Project 11

MBA Program Y.C.M.O.U.
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A
PROJECT REPORT on
‘‘A Study of Consumer Behavior and comparative
analysis of Life Insurance Companies in
Kolhapur District”
Submitted to
THE DIRECTOR, SCHOOL OF COMMERCE AND
MANAGEMENT Y.C.M.O.U. NASHIK
For the Award of
Master of Business Administration (MBA)
By
M. M. MAHAJAN.(B.Sc.)
Under the Guidance of

MR. V. J . DHERE.
B.Sc, MBA, M.Phil, GDC&A, PGDIBO)
(2009-10)
( PRNNO : RPO903231) (STUDY CENTRE: 71122)
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Vivekanand College, Kolhapur (71122)
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SYNOPSIS
1. INTRODUCTION, IMPORTANCE & SIGNIFICANCE OF THE
STUDY –
The insurance industry in India has seen an array of changes in the past of
one decade. The year saw an up rise in the Indian insurance sector as major
structural changes took place with the ending of the government monopoly
and the route of the Insurance Regulatory and Development Authority (IRDA)
Bill lifting all entry restrictions for private players and allowing foreign
players with some entry restrictions and limits on direct investment
ownership. With the fast changing liberalization, globalization and
privatization policies, the changing and growing needs and demands of the
people have made the insurance industry more competitive. Both public and
private players now offer greater choice in terms of products and services.
They also make valuable efforts to create awareness about the benefits and
significance of insurance although there is still a blocking point among the
people.
Kolhapur district in western maharashtra is one of the developed area with
strong agriculture base, cooperative organizations and various types of
industries. further, in this competitive world every life insurance company is
indulged in maximizing it market share by tapping new market segments as
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well as by the means of consumer retention.Therfore the study of consumer
behavior is important in case of life insurance business.
2. RATIONAL OF THE STUDY -
Due to the vast developments in the industrial sector followed by huge
technological inventions both the rural and urban life styles have been
changed. Every human being is surrounded by risks of all types and at all
the times. The risk includes life risk, asset risk, and health risk etc. At the
same time the income level per capita has been increased. The common
person is earning sufficient amount to make his livelihood and make some
investment for future contingencies. Due to the government’s economic
policies he has to pay income tax beyond certain minimum income level in
increasing percentage at different income slabs. Therefore the people have
to find out the different investment avenues where their investment will be
safe and offer good returns in terms of interest, dividends etc. Bank savings
are not giving good returns these days and co-operative banking sector is
facing problem in Maharashtra. Investment Shares is risky for small
investor and the process of buying and selling of shares is out of
understanding of common person. The mutual fund investment is giving
good returns. Insurance is the only investment avenue which covers
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various types of risks to human life, provides good returns and gives
income tax exemption in certain policies.
Due to LPG policy of Indian government along with domestic insurance
companies foreign companies have also entered into the market to tap the
increasing population of the country. There is enormous competition
among these companies to attract the consumers of all the income level
groups. Everyday they are coming with different schemes suitable and
matching to the needs of different classes of people.
The awareness of all the products of these insurance companies and the
preference, perception, attitude, influencing factors while purchasing the
policies, purchasing decisions, post purchase behavior, satisfaction levels
are varying with varied consumer segments. Therefore, it becomes
interesting to study the consumer response to the sensitive service industry
through the means of consumer behavior. Therefore the researcher has
selected the topic for his study which entitles as, ‘‘a study of consumer
behavior and comparative analysis of life insurance companies in Kolhapur
district”
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3. OBJECTIVES OF THE STUDY -
The study will be undertaken with a view to analyze the awareness and buying
behavior of the consumers towards various life insurance companies and their
products. Thus, the objectives of the study will be –
1. To study the awareness of different insurance companies and their
Policies.
2. To know the various reasons for purchasing insurance policies
3. To determine the market potential for various products of different
Insurance companies.
4. To study the prevailing attitudes of consumers towards the various
Insurance policies in terms of price (premium) ,features, returns ,risk
Coverage , tax exemptions, etc.
5. To give suggestions for the further improvement if necessary
4. HYPOTHESIS OF THE STUDY -

1. People normally do not buy insurance services.
2. Life insurance companies are lacking behind in promotional

Efforts.
3. Consumers are selecting the insurance policy after careful study.
Therefore they are happy with their decision.
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5. RESEARCH METHODOLOGY -
There are two types of sources of data collection for the research.
a. Primary Data
A primary data are those, which are collected a fresh & for the first
Time and thus happens to be original in nature.
Here, the researcher will collect the primary data with the help of survey
method. A structured Questionnaire will be prepared for the existing
consumers of insurance. The discussions and interviews of the consumers will
be also conducted to collect the necessary information to fulfill the objectives
of the study.
b. Secondary Data
Secondary data are those which have been already been collected by some
other agencies & which have already been processed & published. Generally
speaking secondary data are the information, which has previously been
collected by same organization to satisfy their own need, but it is later used by
others for entirely for different reason.
Here, various books magazines, journals, websites, reports, etc. will be
referred as Secondary Data.
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Sampling And sample size-
The sample of 125 respondents from of Kolhapur District will be selected by
the convenient sampling method as representative units of whole population.
6. expected contribution -
This research work will cover the study of life insurance business of entire
Kolhapur district market by means of study of consumer behaviour. In the first
chapter the research design of the study will be explained. The profile of
Kolhapur district will be highlighted in the second chapter. The third chapter
will be comprised of review of literature on life insurance industry and
consumer behaviour. The data collected through primary and secondary
sources will be presented, analyzed and interpreted with the help of tables and
graphs in the fourth chapter. The findings based on the analysis and
interpretation of data in earlier chapter will be presented in fifth chapter which
will further followed by the suggestions or recommendations to both buyers
and the insurance companies if necessary. Conclusions of the study and scope
for further study will be given in the last chapter.
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7. CHAPTERSATION -
Chapter No. 1 : Research Design:-
Chapter No. 2 : Over view of insurance industry.
Chapter No. 3 : Consumer behavior: a conceptual discussion.
Chapter No. 4 : Data presentation, analysis and interpretation
Chapter No. 5 : Findings and Suggestions
Annexure: 1. Bibliography
2. Questionnaire
(Research Candidate) (Research Guide)
M.M.MAHAJAN. MR.VAIBHAV J.DHERE
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Guide Certificate
This is to certify that the project report entitled “A study of Consumer
Behavior & comparative analysis of Life Insurance Companies in
KOLHAPUR DISTRICT” is a bonafide work prepared by Mr. MILIND
MAHAJAN. Under my guidance & direct supervision & submitted to the
YCMOU, Nasik as a partial fulfillment of the degree of MBA.
To the best of my knowledge & belief the matter presented in this
project has not been submitted earlier for the award of MBA degree or any
other course of any University or Institute.
Place :- Kolhapur Prof. Vaibhav J. Dhere
Date :- Project Guide
Co-Ordinator Certificate
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This is to certify that the project report entitled “A study of Consumer
Behavior & comparative analysis of Life Insurance Companies in
KOLHAPUR DISTRICT ” is a bonafide work prepared by Mr. M. M.
MAHAJAN. under the able guidance & direct supervision of Mr. Vaibhav J.
Dhere & submitted to the YCMOU Nasik as a partial fulfillment of the degree
of MBA.
To the best of my knowledge & belief the matter presented in this
project has not been submitted earlier for the award of MBA degree or any
other course of any University or Institute.
Place :- Kolhapur Prof. S. D. More
Date :- Co-Ordinator
Vivekanand College
Study Centre, Kolhapur.
Declaration
________________________________________________________________________
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I the undersigned , hereby declare that the project report entitled “A
study of Consumer Behavior & comparative analysis of Life Insurance
Companies in KOLHAPUR DISTRICT ” is a genuine & bonafide work
prepared by me & submitted to the YCMOU, Nasik under the able guidance
of Prof. Vaibhav J. Dhere , the empirical findings of the study are entirely
based on the data collected by myself. The matter included in this report is not
reproduced from any source.
I understand that any such copying is liable to be punished as the
authorities deem fit.
Place :- Kolhapur Mr. M. M. MAHAJAN

Project Student
Date :- ( RP 903231 )
Acknowledgement
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I take it as an opportunity to thank all those who have directly inspired,
directed & help me towards successful completion of this project report.
I am grateful to my project guide Mr. Vaibhav J. Dhere for his valuable
guidelines.
I express my sincere thanks to co-ordinator, YCMOU study center,
Kolhapur, Prof. S.D. More.
I express my sense of gratitude towards my parents & friends for their
constant moral support during my project report.
Place :- Kolhapur Mr. M. M.MAHAJAN

Project Student
Date :- ( RP 903231 )
Index
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Chapter No. Name of Chapter Page No.

1. Introduction & Research Design
Overview of the Indian Insurance
2.
Industry
3. Conceptual Discussion
Data Presentation, Analysis &
4.
Interpretation
5. Findings & Suggestions
Annexures
Questionnaires
Bibliography
1. Introduction & Research Design
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1.1 INRODUCTION, IMPORTANCE & SIGNIFICANCE OF STUDY :-
The Insurance Industry in India has seen an array of changes in the past of one
decade. The year saw an up rise in the Indian Insurance sector as major structural changes
took place with the ending of the Government monopoly and the route of the Insurance
Regulatory & Development Authority ( I.R.D.A. ) bill lifting all entry restrictions for
private players & allowing foreign players with some entry restrictions & limits on direct
investment ownership. With the fast changing liberalization, globalization & privatization
policies , the changing & growing needs & demands of the people have made the Insurance
Industry more competitive. Both public & private players now offer greater choice in terms
of products & services. They also make valuable efforts to create awareness about the
benefits & significance of Insurance although there is still a blocking point among the
people.
Kolhapur District in Western Maharashtra is one of the developed area with strong
Agriculture base , Co-operative Organisations & various types of Industries further in this
competitive world every Life Insurance Company is indulged in maximizing its market
share by tapping new market segments as well as by the means of consumer retention.
Kolhapur is one of the district famous for its textile industries and sugarcane industries and
known as high par capita income district of Maharashtra. Therefore the study of consumer
behavior is important in case of Life Insurance business.
Consumer Behavior:-
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Consumer, the most critical component in marketing strategy of enterprise was
studied in the depth. Even though consumer behavior can’t be precisely quantified &
marketing decisions have to be based on probability, it is much better to know this behavior
& then take decisions rather than taking them without any study. An excellently engineered
product may fail just because the customer does not identify himself or herself with it.
Hence a company must understand how the buyer decide in favor of one brand or product ,
what motivates him or her to select an alternative and who influences him or her to buy the
brand or product. It is important to study how much time customer spends on evaluating
different brands & prices in the same product category.
For better understanding of consumer behavior three major psychological factors
examined – Motivation, Learning & Perception. Buyer decisions are also strongly
influenced by variables like cultural & social factor, personal factor like demographics, self
concept & psychographic variables like lifestyles & personality. The various tools to study
buyer behavior are surveys, projective techniques & focus group discussions.
1.2. RATIONALE:-
Due to the vast developments in the Industrial sectors followed by huge
technological inventions both the rural and urban life styles have been changed. Every
human being is surrounded by risks of all types and at all the times. The risk includes life
risk, asset risk and health risk etc. at the same time the income level per capita has been
increased. The common person is earnng sufficient amount to make his livelihood and
make some investment for future contingencies. Due to Government’s economic policies he
has to pay certain income tax beyond certain minimum income level in increasing
percentage at different income slabs. Therefore the people have to find out the different
investment avenues where their investments will be safe and after good returns in terms of
________________________________________________________________________
_________________________________________________________________________
interests, dividends etc. Bank savings are not giving good returns these days and co-
operative banking sector is facing problems in Maharashtra. Investment share is risky for
small investor and the process of buying and selling of shares is out of understanding of
common person. The mutual fund investment is giving good returns. Insurance is the only
investment avenue which covers various types of risks to human life, provides good returns
and gives income tax exemptions in certain policies. Due to LPG policy of Indian
Government along with Domestic Insurance Companies have also entered into the market
to tap the increasing population of the country. There is enormous competition among these
companies to attract the consumers of all the income level groups. Everyday they are
coming with different schemes suitable and matching to the needs of different classes of
people.
The awareness of all the products of these Insurance Companies and the preference,
perception, attitude, influencing factors while purchasing the policies, purchasing decisions,
post purchase behaviour, satisfaction levels are varying with varied consumer segments.
Therefore, it becomes interesting to study the consumer response to the sensitive service
industry through the means of consumer behavior. Therefore the researcher has selected the
topic for his study which entitles as, “ a study of consumer behavior and comparative
analysis of Life Insurance Companies in Kolhapur District”.
1.3 OBJECTIVES :-
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The study has been undertaken with a view to analyse the awareness and
buying behavior of the consumers towards various Life Insurance Companies and
their products. Thus, the objectives of the study are –
• To study the awareness of different insurance companies and their
policies.
• To study the privatization in Insurance sector.
• To know the various reasons for purchasing Insurance Policies.
• To determine the market potential for various products of different
Insurance companies.
• To ascertain the effect of Insurance advertisements on the minds of
consumers.
• To find out the motivational factors affecting the consumers while
purchasing the policies.
• To study the prevailing attitudes of consumers towards the various
Insurance Policies in terms of price ( Premium ), features, returns, risk
coverage, tax exemption.
• To know the role of consumers in decisions in the buying of the
Insurance Policy.
1.4 HYPOTHSIS :-
a. People normally don’t buy Insurance services.
b. Life Insurance Companies are lacking behind in promotional efforts.
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c. Consumers are selecting the Insurance Policy after careful study. Therefore
they are happy with their decision.
1.5 RESEARCH METHODOLOGY :-
There are two types of sources of data collection for the research.
a) Primary Data –
A primary data are those, which was collected a fresh and for the first time and thus
happens to be original in nature. Here, the researcher has collected the primary data with
the help of survey method. A structured Questionnaire has been prepared with separate sets
of Questionnaires for consumers and the Insurance Agents OR Advisors. The discussion
and interviews of the consumers and Insurance Agent OR Advisors has also been
conducted to collect the necessary information to fulfill the objective of study.
b) Secondary Data –
Secondary Data are those which have already been collected by some other agencies
and which has already been processed and published. Generally speaking secondary data
are the information, which has previously been collected by same organization to satisfy
their own need, but it is later used by others entirely for different reason.
Here, various books magazines, journals, web-sites, reports etc. were referred as
Secondary Data.
1.6 EXPECTED CONTRIBUTION:-
Sampling And Sample Size –
The sample of 150 respondents from all the KOLHAPUR DISTRICT of Kolhapur
District demographics was selected by the convenient sampling method as representative
units of whole population. In this sample of 150 units there were 100 consumers and 50
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Insurance Agents OR Advisors from LIC, Birla Sun Life, HDFC Standard Life, Bajaj
Allianz, ICICI Prudential, Reliance Life Insurance.
1.7 Limitations of the Study :-
1. This study is related to the consumer buying behavior of Insurance Companies.
2. This study is only limited to KOLHAPUR DISTRICT.
3. This study is related only to Insurance Customers & Advisors.
4. The information given by the Insurance Agents/Advisors may be biased.
5. Study is limited only for the period from June-09 to Sept-09.
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CHAPTAR - 2
2. Overview of the Indian Insurance Industry
2.1 Brief History –
In India, insurance has a deep-rooted history. It finds mention in the writings of
Manu ( Manusmrithi ), Yagnavalkya ( Dharmasastra ) and Kautilya ( Arthasastra ). The
writings talk in terms of pooling of resources that could be re-distributed in times of
calamities such as fire, floods, epidemics and famine. This was probably a pre-cursor to
modern day insurance. Ancient Indian history has preserved the earliest traces of insurance
in the form of marine trade loans and carriers’ contracts. Insurance in India has evolved
over time heavily drawing from other countries, England in particular. The insurance sector
in India has come a full circle from being an open competitive market to nationalization
and back to a liberalized market again. Tracing the developments in the Indian insurance
sector reveals the 360-degree turn witnessed over a period of almost 190 years.
Yr. 1818 saw the advent of life insurance business in India with the establishment of
the Oriental Life Insurance Company in Calcutta. This Company however failed in 1834. In
1829, the Madras Equitable had begun transacting life insurance business in the Madras
Presidency. 1870 saw the enactment of the British Insurance Act and in the last three
decades of the nineteenth century, the Bombay Mutual (1871), Oriental (1874) and Empire
of India (1897) were started in the Bombay Residency. This era, however, was dominated
by foreign insurance offices which did good business in India, namely Albert Life
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Assurance, Royal Insurance, Liverpool and London Globe Insurance and the Indian offices
were up for hard competition from the foreign companies.
In 1914, the Government of India started publishing returns of Insurance Companies in
India. The Indian Life Assurance Companies Act, 1912 was the first statutory measure to
regulate life business. In 1928, the Indian Insurance Companies Act was enacted to enable
the Government to collect statistical information about both life and non-life business
transacted in India by Indian and foreign insurers including provident insurance societies.
In 1938, with a view to protecting the interest of the Insurance public, the earlier legislation
was consolidated and amended by the Insurance Act, 1938 with comprehensive provisions
for effective control over the activities of insurers.
The Insurance Amendment Act of 1950 abolished Principal Agencies. However, there
were a large number of insurance companies and the level of competition was high. There
were also allegations of unfair trade practices. The Government of India, therefore, decided
to nationalize insurance business.
An Ordinance was issued on 19th January, 1956 nationalizing the Life Insurance sector
and Life Insurance Corporation came into existence in the same year. The LIC absorbed
154 Indian, 16 non-Indian insurers as also 75 provident societies—245 Indian and foreign
insurers in all. The LIC had monopoly till the late 90s when the Insurance sector was
reopened to the private sector.
The history of general insurance dates back to the Industrial Revolution in the west and
the consequent growth of sea-faring trade and commerce in the 17th century. It came to
India as a legacy of British occupation. General Insurance in India has its roots in the
establishment of Triton Insurance Company Ltd., in the year 1850 in Calcutta by the
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British. In 1907, the Indian Mercantile Insurance Ltd, was set up. This was the first
company to transact all classes of general insurance business.
1957 saw the formation of the General Insurance Council, a wing of the Insurance
Associaton of India. The General Insurance Council framed a code of conduct for ensuring
fair conduct and sound business practices.
In 1968, the Insurance Act was amended to regulate investments and set minimum
solvency margins. The Tariff Advisory Committee was also set up then.
In 1972 with the passing of the General Insurance Business (Nationalization) Act,
general insurance business was nationalized with effect from 1st January, 1973. 107
insurers were amalgamated and grouped into four companies, namely National Insurance
Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company
Ltd and the United India Insurance Company Ltd. The General Insurance Corporation of
India was incorporated as a company in 1971 and it commence business on January 1sst
1973.
This millennium has seen insurance come a full circle in a journey extending to nearly
200 years. The process of re-opening of the sector had begun in the early 1990s and the last
decade and more has seen it been opened up substantially. In 1993, the Government set up
a committee under the chairmanship of RN Malhotra, former Governor of RBI, to propose
recommendations for reforms in the insurance sector. The objective was to complement the
reforms initiated in the financial sector. The committee submitted its report in 1994 where
in, among other things, it recommended that the private sector be permitted to enter the
insurance industry. They stated that foreign companies be allowed to enter by floating
Indian companies, preferably a joint venture with Indian partners.
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Following the recommendations of the Malhotra Committee report, in 1999, the
Insurance Regulatory and Development Authority (IRDA) was constituted as an
autonomous body to regulate and develop the insurance industry. The IRDA was
incorporated as a statutory body in April, 2000. The key objectives of the IRDA include
promotion of competition so as to enhance customer satisfaction through increased
consumer choice and lower premiums, while ensuring the financial security of the
insurance market.
The IRDA opened up the market in August 2000 with the invitation for application for
registrations. Foreign companies were allowed ownership of up to 26%. The Authority has
the power to frame regulations under Section 114A of the Insurance Act, 1938 and has
from 2000 onwards framed various regulations ranging from registration of companies for
carrying on insurance business to protection of policyholders’ interests.
The insurance sector is a colossal one and is growing at a speedy rate of 15-20%.
Together with banking services, insurance services add about 7% to the country’s GDP. A
well-developed and evolved insurance sector is a boon for economic development as it
provides long- term funds for infrastructure development at the same time strengthening the
risk taking ability of the country.
2.2 Some of the important milestones in the life insurance
business in India are: -

1912 - The Indian Life Assurance Companies Act enacted as the first statute to regulate the
life insurance business.
1928 - The Indian Insurance Companies Act enacted to enable the government to collect
statistical information about both life and non-life insurance businesses.
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1938 - Earlier legislation consolidated and amended to by the Insurance Act with the
objective of protecting the interests of the insuring public.
1956 - 245 Indian and foreign insurers and provident societies taken over by the central
government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956,
with a capital contribution of Rs.5 crore from the Government of India.
The General insurance business in India, on the other hand, can trace its roots to the Triton
Insurance Company Ltd., the first general insurance company established in the year 1850
in Calcutta by the British. Some of the important milestones in the general insurance
business in India are:
1907 - The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes
of general insurance business.
1957 - General Insurance Council, a wing of the Insurance Association of India, frames a
code of conduct for ensuring fair conduct and sound business practices.
1968 - The Insurance Act amended to regulate investments and set minimum solvency
margins and the Tariff Advisory Committee set up.
1972 - The General Insurance Business (Nationalization) Act, 1972 nationalized the general
insurance business in India with effect from 1st January 1973.
107 insurers amalgamated and grouped into four companies viz. the National Insurance
Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company
Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company.
2.3 What Is Life Insurance?

- Life insurance is a contract that pledges payment of an amount to the person assured (or
his nominee) on the happening of the event insured against.
- The contract is valid for payment of the insured amount during:

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The date of maturity, or
Specified dates at periodic intervals, or
Unfortunate death, if it occurs earlier.
Among other things, the contract also provides for the payment of premium
periodically to the Corporation by the policyholder. Life insurance is universally
acknowledged to be an institution, which eliminates 'risk', substituting certainty for
uncertainty and comes to the timely aid of the family in the unfortunate event of death of
breadwinner.
- By and large, life insurance is civilization’s partial solution to the problems caused by
death. Life insurance, in short, is concerned with two hazards that stand across the life-path
of every person:
- That of dying prematurely leaving a dependent family to fend for it.
- That of living till old age without visible means of support.
2.4 Life Insurance Vs. Other Savings
Contract Of Insurance:
A contract of insurance is a contract of utmost good faith technically known as
uberrima fides. The doctrine of disclosing all material facts is embodied in this important
principle, which applies to all forms of insurance. At the time of taking a policy,
policyholder should ensure that all questions in the proposal form are correctly answered.
Any misrepresentation, non-disclosure or fraud in any document leading to the acceptance
of the risk would render the insurance contract null and void.
Protection:
Savings through life insurance guarantee full protection against risk of death of the
saver. Also, in case of demise, life insurance assures payment of the entire amount assured
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(with bonuses wherever applicable) whereas in other savings schemes, only the amount
saved (with interest) is payable.
Aid To Thrift:
Life insurance encourages 'thrift'. It allows long-term savings since payments can be
made effortlessly because of the 'easy installment' facility built into the scheme. (Premium
payment for insurance is either monthly, quarterly, half yearly or yearly).
For example: The Salary Saving Scheme popularly known as SSS, provides a convenient
method of paying premium each month by deduction from one's salary.
In this case the employer directly pays the deducted premium to LIC. The Salary Saving
Scheme is ideal for any institution or establishment subject to specified terms and
conditions.
Liquidity:
In case of insurance, it is easy to acquire loans on the sole security of any policy that
has acquired loan value. Besides, a life insurance policy is also generally accepted as
security even for a commercial loan.
Tax Relief:
Life Insurance is the best way to enjoy tax deductions on income tax and wealth tax.
This is available for amounts paid by way of premium for life insurance subject to income
tax rates in force. Assesses can also avail of provisions in the law for tax relief. In such
cases the assured in effect pays a lower premium for insurance than otherwise.
Money When You Need It:
A policy that has a suitable insurance plan or a combination of different plans can
be effectively used to meet certain monetary needs that may arise from time-to-time.
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Children's education, start-in-life or marriage provision or even periodical needs for cash
over a stretch of time can be less stressful with the help of these policies.
Alternatively, policy money can be made available at the time of one's retirement from
service and used for any specific purpose, such as, purchase of a house or for other
investments. Also, loans are granted to policyholders for house building or for purchase of
flats. (subject to certain conditions).
2.5 Objectives of Insurance :-
* Spread Life Insurance widely and in particular to the rural areas and to the socially and
economically backward classes with a view to reaching all insurable persons in the country
and providing them adequate financial cover against death at a reasonable cost.
* Maximize mobilization of people's savings by making insurance-linked savings
adequately attractive.
* Bear in mind, in the investment of funds, the primary obligation to its policyholders,
whose money it holds in trust, without losing sight of the interest of the community as a
whole; the funds to be deployed to the best advantage of the investors as well as the
community as a whole, keeping in view national priorities and obligations of attractive
return.
* Conduct business with utmost economy and with the full realization that the moneys
belong to the policyholders.
* Act as trustees of the insured public in their individual and collective capacities.
* 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.
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* 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.
2.6 Product Portfolio –
Based on the objectives, plans offered by insurers can be classified under three
categories –
8. Insurance products ( Term Plans )
9. Pure investment products ( Pension Plans )
10. Investment cum Insurance products ( Endowment , Money Back , Whole Life &
Unit Linked Insurance Plans )
General climate of Indian Insurance Industry & its Consumers:-
The Indian Insurance Industry, taking advantage of positive conditions in the
economy has seen a fabulous growth in the recent years after passing LPG policies. It has
undergone a significant transformation & emerged noticeable trends. Conversely , it faces
increase in the tremendous challenges because of changing customer demographics,
technology know-how, regulatory changes & emerging channels of distribution. In addition
to that with the increase in awareness of India’s populace about the risks in daily life &
importance of Insurance policies, the entry of global players & their benefits have
positively changed the Insurance Industry into a dynamic one. As a result of this at present
there are thirteen major players in India comprising of one public sector and twelve private
players trying to capture their ranking by fulfilling the need and wants of the customers.
This study will focus on consumers buying behavior of various products of these
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companies as well as comparing these companies in the Insurance Industry and attempts to
access the consumer response rate for privatization and awareness of life cover and the new
and existing policies.
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CHAPATAR - 3
Consumer behavior: a conceptual discussion.
3.1 Who is consumer?
A ‘‘consumer’’ is anyone who typically engages in any one or all of the activities
described in our definition. Traditionally consumers have been defined very strictly in
terms of economic goods and services i.e. goods and services wherein a monetary
transaction is involved. However, over time this concept has been widened to include goods
and services where a monetary exchange is not involved. Thus, the services of voluntary
organizations have also been included in this definition, and users of the services of these
organizations are also viewed as consumers. The logic behind this approach is that
consumers of free service also engage in the same kind of decision process and physical
activity as consumers a product or service from a particular organization or shop. A
customer is always defined in terms of a specific product or company.
However, the term consumer is a far wider term encompassing not only the actual
buyer or customer but also all its users, i.e. consumers. There are two situations when this
distinction between consumers and customers may occur, i) when the service or product
is provided free, and ii) when the customer is not the actual user of the product or is only
one of the many users.
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3.2 What is Consumer Buying Behavior?

Definition of Buying Behavior:
Buying Behavior is the decision processes and acts of people involved in buying
and using products.
Need to understand:
Why consumers make the purchases that they make?
What factors influence consumer purchases?
The changing factors in our society.
Consumer Buying Behavior refers to the buying behavior of the ultimate consumer. A firm
needs to analyze buying behavior for:
• Buyer’s reactions to a firms marketing strategy has a great impact on the firms
success.
• The marketing concept stresses that a firm should create a Marketing Mix (MM)
that satisfies (gives utility to) customers, therefore need to analyze the what, where,
when and how consumers buy.
• Marketers can better predict how consumers will respond to marketing strategies.
• Stages of the Consumer Buying Process:-
• Six Stages to the Consumer Buying Decision Process (For complex decisions).
Actual purchasing is only one stage of the process. Not all decision processes lead
to a purchase. All consumer decisions do not always include all 6 stages,
determined by the degree of complexity...discussed next.
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The 6 stages are:
1. Problem Recognition (awareness of need)-
-difference between the desired state and the actual condition. Deficit in assortment of
products. Hunger--Food. Hunger stimulates your need to eat.
Can be stimulated by the marketer through product information--did not know you
were deficient? I.E., see a commercial for a new pair of shoes, stimulates your
recognition that you need a new pair of shoes.
Problem recognition is that result when there is a difference between one's desired
state and one's actual state. Consumers are motivated to address this discrepancy and
therefore they commence the buying process.
Sources of problem recognition include:
• An item is out of stock
• Dissatisfaction with a current product or service
• Consumer needs and wants
• Related products/purchases
• Marketer-induced
• New products
The relevant internal psychological process that is associated with problem recognition is
motivation. A motive is a factor that compels action. Belch and Belch (2007) provide an
explanation of motivation based on Maslow's hierarchy of needs and Freud's
psychoanalytic theory.
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2. Information search--
o Internal search, memory.
o External search if you need more information. Friends and relatives (word of
mouth). Marketer dominated sources; comparison shopping; public sources etc.
Once the consumer has recognised a problem, they search for information on
products and services that can solve that problem. Belch and Belch (2007) explain that
consumers undertake both an internal (memory) and an external search.
Sources of information include:
• Personal sources
• Commercial sources
• Public sources
• Personal experience
The relevant internal psychological process that is associated with information search is
perception. Perception is defined as 'the process by which an individual receives, selects,
organizes, and interprets information to create a meaningful picture of the world'
The selective perception process Stage Description Selective exposure consumers select
which promotional messages they will expose themselves to. Selective attention consumers
select which promotional messages they will pay attention to Selective comprehension
consumer interpret messages in line with their beliefs, attitudes, motives and experiences
Selective retention consumers remember messages that are more meaningful or important
to them.
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You should consider the implications of this process on the development of an effective
promotional strategy. First, which sources of information are more effective for the brand
and second, what type of message and media strategy will increase the likelihood that
consumers are exposed to our message, that they will pay attention to the message, that
they will understand the message, and remember our message.
A successful information search leaves a buyer with possible alternatives, the evoked
set.
Hungry, want to go out and eat, evoked set is
Chinese food
Indian food
Burger king etc.
3. Evaluation of Alternatives-
-need to establish criteria for evaluation, features the buyer wants or does not want.
Rank/weight alternatives or resume search. May decide that you want to eat something
spicy, indian gets highest rank etc.
If not satisfied with your choice then return to the search phase. Can you think of another
restaurant? Look in the yellow pages etc. Information from different sources may be treated
differently. Marketers try to influence by "framing" alternatives.
At this time the consumer compares the brands and products that are in their evoked
set. How can the marketing organization increase the likelihood that their brand is part of
the consumer's evoked (consideration) set? Consumers evaluate alternatives in terms of the
functional and psychological benefits that they offer. The marketing organization needs to
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understand what benefits consumers are seeking and therefore which attributes are most
important in terms of making a decision.
The relevant internal psychological process that is associated with the alternative
evaluation stage is attitude formation. Belch and Belch (2007, p.117) note that attitudes are
'learned predispositions' towards an object. Attitudes comprise both cognitive and affective
elements - that is both what you think and how you feel about something. The multi-
attribute attitude model explains how consumers evaluate alternatives on a range of
attributes. Belch and Belch (2007) identify a number of strategies that can be used to
influence the process (attitude change strategies). Finally, there are a range of ways that
consumers apply criteria to make decisions. Belch and Belch (2007) explain how
information is integrated and how decision rules are made including the use of heuristics.
The marketing organisation should know how consumers evaluate alternatives on salient or
important attributes and make their buying.
4. Purchase decision--Choose buying alternative, includes product, package, store, method
of purchase etc.
Once the alternatives have been evaluated, the consumer is ready to make a
purchase decision. Sometimes purchase intention does not result in an actual purchase. The
marketing organization must facilitate the consumer to act on their purchase intention. The
provision of credit or payment terms may encourage purchase, or a sales promotion such as
the opportunity to receive a premium or enter a competition may provide an incentive to
buy now. The relevant internal psychological process that is associated with purchase
decision is integration.
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Purchase--May differ from decision, time lapse between 4 & 5, product availability.
Post-Purchase Evaluation--outcome: Satisfaction or Dissatisfaction. Cognitive
Dissonance, have you made the right decision. This can be reduced by warranties,
after sales communication etc.
After eating an Indian meal, may think that really you wanted a Chinese meal instead.
4 Types of Consumer Buying Behavior 3.

Types of consumer buying behavior are determined by:
• Level of Involvement in purchase decision. Importance and intensity of interest in a
product in a particular situation.
• Buyers level of involvement determines why he/she is motivated to seek
information about a certain products and brands but virtually ignores others.
High involvement purchases--Honda Motorbike, high priced goods, products visible to
others, and the higher the risk the higher the involvement. Types of risk:
• Personal risk
• Social risk
• Economic risk
The four type of consumer buying behavior are:
• Routine Response/Programmed Behavior--buying low involvement frequently
purchased low cost items; need very little search and decision effort; purchased
almost automatically. Examples include soft drinks, snack foods, milk etc.
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• Limited Decision Making--buying product occasionally. When you need to obtain
information about unfamiliar brand in a familiar product category, perhaps.
Requires a moderate amount of time for information gathering. Examples include
Clothes--know product class but not the brand.
• Extensive Decision Making/Complex high involvement, unfamiliar, expensive
and/or infrequently bought products. High degree of economic / performance /
psychological risk. Examples include cars, homes, computers, education. Spend a
lot of time seeking information and deciding. Information from the companies MM;
friends and relatives, store personnel etc. Go through all six stages of the buying
process.
• Impulse buying, no conscious planning.
The purchase of the same product does not always elicit the same Buying Behavior.
Product can shift from one category to the next.
For example:
Going out for dinner for one person may be extensive decision making (for someone that
does not go out often at all), but limited decision making for someone else. The reason for
the dinner, whether it is an anniversary celebration, or a meal with a couple of friends will
also determine the extent of the decision making.
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3.5 Categories that Effect the Consumer Buying Decision

Process
A consumer, making a purchase decision will be affected by the following three factors:
1. Social
2. Personal
3. Psychological
Social :- The marketer must be aware of these factors in order to develop an appropriate
MM for its target market.
Personal :- Unique to a particular person. Demographic Factors. Sex, Race, Age etc.
Who in the family is responsible for the decision making.Young people purchase things
for different reasons than older people.
Psychological factors
Psychological factors include:
Motives--
A motive is an internal energizing force that orients a person's activities toward satisfying a
need or achieving a goal. Actions are effected by a set of motives, not just one. If marketers
can identify motives then they can better develop a marketing mix. MASLOW hierarchy of
needs!!
Physiological
Safety
Love and Belonging
Esteem
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Self Actualization
Need to determine what level of the hierarchy the consumers are at to determine what
motivates their purchases.
Perception--
What do you see?? Perception is the process of selecting, organizing and
interpreting information inputs to produce meaning. IE we chose what info we pay
attention to, organize it and interpret it. Information inputs are the sensations
received through sight, taste, hearing, smell and touch.
Selective Exposure-select inputs to be exposed to our awareness. More likely if it is
linked to an event, satisfies current needs, intensity of input changes (sharp price
drop).
Selective Distortion-Changing/twisting current received information, inconsistent
with beliefs.
Advertisers that use comparative advertisements (pitching one product against
another), have to be very careful that consumers do not distort the facts and perceive
that the advertisement was for the competitor. A current example...MCI and
AT&T...do you ever get confused?
Selective Retention-Remember inputs that support beliefs, forgets those that don't.
Average supermarket shopper is exposed to 17,000 products in a shopping visit
lasting 30 minutes-60% of purchases are unplanned. Exposed to 1,500
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advertisement per day. Can't be expected to be aware of all these inputs, and
certainly will not retain many.
Interpreting information is based on what is already familiar, on knowledge that is
stored in the memory.
Ability and Knowledge--
Need to understand individuals capacity to learn. Learning, changes in a person's
behavior caused by information and experience. Therefore to change consumers'
behavior about your product, need to give them new information re: product...free
sample etc.
South Africa...open bottle of wine and pour it!! Also educate american consumers
about changes in SA. Need to sell a whole new country.
When making buying decisions, buyers must process information.
Knowledge is the familiarity with the product and expertise.
Inexperience buyers often use prices as an indicator of quality more than those who
have knowledge of a product. Non-alcoholic Beer example: consumers chose the
most expensive six-pack, because they assume that the greater price indicates
greater quality.
Learning is the process through which a relatively permanent change in behavior
results from the consequences of past behavior.
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Attitudes--
Knowledge and positive and negative feelings about an object or activity-
maybe tangible or intangible, living or non- living.....Drive perceptions
Individual learns attitudes through experience and interaction with other people.
Consumer attitudes toward a firm and its products greatly influence the success or
failure of the firm's marketing strategy.
There is a difference between attitude and intention to buy (ability to buy).
Personality--
All the internal traits and behaviors that make a person unique, uniqueness arrives
from a person's heredity and personal experience. Examples include:
Work holism Dogmatism

Compulsiveness Authoritarianism
Self confidence Introversion
Adaptability Extroversion
Ambitiousness Aggressiveness
Friendliness Competitiveness.
Traits affect the way people behave. Marketers try to match the store image to the
perceived image of their customers.
There is a weak association between personality and Buying Behavior, this may be
due to unreliable measures. Nike ads. Consumers buy products that are consistent
with their self concept.
Lifestyles--
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Recent US trends in lifestyles are a shift towards personal independence and
individualism and a preference for a healthy, natural lifestyle.
Lifestyles are the consistent patterns people follow in their lives.
e.g. healthy foods for a healthy lifestyle. Sun tan not considered fashionable in US
until 1920's. Now an assault by the American Academy of Dermatology.
Social Factors
Consumer wants, learning, motives etc. are influenced by opinion leaders, person's family,
reference groups, social class and culture.
Opinion leaders--
Spokespeople etc. Marketers try to attract opinion leaders...they actually use (pay)
spokespeople to market their products. Michael Jordon (Nike, McDonalds, Gatorade
etc.)
Can be risky...Michael Jackson...OJ Simpson...Chevy Chase
Roles and Family Influences--
Role...things you should do based on the expectations of you from your position within a
group.
People have many roles.
Husband, father, employer/ee. Individuals role are continuing to change therefore marketers
must continue to update information.
Family is the most basic group a person belongs to. Marketers must understand:
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That many family decisions are made by the family unit
Consumer behavior starts in the family unit
Family roles and preferences are the model for children's future family (can
reject/alter/etc)
Family buying decisions are a mixture of family interactions and individual decision
making
Family acts an interpreter of social and cultural values for the individual.
Reference Groups--
Individual identifies with the group to the extent that he takes on many of the
values, attitudes or behaviors of the group members.
Families, friends, sororities, civic and professional organizations. Any group that
has a positive or negative influence on a persons attitude and behavior.
Membership groups (belong to)
Affinity marketing is focused on the desires of consumers that belong to reference
groups. Marketers get the groups to approve the product and communicate that
approval to its members. Credit Cards etc.!!
Aspiration groups (want to belong to)
Disassociate groups (do not want to belong to)
Honda, tries to disassociate from the "biker" group.
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The degree to which a reference group will affect a purchase decision depends on an
individuals susceptibility to reference group influence and the strength of his/her
involvement with the group.
Social Class--
An open group of individuals who have similar social rank. US is not a classless
society. US criteria; occupation, education, income, wealth, race, ethnic groups and
possessions.
Social class influences many aspects of our lives. IE upper middle class Americans
prefer luxury cars Mercedes.
o Upper Americans-upper-upper class, .3%, inherited wealth, aristocratic
names.
o Lower-upper class, 1.2%, newer social elite, from current professionals and
corporate elite
o Upper-middle class, 12.5%, college graduates, managers and professionals
o Middle Americans-middle class, 32%, average pay white collar workers and
blue collar friends
o Working class, 38%, average pay blue collar workers
o Lower Americans-lower class, 9%, working, not on welfare
o Lower-lower class, 7%, on welfare
Social class determines to some extent, the types, quality, quantity of products that a
person buys or uses.
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Lower class people tend to stay close to home when shopping, do not engage in
much pre-purchase information gathering.
Stores project definite class images.
Family, reference groups and social classes are all social influences on consumer
behavior. All operate within a larger culture.
Culture and Sub-culture--
Culture refers to the set of values, ideas, and attitudes that are accepted by a
homogenous group of people and transmitted to the next generation.
Culture also determines what is acceptable with product advertising. Culture
determines what people wear, eat, reside and travel. Cultural values in the US are
good health, education, individualism and freedom. In american culture time
scarcity is a growing problem. IE change in meals. Big impact on international
marketing.
Understanding Consumer Buying Behavior offers consumers greater satisfaction (Utility).
We must assume that the company has adopted the Marketing Concept and are consumer
oriented.
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3.6 CONSUMER AWARENESS IN INSURANCE SECTOR
IRDA's regulatory initiatives have set the stage for a new era in functioning of the
Insurance Companies.
The theme for this conference organized by FORTE & IRDA: "Consumer
Awareness : Insurance Sector" is another major step which hopefully leads to meaningful
discussions.
For the purpose of this conference, I rather use a different nomenclature to facilitate
recognizing the issues and aspects relevant to the theme :
Life insurance always involves two beneficiaries (consumers), namely, those who
are designated to benefit in the event of death of the 'insured', and also, and this is highly
important, the premium payer himself while he is living. The protective influence of life
insurance extends to the insured himself enabling him to live more efficiently and fully than
otherwise be the case.
When we start with the 'beneficiary' in the modern life insurance as the center of
thinking, the line of thought moves out in the direction of an ever widening circle. The
thought process gives rise to a host of economic, social, psychological, legal, actuarial and
financial implications of great magnitude.
Only by emphasizing the potential needs of "beneficiaries", by fostering a keen
sense of responsibility on the part of the family heads for the welfare of their dependents,
by developing effective procedures for translating family love and affection into practical
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financial plans, and by using motivation techniques built on beneficiary relationships could
the institution of life insurance ever attain the stature and achievement required to make life
insurance a more effective instrument for safeguarding the interest of beneficiaries.
Legislators and regulators all over have evidenced their concern for the
beneficiaries and the latter's confidence in life insurance as a practical means of furthering
the social welfare. Courts have evidenced similar beliefs in their numerous decisions.
Every life insurance policy must some day be measured against the job that it must
perform for "beneficiaries". THE trouble is that if it is not measured until it becomes a
claim and then falls short of doing the job, there is nothing that can be done to remedy the
situation. Therefore, the important role of the intermediaries (Agents, Brokers etc). A
skilled and competent intermediary must be able to take men in their imagination into the
future to be able to foresee the risk and by proper planning lessen the impact of financial
consequences. The primary service they offer should be prescriptive through
recommending suitable plans.
Product and Service Combined :
Because life insurance should be purchased to meet 'beneficiaries' financial needs, it
is essential to look beyond the policy as a product and consider their personal situation.
Service includes selling the right policy to fill the policy owner's need, making sure the
policy owner understands the transaction fully, arranging ownership and beneficiary
designation as required. Thus the product and the service are very much interwoven. In the
light of these factors, it is understandable that a number of life insurance industry
organizations abroad, specially in USA and Canada are continuously engaged in special
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research projects with a view to understanding better the service function. Improvements in
the nature and quality of service to beneficiaries/policy owners should follow when the
industry has a clearer understanding of what services policy owners require and how they
are best rendered.
Important as life insurance is today, its real progress is yet to come, largely through
the national education system - collegiate level education as well as public education. Our
time-honoured professions use colleges and universities as allies for the effective initial
preparation of their practitioners and to provide opportunity for continued study. It has to
be so with insurance subject as well which is a relative newcomer on our socio-economic
scene. Insurance and financial counseling as a vocation and profession could advance and
acquire stature and dignity in direct proportion to the education received and success
achieved by those in the business and with the public.
Also Public education in insurance represents a "great selling / teaching movement"
to spread the beneficial influence of the concept of life insurance into millions of our homes
and business enterprises. Public education should be designed to prepare the buying public
for ready and willing acceptance of the professional service of the intermediaries. In fact,
this should be the first and most important step taken in the process of developing
marketing methodology and marketing orientation.
It is true that the life insurance business has tended to describe as a duality, a
combination of protection and savings account, what is really the unity of permanent life
insurance. We have not communicated with sufficient clarity that the savings like features
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of life insurance are a by-product of the reserves necessary for long term or life time
protection, and that without them the protection runs out when the need might be greatest.
Need for regulatory mechanism is recognized as Insurance is effected with public
interest in view of the large numbers involved. As a contract necessarily embodying a host
of legal details, and specially imbalance of bargaining power of the insured (Asymmetrical
information) insurance invites regulatory oversight to adequately protect the insurance
consuming public. (beneficiaries)
No element of insurance business deals more closely with the insurance consuming
public than insurance intermediaries(Agents, brokers and others)
Most of the major problems and issues confronting the life insurance business are
market oriented. Questionable market conduct and misleading sales practices on a
widespread basis could emerge as a major issue.
Related closely to these issues are :
1. How should industry foster thinking on risk with a view to building up a body of
thinkers and a body of literature, which shall be the beginning of more adequate
recognition of the subject influencing our actions?
2. What kind of men and women should be selected to solicit etc., insurance? What
kind of persons to direct the life insurance marketing programme? It is true we have
not perfected the techniques of selecting and recruiting, and managing retention of
agents to keep turnover within limits that would be optimum for the economics of
the business and for the satisfaction of all the individuals involved.
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Insurance industry is in transition and passing through an era of discontinuity.
Competitiveness demands a commitment to truth and willingness to confront brutal facts of
reality. We need to cultivate and use "truth tellers" - people on whom we can rely to "call
them the way they see them". We need "unfiltered feedback".
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CHAPATAR NO-4
4. Data Presentation, Analysis and Interpretation
Here the data collected from primary & secondary sources is presented,
analyzed & interpreted in the form of Tables & Graphs as follows.
A] Analysis from consumer survey:-
4.1 Age of the Policyholder:-
Sr. No. Age (In Yrs.) No. of Respondents Percentage

1. 18-30 28 28
2. 31-40 44 44
3. 41-50 18 18
4. More than 50 10 10
Total 100 100
Agewise Analysis
50
No. of Policyholders
40
30
20
10
0
18-30 31-40 41-50 More than
50
Age ( In Yrs. )
From the above table it is seen that 44% respondents understudy belongs to
the age group 31-40, 28% respondents belongs to the age group 18-30, 18%
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respondents belongs to age group 41-50 & only 10% respondents are having their age
50 or more than it.
Above table & graph highlights that 31-40 age group people are having
good earning & less liabilities than other age groups so they are having more saving
capacity so they get themselves insure more.
4.2 Education of Policyholder:-
Sr. No. Education Of Policyholder No. of Respondents Percentage

1. 10th 8 8
2. 12th 19 19
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3. Graduate 35 35
4. Post-Graduate 38 38
Total 100 100
Educationwise Analysis
40
Percentage Policyholders
35
30
25
20
15
10
5
0
10th 12th Graduate Post-Graduate
Education
From the above table & chart it is observed that only 8% people purchasing
Insurance who have education up to 10th , 12th pass are only 19% insured. In graduate
people this percentage is 35% & in postgraduate persons this percentage is 38%.
Above chart & table 4.2 depicts that more the education more the awareness about
market condition & future planning, so they are insuring themselves more. Higher the
education higher is the insurance percentage.
4.3 Occupation of Policyholder:-
Occupatio No. of
Sr. No. Percentage
n respondents
1. Service 64 64
2. Business 36 36
Total 100 100
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Occupationwise Analysis
Business
36%
Service
64%
From the above chart & table it is depicted that only 36% people who are having
their own business are insured. While 64% people in service sector are insured.
In above chart & table it is seen that servicemen are insuring themselves more may
be for tax purpose & businessmen are insuring themselves for securing their retired life as
they are not having pension after retirement.
4.4 Income of Policyholders :-
Income p.a. of Policyholder ( In

Sr. No. No. of Respondents Percentage
Rs. )
1. Less than 50000 7 7
2. 51000-100000 24 24
3. 100001-300000 37 37
4. More than 300000 42 42
Total 100 100
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Incomewise Analysis
50 Less than
42 40 50000
37 30
20 51000-
24 10 100000
0 100001-
7 300000
More than
300000
100001-
300000
More than
100000
51000-
Percentage %
300000
Less than
50000
Above chart & table shows that 42% People having income above 300000
p.a. are insured. Only 7% people are insured in below 50000 p.a. income group.
24% people are insured in 51000-100000 p.a. income groups. In category of people
who are having income of 100001-300000 p.a. total 37% people are insured.
Above table & chart concludes that higher the earning higher the saving
capacity. Lower income group are also saving for securing their future but they
can’t disturb their present need for better future.
4.5 No. of Dependents:-
Sr. No. No. of dependents No. of Respondents Percentage

1. Less than OR equal 2 19 19
2. 3 to 5 56 56
3. More than 5 25 25
Total 100 100
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No. of dependents
Less than
More than 5 OR equal 2
25% 19%
3 to 5
56%
Above chart & table depicts that total 56% people are insured in the group of
3-5 dependent people. In more than 5 dependent people family the percentage of
insured people is 25% & only 19% people are insured in the group who are having
less than or equal to 2 dependent members.
From the above chart & table it reflects that if there are no dependents then
the people are less bother about savings. If there are more dependents then they
can’t save even though they want to be. But group having medium number of
dependents can able to save so they are having more policies.
4.6 No. of policies:-
No. of
Sr. No. No. of Respondents Percentage
policies
1. Only 1 7 7
2. 2 to 5 72 72
3. 5 to 10 13 13
4. More than 10 8 8
Total 100 100
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80 72
70
60
50 Only 1
2 to 5
40
5 to 10
30
More than 10
20 13
7 8
10
0
Percentage %
Above chart & table highlights that there are only 72% people who are
having 2-5 policies only 7% people have 1 policy.13% people having 5-10 policies
of their own. Only 8% people are having more than 10 or more policies.
Above chart & table highlights that major people are having 2-5 policies
because India is having more middleclass people so they are having only that much
capacity to save. Some high income profile people are doing more than the average
number of policies.
4.7 Opinion about taking Life Insurance policy :-
Sr. No. Opinion of Policyholder No. of Respondents Percentage

1. Life Insurance is only for saving. 16 16
Life Insurance is only for risk
2. 34 34
factor.
3. Life Insurance is necessary for both. 46 46
4. Life Insurance is not necessary. 4 4
Total 100 100
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Opinion of Policyholder
Life Insurance is
4% necessary only for
16%
saving.
Life Insurance is
necessary only for
risk factor.
46% Life Insurance is
necessary for
34% both.
Life Insurance is
not necessary.
Above chart & table observes that 46% policyholders think that life insurance
is necessary for both saving & risk also. Only 4% people think that there is no need
of insurance.16% people think that life insurance is necessary only for saving.
While 34% people think that life insurance is necessary only for risk factor.
Above chart & table shows that large number of people thinks that insurance
is necessary for both saving & risk & negligible amount of people think that
insurance is not necessary. So all people are insurance minded.
4.8 Influencing Media:-
No. of
Sr. No. Influencing Media Percentage
respondents
1. Through Agent 66 66
2. Magazine 3 3
3. Television 10 10
4. Newspapers 12 12
5. Hoardings/Posters 8 8
6. Internet 1 1
Total 100 100
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Media
8% 1%
12% Through Agent

Magazine
Television
10% Newspapers
3% Hoardings/Posters
66%
Internet
Above data depicts that 66% people are influenced by the agent or advisor
of Life Insurance Company. Only 1% are purchasing insurance due to internet ads.
12% people are influenced by newspaper ads. & 10% are through television ads.
Only 8% & 3% people are getting attracted towards insurance because of magazine
& hoardings respectively.
Above chart & table concludes that agent/advisor is the best media for
selling insurance than any other media. So use that media as effectively as possible.
4.9 Policy purchasing Intention:-
No. of
Sr. No. Intention Percentage
respondents
1. To get Lump sum amount at your Retirement 11 11
2. For marriage of your son/daughter. 16 16
3. For Education of your son/daughter. 18 18
4. Risk cover of life with step by step saving. 24 24
5. For Tax Exemption. 31 31
Total 100 100
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Intention To get Lump sum

amount at your
Retirement
For marriage of
your
son/daughter.
11% For Education of
31% 16% your
son/daughter.
Risk cover of life
18% with step by step
24%
saving.
For Tax
Exemption.
From chart we observe that only 11% people insure themselves to get lump
sum amount on their retirement. 31% are investing to save tax liabilities & 16%
people are insuring for their son/daughter's marriage. 18% are insuring for their
son/daughter’s higher studies & 24% are investing for step by step saving & risk.
Above chart & table proves that most of the people are caring about their tax
liability & retirement life.
4.10 Awareness about Privatization:-
Sr. No. Opinion No. of Respondents Percentage

1. Yes 23 23
2. No 77 77
Total 100 100
________________________________________________________________________
_________________________________________________________________________
Awareness about Privatisation
23%
Yes
No
77%
From the survey chart 4.10 we are studying about the awareness in
population about the privatization of insurance sector. Only 23% people know about
the privatization of insurance sector. Major 77% people are unaware about this.
Above table & chart depicts that due to globalization different private
companies are coming in the insurance sector after privatization. As this study is
conducted in small town so major people may unaware about the privatization.
Some people are in wrong impression that LIC is privatized. So there is thinking
like this also.
4.11 Famous Life Insurance Companies:-
Sr. No. Companies No. of Persons Percentage

1. HDFC Standard Life 10 5.88
2. Bajaj Allianz 23 13.53
3. Reliance 15 8.82
4. SBI Life 8 4.70
5. L.I.C. 100 58.82
6. Birla Sunlife 14 8.25
Total 170 100
________________________________________________________________________
_________________________________________________________________________
Famous Companies
70
60 58.82
50
40
Percentage %
30
20
10 13.53
5.88 8.82 8.25
4.7
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From chart we see that only 4.7% know about SBI Life Company. But 58.82%
know LIC. Only 5.88% people know about HDFC standard life, 13.53% know Bajaj
Allianz, 8.82% know Reliance Life Insurance Company & 8.25% about Birla Sun life.
As LIC has 53 years of history in India & private players entered since last 7 years
so people know LIC more than other companies.
4.12 Service by Insurance companies:-
Sr. No. Service Opinion No. of Respondents Percentage

1. Good 21 21
2. Better 66 66
3. Worst 13 13
Total 100 100
________________________________________________________________________
_________________________________________________________________________
Insurance Service
Good
Better
Worst
Survey chart highlights that major part of policyholders i.e. 66% think that service
is better. 21% people think that service they are getting is good. 13% people think that
service is worst.
Above table & chart shows that most of the people are satisfied with the
service they are getting from the insurance industry. But those people who are unsatisfied
with the service are not getting proper service from their agents/advisors & also from the
branch offices. These people are unsatisfied because there are some agents/advisors who
after insuring the person not giving any after sales service to the policyholder. In today’s
market service is most important part of marketing.
4.13 Better Saving option :-
No. of
Sr. No. Saving Options Percentage
respondents
1. Bank F.D. 72 21.82
2. Postal Savings 78 23.64
3. Mutual Funds 38 11.52
4. Insurance 69 20.90
5. P.P.F. 73 22.12
Total 330 100
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_________________________________________________________________________
Saving Options
90
80
70
60
50 No. of respondents
40 Percentage %
30
20
10
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Above table shows preference of the people for saving option. Chart shows that
72% people are interested in Bank F.D. 78% people are interested in postal savings. 38%
shows interest in mutual funds. 69% are inclined towards insurance. Major 73% are going
for PPF.
Above table & chart shows people are interested in diversified investment structure.
While saving they are thinking more about liquidity , returns & security.
4.14 Best policies for Investment:-
Sr. No. Policy Type No. of Respondents Percentage

1. Conventional 68 68
2. ULIP 25 25
3. Whole Life 2 2
4. Pension Plans 5 5
Total 100 100
________________________________________________________________________
_________________________________________________________________________
Planwise Analysis
Conventional
ULIP
Whole Life
Pension Plans
In chart 4.14 plan wise analysis of policyholders is given. 68% people are
going for conventional plans. Only 2% & 5% are purchasing whole life & pension
plans respectively. 25% are going for ULIP plans.
Above table & chart depicts that maximum people are purchasing
conventional plans as these are old ones. Nowadays people are going for ULIP
plans also as awareness has increased in the market. Whole life & pension plans are
not giving much attractive returns to policyholders. Agents/advisors are insisting
conventional plans for their personal benefit.
4.15 Motivating Factor:-
Motivating
Sr. No. No. Of respondents Percentage
Factor
1. Insurance Agent 91 91
2. Friends 3 3
3. Colleague 2 2
4. Family Members 4 4
Total 100 100
________________________________________________________________________
_________________________________________________________________________
Motivating Factorwise Analysis
2%
4%
3%
Insurance Agent
Friends
Colleague
Family Members
91%
Chart 4.15 shows that 91% people are motivated to take insurance is by
Insurance agents/Advisors. Only 3% are getting motivated through friends, 2%
through their office colleague & 4% through family members.
Above table highlights that main motivating factor for purchasing insurance
policy is Agent/Advisors. Friends, colleague & family members are motivating for
insurance when they get self insured from Agents/Advisors. Agent/Advisors are
main motivating factor because they are in large numbers.
B] Analysis from Advisor/Agent survey:-
4.16 Age of Agent/ Advisor:-
Age of No. of
Sr. No. Percentage
advisor/Agent respondents
1. 18 to 30 11 22
2. 31 to 40 28 56
3. 41 to 50 9 18
4. More than 50 2 4
Total 50 100
________________________________________________________________________
_________________________________________________________________________
Agewise Analysis
60 56
50
40
Percentage 30
23
20 17
10 Percentage %
4
0
18 to 31 to 41 to More
30 40 50 than
50
Age
Above survey chart 4.16 shows that major portion of Agent/Advisors are in
the age group 31-40 i.e. 56%. Only 2% Agent/Advisors are in the age group above
50. 22% between the age group 18-30 & 18% are in the age group 41-50.
Above chart shows that people in the age group 31-40 are taking insurance
agency. This is because as privatization of insurance sector is done in the year 2001
private insurance companies has appointed large number of agents in that 2 year
period. These Agent/Advisors are highly qualified as compared to LIC agents.
4.17 Education:-
Sr. No. Education of Advisor No. of Respondents Percentage

1. 10th 16 32
2. 12th 14 28
3. Graduate 9 18
4. Post-Graduate 11 22
Total 50 100
________________________________________________________________________
_________________________________________________________________________
Educationwise Analysis
22% 10th
32%
12th
Graduate
18%
28% Post-Graduate
From the survey chart 4.17 we can see that 32% people are 10 th pass. 28% are 12th
pass. Graduate people are 18% in this sector as Agent/Advisors. 22% people are post
graduate who are working as Agent/Advisors.
We can see from the chart or graph that there is all class of people in this profession.
Previously insurance agent concept was considered to be very cheap as he has to follow the
customers for policies. But nowadays insurance agent is being treated as investment
consultant/advisor.
4.18 Companies:-
Sr. No. Companies No. of Persons Percentage

1. HDFC Standard Life 1 2
2. Bajaj Allianz 6 12
3. Reliance 5 10
4. SBI Life 2 4
5. L.I.C. 32 64
6. Birla Sunlife 4 8
Total 50 100
________________________________________________________________________
_________________________________________________________________________
Companywise Analysis
HDFC Standard
Life
Bajaj Allianz
8% 2% 12%
Reliance
10%
4% SBI Life
64%
L.I.C.
Birla Sunlife
Above chart 4.18 we see that 64% Agent/Advisors are of LIC & remaining
people are from other private insurance companies. SBI life is having only 4% share
in total agency force,12% are of Bajaj Allianz, 10% are of Reliance & Birla Sunlife
has 8% Agent/Advisors.
Above observation founds that major number of Agents/Advisors is of LIC
as it is since 1956. Also private players are new & concentrating on metro cities.
4.19 Service Period:-
No. of
Sr. No. Period as a Advisor/Agent Percentage
respondents
1. Less than 2 Yrs. 7 14
2. 3 to 4 Yrs. 18 36
3. 5 to 6 Yrs. 15 30
4. More than 6 Yrs. 10 20
Total 50 100
________________________________________________________________________
_________________________________________________________________________
Periodwise Analysis
40 36
35 30
30
25 20
20 Percentage %
14
15
10
5
0
Less 3 to 4 5 to 6 More
than 2 Yrs. Yrs. than 6
Yrs. Yrs.
From above chart it depicts that total 36% Agent/Advisors are in this
profession since 3-4 years. There are only 14% Agent/Advisors who are appointed
within 2 years period. 30% Agent/Advisors are doing insurance business since 5-6
years &
total 20% are still in the business since more than 6 years.
Many Agents/Advisors are after taking agency only works for 3-4 years
because inner circle for business gets over in that period & in outer circle they can’t
perform well. Well knowledgeable Agents/Advisors can only survive further.
4.20 Policies in force:-
No. of
Sr. No. No. of policies in force Percentage
respondents
1. Less than 50 10 20
2. 51 to 100 24 48
3. 101 to 200 9 18
4. More than 200 7 14
Total 50 100
________________________________________________________________________
_________________________________________________________________________
Policy In force wise Analysis
14% 20% Less than 50

18% 51 to 100
101 to 200
More than 200
48%
Above survey chart analyses number of policies in force per Agent/Advisor. 48%
Agent/Advisor are having 51-100 policies in force. Only 14% Agent/Advisor are having
more than 200 policies in force. There are 20% Agent/Advisor having less then 50 policies
in force & 18% are having 101-200 policies in force.
From above chart & table it highlights that as Agents/Advisors are working mainly
for 3-4 years so in that period they are able to collect 51-100 policies generally.
Agents/Advisors who works for more years is having more policies in force but this
possibility is lees so is the percentage.
4.21 Category wise policy sell:-
No. of
Sr. No. Policy Type Percentage
respondents
2. ULIP 18 36
4. Health Plan 1 2
Total 50 100
________________________________________________________________________
_________________________________________________________________________
Policy Category sell
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8
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H
Percentage %
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Pl
36
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si
P
en
LI
P
U
54
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na
io
nt
0 20 40 60
ve
on
C
Above chart & table shows that agents/advisors are selling 54% conventional plans.
36% is ULIP plan sell. Agents/advisors selling only 8% pension plans & 2% health plans.
From above analysis it concludes that sell of conventional plans are more than any
other plans sell. This is because previously Agents/Advisors are selling the products which
are beneficial to them & they are less bother about what is customer requires But now a
day’s situation has changed & customers are become choosy & demanding. They are
comparing the different products & selecting best suitable for them. Competition in market
force Agents/Advisors to follow need base selling concept.
4.22 Policyholders Approach for Policy :-
No. of
Sr. No. Approach % Percentage
respondents
1. Less than 5% 48 96
2. 6 to 10% 2 4
3. 11 to 25% 0 0
More than
4. 0 0
25%
Total 50 100
________________________________________________________________________
_________________________________________________________________________
Approach %
More than 25%
11 to 25%
Percentage %
6 to 10%
Less than 5%
0 50 100
Above chart depicts the direct demand for insurance policies. It shows that 96%
Agents/Advisors say that only less than 5% people are approaching for direct insurance.
Only 2% says that this percentage is between 6-10%. Above this the percentage is zero.
Above chart highlights that insurance can’t buy but it is to be sold. So there are so
many Agents/Advisors companies are recruiting every year to increase sell of their
products.
4.23 Promotion of Policies :-
Media for No. of

Sr. No. Percentage
Promotion respondents
1. Through Advisors 33 66
2. Internet 1 2
3. Television Ads. 6 12
4. Hoardings/Posters 4 8
5. Newspapers 6 12
Total 50 100
________________________________________________________________________
_________________________________________________________________________
Promotion Media
12%
8% Through Advisors
Internet
12% Television Ads.

Hoardings/Posters
2% 66% Newspapers
Survey chart 4.23 shows analysis of promotional media of insurance
products. From above chart &graph it is clear that 66% promotion of insurance
products is done through Agents/Advisors. 2% is done through Internet. 8% is done
through Hoardings & Posters.12% contribution is of television ads. Newspapers
contribute 12%.
4.24 People’s saving preference:-
No. of
Sr. No. Saving Option Percentage
respondents
1. P.P.F. 8 16
2. Mutual Fund 4 8
3. Insurance 9 18
4. Bank F.D. 19 38
5. Postal Savings 10 20
Total 50 100
________________________________________________________________________
_________________________________________________________________________
Saving Optionwise Analysis
20% 16% P.P.F.

8% Mutual Fund
Insurance
18% Bank F.D.
38% Postal Savings
Above chart shows analysis of Agents/Advisors thinking about people’s
preference for saving. 38% Agents/Advisors think that people choose PPF as best
saving option. Only 8% Agents/Advisors think that people prefer mutual fund as
major source of saving. 20% Agents/Advisors think postal savings, 16% giving
opinion of Bank F.D & 18% think that Insurance is preferred as 1st source of saving.
Above chart concludes that PPF is preferred by people for security,
flexibility, Liquidity & tax saving purpose which is not available in other savings.
4.25 Policy Demand:-
No. of
Sr. No. Policy Type Percentage
respondents
2. ULIP 17 34
4. Health Plan 1 2
Total 50 100
________________________________________________________________________
_________________________________________________________________________
Policy Demand
8% 2%
Conventional
ULIP
34% 56% Pension Plans
Health Plan
Chart reveals Agents/Advisors opinion about demand of insurance products
in market. 56% people prefer conventional plans according to Agents/Advisors.
Only 2% people are taking Health plans. 34% people are taking ULIP plans & 8%
people go for pension plans.
4.26 Other options:-
No. of
Sr. No. Criteria Percentage
respondents
1. Because of liquidity 10 20
2. Because of higher returns 30 60
3. Because of security 1 2
4. Because of Flexibility 9 18
Total 50 100
________________________________________________________________________
_________________________________________________________________________
Criteria For Saving
18% 20% Because of

liquidity
2% Because of higher
returns
Because of
security
Because of
Flexibility
60%
Survey chart studies about criteria people see in that plan before investing. 60%
Agents/Advisors think that people gives preference to higher returns from the investment.
Only 2% Agents/Advisors think that security is seen by the people before investing. People
giving preference to liquidity is 20%. 18% Agents/Advisors think that flexibility is
important investment for the people.
People prefer higher returns to other options while investing because everyone
wants more & more profit from his investment to fulfill his further requirements. So he
wants to multiply his money in short term by investing in higher return option.
4.27 Better selling option :-
Sr. No. Option No. of Respondents Percentage

1. Agent’s canvassing 45 90
2. Television OR Other media advertising 3 6
3. Seminars 2 4
Total 50 100
________________________________________________________________________
_________________________________________________________________________
Better Selling Option
Agent’s
4 canvassing
6
Television OR
Other media
advertising
Seminars
90
Survey chart highlights better selling option for insurance products. We can see that
Agents/Advisors say that 90% selling is done through agent’s canvassing only. Only 6% is
done through television or other media ads & 4% is possible by arranging seminars.
Above chart & table depicts that agent’s canvassing is the best source for selling life
insurance products than any other sources because it is a business of relations & influence.
4.28 Policy purchasing reason:-
No. of
Sr. No. Reason Percentage
respondents
1. To get Lump sum amount at your Retirement 7 14
2. For marriage of your son/daughter. 11 22
3. For Education of your son/daughter 9 18
4. Risk cover of life with step by step saving. 8 16
5. For Tax Exemption 15 30
Total 50 100
________________________________________________________________________
_________________________________________________________________________
Reason of Investment
To get Lump sum

amount at your
Retirement
For marriage of
your son/daughter.
14%
30% For Education of
your son/daughter
22%
16% Risk cover of life
18%
with step by step
saving.
For Tax
Exemption
Chart shows 14% Agents/Advisors think that people are investing in insurance
policies to get lump sum amount at their retirement. 22% Agents/Advisors think that people
purchase insurance for marriage of their son/daughter & 18% say that education of
son/daughter is main criteria for saving in insurance product. 16% think for risk cover of
life with step by step investment. 30% Agents/Advisors say that tax exemption is the main
motivation for investment.
5. Findings and Suggestions
The findings based on earlier chapter are briefly given in the part first of this
chapter followed by suggestions for the further improvement.
5.1 Findings :-
1. From above table & graph 4.1 it is observed that at the age 18 to 30 the Younger
generation is Unemployed so they are not having saving capacity. They are not become
independent. Even though they have become independent they are having so many
liabilities that they can’t spare amount for saving. But in age group 31-40 maximum people
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_________________________________________________________________________
are having their own income. Also for their family he is the main earning members so his
Insurance is must. So they are insuring themselves. In age 41-50 people are not taking fresh
Insurance as they already having Insurance which was done at the age within 31-40. So
some people whose have matured they are going for Insurance. People above age 50 are
purchasing Insurance from their retired amount.
2. From education wise analysis chart 4.2 we can conclude that the people who are more
educated are taking Insurance policies more. The reason behind this may be they are having
more importance of saving & their family’s security for future. They may have proper
planning of their resources. They are having awareness about the future requirements. Also
they may have need for Insurance for tax saving also as they are highly qualified so they
are having good remuneration. Less studied people may have awareness about security &
future but they are not having enough amounts for saving.
3. Above chart & table 4.3 highlights that service people are having more awareness about
insurance than businessman people. Other side of this issue may be that serviceman is
insuring himself for income-tax saving purpose. But the businessman may not have liability
of income tax that much. So he may purchase insurance for his retirement planning as they
are not having any pension after retirement.
4. From table & chart 4.4 highlights that the person who earns more insures more or we say
saves more. As the low earning people are having expenditures so they are hardly able to
spare money for future planning. They are in need of money for their today’s livelihood
only how they are able to save for future? As income increases saving increases.
5. From chart & table 4.5 we come to the conclusion that if family is very small then they
are less aware of the saving as they are not having any liabilities. So they can spend all their
earnings on their daily requirements & enjoyment, while the family of 3-5 people are
________________________________________________________________________
_________________________________________________________________________
having liabilities of their parents, children & of their future. So they think twice before
spending a single penny. They keep some part of their earnings aside for saving as step by
step saving will help them to complete big requirement. Family who are having more than 5
members in family are having more expenditures so they hardly spare for saving. But they
are also having more liabilities so insurance is necessary for them. So they are anyhow
managing from their earnings who are having awareness about insurance & security. In
some big families there are many earning members so it makes them easy to insure.
6. From survey chart 4.6 we find that there are large no. of population having policies
between 2 to 5. This may be due to their relations with more than one agent or advisors of
insurance sectors which force them to do insurance. We know that insurance can’t buy but
it is to be sold. There may be also chances that people in that group are knowing their
responsibilities & accordingly they are insuring themselves & at that time coincidently
agent may approached. People in remaining two groups of 5-10 & more than 10 policies are
having awareness about insurance & also they are having paying capacity. But this group is
small so is their percentage.
7. Above chart & table 4.7 depicts that negligible amount of people are against insurance.
But all other think that life insurance is necessary in our life. Some people think that
insurance is necessary only for saving because they are able to save their earnings step by
step through insurance policy media. Also they think it to be secure saving source than
other sources. While some people who think that insurance is needed for risk only they are
well aware about the current market situation so they are taking term insurance policies for
covering their life risk & for investment purpose they are going for other source where they
can get better returns than insurance sector. People who believe in insurance for risk &
________________________________________________________________________
_________________________________________________________________________
investment also are totally investing in insurance policies. People who do not believe in
insurance may didn’t know the benefit of it.
8. From survey chart 4.8 we come to know that most of the insurance business is being
done through agents/advisors. From this we conclude that life insurance product is not
purchased but it is to be sold. People who insure themselves influencing by media other
than agents/advisors are well aware about the benefits of insurance policies. They know
each & every product so they can compare within the products. But this population is very
small as each & every person is having contacts with the agents/advisors or agents/advisors
are approaching them. Also there may be reason that as this study is made in small city so
use of internet for this purpose is almost zero.
9. From survey chart 4.9 we come to know that every person is having different intention
behind taking life insurance policy. All people are having somewhat same requirements in
their life somewhat here & there. So there are all kinds of people with different intentions.
But most of the people are taking insurance for securing their future & also of their family.
Also there is major part of those who are investing in insurance policies for tax saving
purpose.
10. Table & chart 4.10 founds that due to globalization different private companies are
coming in the insurance sector after privatization. As this study is conducted in small town
so major people may unaware about the privatization. Some people are in wrong
impression that LIC is privatized. So there is thinking like this also.
11. From the chart & table 4.11 it is clear that as private companies are in market since last
7 Years so they are unable to penetrate in every corner of this country. They are mainly
marketing in metro cities. So this may hamper their popularity. Some know private
companies because they are watching ads on television. But LIC people know because it is
________________________________________________________________________
_________________________________________________________________________
having history of 53 years. LIC reached in remote areas through their agents. This study
may show less popularity of private companies because it has been conducted in small
town.
12. From table & chart 4.12 we found that most of the people are satisfied with the service
they are getting from the insurance industry. But those people who are unsatisfied with the
service are not getting proper service from their agents/advisors & also from the branch
offices. These people are unsatisfied because there are some agents/advisors who after
insuring the person not giving any after sales service to the policyholder. In today’s market
service is most important part of marketing as it gives repeated business at the same
place/family. Most people are saying the service of insurance sector is better means there is
still more scope for improvement. Better service helps insurance companies to retain their
customer & gain additional customers.
13. From chart 4.13 it is clear that people are making diversified investments. This will
reduce their risk of investment. Downfall in one sector will not hamper their investment so
much due to diversification. People are having more trust on postal savings & PPF because
it has liquidity option with step by step saving from small installments. Also it gives tax
benefit also. In small town major class is middle class so they are interested in small
savings. Bank F.D. is done by those people who are retired or who are getting lump sum
amount from any sell of property or something. People believe in insurance for step by step
saving & risk cover for them & their family. Insurance is a long period investment & less
liquidity than bank F.D. & postal savings. Some people who are having awareness about
current market situation & ready to take risk are investing in mutual funds.
14. Chart 4.14 clears that maximum people are going for conventional plans. This is
because conventional plans are old ones. Nowadays people are going for ULIP plans also
________________________________________________________________________
_________________________________________________________________________
as awareness has increased in the market. Whole life & pension plans are not giving much
attractive returns to policyholders. There is other side of more percentage of conventional
plans is agents/advisors are insisting more on these plans because they are getting more
returns from it. Agents/advisors are selling what they want to sell & not selling what people
want to buy or what is his requirement. But now situation is changing and people are asking
for more knowledge about plans & selecting from those accordingly. People are now
interested in short term policies so that they able to spend the amount they earn. They are
not interested in accruing the amount for the next generation.
15. Chart & table 4.15 highlights that main motivating factor for purchasing insurance
policy is Agent/Advisors. Friends, colleague & family members are motivating for
insurance when they get self insured from Agents/Advisors. Agent/Advisors are main
motivating factor because they are in large numbers. All population is in contact with them
directly or indirectly. Agent/Advisors are in continuous touch with the each & every person
who shows interest in policies.
16. Chart 4.16 study shows that people in the age group 31-40 are taking insurance agency.
This is because as privatization of insurance sector is done in the year 2001 private
insurance companies has appointed large number of agents in that 2 year period. These
Agent/Advisors are highly qualified. As compared to LIC agents private company advisors
are more educated i.e. graduate or MBA etc. Also young generation is in this field because
of unemployment & now everyone is looking for other source of income also. Aged
Agent/Advisors are mostly old Agent/Advisors having agency since 20-25 years or retired
persons have taken agency.
17. Above table & chart 4.17 shows Education wise analysis of Agent/Advisors. We can
see from the chart or graph that there is all class of people in this profession. Previously
________________________________________________________________________
_________________________________________________________________________
insurance agent concept was considered to be very cheap as he has to follow the customers
for policies. But nowadays insurance agent is being treated as a investment
consultant/advisor. Previously the person becoming agent/advisor is not given any training
about marketing so he is not well knowledgeable. But now Agent/Advisors are given
proper training & they have to pass examination to get license. So now this career is also
having status. That’s why young generation is diverting towards this career so we can see
highly qualified persons in this field.
18. Table & chart 4.18 we come to the conclusion that LIC is having more number of
Agent/Advisors in small town. Private companies are still unable to penetrate in remote
areas. This is because private companies are concentrating in Metro cities more as this will
give them more business compared to remote area. Private companies are profit oriented
companies so they mainly want more business with minimum overhead expenses. Out of all
private companies SBI Life could reach remote places earlier than other private players
because it state bank is having branches all over the India.
19. Chart & table 4.19 concludes that there are Agent/Advisors retain for 3-4 years in this
business & after that termination percentage goes on increasing. This is because when
anyone took agency of any insurance company then he is having fresh prospecting list. He
approaches those clients who are close relatives & friends i.e. his inner circle. These people
took insurance due to influence. Within 2 to 3 years this inner circle gets completed & now
the Agent/Advisor is open to outer circle where we don’t know anybody. Also he has no
influence so it is difficult for him to get business. Ultimately his agency gets terminated.
The Agent/Advisors who survives in this hard period could sustain for longer period. These
agents become successful Agent/Advisors.
________________________________________________________________________
_________________________________________________________________________
20. Chart 4.20 shows that very few agents who are professionals. This we can say because
only 14% Agent/Advisor are having more than 200 policies in force means they have done
good business. They are getting good commission against it. So they could say this
business is full time or part time business for them. Other Agent/Advisors are not having
that much policy in force either because they are not doing full pledge business or giving
better after sales service. This is directly hampering their business.
21. Chart & table 4.21 concludes that sell of conventional plans are more than any other
plans sell. This is because previously agents/advisors are selling the products which are
beneficial to them & they are less bother about what is customer’s requirement. But now a
day’s situation has changed & customers are demanding according to their requirements.
They are comparing the different products & selecting best suited for them. This awareness
increases ULIP plan, pension plan & health plan sell. Also due to cut throat competition in
the market make agents/advisors to sell products according to market demand. They have to
do that to remain in the market & to retain the existing customers.
22. From chart & table 4.22 it is clear that insurance policy is a product which is to be sold
& not to buy. Insurance is a subject matter of solicitation. If insurance product people are
buying themselves then there is no need of so much insurance agents. Also there is no need
to pay heavy commissions to them. Spend lot of money on advertisements & to train these
agents/advisors. There may be some exceptions where there may be case that anyone come
to the office & asks for insurance. This may happen in such cases where the person is
having lot of money & he is not getting proper source to invest. But mostly those people
who are contacting directly for insurance having some fraud in their mind.
23. From chart & graph 4.23 it is clear that in insurance sector personal touch is important
than distant information. Insurance is a business of influence & relations. It requires

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continuous follow up & lot of patience. So Agents/Advisors play major role in this
business. In small town there is less awareness about self education i.e. taking information
from the sources available, compare it & choose the best of it. People are not using the
changing technologies to collect information. So Agents/Advisors are must for this. If
anyone wants to take information from Medias & wants to study he may not understand the
terms in the prospects. That’s why people require Agents/Advisors while taking insurance.
24. From chart 4.24 it is clear that people are making diversified investments. This will
reduce their risk of investment. Downfall in one sector will not hamper their investment so
much due to diversification. People are having more trust on postal savings & PPF because
it has liquidity option with step by step saving from small installments. Also it gives tax
benefit also. In small town major class is middle class so they are interested in small
savings. Bank F.D. is done by those people who are retired or who are getting lump sum
amount from any sell of property or something. People believe in insurance for step by step
saving & risk cover for them & their family. Insurance is a long period investment & less
liquidity than bank F.D. & postal savings. Some people who are having awareness about
current market situation & ready to take risk are investing in mutual funds.
Agents/Advisors think that everyone is investing according to the source of income he is
having.
25. From table 4.25 it is clear that maximum people are going for conventional plans. This
is because conventional plans are old ones. Nowadays people are going for ULIP plans also
as awareness has increased in the market. Whole life & pension plans are not giving much
attractive returns to policyholders. There is other side for more percentage of conventional
plans is agents/advisors are insisting more on these plans because they are getting more
returns from it. Agents/advisors are selling what they want to sell & not selling what people
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_________________________________________________________________________
want to buy or what is his requirement. But now situation is changing and people are asking
for more knowledge about plans & selecting from those accordingly. People are now
interested in short term policies so that they able to spend the amount they earn. They are
not interested in accruing the amount for the next generation. Agents/Advisors think that
the pension plans & Health plans of life insurance companies are not so attractive so people
are not buying it.
26. Chart 4.26 & related graph observes Agents/Advisors think that people are giving first
preference to high returns through investment. This is because everyone wants to multiply
his amount in short time for better profit. But while investing people are also think of
flexibility & liquidity because if they require money before maturity then it should be
available. This is because people save money so that it will help them in need. Security of
their deposit is also important because if anyone goes for higher returns & loses his
principle amount also. Agents/Advisors think that all the factors are equally important
while investing. But in today’s scenario people are ready to take calculated risk for higher
returns.
27. Chart 4.27 gives analysis about better selling options to sell insurance products. Almost
all the sell is done through agent canvassing only. Negligible percentage of sell is done
through other sources. In seminars information about different products is given but
problem in this is that different person has different needs. So group canvassing is not a
good option. Also in seminars some negative minded people may change other people
mind. Traditional method of individual canvassing is best one. Some people who are
having lump sum amount may approach direct to office by seeing ads. in different medias.
28. From survey chart 4.28 we come to know that every person is having different
intention behind taking life insurance policy. All people are having somewhat same
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_________________________________________________________________________
requirements in their life. So there are all kinds of people with different intentions. But
most of the people are taking insurance for securing their future & also of their family. Also
there is major part of those who are investing in insurance policies for tax saving purpose.
Agents/Advisors think that people are not investing in insurance policies with only one
intention but they are having more than one reason while investing. So they are fulfilling all
their reason by investing in insurance policies.
5.2 Suggestions :-
1. From age wise analysis of policyholders we come to know that 31-40 age group is
purchasing policies more. Insurance industry should concentrate more on this group for
marketing. Bring suitable product for this group. Find out why other group is lagging
behind & make changes in product accordingly. Do aggressive marketing in other age
groups.
2. In education wise analysis we found that higher the education higher the tendency to
purchase the insurance product. Insurance industry should bring products which are having
fewer premiums so that common person can do insurance. This will also help to cover all
the population.
3. In occupation wise analysis service people are insuring more than business people.
Insurance industry should concentrate more on business class as they are having good
money. For this strategy should be made accordingly.
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_________________________________________________________________________
4. In policyholder survey we found that as income increases saving increases. Insurance
industry should concentrate on lower income group by introducing low premium policies.
5. Insurance industry should pay attention towards the less dependent families & educate
them to save for future. In today’s scenario there are many single families so there is lot of
potential.
6. There is more percentage of people who are having 2-5 policies. Companies should
catch those who are having fewer policies. Try to sell them more policies.
7. People should be convinced about policies that it is for both to save & for risk coverage
also. This will turn people from other savings towards insurance. Other savings are not
giving any insurance coverage.
8. From the information media analysis we come to know that agents are major medium for
insurance. So insurance companies should concentrate more to increase strength of agents,
train them and motivate them. Other medias will remain as a superficial information giving
media.
9. Insurance companies should make available all type of products according to the
requirements of the people so that they will not even think of other saving options. Variety
of products will make people choose the best suited for them.
10. Private companies should be more aggressive in marketing in remote areas for their
product’s awareness in people’s mind. Private companies have to make their image like
LIC in the minds of people.
11. Still private companies are not known to small town people that much. So these
companies have to advertise more in remote areas.
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_________________________________________________________________________
12. People are getting better service from insurance sector. But still there are some people
who say that the service is worst so there is scope for improvement and they should
improve to catch the market of investment. Better service gives repeated customers & new
customers also.
13. Still people prefer Bank F.D., PPF, Postal savings as better option than insurance so
they have to be educated about importance of risk coverage in life for income assurance
after death of the earning member.
14. Need based selling is required by the agents/advisors. Here need of people should be
considered.
15. Main motivating factor of people for insurance is Agents/Advisors of insurance
companies. So Agents/Advisors should be in market always. They should be always vibrant
& company should keep them like that.
16. Young blood is necessary in insurance marketing. Today’s generation is sharp &
having up to date knowledge of current market conditions. So they can bring more business
than old Agents/Advisors presently working in market.
17. All categories of educated people from 10th to postgraduate level are working as
Agents/Advisors. But in today’s market while selling insurance only limited knowledge
about insurance sector is not sufficient. People want comparative study of the products &
they choose best of it. So Agents/Advisors should be such that he could grasp updated
knowledge quickly & apply it in the market. So here now only highly qualified people are
suitable so 10th & 12th pass people can’t work as Agents/Advisors in this fast changing
market.
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_________________________________________________________________________
18. According to survey Agents/Advisors can survive mostly for 3-4 years & after that gets
terminated. Insurance companies have to keep watch on this & try to minimize the
termination percentage. In these delicate years company has to observe personally every
problem of those Agents/Advisors. If the Agents/Advisors able to sustain in this years then
they will go long & insurance company will automatically gets benefited.
19. Insurance companies have to bring products which are suited for all the requirements
of the people. Variety of products gives people options to choose according to their
requirement. Then People will not go for other saving options.
# Annextures #
1. Questionnaire :-
1.1 # Questionnaire for Policyholders #
1. Name :-
2. Address :-
3. Age :-
a) 18-30 b) 31-40
c) 41-50 d) More than 50
4. Education :-
a) 10th b) 12th
c) Graduate d) Postgraduate
5. Occupation :-
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_________________________________________________________________________
a) Service b) Business
6. Income Per Annum :-
a) Less than 50000 b) 51000-1,00,000
c) 1,00,001-3,00,000 d) More than 3,00,000
7. No. of Dependent Members :-
a) Less than or equal 2 b) 3 to 5 c) More than 5
8. No. of policies you are having :-
a. 1 b. 2 to 5
c. 5 to 10 d. More than 10
9. What did you think about Life Insurance ?
a. Life Insurance is necessary only for saving.
b. Life Insurance is necessary only for risk factor.
c. Life Insurance is necessary for both.
d. Life Insurance is not necessary.
10. While doing policy which media you think is more influential ?
a. Through Agent b. Newspaper
c. Television d. Magazine
e. Internet f. Hoarding/Posters
11. What is your intention while purchasing Insurance policy ?
a. To get Lump sum amount at your Retirement.
b. For marriage of your son/daughter.
c. For Education of your son/daughter.
d. Risk cover of life with step by step saving.
e. For Tax Exemption.

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_________________________________________________________________________
12. Do you know about the Privatisation of Insurance Sector ?
a. Yes
b. No
13. Which companies in Life Insurance Industry you know ?
a. HDFC Standard Life b. Bajaj Allainz
c. ICICI Prudential d. Reliance
e. L.I.C. f. S.B.I. Life
14. How is the service given by your Insurance Company ?
a. Good
b. Better
c. Worst
15. Which option of saving is better ?
a. Bank F.D. b. Postal Savings
c. PPF d. Insurance
e. Mutual Funds
16. Which Insurance policies you think are more attractive ?
a. Conventional b. ULIP
c. Whole Life d. Pension Plans
17. Which are the motivational factors for purchasing Insurance ?
a. Insurance Agent b. Friend
c. Family Members d. Colleague
________________________________________________________________________
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1.2 # Questionnaire for Insurance Advisor #
1. Name :-
2. Address :-
3. Age
a) 18-30 b) 31-40
c) 41-50 d) More than 50
4. Education :
a) 10th b) 12th
c) Graduate d) Postgraduate
6. Company in which you are working ?
a) L.I.C. b) Bajaj Allianz
c) HDFC Std. Life d)Birla Sunlife
e) Reliance Life Insurance
________________________________________________________________________
_________________________________________________________________________
7. Period of your service as a Advisor ?
a) Less 2 Yrs. b) 3 to 4 Yrs.
c) 5 to 6 Yrs. d) More than 6 Yrs.
8. Number of Policies in force under your Agency ?
a) Less than 50 b) 51 to 100
c) 101 to 200 d) More than 200
9. Which Policies you sell more ?
a) Conventional b) ULIP
c) Pension Plans d) Health Plan
10. What is the percentage of Policyholders who approached you for their policy ?
a) Less than 5% b) 6 to 10%
c) 11 to 25% d) More than 25%
11. How company is promoting their Insurance Products i.e. Policies ?
a) Through Advisors b) Internet
c) Television Ads. d) Hoardings/Posters
e) Newspapers
12. Which Saving option do you think people are preferring more ?
a) PPF b) Mutual Fund
c) Insurance d) Bank F.D.
e) Postal Savings
13. Which insurance plans are having more demand in market ?
a) ULIP b) Conventional
c) Pension d) Health
14. Why People are going for other savings options ?

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_________________________________________________________________________
a) Because of liquidity. b) Because of higher returns.
c) Because of security. d) Because of Flexibility
15. Which option is better to divert people from other investments to Insurance?
a) Agent’s canvassing b) Television OR Other media advertising
c) Seminars
16. What you think about people’s intention while purchasing Insurance policy ?
a. To get Lump sum amount at your Retirement.
b. For marriage of your son/daughter.
c. For Education of your son/daughter.
d. Risk cover of life with step by step saving.
e. For Tax Exemption.
2. Bibliography :-
1. Gupta, A. K. & D. Wileman (1990).’improving R & D / Marketing Relations: R & D
Perspective’, R & D Management, 20(4), 277-90 Shrivastava, P. and W.E. Souder
(1987),’ The Strategic Management of Technological Innovation: A Review and a
Model’, Journal of Management Studies, 24(1), 24-41.
2. Frey, D., (1991). ‘ Learning the Ropes: My Life as a Product Champion’, Harvard
Business School, Sept.-Oct., 46-56.
3. Rogers, E.M.,(1983). Diffusion of Innovations, New York: Free Press.
4. Brown, R.,(1991).’Managing the S Curves of Innovation’, Journal of Marketing
Management, 7(2), 189-202.
5. Wind and Cardozo (1974), op. cit.
6. R. E. Plank (1985), ‘A Critical Review of Industrial Market Segmentation’, Industrial
Marketing Management, 14, 79-91.

________________________________________________________________________
_________________________________________________________________________
7. Wind, Y. (1978),’Issues and Advances in Segmentation Research’, Journal of
Marketing Research, August, 317-37.
8. Sampson, P.(1992),’People are People the World over: The case for Psychological
Market Segmentation’, Marketing and Research Today, November 236-44.
9. Wind, Y. and R. N. Cardozo (1974),’ Industrial Market Segmentation’, Industrial
Marketing Management, 3, 153-66.
Internet Sites Referred :-
1. www.sancharnet.in
2. www.licindia.com
3. www.google.com
________________________________________________________________________

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MBA Program Y.C.M.O.U.

Under the Guidance of

1. INTRODUCTION, IMPORTANCE & SIGNIFICANCE OF THE

players with some entry restrictions and limits on direct investment

ownership. With the fast changing liberalization, globalization and

significance of insurance although there is still a blocking point among the

Kolhapur district in western maharashtra is one of the developed area with

strong agriculture base, cooperative organizations and various types of

industries. further, in this competitive world every life insurance company is

indulged in maximizing it market share by tapping new market segments as

well as by the means of consumer retention.Therfore the study of consumer

behavior is important in case of life insurance business.

2. RATIONAL OF THE STUDY -

Due to the vast developments in the industrial sector followed by huge

investment for future contingencies. Due to the government’s economic

increasing percentage at different income slabs. Therefore the people have

facing problem in Maharashtra. Investment Shares is risky for small

investor and the process of buying and selling of shares is out of

understanding of common person. The mutual fund investment is giving

good returns. Insurance is the only investment avenue which covers

income tax exemption in certain policies.

Due to LPG policy of Indian government along with domestic insurance

increasing population of the country. There is enormous competition

matching to the needs of different classes of people.

preference, perception, attitude, influencing factors while purchasing the

policies, purchasing decisions, post purchase behavior, satisfaction levels

are varying with varied consumer segments. Therefore, it becomes

interesting to study the consumer response to the sensitive service industry

through the means of consumer behavior. Therefore the researcher has

behavior and comparative analysis of life insurance companies in Kolhapur

3. OBJECTIVES OF THE STUDY -

products. Thus, the objectives of the study will be –

1. To study the awareness of different insurance companies and their

2. To know the various reasons for purchasing insurance policies

3. To determine the market potential for various products of different

4. To study the prevailing attitudes of consumers towards the various

Insurance policies in terms of price (premium) ,features, returns ,risk

Coverage , tax exemptions, etc.

5. To give suggestions for the further improvement if necessary

4. HYPOTHESIS OF THE STUDY -

2. Life insurance companies are lacking behind in promotional

Time and thus happens to be original in nature.

method. A structured Questionnaire will be prepared for the existing

consumers of insurance. The discussions and interviews of the consumers will

be also conducted to collect the necessary information to fulfill the objectives

others for entirely for different reason.

Here, various books magazines, journals, websites, reports, etc. will be

referred as Secondary Data.

Sampling And sample size-

The sample of 125 respondents from of Kolhapur District will be selected by

the convenient sampling method as representative units of whole population.

Kolhapur district market by means of study of consumer behaviour. In the first

will be comprised of review of literature on life insurance industry and

consumer behaviour. The data collected through primary and secondary

interpretation of data in earlier chapter will be presented in fifth chapter which

will further followed by the suggestions or recommendations to both buyers

for further study will be given in the last chapter.

Chapter No. 1 : Research Design:-

Chapter No. 2 : Over view of insurance industry.

Chapter No. 3 : Consumer behavior: a conceptual discussion.

Chapter No. 4 : Data presentation, analysis and interpretation

Chapter No. 5 : Findings and Suggestions

(Research Candidate) (Research Guide)