CONSUMER BEHAVIOUR

A Study on Consumer’s Satisfaction towards Life Insurance Corporation in India

MITUL BHOLA
Introduction
This study will examine the satisfaction level of consumers towards Life Insurance
Corporation in India. Due to increasing awareness of uncertainty towards life, and growing
competition in the insurance sector, it becomes essential for the insurance company to
collaborate the necessity of their customers. The objectives of the study will explain the
significance of the behavioural mindset of consumer towards life insurance. Insurance
Corporation is a servicing sector of India. LIC of India with the main objective to circulate the
message of life insurance among people. The review of literature will help in understanding the
main characteristics of the insurance. In the requirement to improved consumer relationship, Life
Insurance Corporation should provide services where it needed. The primary purpose of life
insurance is to transferring a loss from one person to another or an institution in exchange for
currency.

Background of the Study

The sector of Insurance in India developed at very high scale. The background of the
study is according to the appraisal of past research and similarly, this study will present the
resolutions related to the topic. Consumer buying behaviour with respect to the Life insurance
policy in Indian Corporation. As a result of emancipation with the economy of India, a new
sector of independent insurance companies was created. Insurance Companies are essential as
there have been new participants in the market. The competition between the industries became
very complex. It is essential for the insurance company to recognise and examines the factors
affecting customer choice for the institution of insurance. This study will focus on defining the
attributes of a product that affects consumer behaviour.

History of Life Insurance in India

The concept of insurance in its contemporary form came to India from England in the
year of 1818. Insurance in India was basically ruled by insurance agents to whom they paid
commission until the sector of liberalization and globalization originated. In1956, after
independence, the Life Insurance Corporation was associated. The reasons behind the beginning
of the insurance sector were basically to provide the modified services to the customers and to
presented valid solutions in order to meet with their financial requirements. India has become a
progressive nation performs as a representative in the field of the social market to study the
characteristics of insurance services. India has been divided into Gujrat is, Marwari’s, Brahmans,
Bengalis, South Indians and Christians followed different morals, cultural values, languages
beliefs. Due to the diversified mix of various sections of ethnic, religious and cultural
fragmentations, it becomes complicated to deploy an extensive marketing insurance policy.

Aim and Objectives of the Research

The aim of the research will focus on explaining consumer satisfaction towards life
insurance policies in India. Considering this aim, the following objectives should be met at the
completion of the proposed research work:
1. To find the attributes of a life insurance policy to which consumer attracted most.
2. To understand the level of knowledge that people possess about the policies of insurance
provided by the Life Insurance Corporation of India.
3. To find the level of consumer satisfaction regarding the life insurance policies provided
by the Life Insurance Corporation of India.

Problem Statement
Due to various policies are available in the market, investors are bewildered in selecting a
policy. The problem lies for the consumer in order to select a Life insurance policy. This study
will make a better understanding of consumer satisfaction level related to life insurance policy
Corporation of India. And how to satisfied customers while they are selecting the policy,
organises and explicate the quality of service and also the product offered by the company.
Consumers are extremely concerned related to their satisfaction and it is conveyed through the
market to policyholders, to become more attentive about their policies they availed. This is the
basic element in the insurance company to make sure that their consumer is satisfied.

The significance of the Research

The progress of any county depends upon the smoothness of its system of finance. The
insurance sector is one of the chief players in the financial system. With the help of various
services provided by insurance sectors, it would give a positive influence on consumer
behaviour. Due to growing poverty in India, the insurance sector would suffer from lacking in
services so they would face the criteria to meet the requirements of the consumer. The
significance of the consumer's attitude towards insurance would also be determined by the
growing competition in activities and organisation in the insurance system across the globe.
Therefore, the satisfaction of the customer is core significance for the company of insurance
management to retain and to appeal its potential customers. This study will examine the
important factors that have a positive influence on customer's choice and rank these factor.

Theoretical Framework
Fishenbein and Ajzen's (1975) presented the theory of reasoned action Buyer behavioural
of the school of marketing theory. This theory emphasized on consumers within the marketplace
within two ways. The first relied on the personal analytical characteristics of the consumer, and
second on why customer reacted in certain ways (Day & Montgomery, 1993). With the
increasing attention towards the consumer needs, wishes and desires (Macrus & Thompson,
2001). The study of consumer manners towards insurance policy proved as most essential for
both theory and practical application.
The behaviour of the consumer may be described as a stable institution of motivated,
emotional and process of reasoning with related to the environment around us (Best et al, 2003).
On the other hand, consumer behaviour attitude is adopted inclination accordance with required
objective (Kanuk & Schiffman, 2003) On this basis it can be claimed that what is the
significance, which can be adopted mostly by the consumer from the services of insurance
services.
Kahneman and Tversky (1979) reported a risk against an individual, therefore, all the
risks should be avoided. Through empirical proofs, however, recommends, most people are
against risks for gain and risk persuading for losses. Life insurance sector not created restrictions
and barriers. It provides a lot of opportunities for the people who wanted to build their career in
this sector. The company maintained a strong relationship with agents of life insurance.

Literature Review
In order to spend quality of life, there are various factors played a major role including
health, employment, and gender equality. In addition to it, insurance is also considered as the
main factor for quality of life. The approach to literature and observation of life insurance
policyholders have basically focused on factors forecasting these attitudes (Skinner & Dubinsky,
1984; Kruse & Ozdemir, 2004).
Babita Yadav (2011) stated the main support of any organization is the belief of
customers, it is considered as the main developing factor for the success of the business.
Krishnamurthy (2005) in the paper explained the position and development of Insurance industry
of India presented future tasks and opportunities related to insurance. Insurance played a role in
maintaining the economy of the country and reduced the factors of risks, influenced the growth
of the country.
According to the paper of Rajkumari (2007) “The awareness of customer towards the
inclination of insurance service and its satisfaction. In this study, the researcher has examined the
attitude of the customer towards buying insurance products, available through banks. He also
gave a recommendation to improved awareness on the performance of bank". Thus the people
who spend their amount in order to secure their lives are not only assured their safety but also
achieved positive status in society.
According to the study of Ranjhan, Jayanthi, Bhatnagar and Vishal (2009), the effective
management of customers communication is today’s need. Analysing relationship with the
customer for a long time proved to be basic characteristics for success.
Kumar (2005) in his study, resulted that the Life Insurance dissemination, in India is
almost 2% of GDP. The premium of life insurance is 550 per capita. The LIC is the largest
participant with over 2000 officers.
The prospects of attitude and observation of policyholders maintained life insurance
policy eventually focused on factors determined consumer behaviour. (Skinner and Dubinsky,
1984; Kruse & Ozdemir, 2004) the factors which include the supposed value of consumer,
(Smith, 2006) satisfaction (Allen, 1999) and obligation to purchase decisions. (Barron and
Staten, 1995) have been presented as essential in the field of holding policy. For instance, in
observation of 1,462 families, it is the results of Skinner and Dubinsky (1984) that the status of
employment and educational level of husband and wife differentiate mostly among which
member is accountable for buying an insurance policy. Other essential factors include the
educational level of wife, earning the status of husband, the income of their family, and the
occupation of the husband. Kruse and Ozdemir (2004) explain the relationship between risk
dividing among people, and their ability to pay for safety.
Within the concept of consumer behaviour, attitude is adopted inclination to react in a
reliable complimentary or non-complimentary way in the accomplishment of a particular object
(Kanuk & Schiffman, 2000)
According to the examination of Namasiyayam et.al.,(2006), there are certain factors
liable for the purchasing of life insurance policies and the importance of the policy makers
concerning multiple types of policies of LIC. It is also concluded from the study that the most
influencing factors in the Life insurance policy are educational level, income, profession and size
of the family is important to consider.
There is a significant report regarding Insurance policy named “Marketing of Life
insurance” (1987). The aim behind conducting the project was to examine multiple
characteristics related to insurance such as life insurance coverage, awareness among people
regarding life insurance plans and policies, beliefs and approaches in life insurance, sense of
recognition with the life insurance company. The conclusion also derived that Life insurance is a
better policy of investment for investors.
Khanna (1997) in his study mentioned that Life insurance policy entails significant
services of an agent to render their service. This study also highlights the fact that this is the
responsibility of insurance agents to spread awareness in rural areas and to serve the people
belongs to the poor class. Moreover, he also emphasis on the fact that the positive response of
consumer can only be developed through the quality of performance, and upgraded work.

Consumer’s Behaviour and Insurance Corporations in India

In India, Insurance sectors play a vital role in both fields, financial system and socio-
economic function, provide basics to cores of the economy. It has also become a reason for
enhancing stable, efficient businesses in India in order to meet the requirements of the country.
Deepika & Badlani (2011) concluded results from study “Service Quality opinion and
Satisfaction of customer in India” with an observation to recognize consumer contentment in
retail life insurance in India. They discovered that the satisfaction of customer with the
estimation followed by competence between the employee, product and services, delivery,
technological works, advertisement and management by service”.
How Consumers Selects Policies Regarding Insurance
The facilities that are provided by insurance companies are almost alike and so the
customer has a variety of choices. This also defines that they have limitless choices and so
customer go towards his own satisfaction, chooses the policy which gives them satisfaction as its
peak (Dewan, 2008).
The Indian insurance industry has been experiencing rapid changes, reflecting various underlying
developments. The competition between insurance companies is mainly based on technology and
unique products (Dewan, 2008).

Indian Insurance Regulations

Insurance regulation in India has started with two acts: Life insurance companies act,
1912, and provident fund act, 1912. Insurance act of 1938, works as firm control over insurance
business in the county. The business of life insurance was nationalized in 1956, under the control
of life insurance Corporation of India. In the year 1993, the group of Malhotra was organized to
study the business of insurance. After this, Mukherjee committee came with the same function
and submitted their report with recommendations. The study decided to allow 40% foreign
equity in private insurance companies and foreign company consist of 14% (Parida & Acharya,
2016).

Methodology
The study will be conducted through applied the approach of a mixed method for the
accomplishment of the goals and objectives of the research. The study will be consist of
assembling of primary data as well as secondary data in order to gain the exact results and
findings of the research and explaining them under the framework of speculative and conceptual
theoretical work. In order to conduct primary data, the survey which would be created consist of
an appropriate questionnaire which would also be fulfilling towards the objectives of the study.
The collection of questionnaire survey will be analysed with the help of quantitative
research, examined for the findings of numerical pieces of evidence and those figures which
shows knowledge related to consistent different characteristics of research.
Research Design
The design which would be used for this research is a mixed method includes both
quantitative and qualitative) the findings of mixed method research is the attainment of
Research that includes analysing, accumulating, and to participate quantitative and qualitative
that would focus within the area of interviews research, and grouping as well (Goddard &
Melville, 2011).
In order to conduct the secondary section of the research method, the data will be
assimilated through the analysis of applicable secondary research related to the topic under the
consideration of research. This will consist of journal articles which are revised by other expert’s
scholars. The findings which emerged from secondary data will permit the authentication and
intensifications of the findings through the implementation of primary data quantitative analysis
(McBurney & White, 2013).
The findings which would be emerged from the analysis of the primary data and
secondary data will be incorporated after the implementation of the descriptive research analysis
centred on the informative philosophies. This would also deliver the establishment of convincing
discussions relatable to the study of consumer behaviour (Fowler, 2014).

Sample Size
The size of the sample will be 100 respondents. The procedure of the questionnaire
would be completed online through an emailed system. The random population will be taken for
the purpose of study (McBurney & White, 2013).

Instrument (Questionnaire)
This survey would be conducted in order to know about awareness, ideas and behaviour
towards life insurance Policy Corporation in India. The whole questionnaire will focus on
finding demographic information and personal opinions about the insurance policy. The Likert
scale would be used to demonstrate this survey. The scale of Likert would be useful for the
measurement of latent constructs that are based on features such as attitudes, opinion and
feelings. The information would be placed confidential (McBurney & White, 2013).

Data Collection Method

 The present study will be conducted within the population of India. Data would be
collected from the random population of India. The questionnaire would be completed by taking
the data from 100 people. The answers will depend upon the participant’s choices. The analysis
of the survey would calculate through the theoretical framework linked with the multiple
characteristics of this proposal (McBurney & White, 2013). Secondary data will be gathered
publications, journals, books and scholarly work already published in a similar context. The
secondary data will be collected with the use of both online and offline sources of information
(Goddard & Melville, 2011).

Ethical Considerations
The proposed research work will be conducted considering the ethical boundaries defined
in the academic literature of the university and as prescribed by the laws of the country.
Moreover, the researcher will properly cite the references which are used in the completion of
this work. Lastly, the researcher will also take prior consent of the university and the respondents
before initiating the primary research phase.
 References

Beck, T. and Webb, I., 2003. Economic, demographic, and institutional determinants of life
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pp.297-334.
Cronbach, L.J., 1951. Coefficient alpha and the internal structure of tests. psychometrika, 16(3),
pp.297-334.
Dev, S. and Bansal, M., A Study Of Consumer Buying Behaviour Towards Life Insurance
Policies In Punjab State.
Dionne, G. and Harrington, S.E., 1992. An introduction to insurance economics. In Foundations
of Insurance Economics(pp. 1-48). Springer, Dordrecht.
Dionne, G. and Harrington, S.E., 1992. An introduction to insurance economics. In Foundations
of Insurance Economics(pp. 1-48). Springer, Dordrecht.
Dewan, N. (2008). Indian Life and Health Insurance Industry. Wiesbaden: Betriebs wirts
chaft licher Verlag Dr.Th. Gabler / GWV Fachverlage GmbH, Wiesbaden.
Fowler, F. (2014). Survey research methods. London: Sage Publication.

Gnana kumari, V., 2006. Customer based brand equity among personal care products a study
with reference to Chennai city.
Goddard, W. and Melville, S. (2011). Research methodology. Kenwyn, South Africa: Juta & Co.

Hawkins, I.D., Best, J.R. and Coney, A.K., 2003. Consumer Behaviour Building Marketing
Strategy.
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McBurney, D. and White, T. (2013). Research methods. Belmont, CA: Wadsworth Cengage
Learning.

Parida, T. and Acharya, D. (2016). The Life Insurance Industry in India: Current State and
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Roy, A.D., 1987. We Care for our Customers.

Sharma, N., 2018. A Study Of Buying Behaviour Of Consumers Towards Life Insurance
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Appendix-I: Survey Questionnaire

Demographic
Name: _________________
Age: __________________
Gender: _______________
Options provided for each question:
o Strongly agree
o Agree
o Neutral
o Disagree
o Strongly Disagree

Q.1. the concept of buying Insurance policy is beneficial for an individual and family.
o Strongly agree
o Agree
o Neutral
o Disagree
o Strongly Disagree
Q.2. Consumer satisfaction is essential for the credibility of insurance company.
o Strongly agree
o Agree
o Neutral
o Disagree
o Strongly Disagree
Q.3. Life Insurance Corporation in India plays vital role in securing people lives.
o Strongly agree
o Agree
o Neutral
o Disagree
o Strongly Disagree
Q.4. Diversified choices in selecting Life insurance policy gives positive impact on consumer
behaviour towards Insurance Company.
o Strongly agree
o Agree
o Neutral
o Disagree
o Strongly Disagree
Q.5. the risks of uncertainty after loss of the family towards life insurance has reduced after the
services provided by Life Insurance Company of India.
o Strongly agree
o Agree
o Neutral
o Disagree
o Strongly Disagree

Q.6 creating awareness programme among population of India regarding Life insurance is
essential.

o Strongly agree
o Agree
o Neutral
o Disagree
o Strongly Disagree
Q.7 the demands of the consumer regarding Life insurance depends upon their social, cultural
and historical background.
o Strongly agree
o Agree
o Neutral
o Disagree
o Strongly Disagree
Q.8 People live below the poverty line, their insurance perception supposed to be low.
o Strongly agree
o Agree
o Neutral
o Disagree
o Strongly Disagree
Q.9 In today's life Insurance policy is considered as the quality standard of life.
o Strongly agree
o Agree
o Neutral
o Disagree
o Strongly Disagree
Q.10 The future development of Insurance Policy depend upon how successfully insurers are
fulfilling the needs and expectations of customers.
o Strongly agree
o Agree
o Neutral
o Disagree
o Strongly Disagree

(Based on Likert scale)