European Journal of Social Sciences Volume 25, Number 2 (2011)

A Study on Customers Perception towards General Insurance Products (Livestock & Crop Insurance) with Special Reference to Erode Rural, Tamilnadu, India
A. G. V. Narayanan Dean - Faculty of Management Erode Builder Educational Trusts, Group of Institutions EBET Knowledge Park, Kangayam, Tirupur Dt. Tamilnadu, India T. P. Saravanan Associate Professor, Faculty of Management Erode Builder Educational Trusts, Group of Institutions EBET Knowledge Park, Kangayam, Tirupur Dt. Tamilnadu, India Abstract In India, the agriculture sector needs protection for its critical role in responding to human needs as well as its vulnerability to various risks. This risk factor emanates from sectors high dependence to natural conditions and it is mainly this factor, which necessitates protection. Insurance is one way to cope with natural risks involved in agricultural activities. The main theme of this insurance is agricultural production in general, covering both crop farming and livestock activities. The study is an attempt to examine the present state of perception towards crop and live stock insurance in the 6 villages of Erode rural, Tamilnadu, India and to expose the awareness towards crop and livestock insurance practices and it highlights the farmers opinion towards insurance and operational problems. This study has employed convenience sampling and a few research tools as ANOVA, Chi Square and Percentage analysis with help of 120 samples. This research provides a framework for designing rural insurance products and services with help of cost effective risk management technique. The study provides some new ideas and thinking towards improving the existing rural insurance services. Keyerms:

Livestock and Crop insurance, Customer Perception and Operational problems

Chapter I. Introduction to The Study

1.1. Insurance Industry in India The insurance industry in India, private and public, has its roots in the 19th century. The British Government set up state-run social protection schemes for its colonial officials, many of which evolved into the schemes that operate to this day. The first private insurance company was the Oriental Life Insurance Company, which started in Calcutta in 1818. The 19th century saw the development of a number of Indian insurance companies including the Bombay Mutual ( 1871), Oriental ( 1874) and the Empire of India ( 1897).Under British rule there were large numbers of insurance companies operating in India. In 1938 the British passed the Insurance Act, a comprehensive piece of legislation governing the insurance industry. The Act remains the legislative cornerstone of the insurance industry to this day. 219

European Journal of Social Sciences Volume 25, Number 2 (2011) Regulated Indian insurers are divided into two core categories: life and general insurance. Life insurance includes products like endowment policies and retirement annuities. General insurance covers all other types of insurance. In 1956 the Indian Government nationalized the insurance industry. All four the general insurance companies namely Oriental Insurance Company Limited, New India Assurance Company Limited, National Insurance Company Limited, and United India Insurance Company Limited. Brought under GIC When the ideological winds of change blew in the early 1990s, the Indian Government set about liberalizing its insurance markets. It set up a commission of enquiry under the chairmanship of R.N. Malhotra. The central outcome of the commission was the establishment of the Insurance Regulatory and Development Authority ( IRDA ) that in turn laid the framework for the entry of private ( including foreign) insurance companies. At present 22 life and 18 non-life insurers are operating in India. Indian General Insurance Industry Market Overview India is the 5th largest market in Asia by premium, following Japan, Korea, China and Taiwan. The country is geographically large and has the worlds 2nd largest population -- 1.13 billion in 2007 but it also has one of the lowest penetration rates for property and casualty insurance in Asia in terms of premium as a percentage of GDP. This situation reflects the fact that Indias insurance market is still in its infancy, meaning good growth potential. Even though the economy is expected to slow, it has sufficient momentum to maintain an impressive rate of growth when compared to the more advanced economies. Against the backdrop of rising income levels, insurers operating in a now deregulated environment will be able to expand product lines to cater to the demand for more customized and sophisticated risk solutions. And as India continues to revamp its infrastructure, the flow-on effects will ensure ongoing growth In 2006-2007, Indias general insurance market witnessed a variety of changes as deregulation continued at a hectic pace. On the whole, the sector achieved double-digit growth and this trend is expected to persist over the medium term on the back of greater penetration, due partly in turn to the intense marketing efforts of private insurers. With the removal of pricing controls on fire and engineering lines in 2007, insurers have since discounted their rates by 50% or more in their quest to retain or win market share. These practices will translate into weaker underwriting performances in the short term. Private players will continue to capture market share at the expense of public enterprises on a mix of aggressive distribution and service. Having penetrated the corporate segment in the past, most private insurers now seek to grow their retail books. Furthermore, the number of private insurers is expected to grow as various foreign companies have announced intentions to establish joint ventures. Given the low level of penetration in some segments, this trend towards foreign participation is likely to continue. Rate reductions in the recently de-tariffed corporate portfolio (fire & engineering) will impact premium growth, but this outcome will be offset by greater sales of existing and new products. The formation of a third party motor pool, where all general insurers are required to participate based on the size of their overall market shares, will reduce the underwriting burden on public entities. The claims ratio for the segment is likely to improve in the medium term as premium rates for the third party motor pool have also climbed. Although public entities have sustained consistent underwriting losses on some product lines, in particular for third party motor business, their investment income and gains have more than offset their underwriting losses and helped them achieve solvency margins.

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European Journal of Social Sciences Volume 25, Number 2 (2011) With the regulatory environment in India, it generally ensures that insurers adopt sound underwriting, valuation and investment practices, while protecting the interests of policyholders. At the same time, the environment will undergo reform and modernization. Market Place Moving Quickly The Indian insurance sector is rapidly moving towards international standards of free (risk-based) market pricing and new/innovative product offerings. Big changes have occurred over the last seven years, during which the sector was opened to private participation, but with foreign direct investment (FDI) capped at 26%. In line with forecasts for a continuation of solid growth and strong domestic demand, the number of insurers in the private sector will keep growing. Major foreign players see opportunities to increase both volumes and types of products. With the regulator possibly lifting the ceiling on foreign ownership to 49%, the capacities of domestic partners would no longer constrain capital levels for joint ventures. Until 2000, the general insurance sector had only four public sector players, formed after the nationalization of 107 general insurers. The public enterprises Oriental Insurance Company of India (OIC), National Insurance Company of India (NIC), New India Assurance Company of India (NIA) and United Insurance Company of India (UII) -- were located in Delhi, Kolkata, Mumbai and Chennai respectively. They primarily focused on their immediate regions and there was little competition, leading to a near monopolistic environment. In the private sector, there were 19 players with L&T the latest entrant as of last year. A number of potential new entrants await the necessary approvals. Most private players have tie-ups with international companies to compensate for their lack of experience in insurance. Within the private sector, ICICI Lombard (IL) leads with 12.4% market share for the period April-December 2007. The private sector has been steadily growing market share despite the fact that public sector companies have been around for a lot longer. The private insurers enjoy considerable operational flexibility, whereas the public sector companies have been constrained by their traditions and inability to innovate.
Table 1: Gross Premium Collected by Non Life Insurance Companies for the Year 2010- 2011
Sl No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Insurer Royal Sundaram TATA-AIG Reliance IFFCO Tokio ICICI Lombard Bajaj Allianz HDFC ERGO Cholamandalam Future Generali Universal Sompo Shriram Bharti Axa Raheja QBE* SBI L&T New India National United India Oriental Grand Total Gross Premium (in Crores) 1143.70 1214.01 1655.43 1815.50 4251.87 2904.74 1302.05 967.83 612.17 299.04 780.89 551.48 7.96 43.02 17.24 7096.53 6115.41 6376.35 5439.60 42594.81

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Figure 1: Premium Collected by the Companies for the Year 2010 -2011

Figure 1: Market Share of Non Life Insurers in Indian Market (2010 2011)

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Table 2:
Sl No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Insurer Royal Sundaram Previous year TATA-AIG $ Previous year Reliance Previous year IFFCO Tokio Previous year ICICI Lombard Previous year Bajaj Allianz Previous year HDFC ERGO Previous year Cholamandalam Previous year Future Generali Previous year Universal Sompo Previous year Shriram Previous year Bharti Axa Previous year Raheja QBE* Previous year SBI L&T New India Previous year National Previous year United India Previous year $ Oriental Previous year Grand Total Previous year SPECIALISED INSTITUTIONS ECGC Previous year

Segment-Wise Premium for the Year 2010 - 2011

Fire Marine Marine Cargo 24.80 22.55 153.63 115.11 22.15 27.35 84.42 70.54 110.01 81.59 75.89 68.41 30.10 15.49 43.67 41.44 30.74 15.50 5.98 3.85 0.93 0.04 11.34 5.44 0.13 0.02 0.17 0.43 271.96 196.01 170.03 141.80 274.19 275.68 233.93 183.42 1,544.48 1,264.24 Marine Hull 0.41 0.47 0.00 0.00 16.55 17.07 45.19 64.58 56.37 64.98 3.99 6.35 18.41 9.52 0.01 0.95 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 281.97 278.29 135.85 97.13 224.57 176.29 213.65 207.03 996.97 922.66 Engineering 36.87 36.34 38.49 39.56 58.31 103.86 64.89 93.57 149.04 152.83 111.86 100.47 53.87 29.31 23.92 22.41 23.77 15.20 5.87 3.48 2.26 1.48 12.17 13.18 0.38 0.40 1.51 1.74 342.04 291.83 244.51 186.81 416.51 306.43 322.25 281.80 1,910.27 1,678.94 Motor OD 793.03 629.37 616.06 477.62 421.47 361.20 240.46 207.76 1,074.87 738.46 1,318.71 905.71 941.23 659.19 849.01 501.67 1,544.96 1,136.55 1,379.16 957.22 1,714.07 1,302.18 1,445.77 1,052.08 420.70 304.26 366.12 201.00 623.49 433.33 450.10 312.82 319.49 231.69 210.40 150.86 163.43 128.12 78.90 61.66 768.30 406.38 411.48 202.64 413.61 321.30 184.52 138.83 0.24 0.19 0.17 0.15 0.07 0.06 10.95 8.26 2,303.52 1,345.43 2,070.94 1,172.06 2,761.60 1,654.55 2,179.74 1,270.38 2,114.52 1,152.54 1,817.13 963.74 1,744.70 955.72 1,610.19 868.39 18,134.26 11,768.78 15,228.86 9,444.59 Motor Motor TP 163.67 138.44 60.27 32.70 336.41 413.00 282.04 347.34 408.40 421.94 411.89 393.69 116.44 165.13 190.17 137.28 87.80 59.55 35.31 17.23 361.93 208.84 92.31 45.69 0.06 0.02 0.00 2.69 958.09 898.88 1,107.04 909.36 961.98 853.39 788.99 741.80 6,365.48 5,784.28 Health 155.98 125.47 110.72 83.40 254.28 238.75 176.88 164.22 1,341.94 911.81 339.49 295.39 328.73 268.74 148.07 149.51 105.34 69.32 23.49 17.41 0.00 0.00 52.34 49.19 0.00 0.00 0.12 0.00 1,993.96 1,552.47 1,572.39 1,077.55 1,681.47 1,256.14 1,330.82 1,063.51 9,616.02 7,322.89 Aviation Liability 0.00 0.00 0.00 0.00 45.64 40.61 46.09 41.91 101.10 57.32 28.42 28.62 32.61 18.28 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 11.70 0.00 70.42 64.40 25.96 37.13 20.07 30.02 79.87 92.08 461.87 410.37 15.95 16.21 149.30 141.53 18.17 18.64 57.06 43.98 130.34 104.91 100.19 73.81 76.14 69.18 11.34 12.11 13.74 8.93 1.93 0.73 0.41 0.16 2.82 3.20 5.50 1.00 0.00 0.82 161.76 126.88 71.61 53.13 101.36 91.43 104.43 99.85 1,022.88 865.67 Personal Accident 37.26 26.56 125.07 104.28 31.95 43.63 28.05 20.60 94.35 79.69 53.11 52.73 129.17 72.90 32.32 29.42 28.02 13.15 3.46 9.84 2.85 1.63 15.04 23.92 0.55 0.18 5.82 0.00 124.07 103.20 126.54 97.57 132.10 109.17 151.31 101.12 1,121.04 889.58 All Others 33.85 28.63 28.48 17.53 35.83 41.26 158.96 88.75 440.31 192.72 189.68 182.75 17.99 12.29 28.38 31.15 21.19 11.82 39.02 32.54 1.71 0.39 5.08 2.98 0.05 0.02 0.53 0.85 496.20 434.72 434.55 327.49 621.08 527.11 587.05 504.73 3,140.81 2,436.85 885.67 813.71 Grand Total 1,143.70 915.56 1,214.01 900.58 1,655.43 1,979.65 1,815.50 1,639.56 4,251.87 3,295.06 2,904.74 2,515.70 1,302.05 1,004.62 967.83 784.85 612.17 386.72 299.04 189.28 780.89 416.93 551.48 310.95 7.96 1.94 43.02 17.24 7,096.53 6,042.51 6,115.41 4,625.10 6,376.35 5,237.32 5,439.60 4,718.75 42,594.81 34,965.08 885.67 813.71 Market Share 2.69 2.62 2.85 2.58 3.89 5.66 4.26 4.69 9.98 9.42 6.82 7.19 3.06 2.87 2.27 2.24 1.44 1.11 0.70 0.54 1.83 1.19 1.29 0.89 0.02 0.00 0.10 0.04 16.66 17.28 14.36 13.23 14.97 14.98 12.77 13.50 100.00 100.00

45.55 25.20 43.26 23.02 186.85 153.63 158.72 115.11 97.68 38.70 129.78 44.42 212.72 129.62 202.38 135.12 283.46 166.37 270.06 146.57 288.05 79.88 261.40 74.76 194.32 48.52 142.78 25.01 56.61 43.68 47.77 42.39 69.88 30.74 42.38 15.50 55.85 5.98 42.54 3.85 4.42 0.93 1.74 0.04 39.08 11.34 28.52 5.44 1.11 0.13 0.16 0.02 23.10 0.17 2.46 0.43 1,050.64 553.92 923.78 474.30 572.36 305.89 426.76 238.92 790.48 498.76 647.93 451.97 671.58 447.58 575.03 390.45 4,646.22 2,541.45 3,945.01 2,186.90

20

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Figure 2: Gross Premium upto May, 2011

Agricultuiral Insurance Overview Agricultural insurance is one method by which farmers can stabilize farm income and investment and guard against disastrous effect of losses due to natural hazards or low market prices. Crop insurance not only stabilizes the farm income but also helps the farmers to initiate production activity after a bad agricultural year. It cushions the shock of crop losses by providing farmers with a minimum amount of protection. It spreads the crop losses over space and time and helps farmers make more investments in agriculture. It forms an important component of safety-net programmes as is being experienced in many developed countries like USA and Canada as well as in the European Union. However, one need to keep in mind that crop insurance should be part of overall risk management strategy. Insurance comes towards the end of risk management process. Insurance is redistribution of cost of losses of few among many, and cannot prevent economic loss. There are two major categories of agricultural insurance: single and multi-peril coverage. Single peril coverage offers protection from single hazard while multiple peril provides protection from several hazards. In India, multi-peril crop insurance programme is being implemented, considering the overwhelming impact of nature on agricultural output and its disastrous consequences on the society, in general, and farmers, in particular. This present study looks at the genesis of agricultural insurance in India, examines various agricultural insurance schemes launched in the country from time to time and the coverage provided by them. Major issues and problems faced in implementing agricultural insurance in the country are discussed in detail. 1.2.1. Agriculture Insurance Company of India Ltd Agriculture Insurance Company of India Ltd is the largest agri-insurance company in India providing insurance cover to millions of framers in the country. Popularly known as AIC, this company was set up in 1st April, 2003 by the Government of India. 224

European Journal of Social Sciences Volume 25, Number 2 (2011) AIC offers area based and weather based crop insurance programs in about 500 districts of India and covers almost 20 million farmers, making it one of the biggest crop insurers in the world. Agriculture Insurance Company of India Ltd is directly controlled by the Ministry of Finance, Government of India. The formation of the organization follows the announcement of the same by the then Finance Minister in his General Budget Speech of 2002-03. AIC has taken over the implementation of the National Agricultural Insurance Scheme (NAIS) which was previously being implemented by General Insurance Corporation of India. In future AIC is slated to be transacting other insurance businesses directly or indirectly concerning agriculture and its allied activities. AIC is promoted by General Insurance Corporation of India, National Bank of Agriculture and Rural Development (NABARD), United India Insurance Company Limited, National Insurance Company Limited, Oriental Insurance Company Limited and The New India Assurance Company Limited.
Table 3: Aic Promoters Share Holdings
Share Holdings (%) 35.00 30.00 8.75 8.75 8.75 8.75

Organization General Insurance Corporation of India National Bank for Agriculture And Rural Development (NABARD) National Insurance Company Limited The New India Assurance Company Limited Oriental Insurance Company Limited United India Insurance Company Limited

Scope of The Study The study highlights the factors influencing the selection of cattle and crop insurance and insurance companies. It also covers the problem faced by the respondents and throws light on their opinion on the insurance services provided by the companies Objective of the Study Primary Objective 1. To find out the customers perception about general insurance. (Livestock & Crop) Secondary Objectives 1. To understand rural customers knowledge and attitude towards Live stock and Crop insurance 2. To find out the awareness about general insurance products (Livestock & Crop) 3. To know the customers perception towards private general insurance companies 4. To identify factors which are influencing to purchase insurance policies 1.5. Research Design The validity of any research is based on the systematic method of data collection and analysis. Both primary and secondary data were used for the present study. The primary data were collected from 120 farmer respondents in the study area. For collecting the first-hand information, respondents were chosen by convenient sampling method. The researcher approached the respondents located at in and around Erode rural namely Arachalur, Bhavani, Nanjai Uthukuli, Nasiyanur and Vellode. In this study researcher has used descriptive research design. Data Collection Primary Data The primary data thus collected from the primary sources of information were arranged systematically and logically and were tabulated under necessary heads for the study of various aspects and evaluation. 225

European Journal of Social Sciences Volume 25, Number 2 (2011) The specimen of the questionnaires given to the selected sample respondents is given in the Appendices section of the report. Secondary Data Secondary data were also collected for this study from leading journals, magazines and websites relating to insurance. Tools for Data Collection & Analysis By virtue of the mass data obtained from research survey, as well as data from primary and secondary sources were collected, descriptive research was considered the most appropriate for this study. The research problems and questionnaire were all framed accordingly. The suggestions offered in the final chapter of the present research report emerged from the inferences drawn from the study of the sample respondents information thus analysed by using Percentage analysis, ANOVA test and Chi Square test. The researcher used close-ended and open-ended questions in the questionnaire to collect the primary data. Review of Literature In the absence of formal risk sharing / diffusion mechanisms, farmers rely on traditional modes and methods to deal with production risk in agriculture. Many cropping strategies and farming practices have been adopted in the absence of crop insurance for stabilizing crop revenue. Availability and effectiveness of these risk management strategies or insurance surrogates depend on public policies and demand for crop insurance (Walker and Jodha 1986). The major role played by insurance programmes is the indemnification of risk-averse individuals who might be adversely affected by natural probabilistic phenomenon. The philosophy of insurance market is based on large numbers where the incidence of risk is distributed over individual. Insurance, by offering the possibility of shifting risks, enables individuals to engage in risky activities which they would not undertake otherwise (Ahsan et al., 1982). It is argued that farmers' own measures to reduce the risk in farming in semi-arid tropical India were costly and relatively ineffective in reducing risk in farming and to adjust to drought and scarcity conditions. Jodha finds that the riskiness of farming impinges upon the investment in agriculture leading to suboptimal allocation of resources. He also finds that official credit institutions are ill equipped to reduce the exposure of Indian farmers to risks because they cannot or do not provide consumption loans to drought-affected farmers (Jodha 1981). Crop credit insurance also reduces the risk of becoming defaulter of institutional credit. The reimbursement of indemnities in the case of crop failure enables the farmer to repay his debts and thus, his credit line with the formal financial institutions is maintained intact (Hazell et al., 1986 ; Pomareda 1986; Mishra 1996;). The farmers do not have to seek loans from private moneylenders. The farmer does not have to go for distress sale of his produce to repay private debts. Credit insurance ensures repayment of credit, which helps in maintaining the viability of formal credit institutions. The government is relieved from large expenditures incurred for writing-off agricultural loans, providing relief and distress loans etc., in the case of crop failure. A properly designed and implemented crop insurance programme will protect the numerous vulnerable small and marginal farmers from hardship, bring in stability in the farm incomes and increase the farm production (Bhende 2002). The farmer is likely to allocate resources in profit maximizing way if he is sure that he will be compensated when his income is catastrophically low for reasons beyond his control. A farmer may grow more profitable crops even though they are risky. Similarly, farmer may adopt improved but uncertain technology when he is assured of compensation in case of failure (Hazell 1992). This will increase value added from agriculture, and income of the farm family. 226

European Journal of Social Sciences Volume 25, Number 2 (2011) Bhende (2005) found that income of the farm households from semi-arid tropics engaged predominantly in rain-fed farming was positively associated with the level of risk. Hence, the availability of formal instrument for diffusion of risk like crop insurance will facilitate farmers to adopt risky but remunerative technology and farm activities, resulting in increased income. Some of the studies confirm the conventional view that moral hazard incentive lead insured farmers to use fewer chemical inputs (Smith and Goodwin 1996). Babcock and Hennessy (1996), find that at reasonable levels of risk aversion, nitrogen fertilizer and insurance are substitutes, suggesting that those who purchase insurance are likely to decrease nitrogen fertilizer applications. A study by Horowitz and Lichtenberg (1993) find that in the US Midwest, crop insurance exerts considerable influence on maize farmers' chemical use decisions. Those purchasing insurance applies significantly more nitrogen per acre (19 %), spend more on pesticides (21 %), and treats more acreage with both herbicides and insecticides (7 % and 63 %) than those not purchasing insurance. These results suggest that both fertilizer and pesticides may be risk-increasing inputs. It is observed that insured households invest more on agricultural inputs leading to higher output and income per unit of land. Interestingly, percentage increase in output and income is more for small farms. Based on 1991 data, CCIS was found to contribute 23, 15, and 29 per cent increase in income of insured farmers in Gujarat, Orissa and Tamil Nadu, respectively (Mishra 1994) Data Analysis Anova Test
Table 4: Period of Using the Insurance Service and Level of Satisfaction Towards Customer Care

Hypothesis :
Null Hypothesis (H0) Alternative Hypothesis (H1) : : Level of satisfaction towards Customer care service will not affect the respondents using period of insurance service. Level of satisfaction towards Customer care service will affect the respondents using period of insurance service.

Table 5:
S.No 1 2 3 4

Period of Using The Insurance Service And Level of Satisfaction Towards Customer Care
Period One Year 1-3 years 3-5 years Above 5 years Total Level of Satisfaction Satisfied 0 9 3 6 18 Total 10 9 6 9 34

Highly Satisfied 0 0 3 0 3

Neutral 10 0 0 3 13

It could be noted from the above analysis that majority of the respondents are satisfied with the premium collection followed by neutrally satisfied.
Source Between Groups Within Groups Total Sum of Squares 9.559 3.500 13.059 Degrees of Freedom 3 30 33 Mean Square 3.186 0.117 Calculated F Value 27.311 2.92 Table Value S Significant at 5% level

It is noted from the above analysis that calculated F value is greater than the table value at 5% level of significance. So, the null hypothesis is rejected and alternative hypothesis is accepted. Hence, 227

European Journal of Social Sciences Volume 25, Number 2 (2011) it is found from the analysis that Level of satisfaction towards customer care service will affect the respondents using period of insurance service.
Table 6: Period of Using the Insurance Service and Level of Satisfaction towards Followup

Hypothesis :
Null Hypothesis (H0) Alternative Hypothesis (H1) : : There is no significant difference between period of using the insurance service and level of satisfaction towards follow up. There is a significant difference between period of using the insurance service and level of satisfaction towards follow up.

Table 7:

Period of Using the Insurance Service and Level of Satisfaction towards Followup
Period One Year 1-3 years 3-5 years Above 5 years Total Level of Satisfaction Satisfied Neutral 3 7 9 0 6 0 9 0 27 7 Total 10 9 6 9 34

S.No. 1 2 3 4

It could be noted from the above analysis that majority of the respondents are satisfied with the followup services followed by neutrally satisfied.
Table 8:
Source Between Groups Within Groups Total

Anova Test
Sum of Squares 3.459 2.100 5.559 Degrees of Freedom 3 30 33 Mean Square 1.153 0.070 Calculated F Value 16.471 2.92 Table Value S Significant at 5% level

It is noted from the above analysis that calculated F value is greater than the table value at 5% level of significance. So, the null hypothesis is rejected and alternative hypothesis is accepted. Hence, it is found from the analysis that there is some significant difference between period of using the insurance service and level of satisfaction towards follow up. Chi-Square Test
Table 9: Occupation and Level of Satisfaction towards Services Provided by the Insurer
: : There is no significant relationship between occupation and level of satisfaction towards services provided by the insurer. There is a close significant relationship between occupation and level of satisfaction towards services provided by the insurer.

Null Hypothesis (H0) Alternative Hypothesis (H1)

Table 26: Occupation and Level of Satisfaction towards Services Provided by the Insurer
S.No. 1 Occupation Farmer cum Businessman Level of Satisfaction Medium 6 Total 12

Low 0

High 6

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Table 26: Occupation and Level of Satisfaction towards Services Provided by the Insurer - continued
2 3 Farmer cum Employee Farmer Total 7 0 7 0 0 6 0 15 21 7 15 34

Chi-Squared Test :
Calculated 2 value Degrees of Freedom Table value Significant : : : : 46.143 4 9.488 Significant at 5% level

It is cleared from the above analysis that calculated chi-squared value is greater than the table value and it is significant at 5% level. So the null hypothesis is rejected. Hence, there exists a close significant relationship between occupation of the respondents and level of satisfaction towards services provided by the insurer.
Table 10: Selection of Insurance Company and Level of Satisfaction Towards Services Provided by the Insurer
Null Hypothesis (H0) Alternative Hypothesis (H1) : : There is no significant relationship between selection of insurance company and level of satisfaction towards services provided by the insurer. There is a close significant relationship between selection of insurance company and level of satisfaction towards services provided by the insurer.

Table 11: Selection of Insurance Company and Level of Satisfaction towards Services Provided by the Insurer
S.No. 1 2 3 4 Insurance company Reliance Tata AIG Bajaj Allianz ICICI Total Level of Satisfaction Low Medium 0 0 0 3 3 3 4 0 7 6 Total 9 12 9 4 21 34

High 9 9 3 0

Chi-Squared Test :
Calculated 2 value Degrees of Freedom Table value Significant : : : : 7.321 6 2.592 Significant at 5% level

It is cleared from the above analysis that calculated chi-squared value is greater than the table value and it is significant at 5% level. So the null hypothesis is rejected. Hence, there exists a close significant relationship between insurance company and level of satisfaction towards services provided by the insurer.
Table 12: Period of Insuring and Level of Satisfaction towards Services Provided by the Insurer
Null Hypothesis (H0) Alternative Hypothesis (H1) : : There is no significant relationship between period of insuring and level of satisfaction towards services provided by the insurer. There is a close significant relationship between period of insuring and level of satisfaction towards services provided by the insurer.

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Table 28: Period of Insuring and Level of Satisfaction towards Services Provided by the Insurer
S.No. 1 2 3 4 Period of insuring One year 1-3 years 3-5 years Above 5 years Total Level of Satisfaction Medium 3 0 0 3 6 Total 10 9 6 9 34

Low 7 0 0 0 7

High 0 9 6 6 21

Chi-Squared Test :
Calculated 2 value Degrees of Freedom Table value Significant : : : : 31.329 6 12.592 Significant at 5% level

It is clear from the above analysis that calculated chi-squared value is greater than the table value and it is significant at 5% level. So the null hypothesis is rejected. Hence, there exists a close significant relationship between period of insuring and level of satisfaction towards services provided by the insurer. Findings & Suggestions It was observed from the study that 41.7% of the respondents have not completed formal education. Majority of the respondents are farmers (41.7%) and are doing business (33.3%). 50 % of the respondents are having below 5 acres of land. It was found from study that 92 (76.7 %) respondents are having cultivable lands. It was found from study that 89.2 % respondents are undertaking farming in their lands. Majority of the respondents have cultivated Sugarcane and Turmeric in the land. Majority of the respondents (89.2 %) are having cattle (livestock). The study reveals that, 82.5% of the respondents have taken life insurance for their family. It was found from the study that 71.7% of the respondents have not taken insurance for their cattle and crop. It was found from the study that only 35.3% of the respondents have insured for both cattle and crop. From this study we came to know that, 82.4% of the respondents have been motivated by other farmers. Majority of the respondents have got their insurance for cattle and crop through agents (47.1%). 29.4% of the respondents have felt that TV media is more effective media than others to know about agriculture insurance 52.5%. of the respondents are not aware about the cattle and crop insurance. 30.8 % of the respondents are not willing to go for the insurance. It is found from the ANOVA analysis that level of satisfaction towards customer care service will affect the respondents period of using insurance service. From the ANOVA test it could be found that there is some significant difference exists between period of using the insurance service and level of satisfaction towards followup. From the Chi-Square test, there is a close significant relationship between period of insuring and level of satisfaction towards services provided by the insurer. 230

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From the Chi-Square test, there is a close significant relationship between insurance company and level of satisfaction towards services provided by the insurer. From the Chi-Square test, there exists a close significant relationship between occupation of the respondents and level of satisfaction towards services provided by the insurer. Majority of the respondents have ranked Premium and Agent approach as first with weighted average score of 136

Suggestions 1. Customers are ready to avail agriculture insurance but they dont have much knowledge on this. So the respective insurance and Government authorities should take necessary steps to disseminate the importance of agriculture insurance among farmers. 2. Most of the farmers are well aware of Life Insurance but their awareness is very low in agriculture insurance. Insurance companies should educate the farmers that the premium paid by them should not be considered an expenditure but should be treated as to minimize the risks and future losses. 3. Agricultural insurance is meant for minimizing the losses incurred by the farmers. So the Government should make agriculture insurance is mandatory to get farmer card. 4. Private players should take necessary steps to reach, attract and retain the farmers by espousing creative marketing plans. Future Scope of The Study The farming community in India consists of about 121 million farmers of which only about 20 per cent avail crop loans from financial institutions and only three fourth of those are insured. The remaining 80 per cent (96 millions) are either self-financing or depending upon informal sources for their financial requirements. Most of the farmers are illiterate and do not understand the procedural and other requirements of formal financial institutions and, therefore, shy away from them. This is quite indicative of the enormous insurance potential that exists for addressing the needs of the farming community and enhancing the overall efficiencies as also the competitiveness of the agriculture sector. This also signifies the tremendous potential of research studies on agriculture insurance in the country, which can mitigate the adverse impacts that such uncertainties would have on the individual farmers.

References
[1] [2] [3] Agriculture Insurance Company of India Ltd.(2008): www.aicofindia.org accessed 2006 to 2008. Basic Animal Husbandry Statistics (2006) : Department of Animal Husbandry, Dairying and Fisheries, Ministry of Agriculture, GOI, New Delhi. Bhende, M.J.(2005). Agricultural Insurance in India : Problems and Prospects. Department of Economic Analysis and Research, National Bank for Agriculture and Rural Development Occasional paper 44. Binswanger, H.P. (1980). Attitudes Towards Risk: Experimental Measurement in Rural India. American Journal of Agricultural Economics. 62(3):174-82. Dandekar,V.M (1976): Crop Insurance in India , Economic and Political Weekly, A-61 to A-80. Dandekar,V.M (1985): Crop Insurance in India A Review, 1976-77 to 1984-85, Policy Note by Tamilnadu Agriculture department 2010 Planning Commission (2007) Report of Working Group on Risk Management in Agriculture for XI Five-Year Plan (2007-2012), New Delhi. Vyas, V.S. and Singh, Surjit (2006): Crop Insurance in India - Scope for improvement, Economic and Political Weekly, 4 November : 4585-94. 231

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European Journal of Social Sciences Volume 25, Number 2 (2011) [9] [10] Economic and Political Weekly, 20(25&26): A-46 to A-59. Economic Survey (2007-08): Ministry of Finance, Government of India, New Delhi. Mishra, P.K. (1994) : Crop Insurance and Crop Credit : Impact of the Comprehensive Crop Insurance Scheme on Cooperative Credit in Gujarat. Journal of International Development. 6(5) : 529-68. Mishra, P.K. (1996). Agricultural Risk, Insurance and Income. Arabury, Vermont: Ashgate Publishing Company. 60 Sinha, Sidharth (2004), Agriculture Insurance in India Scope for participation of private insurers, Economic and Political Weekly, June 19, PP 2605-12. Sharma, H.R. Kamlesh Singh and Shanta Kumari. (2006): Extent and source of Instability in Food grains Production in India, Indian Journal of Agricultural Economics, 61(4):648-666. Smith, V.H. and B.K. Goodwin (1996). Crop Insurance, Moral Hazard, and Agricultural Chemical Use. American Journal of Agricultural Economics. 28(2) : 428-438. Tripathi, S.L. (1987). Crop Insurance in India with special reference to Comprehensive Crop Insurance Scheme. A note prepared for induction training programme in crop insurance for newly recruited assistant administrative officers of General Insurance Corporation of India, 928 November, Vaikunth Mehata National Institute of Cooperative Management, Pune.

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