implications

The liberalizations of the Indian insurance sector has been the subject of much heated
debate for some years. The sector is finally set to open up to private competition. The
Insurance Regulatory and Development Authority bill will clear the way for private entry
into insurance, as the government is keen to invite private sector participation into
insurance. To address those concerns, the bill requires direct insurers to have a minimum
paid-up capital of Rest. 1 billion, to invest policyholders funds only in India; and to
restrict international companies to a minority equity holding of 26 percent in any new
company. Indian Promoters will also have to dilute their equity holding to 26 percent over
a 10-year period.
Over the past three year, around 30 companies have expressed interest in entering the
sector and many foreign and Indian companies have arranged alliances. Whether the
insurer is old or new, private or public, expanding the market will present challenges. A
number of foreign Insurance Companies have set up representative offices in India and
have also tied up with various asset management companies. Some of the Indian
companies, which have tied up with International partners, are.
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Indian Partners International Partners

Bombay Dyeing General Accident, UK
Tata American Int. Group, US
Dabur Group Liberty Mutual Fund, US
ICICI Prudential, UK
Sundaram Finance Winterthur Insurance, Switzerland
Hindustan Times Commercial Union, UK
Ranbaxy Cigna, US
HDFC Standard Life, UK
CK Birla Group Zurich Insurance, Switzerland
DCM Shriram Royal Sun Alliance, UK
Godrej J Rothschild , UK
M A Chidambaram Met Life
Cholamandalam Guardian Royal Exchange, UK
SK Modi Group Legal and General, Australia
20th Century Finance Canada Life
Alpic Finance Allianz Holding, Germany
Vysya Bank ING
Kotak Mahindra Chubb, US

The likely impact of opening up of Indias insurance sector is that private players may
swamp the market. International insurers often derive a significant part of their business
from multinational operations. Multinational insurers are indeed keenly interested as;
perhaps there home markets are saturated while emerging countries have low insurance
penetration and high growth rates
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TYPE OF LIFE INSURANCE POLICIES

Whole life insurance

Whole life is a form of permanent insurance, with guaranteed rates and guaranteed cash
values. It is the least flexible form of permanent insurance.

Universal life insurance

Universal life is similar to whole life, except that you can change the death benefit (the
money paid to the beneficiary when the insured person dies), the amount of premiums and
how often you pay the premiums.

Variable life insurance

Variable life insurance is the riskiest form of permanent insurance, but it can also give you
the best return for your money. Essentially, the life insurance company will invest your
insurance premiums for you. If the investments do well, the death benefit and cash value
of the policy go up. If they do poorly, they go down. It's a little like putting your savings
into the stock market.

Group life insurance

Many companies allow their employees to buy group life insurance through the company.
Usually, you can get very good rates for this insurance but you have to give the insurance
up when you stop working there. For that reason, group insurance can be a good way to
buy a little extra life insurance, but it does not make sense to make it your main policy.

There are a number of policies for specific insurance needs. Some of these include:

1. Family income life insurance.

This is a decreasing term policy that provides a stated income for a fixed period of time, if
the insured person dies during the term of coverage. These payments continue until the
end of a time period specified when the policy is purchased.

2. Family insurance.
A whole life policy that insures all the members of an immediate family -- husband, wife
and children. Usually the coverage is sold in units per person, with the primary wage-
earner insured for the greatest amount.

3. Senior life insurance.

 26

Also known as graded death benefit plans, they provide for a graded amount to be paid to
the beneficiary. For example, in each of the first three to five years after the insured dies,
the death benefit slowly increases. After that period, the entire death benefit is paid to the
beneficiary. This might be appropriate if the beneficiary is not able to handle a large
amount of money soon after the death, but would be in a better position to handle it a few
years later.

4. Juvenile insurance.
This is life insurance on a child. Coverage is paid for by an adult, usually the parents or
guardians. Such policies are not considered traditional life insurance because the child is
not producing an income that needs to be protected. However, by buying the policy when
the child is young, the parents are able to lock in an extremely low premium rate and
allow many more years of tax-deferred cash value buildup

Credit life insurance.

This insurance is designed to pay off the balance of a loan if you die before you have
repaid it. Credit life insurance is available for many kinds of loans including student loans,
auto loans, farm equipment loans, furniture and other personal loans including credit
cards. Credit life insurance can be purchased by an individual. Usually it is sold by
financial institutions making loans, like banks, to borrowers at the time they take out the
loan. If a borrower dies, the proceeds of the policy repay the loan directly to the lender or
creditor.

5. Mortgage insurance

This decreasing term coverage is designed to pay off the unpaid balance of a mortgage if
you die before the mortgage is paid off. Premiums are generally level throughout the term
of the policy. The policy is usually independent of the mortgage, meaning that the
financial institution granting the mortgage is separate from the insurance company issuing
the policy. The proceeds of the policy are paid to the beneficiaries of the policy, not the
mortgage company. The beneficiary is not required to use the proceeds to pay off the
mortgage

6. Annuity
An annuity is a form of insurance that enables you to save for your retirement. Basically,
you give the insurance company money for a certain period of time, and then after you
retire they will pay you a certain amount of money every year until you die.
 27

PROFILE OF THE ORGANISATIONS: LIFE INSURANCE

CORPORATION OF INDIA

Life Insurance Corporation of India was formed in September 1956 by passing LIC Act,
1956 in Indian parliament. On the nationalization of the life insurance in 1956, the
premium rating of Oriental Government security life Assurance company were adopted by
LIC with a reduction of 5% of the tabular premium or Re. 1 per thousand sum assured,
whichever was less. This reduction was made in anticipation of economies of scale that
would emerge on the merger of different insurers in a single entity.

Life Insurance Corporation Of India - there are many things to consider as Life Insurance
Corporation of India offers various insurance products which are very complex, but
underlying this complexity is a simple fact. The building blocks for all Life Insurance
Corporation of India are (1) investment return; (2) mortality experience; and (3) expense
management; for your Life Insurance Corporation Of India
Objectives of LIC
Spread Life Insurance much more widely and in particular to the rural areas and
to the socially and economically backward classes with a view to reaching all insurable
persons in the country and providing them adequate financial cover against death at a
reasonable cost.
Maximize mobilization of people's savings by making insurance-linked savings
adequately attractive.
Bear in mind, in the investment of funds, the primary obligation to its
policyholders, whose money it holds in trust, without losing sight of the interest of the
community as a whole; the funds to be deployed to the best advantage of the investors as
well as the community as a whole, keeping in view national priorities and obligations of
attractive return.
Conduct business with utmost economy and with the full realization that the
moneys belong to the policyholders.
Act as trustees of the insured public in their individual and collective capacities.
 28

Meet the various life insurance needs of the community that would arise in the
changing social and economic environment.
Involve all people working in the Corporation to the best of their capability in
furthering the interests of the insured public by providing efficient service with courtesy.
Promote amongst all agents and employees of the Corporation a sense of participation,
pride and job satisfaction through discharge of their duties with dedication towards
achievement of Corporate Objective
VISION
"A trans-nationally competitive financial conglomerate of significance to societies and
Pride of India

MISSION
"Explore and enhance the quality of life of people through financial security by providing
products and services of aspired attributes with competitive returns, and by rendering
resources for economic development

Various policies offered by life insurance corporation of India are

1) Whole Life Schemes
Whole life with profit
Limited payment whole life
Single Premium whole life
Convertible whole life plan
2) Endowment Schemes
Endowment plan with profit
Limited payment Endowment
Jeevan Mitra (Double Cover)
Jeevan Mitra (Triple cover)
Bhavishya Jeevan
Jeevan Anand
New Jana Raksha

3) Term Assurance Plan

Anmol Jeevan
2 Year Term Assurance
 29

Covertible Term
New Bima Kiran

4) Plan for needs of Children

Komal Jeevan
Jeevan Sukanya
Jeevan Kishore
Jeevan Balya
Jeevan Chaya
Marriage/educational annuity
Deffered Endowment

5) Periodic Money Back Plan

Jeevan Samridhi
Jeevan Rekha Plan
Money Back Plan
Jeevan Surabhi
Jeevan bharathi

6) Medical benefits linked insurance

Asha Deep II
Jeevan Asha II

7) For benefits to Handicapped

Jeevan Aadhar
Jeevan Vishwas

8) Plans to cover housing loans

Mortagage redemption
9) Joint life plan
Jeevan sathi
10) Investment plan
Bima Nivesh Triple cover
11) Capital market linked plan
Bima plus.
 30

Description of the LIC Policies Whole life plan:

Whole life plan are those policies which life assured has to pay premiums till his death the
sum assured will be paid to his dependent generally 70 years is assumed as a maximum
age for payment of premium.
Under the whole life premium are payable throughout the life time of the life assured and
this is the cheapest form of policy.
This plan is ideally suited to person who wants maximum provision for his family at
minimum cost. It also meets the needs for funds required for funeral, religious rites and
ceremonies to be performed, tax liabilities if any and expenses connected with the last
sickness and hospital charges etc.

Endowment Assured Plan:

Endowment plans are not covering the risk for whole life of the life assured. The term of
risk cover under this plan is as per the need of life assured.
Endowment assurance plan are the most popular. They are eminently
Suited to meet it one policy the twin demands of old age provision and risk cover for
family. The sum assured is payable on maturity or at death if earlier. Thus an Endowment
Assurance Policy provides for retirement and also serves as a means of family provisions.

Term Assurance
Under the term assurance the risk cover is generally for specific short term. Such term
assurance is maximum for 2 years. Generally this type of assurance is useful for air
traveling.

Money Back Plans

Under this plan specific percentage of sum assured will be backed to the life assured after
specific period of time. This plan is of special interest to person who besides desiring to
provide for their own old age and family feels the need for lump sum benefits at periodical
intervals. Under these policies part of the sum assured is paid to the life assured in
installments at selected intervals.
Children Plan
Under the children plans the risk on the life of the children where covered generally this
type of plans are helpful in education and marriage of the children.
Jeevan Balya:
This plan is designed to enable a parent to provide for the child by payment of a very low
 31

premium an Endowment Assurance Policy, the risk under which will commence from the
vesting date. In addition, Premium benefit and income benefit are included as additional
benefit by payment of appropriate additional premium during the deferment period.
This policy shall be cancelled in case the life assured shall die before the deferred dates
and in such an event provided the policy is then in full force in for a reduced cash option.
Marriage Endowment/ educational annual plan
Every father desires to see that his children are well settled in life through sound
education, leading to good jobs and happy marriage. These needs arise at ages which can
be approximately anticipated. Say when the children are between 18 to 25 year of age.
This plan provides for a sum assured to keep aside to meet marriage educational expenses
of children. Under this plan the S A along with the vested bonus shall be payable at the
end of the selected term either is lump sum or in ten half yearly installment, at the option
of the life assured nominee beneficiary.
Jeevan Mitra
This plan provides additional insurance cover equal to the sum assured in the even of
death during the term of policy so that the total insurance cover in the event of death is
twice the basic sum assured. i.e. The basic sum assured is doubled and the accrued bonus
is also paid.
 32

ING VYSYA LIFE INSURANCE

ING Vysya Life Insurance Company Private Limited entered the private life insurance
industry in India in September 2001, and in a short span of 18 months has established
itself as a distinctive life insurance brand with an innovative, attractive and customer
friendly product portfolio and a professional advisor force. It also distributes products in
close cooperation with its sister company ING Vysya Bank through Bank assurance.
Currently, it has over 3000 advisors working from 22 locations across the country and
over 300 employees.
ING Vysya Life Insurance Company is headquartered at Bangalore and has established a
strong presence in the cities of Delhi, Mumbai, Kolkata, Hyderabad and Chennai. In
addition ING Vysya Life operates in Vizag, Vijaywada, Mangalore, Mysore, Pune,
Nagpur, Chandigarh, Ludhiana and Jaipur.
ING Vysya Life has pioneered product innovations in the Indian life insurance market
with customer-oriented cash bonus endowment and money back products. (Reassuring
Life and Maximising Life), the first anticipated whole life product (Fulfilling Life) and the
first Term/Critical Illness combination product (Conquering Life). Conquering Life is an
innovative term and critical illness product that has been launched recently.
Conquering Life provides affordable term cover and critical illness coverage for 10 critical
illnesses of upto 50% of the Sum Assured. ING Vysya Life declared a bonus in September
2002 of 5% (cash bonus - payable immediately) and 4% (reversionary bonus - payable at
the end of the term).

The company has over 25,000 customers at the end of 2002 and has achieved a first
premium income of Rs. 17 crores in 2002.
ING Vysya Life Insurance is a joint venture between ING Insurance International BV a
part of ING Group, the world's largest life insurance company (Fortune Global 500, 2002),
ING Vysya Bank, with 1.5 million customers and over 400 outlets and GMR
Technologies and Industries Limited, part of GMR Group also based in Bangalore and
involved in the field of power generation, infrastructural development and several other
businesses.
ING Vysya Life has a paid up capital of Rs.140 crores and an authorised capital of Rs. 200
crores.
 33

Life insurance products offered by the company are:

1) Protection plan
Critical illness plan
Endowment plan
2) Savings plan
Endowment plan
Child protection plan
Money back plan
3) Investment Plan

Whole life plan

Limited payment endowment plan

Anticipated whole life plan

 34

TATA-AIG Life Insurance

Tata-AIG Life Insurance Company is a joint venture between the Tata Group and
American International Group Inc (AIG), the leading US-based international insurance
and financial services organization and the largest underwriter of commercial and
industrial insurance in America. Its member companies write a wide range of commercial,
personal and life insurance products through a variety of distribution channels in
approximately 130 countries and jurisdictions throughout the world. AIGs global
businesses also include financial services and asset management, including aircraft
leasing, financial products, trading and market making, consumer finance, institutional,
retail and direct investment fund asset management, real estate investment management,
and retirement savings products. TATA holds 76% shares and AIG holds 24% shares in
the total share capital of TATA AIG.

Tata AIG Life Insurance Company Ltd. "Tata AIG Life" offers a broad array of life
insurance products to individuals, associations and businesses of all sizes, with a wide
variety of additional coverage to ensure our customers can find an insurance product to
meet their needs. Tata-AIG Life Insurance and Tata-AIG General Insurance, both joint
ventures between the Tata Group and American International Group (AIG), provide life
and general insurance policies and solutions to companies, institutions and
organizations across India. It is licensed to operation on 12th February 2001. TATA-AIG
life is spread over28 branch offices and 39 training offices across the country.

Tata-AIG Life offers a broad array of life insurance products and solutions to corporate
and other organizations. These products and solutions have various value- added benefits
and options that deliver flexibility and choice to the company's clients. Tata AIG Life has
completed its 4th year of operations and registered a Total Premium of Rs. 497 Crores for
the period April 2004 - March 2005.
The company has some 20 life insurance products with over 250 product combinations,
including endowment to term, pension to group life and credit life, money back to whole
life plans, etc. Tata-AIG Life uses different distribution channels, including direct
marketing, brokerage and banc assurance, to service client groups in 19 Indian cities.

Tata-AIG Life is the first private insurer in India to offer group retirement schemes.
Additionally, the company's group management division focuses on providing employee
 35

benefit solutions.

PRODUCTS

The product range of TATA-AIG Life is wide-spread across different segments.

Some of the products are mentioned below.

Maha life
Invest Assure
Health Protector
Star Kid
Shubh Life
Nirvana
Nirvana Plus
Money Saver Plan
Health First
Assure Golden Life
Assure 10, 20, 30 years Security and Growth
Assure Educate at 18, 21
Assure Career Builder Plan at 27
Assure Golden Years Plan
Assure 21 Money Saver Plan
Assure 1/5/10/15/20/25 years/ to age lifelines
TROP
 36

ICICI PRUDENTIAL LIFE INSURANCE COMPANY

ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a
premier financial powerhouse, and prudential plc, a leading international financial services
group headquartered in the United Kingdom. ICICI Prudential was amongst the first
private sector insurance companies to begin operations in December 2000 after receiving
approval from Insurance Regulatory Development Authority (IRDA).

ICICI Prudentials equity base stands at Rs. 925 crore with ICICI Bank and Prudential plc
holding 74% and 26% stake respectively. In the quarter ended June 30, 2005 , the
company garnered Rs 335 crore of new business premium for a total sum assured of Rs
2,619 crore and wrote 111,522 policies. For the past four years, ICICI Prudential has
retained its position as the No. 1 private life insurer in the country, with a wide range of
flexible products that meet the needs of the Indian customer at every step in life.

Products offered by ICICI Prudential are

1. Savings Plan

1) Smart kid

2) Life Time

3) Save n Protect

4) Cash Bak

2. Protection plan

Life Guard
Extra Protection Through

Riders

3. Retirement Plans

Forever Life
 37

Life link pension

Life time pension

Reassure

4. Investment Plans

Assure Invest

Life Link

5. Group plans

Group Superannuation

Group Gratuity

Group Term Assurance

 38

OM KOTAK MAHINDRA LIFE INSURANCE COMPANY

Established in 1985 as Kotak Capital Management Finance promoted by Uday Kotak the
company has come a long way since its entry into corporate finance. It has dabbled in
leasing, auto finance, hire purchase, investment banking, consumer finance, broking etc.
The company got its name Kotak Mahindra as industrialists Harish Mahindra and Anand
Mahindra picked a stake in the company. Kotak Mahindra is today one of India's leading
Financial Institutions

Old Mutual plc is an international financial services group based in London with
expanding operations in life assurance, asset management, banking and general insurance.
Old Mutual is listed on the London Stock Exchange (where it is included on the FTSE 100
Index) and also on the South African, Namibian, Malawi and Zimbabwe stock exchanges.
It has 156 years of experience in the life insurance business. The Products offered by the
Company are

Individual Plan

Kotak Endowment Plan

Kotak Term Plan
Kotak Retirement Income Plan
Kotak Child Advantage Plan
Kotak Preferred Term Plan
Kotak Capital Multiplier Plan
Kotak Safe Investment Plan
Riders
Exclusions Under Riders

Group Plan

Kotak Term Group plan Kotak Gratuity Group plan

Kotak Credit Term Group plan Riders

Exclusions Under Riders

Rural

Kotak Gramina Bima Yojana

 39

MET LIFE INSURANCE COMPANY

MetLife
For almost 137 years, Metropolitan Life Insurance Company has been insuring the lives of
the people who depend on them. Their success is based on their long history of social
responsibility, strong leadership, sound investments, and innovative products and services.
MetLife Begins
The origins of Metropolitan Life Insurance Company (MetLife) go back to 1863, when a
group of New York City businessmen raised $100,000 to found the National Union Life
and
Helping and Healing People
In 1909, MetLife Vice President Haley Fiske announced that "insurance, not merely as a
business proposition, but as a social program" would be the future policy of the company
Supporting Country and Community
Over the years, MetLife has made a difference by supporting urban renewal projects and
community financing. The company's social commitment and its commitment to the
security of its policyholders have proven to be good business.
MetLife Today In 2001 MetLife was the first insurance company to establish a financial
holding company with a nationally chartered bank.

Products Offered by the company are

1) Whole Life
Met 100 Non par
Met 100 Gold par
Met 100 Platinum par
2) Endowment
Met Gold par
Met Platinum par
Met Junior par
Met junior Non par

3) Money Back
Met Sukh
Met Junior MB
 40

4) Term
Met Mortagage Protector
Met Riders
Accidental death
 41

BIRLA SUN LIFE INSURANCE COMANY LIMITED

Birla Sun Life Financial Services offers a range of financial services for resident Indians
and Non Resident Indians. Brought together by two large, powerful and reputed business
houses, the Aditya Birla Group and Sun Life Financial , it is our aim to offer diverse and
top quality financial services to customers. The Mutual Fund and Insurance companies
provide wealth management and protection products to customers while the Distribution
and Securities companies provide brokerage and trading services for investment in
equities, debt securities, fixed deposits, etc.
Insurance is not about something going wrong. It's often about things going right. One of the
wonders of human nature is that we never believe anything can actually go wrong. Surely, life has
its share of ifs. At Birla Sun Life however, they believe it has its equally pleasant share of buts as
well. Birla Sun Life stand committed to help you realize those happy moments which make a life.
Be it living the same lifestyle in your post retirement days or providing a secure future for your
loved ones, in case something happens to you.
The life insurance products offered by the company are
Individual life
Premium Back Term Plan
Flexi Secure Life Retirement Plan
Single Premium Bond
Birla Sun Life Term Plan
Flexi Life Line Whole Life Plan
Flexi Cash Flow Money back Plan
Group Life
Pro Group Term Insurance
Group Superannuation Plan
Group Gratuity Plan
 42

BAJAJ ALLIANZ LIFE INSURANCE COMPANY LIMITED

Bajaj Allianz life Insurance Company Limited is a joint venture between Bajaj Auto
Limited and Allianz AG of Germany. Both enjoy a reputation of expertise, stability and
strength. Bajaj Allianz General Insurance received the Insurance Regulatory and
Development Authority (IRDA) certificate of Registration (R3) on May 2nd, 2001 to
conduct General Insurance business (including Health Insurance business) in India. The
Company has an authorized and paid up capital of Rs 110 crores. Bajaj Auto holds 74%
and Allianz, AG, holds the remaining 26% Germany.

In its first year of operations, the company has acquired the No. 1 status among the private
non-life insurers. As on 31st March 2003, Bajaj Allianz General Insurance maintained its
leadership position by garnering a premium income of Rs.300 Crores.
Bajaj Allianz also became one of the few companies to make a profit in its first full year
of operations. Bajaj Allianz made a profit after tax of Rs.9.6 crores

Bajaj Allianz today has a network of 42 offices spread across the length and breadth of the
country. From Surat to Siliguri and Jammu to Thiruvananthapuram, all the offices are
interconnected with the Head Office at Pune.

In the first half of the current financial year, 2004-05, Bajaj Allianz garnered a premium
income of Rs. 405 crores, achieving a growth of 84% and registered a 52% growth in Net
profits of Rs.20 Crores over the last year for the same period. In the financial year 2003-
04, the premium earned was Rs.480 Crores, which is a jump of 60% and the profit zoomed
by 125% to Rs. 21.6 Crores
 43

CHAPTER 4

ANALYSIS AND INTERPRETATION

 44

INTRODUCTION TO ANALYSIS:

In order to extract meaningful information from the data them. The analysis can be
conducted by using simple statistical tools like percentages, averages and measures of
dispersion. Alternatively the collected data may be analyzed, the data analysis is carried
out. The data are first edited, coded and tabulated for analyzing by using diagrams, graphs,
charts, pictures etc. Data analysis is the process of planning the data in an ordered form,
combining them with the existing information and extracting from them.

Interpretation is the process of drawing conclusions from the gathered data in the study. In
this research the researcher has analyzed the data using percentages and graphs.

DATA ANALYSIS TOOLS USED:

In this research the data analysis tools used are percentages and graphs. The various
attributes were analyzed separately and the importance to each was calculated on the basis
of the percentage. The rank having the maximum percentage was taken to be preferred
importance to the particular attribute.
After looking at each attribute separately, all the attributes were considered together to
develop a map on the most preferred rank for all the attributes.
 45

TABLE 1

AGE OF RESPONDENTS

SL.NO AGE IN YEARS NUMBER OF PERCENTAGE OF

RESPONDENTS RESPONDENTS

1. 19 28 24 48 %

2. 29 38 13 26 %

3. 39 48 6 12 %

4. 49 58 6 12 %

5. 59 68 0 0%

6. 69 78 1 2%

TOTAL 50 100 %

SOURCE :- SURVEY DATA

INFERENCE: The above table classified the respondents according to their age group.

The majority of the respondents belong to the age group 19 to 28 years with 48% and the

second age group is 29 to 38 years with 26%, followed by 39 to 48 years and 49 to 58

years with 12% each.

 46

GRAPH 1

AGE OF RESPONDENTS

60%

50% 48%

40%

30% 26%

20%
12% 12%
10%
2%
0%
0%
19 - 28 29 - 38 39 - 48 49 - 58 59 - 68 69 - 78
YRS YRS YRS YRS YRS YRS
 47

TABLE 2

DIFFERENCIATION OF THE RESPONDENTS INTO MALE AND FEMALE

TYPES OF NUMBER OF PERCENTAGE OF

RESPONDENTS RESPONDENTS RESPONDENTS

MALE RESPONDENTS 34 68%

FEMALE 16 32%
RESPONDENTS

TOTAL 50 100 %

SOURCE: - SURVEY DATA

INFERENCE: This table helps us to understand that there are more number of male

consumers with 68% market share than the female consumers with 32% Market share.
 48

GRAPH 2

DIFFERENCIATION OF THE RESPONDENTS INTO MALE AND FEMALE

80%

70% 68%

60%

50%

40%
32%
30%

20%

10%

0%
 49

TABLE 3

DIFFERENCIATION OF RESPONDENTS BASED ON THEIR OCCUPATION

SL.NO OCCUPATION NUMBER OF PERCENTAGE

RESPONDENTS OF
RESPONDENTS

1. STUDENTS 2 4%

2. GOVERNMENT 20 40 %
EMPLOYEES

3. PRIVATE 24 48 %
EMPLOYEES

4. HOUSE WIVES 2 4%

5. RETIRED 2 4%
PERSONS

TOTAL 50 100 %

SOURCE :- SURVEY DATA

INFERENCE: It could be inferred that majority of consumers of life insurance policies are

private employees with 48% and Government employees with 40%, followed by students,

house wives and retired persons with 4 % each.

 50

GRAPH 3

DIFFERENCIATION OF RESPONDENTS BASED ON THEIR OCCUPATION

60%

50% 48%

40%
40%

30%

20%

10%
4% 4% 4%

0%
 51

TABLE 4

TABLE SHOWING INCOME GROUP OF RESPONDENTS

SL.NO INCOME GROUP NUMBER OF PERCENTAGE OF

RESPONDENTS RESPONDENTS

1. LESS THAN 5000 5 10 %

2. 5001 10,000 16 32 %

3. 10001 15000 17 34 %

4. 15001 20000 8 16 %

5. 20001 25000 2 4%

6. GREATER THAN 1 2%
30000

7. NIL 1 2%

TOTAL 50 100 %

SOURCE: - SURVEY DATA

INFERENCE: The majority of dominant income group having life insurance policies

belong to the income group of 10,001 to 15,000, which is middle class group. Followed by

the income group of 5,001 to 10,000.

 52

GRAPH 4

GRAPH SHOWING INCOME GROUP OF RESPONDENTS

40%

35%

30%

25%

20%

15%

10%

5%

0%
<5000 5001 - 10001 - 15001 - 20001 - >25000 NIL
1000 15000 20000 25000
 53

TABLE 5

DIFFERENCIATION OF RESPONDENTS ACCORDING TO THE ASSETS

OWNED

SL.NO ASSETS NUMBER OF PERCENTAGE OF

RESPONDENTS RESPONDENTS

1. HOUSE 19 38 %

2. TWO 25 50 %
WHEELER

3. CAR 6 12 %

TOTAL 50 100 %

SOURCE: - SURVEY DATA

INFERENCE: This table helps us to know that most of consumers with life insurance

policies own two wheelers with 50%, 38% of consumers own house and12% of the

consumers own car.

 54

GRAPH 5

DIFFERENCIATION OF RESPONDENTS ACCORDING TO THE ASSETS

OWNED

60%

50%
50%

40% 38%

30%

20%

12%
10%

0%
HOUSE TWO CAR
WHEELER
 55

TABLE 6

MARKET SHARE OF DIFFERENT LIFE INSURANCE COMPANIES

COMPANIES NUMBER OF PERCENTAGE OF

RESPONDENTS RESPONDENTS

LIC 39 78 %

TATA AIG 1 2%

HDFC 3 6%

ICICI 4 8%

MAX NEWYORK 1 2%

KOTAK MAHINDRA 1 2%

ALLIANCE BAJAJ 1 2%

SOURCE: - SURVEY DATA

INFERENCE: This table helps us to understand the market share of different life

insurance companies. LIC has a major share of 78 %, followed by ICICI Prudential with

8% market share, followed by HDFC Standard Life with 6% market share.

 56

GRAPH 6

MARKET SHARE OF DIFFERENT LIFE INSURANCE COMPANIES

90%
78%
80%

70%

60%

50%

40%

30%

20%
6% 8%
10%
2% 2% 2% 2%
0%
 57

TABLE 7

TABLE SHOWING ATTRIBUTES FROM RESPONDENTS

SL.NO ATTRIBUTE RESPONDENTS RANK

1. RETURN ON 17 1
INVESTMENT

2. COMPANY 13 2
REPUTATION

3. PREMIUM 10 3
OUTFLOW

4. SERVICE 7 4
QUALITY

5. PRODUCT 3 5
QUALITY

SOURCE :- SURVEY DATA

INFERENCE: This table shows the strengths and weaknesses of the company, and what

are the important criteria or attributes on which decision making is done. From this table

we can infer that consumers give more importance for Return on investment, secondly

they prefer company reputation, and then premium outflow followed by service quality

and product quality.

 58

GRAPH 7

GRAPH SHOWING ATTRIBUTES FROM RESPONDENTS

18 17

16

14 13

12
10
10

8 7

4 3

0
 59

TABLE 8

FACTORS WHICH INFLUENCED TO SELECT LIFE INSURANCE COMPANY

SL.NO FACTORS RESPONDENTS RANK

1. PERSONAL INTEREST 25 1

2. FAMILY 11 2

3. FRIENDS 6 3

4. AGENTS 5 4

5. ADVERTISEMENT 2 5

6. OTHERS 1 6

SOURCE :- SURVEY DATA

INFERENCE: This table is helpful in knowing which media is best suitable for promoting

a life insurance company. It can be seen that personal factor influences a consumers to

select a life insurance company, followed by family, friends , agents and advertisements.
 60

GRAPH 8

FACTORS WHICH INFLUENCED TO SELECT A LIFE INSURANCE

COMPANY

30

25
25

20

15

11

10

6
5
5
2
1

0
 61

TABLE 9

VALUE OF RESPONDENTS LIFE INSURANCE POLICY

SL.NO AMOUNT NUMBER OF PERCENTAGE OF

RESPONDENTS RESPONDENTS

1. < 10000 0 0%

2. 10000 25000 5 10 %

3. 25000 50000 8 16 %

4. 50000-100000 15 30 %

5. > 100000 22 44 %

SOURCE :- SURVEY DATA

INFERENCE: It can be inferred that majority of consumers buy the life insurance policy

which costs more than Rs. 1,00,000 followed by Rs. 50,000 to Rs.1,00,000, followed by

Rs. 25,000 to Rs. 50,000.

 62

GRAPH 9

VALUE OF RESPONDENTS LIFE INSURANCE POLICY

50%
44%
45%

40%

35%
30%
30%

25%

20%
16%
15%
10%
10%

5%
0%
0%
> 10000 10000 - 25000 - 50000 - > 100000
25000 50000 100000
 63

TABLE 10

RESPONDENTS PREFERENCE TO INVEST THEIR MONEY

NUMBER OF PERCENTAGE OF
RESPONDENTS RESPONDENTS

INSURANCE 24 48 %
COMPANY

BANK 26 52 %

TOTAL 50 100 %

SOURCE :- SURVEY DATA

INFERENCE: From the table it is clear that majority of people (52%) prefer to invest in

Bank and others (48%) prefer to invest in Insurance companies.

 64

GRAPH 10

RESPONDENTS PREFERENCE TO INVEST THEIR MONEY

53%

52%
52%

51%

50%

49%

48%
48%

47%

46%
INSURACE BANK
COMPANY
 65

TABLE 11

SCORES OF DIFFERENT LIFE INSURANCE COMPANIES

COMPANIES SCORES RANK

LIC 345 1

ICICI PRUDENTIAL 211 2

HDFC 194 3

TATA AIG 123 4

ING VYSYA 121 5

BIRLA SUNLIFE 118 6

MET LIFE 90 7

OTHERS 41 8

SOURCE:- SURVEY DATA

INFERENCE: From the table we can rank the life insurance companies, LIC stands first,

followed by ICICI Prudential followed by HDFC Standard life, followed by TATA AIG.
 66

GRAPH 11

SCORES OF DIFFERENT LIFE INSURANCE COMPANIES

9
8
8
7
7
6
6
5
5
4
4
3
3
2
2
1
1

0
 67

CHAPTER 5

FINDINGS, CONCLUSION AND

SUGGESTIONS
 68

FINDINGS

The majority of respondents belonged to the age group of 19 to 28

years which formed 48% followed by age group of 29 to 38 years which formed 26%.

The male consumers capture the Market share with 68%, followed by

the female consumers with 32%.

The majority of the consumers of life insurance companies are private

employees with 48% and Government employees with 40%

The dominant income group having life insurance group belong to the

group of 10001 to 15,000 followed by 5,001 to 10,000.

LIC has a major market share of 78%.

The factors which influenced to select a life insurance company is the

personal factor, followed by family, friends, agents and advertisements.

The value of respondents life insurance policy costs more than 1,

00,000 followed by 50,000 to 1,00,000.

Majority of consumers are satisfied with the service and quality of

products of their life insurance companies.

Majority of consumers (58%) are aware about 5 to 7 life insurance

companies.

LIC stands first followed by ICICI prudential, followed by HDFC

Standard Life.
 69

CONCLUSION
An Insurance policy is an investment oriented plan. As compared to other investment

plans, the investment portfolio of the Insurance Policy functions like a mutual fund and

other investment. It is invested in a portfolio of debt and equity instruments, in conformity

with the announced investment policy. Hence it grows or erodes in line with the

performance of that portfolio.

From this study it reveals that the consumers attitude towards Insurance Policy and

Insurance Company changed a lot. A 5 years before the consumers and the general public

were not interested to take an Insurance Policy but now days there are many options and

choices in front of the customers. They are interested to take high return policies in order

to secure their lives. People are aware of all the benefits and returns of insurance policies.

As a result of this new international and domestic companies are coming to the Indian

Market.

Since there are many players in the Indian Insurance Market the competition level is very

high. So the companies are introducing new schemes. From this it is found that The LIC is

the major market share holder in the insurance field. Even if there are many players in this

field still it is an untapped market. Only a few portion of Indian population is insured.
 70

RECOMMENDATIONS AND SUGGESTIONS

With regard to insurance companies, consumers respond at different rates, depending on

the consumers characteristics. Hence Insurance companies should try to bring their new

product to the attention of potential early adopters.

a) Due to the intense competition in the life insurance market, the life insurance

companies have to adopt better strategies to attract more customers.

b) Keeping the cost, quality and return on investment in tact is necessary in order to

tackle the competition.

c) Life insurance products are taken mainly by middle and higher income group.

Hence they should be regarded as maim targeted income groups. Life insurance products

which are suitable for lower income group should also be released so that the market share

increases.

d) Return on investment, company reputation and premium outflow are most

preferred attributes that are expected by the respondents. Hence greater focus should be

given to these attributes.

e) Private life insurance companies should adopt effective promotional strategies to

increase the awareness level among the consumers.

f) Life insurance companies should ask for their consumer feedback to know

whether the consumers are really satisfied or dissatisfied with the service and product of

the companies. If they are dissatisfied , then the reasons for dissatisfaction should be

found out and should be corrected in future.

g) The LIC brand name has earned a lot of goodwill and enjoys a high brand equity.

As there is intense competition in life insurance market, LIC should work hard to maintain

its top position and offer better service and product.

 71

BIBLIOGRAPHY
 72

BIBLIOGRAPHY
1) Dr. Singh, Avtar, Principles of Insurance Law, S Chand & Sons, Delhi,2003.

2) Leon G. Schiffman, Lestie Lazar Kanwk, Consumer Behaviour, Himalaya

Publishers, Delhi,2004

3) Kotler Philip, Marketing Management, Pearson Education Inc. 11th

Edition.

4) Stanton William J, Etzel Michael J, Walker Bruce J, Fundamentals of

Marketing, McGraw-Hill international, Singapore, 2002

5) Ravi Shankar, Services Marketing, Prentice Hall, 2000.

6) Valarie Azithaml, Marry Jo Bittner, Services of Marketing, Prentice Hall, 2001

7) Rutchnee .T & K.S.Arun Kumar,Consumer preference & buying perception of

ready made silk garments,PGDSM,International center for training & research in tropical

sericulture,

Newspapers:

Economic Times
Business LineWorld Wide Web:

www.lic.com

www.irda.org

www.wikipedia.com
 73

ANNEXURE
 74

QUESTIONNAIRE
A STUDY CONDUCTED TO UNDERSTAND THE CONSUMERS PERCEPTION
ABOUT LIFE INSURANCE POLICIES

1. Name :

2. Age:

3. Address:

3 a. Phone number:

4. Occupation:

5. Monthly income:

<5000 5001-10,000 10,000-15,000

15,001-20000 20,001-25,000 >25,000

Nil

6. Do You Own

House Two Wheeler Car

7. Do you have a Life Insurance Policy with any Life InsuranceCampany?

Yes No

7.a) If yes, name the Company

b) Name the policy which you own

 75

8. What factors do you consider while selecting a life insurance company?

Premium Outflow Company Reputation Service Quality

Product Quality Return on Investment

9. What factors influenced to select a Life Insurance company?

Personal interest Friends Family

Agents Advertisements others

10. What is the value of your life insurance?

>10,000 10,000-25,000 25,000-50,000

50,000-1,00,000 >1,00,000

11. Do you prefer to invest your money in a Insurance company or in a Bank?

Insurance Company Bank

12. Are you satisfied with your current Life Insurance Company?

Yes No

If Yes Why?

If No Why?

13. How do you rate the service offered by your Life Insurance Company?

Excellent Very Good Good Average Poor

 76

14. Would you like to communicate the service offered by your Life Insurance
Company to others?

Yes No

15. How many Life insurance Compannies do you know?

<5 5-7 8-10 >10

16. How do you rate the following Life Insurance Companies?

LIC HDFC
ING VYSYA
MET LIFE INDIA INSURANCE BIRLA SUNLIFE
ICICI Prudential TATA AIG
Others

17. Would You like to continue with the same Life Insurance Company?

Yes No

18. Any suggestions for improving the service offered by life insurance companies

Thank You.