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INTRODUCTOIN
1.1
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.
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.
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)
e)
Miscellaneous insurance
Personal insurance
b)
Property insurance
c)
Liability insurance
d)
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 nonlife insurance business transacted in India by Indian and foreign insurer, including the
provident insurance societies.
th
The first half of the 20 century marked by two world war, the adverse affects
of the World War I and World War II on the economy of India, and in between them the
period of world wide economic crises triggered by the Great depression. The first half of
the 20th century was also marked by struggles for Indias independence. The aggregate
effect of these events led to a high rate of bankruptcies and liquidation of life insurance
companies in India. This had adversely affected the faith of the general public in the
utility of obtaining life cover
In this background, the Parliament of India passed the Life Insurance of India Act on
19th June 1956, and the Life Insurance Corporation of India was created on 1st
September, 1956, by consolidating the life insurance business of 245 private life insurers
and other entities offering life insurance services.
Since 1972, the insurance sector has been totally under the control of
government of India through LIC and GIC and its subsidiaries. As a result, revenue of
both of them increased in the last years .the amount of savings pooled by LIC increased
from Rs.2704 crores in 1974 to Rs .57670 in 1994 with an annual growth rate of 16.53%
.similarly premium underwritten by GIC rose from 280 crores in 193 to 7647 crores in
1998 showing an annual growth rate of 25.18%.
Despite increase in premium collected by both LIC and GIC their were inefficiency
and red tapeisum creeped in to the insurance sector. Apart from that a major policy shift
by the Narasimha Rau government during 1990s.the Indian economy opened for foreign
competition .In this background The government of India in 1993 had set-up a high
powered committee by R.N Malhothra ,former governor reserve bank of India, to
examine the structure of Indian insurance sector and recommended changes to make it
more efficient and competitive keeping in view structural changes in other part of the
financial system of the country.
Insurance sector has been opened up for competition from Indian private insurance
companies with the enactment of Insurance Regulatory and Development Authority Act,
1999 (IRDA Act). As per the provisions of IRDA Act, 1999, Insurance Regulatory and
Development Authority (IRDA) was established on 19th April 2000 to protect the
interests of holder of insurance policy and to regulate, promote and ensure orderly growth
of the insurance industry. IRDA Act 1999 paved the way for the entry of private players
into the insurance market, which was hitherto the exclusive privilege of public sector
insurance companies/ corporations.
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.
10
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
11
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 interest.
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Compe
on
mpetitio
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
Regula
ato
ory 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)
In
nvestm
ments
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
holdings to be brought down to this level over a period of time).
Custo
Cu omer Servicce
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
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14
15
16
CHAPTER 2
RESEARCH DESIGN
17
RESEARCH DESIGN
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.
18
19
20
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
framing questionnaires. The questionnaire contained questions, which are both openended and closed-ended. Open-ended questions are questions
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. Openended questions yielded more insightful information, whereas closed-Ended questions
were relatively simple to tabulate and analyze.
2.9 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.
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22
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
from those of competitors.
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24
CHAPTER 3
25
carrying online insurance business in India. On 19 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
st
operating in India, was taken over by the central Government and then nationalized on 1
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.
26
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.
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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Indian Partners
International Partners
Bombay Dyeing
General Accident, UK
Tata
Dabur Group
ICICI
Prudential, UK
Sundaram Finance
Hindustan Times
Commercial Union, UK
Ranbaxy
Cigna, US
HDFC
Standard Life, UK
CK Birla Group
DCM Shriram
Godrej
J Rothschild , UK
M A Chidambaram
Met Life
Cholamandalam
SK Modi Group
Canada Life
Alpic Finance
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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30
There are a number of policies for specific insurance needs. Some of these include:
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32
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
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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.
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.
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
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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
2) Endowment Schemes
Bhavishya Jeevan
Jeevan Anand
Anmol Jeevan
Covertible Term
35
Komal Jeevan
Jeevan Sukanya
Jeevan Kishore
Jeevan Balya
Jeevan Chaya
Marriage/educational annuity
Deffered Endowment
Jeevan Samridhi
Jeevan Surabhi
Jeevan bharathi
Asha Deep II
Jeevan Asha II
Jeevan Aadhar
Jeevan Vishwas
Mortagage redemption
Jeevan sathi
36
Bima plus.
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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).
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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.
Life insurance products offered by the company are:
1) Protection plan
Endowment plan
2) Savings plan
Endowment plan
3) Investment Plan
Whole life plan
Limited payment endowment plan
Anticipated whole life plan
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Tata-AIG Life offers a broad array of life insurance products and solutions to
corporate and other organizations. These products and solutions have various valueadded 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.
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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 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
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Childrens Plan
GROUP PLANS
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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.
2.
Savings Plan
1)
Smart kid
2)
Life Time
3)
Save n Protect
4)
Cash Bak
Protection plan
Life Guard
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Riders
3.
Retirement Plans
Forever Life
Reassure
4.
Investment Plans
Assure Invest
Life Link
5.
Group plans
Group Superannuation
Group Gratuity
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Riders
47
Group Plan
Kotak Term Group plan
Kotak Gratuity Group plan
Kotak Credit Term Group plan
Riders
Exclusions Under Riders
Rural
Kotak Gramina Bima Yojana
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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
49
2) Endowment
3) Money Back
Met Sukh
Met Junior MB
4) Term
Met Riders
Accidental death
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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
Group Life
Max New York Life today emerged as the country's leading private life insurance
company having recorded a sum assured of over Rs 2100 crore for the year ending March
31, 2002. This was the first full year of operations for Max New York Life.
The company has sold over 64,000 policies in the last financial year. The total annualized
first year premium for the financial year was over Rs 43 crore with the First Year
Premium Income amounting to over Rs 38 crore. This has exceeded the expectations of
the company and the projections as submitted to IRDA. Over 70 per cent of the premia
income was from protection-oriented Whole Life Policies, which reinforces the
company's focus on providing the true value of life insurance to the customer
Given the better-than-expected performance of the company, the shareholders have
increased their investment in the company to Rs 250 crore with an authorized share
capital to Rs 300 crore making Max New York Life Insurance Company among the
highest capitalized life insurance companies in India
Max New York Life also met its commitment for the rural and social sectors.
The company has 11 offices, over 1900 Agent Advisors and over 490 employees. Max
New York Life believes in delivering top value to all its stakeholders. As part of the best
practices adopted, the Company instituted satisfaction survey's conducted by independent
agencies to measure the satisfaction levels of its customers, agents and employees. Max
New York Life has clearly emerged as delivering top value across all these stakeholders
Max New York Life offers a suite of flexible products. It has eight base products and
nine options & riders that can be customized to over 250 combinations enabling
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53
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
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CHAPTER 4
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56
TABLE 1
AGE OF RESPONDENTS
SL.NO
AGE IN YEARS
NUMBER
OF
RESPONDENTS
PERCENTAGE
OF
RESPONDENTS
1.
19 28
24
48 %
2.
29 38
13
26 %
3.
39 48
12 %
4.
49 58
12 %
5.
59 68
0%
6.
69 78
2%
TOTAL
50
100 %
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.
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GRAPH 1
AGE OF RESPONDENTS
60%
50%
48%
40%
30%
26%
20%
12%
12%
10%
0%
0%
19 - 28
YRS
29 - 38
YRS
39 - 48
YRS
49 - 58
YRS
59 - 68
YRS
2%
69 - 78
YRS
58
TABLE 2
TYPES OF
RESPONDENTS
NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
MALE RESPONDENTS
34
68%
FEMALE
RESPONDENTS
16
32%
50
100 %
TOTAL
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.
59
GRAPH 2
DIFFERENCIATION OF THE RESPONDENTS INTO MALE AND FEMALE
80%
70%
68%
60%
50%
40%
32%
30%
20%
10%
0%
60
TABLE 3
SL.NO
OCCUPATION
NUMBER OF
RESPONDENTS
PERCENTAGE
OF
RESPONDENTS
1.
STUDENTS
4%
2.
GOVERNMENT
EMPLOYEES
20
40 %
3.
PRIVATE
EMPLOYEES
24
48 %
4.
HOUSE WIVES
4%
5.
RETIRED
PERSONS
4%
TOTAL
50
100 %
61
GRAPH 3
DIFFERENCIATION OF RESPONDENTS BASED ON THEIR OCCUPATION
60%
48%
50%
40%
40%
30%
20%
10%
4%
0%
4%
4%
62
TABLE 4
SL.NO
INCOME
GROUP
NUMBER OF
RESPONDENTS
PERCENTAGE
OF
RESPONDENTS
1.
LESS THAN
5000
10 %
2.
5001 10,000
16
32 %
3.
10001 15000
17
34 %
4.
15001 20000
16 %
5.
20001 25000
4%
6.
GREATER
THAN 30000
2%
7.
NIL
2%
TOTAL
50
100 %
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.
63
GRAPH 4
GRAPH SHOWING INCOME GROUP OF RESPONDENTS
40%
35%
30%
25%
20%
15%
10%
5%
0%
<5000
5001 1000
NIL
64
TABLE 5
SL.NO
ASSETS
NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
1.
HOUSE
19
38 %
2.
TWO
WHEELER
25
50 %
3.
CAR
12 %
TOTAL
50
100 %
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.
65
GRAPH 5
DIFFERENCIATION OF RESPONDENTS ACCORDING TO THE ASSETS
OWNED
60%
50%
50%
40%
38%
30%
20%
12%
10%
0%
HOUSE
TWO
WHEELER
66
CAR
TABLE 6
MARKET SHARE OF DIFFERENT LIFE INSURANCE COMPANIES
COMPANIES
NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
LIC
39
78 %
TATA AIG
2%
HDFC
6%
ICICI
8%
MAX NEWYORK
2%
KOTAK MAHINDRA
2%
ALLIANCE BAJAJ
2%
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.
67
GRAPH 6
MARKET SHARE OF DIFFERENT LIFE INSURANCE COMPANIES
90%
80%
78%
70%
60%
50%
40%
30%
20%
10%
0%
2%
6%
8%
2%
2%
2%
68
TABLE 7
SL.NO
ATTRIBUTE
RESPONDENTS
RANK
1.
RETURN ON
INVESTMENT
17
2.
COMPANY
REPUTATION
13
3.
PREMIUM
OUTFLOW
10
4.
SERVICE
QUALITY
5.
PRODUCT
QUALITY
69
GRAPH 7
GRAPH SHOWING ATTRIBUTES FROM RESPONDENTS
18
16
14
12
10
8
6
4
2
0
17
13
10
70
TABLE 8
SL.NO
FACTORS
RESPONDENTS
RANK
1.
PERSONAL INTEREST
25
2.
FAMILY
11
3.
FRIENDS
4.
AGENTS
5.
ADVERTISEMENT
6.
OTHERS
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.
71
GRAPH 8
FACTORS WHICH INFLUENCED TO SELECT A LIFE INSURANCE
COMPANY
30
25
25
20
15
11
10
6
5
2
0
72
TABLE 9
SL.NO
AMOUNT
NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
1.
< 10000
0%
2.
10000 25000
10 %
3.
25000 50000
16 %
4.
50000-100000
15
30 %
5.
> 100000
22
44 %
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.
73
GRAPH 9
VALUE OF RESPONDENTS LIFE INSURANCE POLICY
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
> 10000
10000 25000
25000 50000
30%
16%
10%
0%
74
50000 44%
100000
> 100000
TABLE 10
NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
INSURANCE
COMPANY
24
48 %
BANK
26
52 %
TOTAL
50
100 %
75
GRAPH 10
RESPONDENTS PREFERENCE TO INVEST THEIR MONEY
53%
52%
51%
50%
49%
48%
47%
46%
52%
48%
INSURACE
COMPANY
BANK
76
TABLE 11
RESPONSE
NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
YES
47
94 %
NO
6%
TOTAL
50
100 %
INFERENCE: From this table it could be inferred that 94% of the consumers are
satisfied with the service and quality of products of their life insurance companies. Only
6% of consumers are not satisfied.
77
GRAPH 11
100%
94%
90%
80%
70%
60%
50%
40%
30%
20%
6%
10%
0%
YES
NO
78
TABLE 12
NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
EXCELLENT
14 %
VERY GOOD
12
24 %
GOOD
20
40 %
AVERAGE
11
22 %
POOR
0%
TOTAL
50
100 %
INFERENCE: From this table it could be inferred that 40% of the consumers have rated
service offered as good, 24% of them have rated them as very good, 22% of them have
rated as average and 14% of them have rated as excellent.
79
GRAPH 12
45%
40%
40%
35%
30%
24%
25%
20%
22%
14%
15%
10%
5%
0%
0%
80
TABLE 13
RESPONSES
NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
YES
39
78 %
NO
11
22 %
TOTAL
50
100 %
INFERENCE: From this table it can be noted that the majority of consumers (78%)
would like to communicate to others about the service offered by life insurance
companies and 22% of consumers would not like to communicate the service offered.
81
GRAPH 13
CONSUMERS WILLINGNESS TO COMMUNICATE THE SERVICE OFFERED
BY THEIR LIFE INSURANCE COMPANY
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
78%
22%
YES
NO
82
TABLE 14
NUMBER OF LIFE
INSURANCE
COMPANY KNOWN
NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
<5
18
36 %
57
29
58 %
8 10
4%
>10
2%
TOTAL
50
100 %
83
GRAPH 14
70%
60%
50%
40%
30%
20%
10%
0%
58%
36%
4%
<5
2%
5 TO 7
8 to 10
84
> 10
TABLE 15
COMPANIES
SCORES
RANK
LIC
345
ICICI PRUDENTIAL
211
HDFC
194
TATA AIG
123
ING VYSYA
121
BIRLA SUNLIFE
118
MET LIFE
90
OTHERS
41
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.
85
GRAPH 15
9
8
7
6
5
4
3
2
1
0
8
7
6
5
4
3
2
1
86
CHAPTER 5
87
5.1
FINDINGS
The male consumers capture the Market share with 68%, followed by
the female consumers with 32%.
The dominant income group having life insurance group belong to the
group of 10001 to 15,000 followed by 5,001 to 10,000.
88
89
5.2 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.
90
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.
91
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.
92
BIBLIOGRAPHY
93
BIBLIOGRAPHY
1)
Dr. Singh, Avtar, Principles of Insurance Law, S Chand & Sons, Delhi,2003.
2)
6)
7)
Newspapers:
Economic Times
Business Line
94
www.lic.com
www.irda.org
www.wikipedia.com
95
ANNEXURE
96
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
15,001-20000
5001-10,000
20,001-25,000
10,000-15,000
>25,000
Nil
6. Do You Own
House
Two Wheeler
Car
No
97
Company Reputation
Product Quality
Friends
Advertisements
Family
others
10,000-25,000
>1,00,000
25,000-50,000
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
Average
Very Good
Poor
Good
98
14. Would you like to communicate the service offered by your Life Insurance
Company to others?
Yes
No
5-7
8-10
>10
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.
99