Project Report

Factors affecting customer decision in selecting insurance products & their relative importance in the current market scenario.
PROJECT REPORT
PROJECT DURATION: 16.07.07 to 16.09.07
PROJECT TITLE: Factors affecting customer decision

in selecting insurance products &
their relative importance in the
current market scenario.
PROJECT MENTOR: Ms. Pinky Samantaray
LOCATION: Noida
SUBMITTED BY: Kaushal Kumar (PGP / FW 2006-08)

IIPM NEW DELHI.
ID NO. – D0608FW11146
SUMMER TRAINING (KOTAK) / PROJECT REPORT / PGP / FW 2006 – 08 / IIPM / DEL 1

ACKNOWLEDGEMENT
I would like to express our heartfelt gratitude to Ms. Pinky

Samantaray and Mr. Rajeev Bansal for their invaluable advice
and constant guidance, without which it would have been quite
difficult to accomplish this project.
I sincerely thank Mr. Rakesh kalra Branch head Kotak Life
Insurance Chokhani square Building 6th floor Noida, for
giving me a chance to work on the project of Customer
perception of factors affecting customer decision in selecting
insurance products & their relative importance in the current
market scenario.
And I would also like to thank to IIPM that has given me
chance to work with an organization.
Kaushal Kumar
(IIPM / PGP / FW 2006-08)
(ID. NO. D0608FW11146)

CONTENTS
S.NO. TOPIC P.NO.
Acknowledgements 2
1. Executive Summary 4-7
2. An Overview 8-9
3. Research Methodology 10-12
• Research Objective and Scope
• Research Design
• Sources of Data
• The Sampling process
4. Findings and Analysis 13-15
5. Conclusions 16
6. Recommendations 17
7. Limitations 18
Appendix 19
• Questionnaire 20-21
• Graphs 22-29
Bibliography 30

Executive Summary
Research Objective
To study the factors affecting customer decision in selecting insurance products &
their relative importance in the current market scenario.
Research Design
• Descriptive Research
A systematic collection of the information needed its analysis and findings, as

per our research objective. Our findings are supported by the Graphs.
• Sources of Data
 Primary Data
Primary data are those collected specifically by, or for, the

data users. There was no intervening party to summarize the
original data. We collected the data specifically for the data
users- Kotak Life Insurance Noida.

 Questionnaire Method
It was used in order to get direct responses. The respondents

were questioned directly about their attitudes, opinions, likings,
etc. as such it provided versatility.
We used a structured and disguised type of Questionnaire.
 The Sampling Process
 Sample size
A sample of 50 respondents was taken for our research to

collect primary data.
 Sampling Techniques
My approach was based on the non-probability method. It

was a mix of the following techniques:
1. Convenience Sampling
We chose a sample as per the availability of time,

cost and respondents.

2. Judgment Sampling
I have had a thorough knowledge of the population

under study.
Findings
 The LIC is the most recalled brand of Life Insurance.
 For majority of the users Brand Name and safety are the most important
factors in a Life Insurance.
 Family plays a crucial role for almost half of the respondents for Life
Insurance products. Brand name and word of mouth are the other important
influencers.
 LIC is the market leader in Delhi, followed by Kotak.

Conclusions
 The LIC leads the pack in almost all categories like Brand Recall and
Brand Awareness.
 The immediate competition to the LIC comes from Kotak Life, but still it is
far ahead in terms of Brand Awareness to Kotak Life.
 Services and Safety, especially The Kotak Life is preferred over the entire
Life Insurance Brand in today market. People are well known about the
features and services provided by Kotak Life.
 Enjoy unlimited upside with capital preservation, Choice of five fund

options, ill- health early retirement benefit, tax-free switching to help you
maximize returns and Flexible withdrawals / top-up contributions, increase
the users of the Kotak Life Insurance and it is revolution for Kotak Life.

AN OVERVIEW
Insurance has always been a politically sensitive subject in India. Within less than
10 years of independence, the Indian government nationalized private insurance
companies in 1956 to bring this vital sector under government control to raise much
needed development funds.
Since then, state-owned insurance companies have grown into

monoliths, lumbering and often inefficient but the only
alternative. They have been criticized for their huge
bureaucracies, but still have millions of policy holders as there
is no alternative.
Any attempt to even suggest letting private players into this vital sector has met with
resistance and agitation from the powerful insurance employees unions. The
Narasimha Rao government (1991-96) which unleashed liberal changes in India's
rigid economic structure could not handle this political hot potato. Ironically, it is
the coalition government in power today which has declared its intention of opening
up insurance to the private sector. Ironical because this government is at the mercy
of support from the left groups which have been the most vociferous opponents of
any such move.
No policy initiatives have yet been announced, but the government has already
clarified it will not privatize the existing insurance companies.
But while the decision has been welcomed by the big companies
who were planning to make a foray into this lucrative business,
the move has been criticized by trade unions and even some left
supporters of the government.
In some ways it was inevitable-all segments of the financial sector had been opened

to private players and it was only a matter of time before insurance followed. The
bigger private players claim that opening up insurance will give policy holders
better products and service; the opponents of privatization argue that in a poor
country like India insurance needs to have social objectives and newcomers will not
have that commitment.
Many international players are eyeing the vast potential of the Indian market and
are already making plans to come in. But it will take some time before the intent
translates into policy-the unions are not going to give up without a fight and in that
they will get the support of some elements of the coalition government.
Kotak Mahindra believes in offering its customers a lifetime of value.
Old Mutual is the 37th largest company in the FTSE 100 with a market cap of
approximately $ 20 billion and is listed on the London, Johannesburg and
Stockholm stock exchanges.
But the scenario is quite different in the national capital and therefore I intend to
substantiate this fact with the help of primary research.

RESEARCH METHODOLOGY
# Research Objective
To study the Factors affecting customer decision in selecting insurance products &
their relative importance in the current market scenario.
I also intend to find out the various factors which influence the customership of the
most popular Life Insurance Brand.
# Scope
At the national level Kotak Life, LIC, and HDFC are the top Life Insurance brands
but this is not true for Delhi and therefore my research focuses on Life Insurance
customer in Delhi and NCR area based on a sample size of 50 in Delhi and Noida.
# Research Design
Descriptive Research
It is a systematic collection of the information needed, its analysis and findings as
per the research objectives. Its findings are supported by the statistical tools. It
establishes relationship between variables and gives a complete account of the
strength of there relationship. In descriptive research the data is collected for a
specific purpose and it is designed to describe something for example, the
characteristics of users of a given product. A majority of marketing research and
customer behavior studies are of this type.
Statistical Method

It is the method which uses statistical techniques in order to evaluate and analyze
the findings to study a large number of respondents over a variety of factors. This
method is usually employed when a survey is referred to. The name comes from the
statistical techniques that vary from simple means and percentages to very
sophisticated techniques that require computers to manipulate the data.
# Sources of Data
The marketing research and marketing managers get the information they need
either from sources internal or external to the firm. External sources are of two
types: Primary and Secondary. In my research I used primary data.
Primary Data
Primary data are those collected especially by, or for, the data users. There is no
interviewing party to summarize the original data. As the original data from each
respondent are available they can be re-tabulated or re-analyzed in as many ways as
required.
There are two options available for collection of data either the respondent can be
asked directly or his actions may be observed. The former is referred to as
questionnaire method, while the latter is termed as the observation method. In my
case I used questionnaire method as a research instrument.
Questionnaire Method
• We prepared a list of 9 questions to be asked to the respondents. Each
question in my questionnaire was worded exactly as to be asked and
questions were listed in an established sequence.
• If one wants to know which brand customer uses, what they think of Life
insurance advertisements, why they buy products of brand, the natural

procedure is to ask them. Thus, the questionnaire method was used for data
collection.
• Questionnaire method was used in order to get direct responses. The
respondents were questioned directly about their attitudes, opinions, likings,
etc. It provided me more control over data gathering activities. It records not
only facts but also attitudes and opinions. It also has been very structured,
more reliable and valid using a large number of respondents at the same
time.
• My questionnaire was structured and disguised type having the advantages
that respondents could understand the questions easily and at the same time
did not know what was being measured. This reduced bias in their answers.
The advantages of structure lie in quicker and cheaper interviewing and
easier tabulation of the results.
# The Sampling Process
Sample size and Sampling Techniques

• We selected a sample size of 50 respondents. The techniques used by me
to conduct my research include a mix of convenience sampling and
judgment sampling, a part of the non-probability approach.
Convenience Sampling
We selected a sample as per the availability of time and cost.
Judgment Sampling
We have had enough knowledge of the population under study. Any bias on my part
was minimized by using the judgment of my guide and poll experts.
FINDINGS AND ANALYSIS

1) In my research based on a sample of 50, I found that the brand recall was 23
for LIC, 14 for Kotak, 5 for ICICI, and 8 for Max NY Life insurance.
(Please refer Graph 1: Brand Recall)
2) For 50% respondents brand name was the most important factor while
thinking of selecting Life insurance. While 30%, 16%, and 4% found safety,
service and price as the most important factors, respectively.
(Please refer Graph 2: The most important for you in life insurance)
3) 27 respondents were influenced by the family when they really select a Life
insurance and 10, 10, and 3 were influenced by brand name, word of mouth
and advertisements, respectively.
(Please refer Graph 3: Factors influence you the most)
4) 20 of the respondents go for LIC, 15 for Kotak, 5 for ICICI and 10 for Max
NY.
(Please refer Graph 4: percentage of brand of Life insurance liked most)
5) When the respondents were asked whether they choose any other brand of
life insurance, other than the one they favor to I found that 40% told yes and
60% told No for Life Insurance.
(Please refer Graph 5: other life insurance chosen by the users besides one
they favor).
6) Different features in various Life insurance brands were liked by the

respondents.
a. The users of Kotak life like their safety, services mostly, especially the
Businessman, while the Goodwill and financial planning of LIC were
rated the best in that.

b. It was also noticed that students, Newly married couple and children
rated the Kotak life the best Life insurance brand allover followed by
LIC and Max NY.
c. The LIC and Kotak were liked equally by the respondents as far as its
features and their facilities concerned. There features were rated on a
scale of 1 to 4 accordingly.
7) 27 respondents have been associated for their respective Life insurance

brands for more than 10 years, 10 for 5 years, 4 for 1 year and 8 for more
than 10 years. It clearly shows that customers develop an association /
attachment with their life insurance brands and like stay with it.
(Please refer Graph 7: Duration of users with the current life insurance
brands)
8) Majority of the respondents i.e. 60% were in favor of May be with life
Insurance, they may be change their brand while 10% were not go for other
they stay for the same with their current Life Insurance Brand. And 30%
were sure to go for other like HDFC, Aviva Life Insurance, Barkless and
others.
(Please refer Graph 8: Percentage of switching on other Life Insurance)
9) When respondents were asked to rate various Life Insurance Brands as per
their likings, majority rated LIC as no. 1 brand while Kotak Life was rated
as the 2nd most liked Life Insurance Brand, the Max NY came 3rd and the
ICICI was ranked last. From this we can conclude that LIC is way ahead of
all other Life Insurance Brands and especially with its closest rival Kotak
Life.

(Please refer Graph 9: Rating of the brands of Life insurance as per their
liking)
CONCLUSIONS

1. In Delhi and Noida, LIC is the clear cut leader in the block of life insurances
and Kotak life is the runner up. The LIC leads the pack in almost all the
categories like Brand recall, Brand awareness, Leadership etc.
2. The immediate competition to the LIC comes from the Kotak Life. But we
see the Life Insurance products renew we find that again the LIC group
which Safety and Service features emerge as a leader way ahead of the Kotak
Life group which is new and doing their best.
3. Managers, people having an association with the share market and business
person prefer the more trustable life Brand as LIC.
4. Different people have different way of thinking, preferences, level of
knowledge and understanding and intellect and according they chose
different types of Life Brands products according to Life Insurance Brands.
An average person who like not to go for headache like to choose LIC or
Kotak Life insurance.
RECOMMENDATIONS

 Kotak Life must work upon a strategy to lure the unsatisfied customers of
LIC as there exist a good number of unsatisfied customers.
 Kotak Life Insurance can compete with the LIC only if it keeps on coming up
with new and original ideas like Flexible withdrawals / top-up contributions
instead of following the already set trends.
 There is lot of scope for improvement in the products as investment benefits

of LIC. It must also bring down the number of bold pictures in its dual
benefits of investment as well as insurance which offend the families.
 Max NY can increase their products and can highlight the customers a bit
simple and easily gather their trust in it without compromising on its quality.
LIMITATIONS

1. In some case potential respondents refused to take the time to fill the
questionnaire.
2. Despite a willingness to cooperate, many people were unable to give
accurate information.
3. Many respondents still answer the questions which they cannot answer
correctly because they do not know and have never known the
information.
4. Due to a busy schedule it was really difficult to meet all the respondents
and therefore time was a big constraint.
5. My research remained limited to Delhi and Noida.

APPENDIX
QUESTIONNAIRE
Q1. Which brand of Life Insurance comes to your mind whenever you hear the word

“Life Insurance”?
____________________________________________________________________
Q2. What is most important for you in a Life Insurance?
Brand Servic
Safety Price
name e
Q3. Which factor influence you the most when you buy a Life Insurance?
Brand Famil Word of Advertiseme

Name y mouth nt
Q4. Which brand of Life Insurance do you choose?
LI Kotak ICIC
Max new york
C Life I
Q5. Do you like to choose any other brand of Life Insurance besides the one you favor?
(Please write the name of brand)
Yes No
_______________________________________________________________________
_
Q6. Which features of the Life Insurance do you like the most?
Rate: 1-most important, 2- important, 3- not so important, 4- least important.
Kotak Life LIC ICICI Max New York

Safety
Service
Financial planning
Goodwill
Q7. For how long you have been associated with your current Life Insurance?
More than 10
1 year 5 years 10 years
years
Q8. Would like to prefer any other Life Insurance?
Ye
No May be
s
If yes then which one? ________________________________

Q9. Rate the following brand of Life Insurance as per your liking.
Rate: 1- Best, 2- Good, 3- Fair, 4- Poor.
LIC
Kotak
Life
ICIC
I
Max New York

25
20
15
No. of Respondent
10
T he m o s
16%

Fa
30
25
20
N o . o f R esp o n d en
15t
P e rc e n ta
20
20
18
16
14
12
N o . o f R e s p o n d1 e0 n t
O t h e r L if e In s u r a

D u ra tio n
30
25
20
of Respondant
15
Percen
60%
Rating of the
30
28
25
20
No. of Respondant 15
10
BIBLIOGRAPHY
1. Marketing Research: Boyd and Stasch, 7th edition, AITBS Publishers, Delhi.
2. Google.com Internet.
3. www. Insurancesector.com
4. India 2007, Publications Division, New Delhi.

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Factors affecting customer decision in selecting insurance products & their relative importance in the current market scenario.

PROJECT DURATION: 16.07.07 to 16.09.07

PROJECT TITLE: Factors affecting customer decision

PROJECT MENTOR: Ms. Pinky Samantaray

SUBMITTED BY: Kaushal Kumar (PGP / FW 2006-08)

SUMMER TRAINING (KOTAK) / PROJECT REPORT / PGP / FW 2006 – 08 / IIPM / DEL 1

I would like to express our heartfelt gratitude to Ms. Pinky

SUMMER TRAINING (KOTAK) / PROJECT REPORT / PGP / FW 2006 – 08 / IIPM / DEL 2

S.NO. TOPIC P.NO.

1. Executive Summary 4-7

3. Research Methodology 10-12

• Research Objective and Scope

• The Sampling process

4. Findings and Analysis 13-15

SUMMER TRAINING (KOTAK) / PROJECT REPORT / PGP / FW 2006 – 08 / IIPM / DEL 3

A systematic collection of the information needed its analysis and findings, as

Primary data are those collected specifically by, or for, the

SUMMER TRAINING (KOTAK) / PROJECT REPORT / PGP / FW 2006 – 08 / IIPM / DEL 4

It was used in order to get direct responses. The respondents

 The Sampling Process

A sample of 50 respondents was taken for our research to

My approach was based on the non-probability method. It

We chose a sample as per the availability of time,

SUMMER TRAINING (KOTAK) / PROJECT REPORT / PGP / FW 2006 – 08 / IIPM / DEL 5

I have had a thorough knowledge of the population

 The LIC is the most recalled brand of Life Insurance.

 LIC is the market leader in Delhi, followed by Kotak.

SUMMER TRAINING (KOTAK) / PROJECT REPORT / PGP / FW 2006 – 08 / IIPM / DEL 6

 Enjoy unlimited upside with capital preservation, Choice of five fund

SUMMER TRAINING (KOTAK) / PROJECT REPORT / PGP / FW 2006 – 08 / IIPM / DEL 7

Since then, state-owned insurance companies have grown into

SUMMER TRAINING (KOTAK) / PROJECT REPORT / PGP / FW 2006 – 08 / IIPM / DEL 8

SUMMER TRAINING (KOTAK) / PROJECT REPORT / PGP / FW 2006 – 08 / IIPM / DEL 9

SUMMER TRAINING (KOTAK) / PROJECT REPORT / PGP / FW 2006 – 08 / IIPM / DEL 10

SUMMER TRAINING (KOTAK) / PROJECT REPORT / PGP / FW 2006 – 08 / IIPM / DEL 11

# The Sampling Process

Sample size and Sampling Techniques

FINDINGS AND ANALYSIS

SUMMER TRAINING (KOTAK) / PROJECT REPORT / PGP / FW 2006 – 08 / IIPM / DEL 12

6) Different features in various Life insurance brands were liked by the

SUMMER TRAINING (KOTAK) / PROJECT REPORT / PGP / FW 2006 – 08 / IIPM / DEL 13

7) 27 respondents have been associated for their respective Life insurance

SUMMER TRAINING (KOTAK) / PROJECT REPORT / PGP / FW 2006 – 08 / IIPM / DEL 14

SUMMER TRAINING (KOTAK) / PROJECT REPORT / PGP / FW 2006 – 08 / IIPM / DEL 15

SUMMER TRAINING (KOTAK) / PROJECT REPORT / PGP / FW 2006 – 08 / IIPM / DEL 16

 There is lot of scope for improvement in the products as investment benefits

SUMMER TRAINING (KOTAK) / PROJECT REPORT / PGP / FW 2006 – 08 / IIPM / DEL 17

SUMMER TRAINING (KOTAK) / PROJECT REPORT / PGP / FW 2006 – 08 / IIPM / DEL 18

SUMMER TRAINING (KOTAK) / PROJECT REPORT / PGP / FW 2006 – 08 / IIPM / DEL 19

Q2. What is most important for you in a Life Insurance?

Brand Famil Word of Advertiseme

Q4. Which brand of Life Insurance do you choose?

Kotak Life LIC ICICI Max New York

Q8. Would like to prefer any other Life Insurance?

If yes then which one? ________________________________

SUMMER TRAINING (KOTAK) / PROJECT REPORT / PGP / FW 2006 – 08 / IIPM / DEL 20

SUMMER TRAINING (KOTAK) / PROJECT REPORT / PGP / FW 2006 – 08 / IIPM / DEL 21

SUMMER TRAINING (KOTAK) / PROJECT REPORT / PGP / FW 2006 – 08 / IIPM / DEL 23

SUMMER TRAINING (KOTAK) / PROJECT REPORT / PGP / FW 2006 – 08 / IIPM / DEL 24

SUMMER TRAINING (KOTAK) / PROJECT REPORT / PGP / FW 2006 – 08 / IIPM / DEL 26

SUMMER TRAINING (KOTAK) / PROJECT REPORT / PGP / FW 2006 – 08 / IIPM / DEL 28

4. India 2007, Publications Division, New Delhi.

SUMMER TRAINING (KOTAK) / PROJECT REPORT / PGP / FW 2006 – 08 / IIPM / DEL 30