A REPORT

ON
(Factors affecting buying behaviour of
customers of Life Insurance)
By
(Pooja Mittal)
17BSP1891
(IDBI Federal Life Insurance Co Ltd.)

1
 REPORT
ON
(Factors affecting buying behaviour of
customers of Life Insurance)
By
(Pooja Mittal 17BSP1891)

(IDBI Federal Life Insurance Co Ltd.)

A report submitted in partial fulfilment of
the requirements of PGPM Program of IBS
Gurgaon
Distribution List:
Miss. Ekta Rani Chauhan (Faculty Guide)
Mr. Ezad Ahmed (Company Guide)

Date Of Submission: 25-06-2018

2
 Authorization
This is to certify that this report is submitted in partial fulfilment of the requirements of PGPM
program of ICFAI Business School (IBS), Gurgaon. This report document titled: ―Factors
Affecting Buying Behaviour of the Customer of Life Insurance” is done by Pooja Mittal as
part of the completion of the study at IDBI Federal Life Insurance Co. during her Internship
program under the guidance of Mr.Ezad Ahmed .

DATE:

Sign by Company Guide

3
 Acknowledgement
I would like to convey my sincere thanks to all those who have directly or indirectly helped me
to accomplish my goals. I would like to thanks IBS college for giving me the opportunity .

I would like to express my heartiest gratitude to my company guide Mr. Ezad Ahmed (Senior AL
Manager) and Mr. Manas Das (Branch Head) for guiding me throughout the project and giving
me the opportunity to work in the organization. I would also like to thank them for the guidance
they had given me for the project work.

Above all, I am extremely thankful to Prof Ekta Rani Chauhan without whom the Summer
Internship Program would not have been a learning experience since he gave me the right kind of
guidance. Without his guidance, co-operation and motivation this project would not have been
completed.

Also, I would like to thanks all my colleagues for supporting me and helping me out.

Last but not the least I would like to thank my parents and friends who have been pillar of
strength for me in all phases of life.

4
Contents
Abstract ........................................................................................................................................... 7
Chapter 1 ......................................................................................................................................... 8
1.1 Introduction of Insurance Sector ........................................................................................... 8
1.1.1 Market size ..................................................................................................................... 8
1.1.2 Growth ............................................................................................................................ 8
1.1.3 Investments ................................................................................................................... 11
1.1.4 Government Initiatives ................................................................................................. 11
1.1.5 Industry outlook ............................................................................................................ 12
1.1.6 Road Ahead .................................................................................................................. 12
1.2 Introduction about IDBI Federal Life Insurance Company ................................................ 13
1.2.1 Company‘s Profile ........................................................................................................ 13
1.2.2 Details of the Company ................................................................................................ 13
1.2.3 Nature of Business ........................................................................................................ 18
1.2.4 Mission, Vision and Values .......................................................................................... 18
1.2.5 Product Range of IDBI Federal .................................................................................... 19
1.2.6 Size of the company ..................................................................................................... 20
1.2.7 Organization Structure .................................................................................................. 21
............................................................................................................................................... 21
Chapter 2 ....................................................................................................................................... 22
2.1 Market Share & Position of the company ........................................................................... 22
2.2 SWOT Analysis................................................................................................................... 23
2.3 Net sales of the company .................................................................................................... 24
2.4 CRM Policies – IDBI Federal Life Insurance ..................................................................... 24
2.5 Marketing Mix of IDBI Federal Life Insurance .................................................................. 25
2.6 BCG Matrix for IDBI Federal ............................................................................................. 26
2.7 Segmentation of IDBI Federal ............................................................................................ 27
Chapter 3 ....................................................................................................................................... 28
3.1 Factors Affecting Buying Behaviour of Customers of life insurance ........................... 28
3.1.1Defining Consumer Behaviour ...................................................................................... 28
3.1.2 Objective of the study ................................................................................................... 30

5
 3.1.3 Methodology:................................................................................................................ 30
3.1.4 Data Analysis ................................................................................................................ 31
3.2 Observations and Learning............................................................................................. 41
3.3 Recommendations & Suggestions .................................................................................. 41
3.4 Conclusion........................................................................................................................... 42
3.4 Annexure ............................................................................................................................. 43
3.5 Bibliography ........................................................................................................................ 47

6
 Abstract
IDBI Federal Life Insurance Co Ltd is a joint-venture of IDBI Bank, India‘s premier
development and commercial bank, Federal Bank, one of India‘s leading private sector banks
and Ageas, a multinational insurance giant based out of Purpose. In this venture, IDBI Bank
owns 48% equity while Federal Bank and Ageas own 26% equity each. Having started in March
2008, in just five months of inception, IDBI Federal became one of the fastest growing new
insurance companies to garner Rs 100 Cr in premiums. Through a continuous process of
innovation in product and service delivery IDBI Federal aims to deliver world-class wealth
management, protection and retirement solutions that provide value and convenience to the
Indian customer.

During the time period of my internship my work was to:

 Training for IC-38

 Induction for financial market, insurance sector.
 Thorough study of IDBI Federal.
 Studying various saving and investment plans of IDBI Federal.
 Prospecting clients and selling of plans
 Documentation and form filling from the clients.
 Studying live projects.

7
 Chapter 1
1.1 Introduction of Insurance Sector
The insurance industry of India consists of 57 insurance companies of which 24 are in life
insurance business and 33 are non-life insurers. Among the life insurers, Life Insurance
Corporation (LIC) is the sole public sector company. Apart from that, among the non-life
insurers there are six public sector insurers. In addition to these, there is sole national re-insurer,
namely, General Insurance Corporation of India (GIC Re). Other stakeholders in Indian
Insurance market include agents (individual and corporate), brokers, surveyors and third party
administrators servicing health insurance claims.

Out of 33 non-life insurance companies, five private sector insurers are registered to underwrite
policies exclusively in health, personal accident and travel insurance segments. They are Star
Health and Allied Insurance Company Ltd, Apollo Munich Health Insurance Company Ltd, Max
Bupa Health Insurance Company Ltd, Religare Health Insurance Company Ltd and Cigna TTK
Health Insurance Company Ltd. There are two more specialized insurers belonging to public
sector, namely, Export Credit Guarantee Corporation of India for Credit Insurance and
Agriculture Insurance Company Ltd for crop insurance.

1.1.1 Market size

Government's policy of insuring the uninsured has gradually pushed insurance penetration in the
country and proliferation of insurance schemes are expected to catapult this key ratio beyond 4
per cent mark by the end of this year, reveals the ASSOCHAM latest paper.

The number of lives covered under Health Insurance policies during 2015-16 was 36 crores
which is approximately 30 per cent of India's total population. The number has seen an increase
every subsequent year as 28.80 crores people had the policy in the previous fiscal.

Premium income of the life insurance segment had increased 14.04 per cent in FY17 to Rs 4.18
trillion (US$ 64.92 billion). In August 2017, the Life Insurance industry reported a 24 per cent
growth in overall annualized premium equivalent with the help of both private players and Life
Insurance Corporation.

1.1.2 Growth
The Indian life insurance industry has begun to recover and is likely to report 12-15% growth in
financial year (FY) 2016-17, according to an ICRA paper analyzing the performance of nine life
insurance companies in India, one in the public sector and eight in the private sector. Together,

8
they represent over 87% of the total annualized premium equivalent (APE) of the life insurance
industry during first nine months (April-December) of FY16.

The companies analysed are: Life Insurance Corporation of India (LIC), ICICI Prudential Life
Insurance Corp. Ltd, Bajaj Allianz Life Insurance Co. Ltd, SBI Life Insurance Co. Ltd, Birla
Sunlife Insurance Co. Ltd, Max Life Insurance Co. Ltd, Reliance Life Insurance Co. Ltd, Kotak
Mahindra Old Mutual Life Insurance Ltd, and HDFC Standard Life Insurance Co. Ltd.

During the period, the industry APE grew 6% year-on-year (y-o-y), as against a contraction of
9% y-o-y in FY15 to stand at Rs.37,300 croress (it was Rs.35,000 croress in the first nine months
of FY15). The growth for private companies was 13% y-o-y during the period. LIC witnessed an
improvement to 1% y-o-y during April-December FY16 from a contraction of 24% in FY15.

During the last few quarters, LIC reported poor APE performance following the contraction in its
regular premium collections and the weakness in its unit-linked insurance plan (Ulip) portfolio
against the backdrop of an upbeat domestic stock market. In FY15, the regular segment

contracted by 27% y-o-y and reported volumes of Rs.23,000 crores. However, in first nine
months of FY16, contraction in the regular premium segment reduced to 4% y-o-y.

9
LIC‘s regular premium segment contracted 4% y-o-y during the reported period, while that for
the private companies analyzed grew by 12% y-o-y during this period. Industry APE drew
adequate support from declining LIC contraction rates and marginal improvement in the regular
premium growth rate for private companies (29% y-o-y in first nine months of FY16, as against
25% in FY15).

In line with the trend witnessed during the past few years, especially since the regulatory changes
of September 2011, the proportion of single premium in the total new business premia generated
by the industry continued to rise in the first nine months of FY16. It rose to 63% during the
stated period from 58% both in FY15 and April-December FY15.

But contrary to the trend of maintaining the single-premium proportion stable at around 30%
during the past few years, private companies reported an increase in the proportion to 34% in the
period of FY16, as against 31% in the year-ago period. The increase followed the sharper focus
that they brought to the single-premium segment. LIC, on the other hand, continues with its
historical trend of growing its new business mix in favor of single-premium products. As of
December 2015, single premium accounted for 75% of LIC‘s total new business, versus 70% in
December 2014.

Private insurers, who till last year had not paid much attention to the single-premium segment,
have turned more aggressive.

Single-premium collections for them grew at a faster pace (29% y-o-y), compared with LIC
(24% y-o-y), enabling industry collections in the segment to rise 25% y-o-y in this period.

10
The regular-premium segment has remained on a marginally lower growth trajectory. For private
insurers, this segment grew 12% y-o-y during the period, while for LIC it contracted 4% y-o-y
(contraction of 27% in FY15). Consequently, for the overall industry, the growth rate in the
regular premium remained at the sub-5% levels in 9M FY16 (as against a contraction of 10% y-
o-y in FY15).

1.1.3 Investments
The following are some of the major investments and developments in the Indian insurance
sector.

 Pradhan Mantri Fasal Bima Yojana (PMFBY) covered 50.9 million farmers in India in
2016-17.

 India's leading bourse Bombay Stock Exchange (BSE) will set up a joint venture with
Ebix Inc to build a robust insurance distribution network in the country through a new
distribution exchange platform.

 Revenues of the healthcare sector are projected to grow by 15 per cent between FY18-20
on the back of rise in health insurance coverage through government-sponsored
schemes@.

1.1.4 Government Initiatives

The Government of India has taken a number of initiatives to boost the insurance industry. Some
of them are as follows:

 Government of India launches Pradhan Mantri Vaya Vandana Yojana, a pension scheme
which will provide guaranteed 8 per cent annual return to all the senior citizen above 60
years of age for a policy tenure of 10 years.

 The Union Cabinet has approved the public listing of five Government-owned general
insurance companies and reducing the Government‘s stake to 75 per cent from 100 per
cent, which is expected to bring higher levels of transparency and accountability, and
enable the companies to raise resources from the capital market to meet their fund
requirements.

 The Insurance Regulatory and Development Authority of India (IRDAI) plans to issue
redesigned initial public offering (IPO) guidelines for insurance companies in India,
which are to looking to divest equity through the IPO route.

11
 IRDAI has allowed insurers to invest up to 10 per cent in additional tier 1 (AT1) bonds
that are issued by banks to augment their tier 1 capital, in order to expand the pool of
eligible investors for the banks.

1.1.5 Industry outlook

 As of the first half (April-September) of FY16, domestic life insurance companies

remained well capitalized, partly because of the low growth in gross premium collections.
The capitalization levels are comfortable, despite deteriorating profitability matrices
largely on account of the large cushion of capital available—over and above the
minimum regulatory requirement.
 After the passage of the Insurance Laws (Amendment) Bill, 2015, which sets a higher cap
on foreign investment in insurance joint ventures (JVs), nearly all foreign JV partners
have shown interest in increasing the equity stake in their respective JVs.
 The announcements made so far suggest Rs.10,000-crores deals have been executed or
are in their final stages of execution in the life insurance industry. But a significant part
of the capital may go to the Indian JV partners concerned as they look to monetise their
investments. In most of these deals, the post-money valuation of the JV stands between
1.0 times and 4.0 times their FY15 Gross Premium Written. If one were to use another
multiple, such as Price/Net Worth, the range would stand substantially wider between 6.0
and 7.0 times.

1.1.6 Road Ahead

The future looks promising for the life insurance industry with several changes in
regulatory framework which will lead to further change in the way the industry conducts
its business and engages with its customers. India with 3.42 per cent penetration rate in
the insurance sector offers greater penetration potential when compared to global average
of 6.2 per cent
The country‘s insurance market is expected to quadruple in size over the next 10 years
from its current size of US$60 billion.
Demographic factors such as growing middle class, young insurable population and
growing awareness of the need for protection and retirement planning will support the
growth of Indian life insurance.
Exchange Rate Used: INR 1 = US$ 0.015 as on January 4, 2018

12
 1.2 Introduction about IDBI Federal Life Insurance Company

1.2.1 Company’s Profile

Name of the company IDBI Federal Life Insurance Co. Ltd.

Address Aggarwal Corporate Heights, Plot no. A-7,

District Centre, Netaji Subash Place, Delhi,
110034
Telephone No. 1800 209 0502 (Toll Free)
Email id
manas.das@idbifederal.com

Website www.idbifederal.com
Type of the organization Insurance
Corporate office address 1st Floor Trade View, OASIS Complex,
Kamala city, PB Marg, Lower Parel(w)
Mumbai – 400013
Areas of operation All over the India
Specific Function area Bank & Insurance

1.2.2 Details of the Company

IDBI Federal Life Insurance Co Ltd is a joint-venture of IDBI Bank, India‘s premier
development and commercial bank, Federal Bank, one of India‘s leading private sector banks
and Ageas, a multinational insurance giant based out of Purpose. In this venture, IDBI Bank
owns 48% equity while Federal Bank and Ageas own 26% equity each. Having started in
March 2008, in just five months of inception, IDBI Federal became one of the fastest growing
new insurance companies to garner Rs 100 Cr in premiums. Through a continuous process of
innovation in product and service delivery IDBI Federal aims to deliver world-class wealth
management, protection and retirement solutions that provide value and convenience to the
Indian customer. The company offers its services through a vast nationwide network of 3014
partner bank branches of IDBI Bank and Federal Bank in addition to a sizeable network of
advisors and partners. As on 31stMarch 2015, the company has issued over 8.35 lakh policies
with a sum assured of over Rs. 53,918 Cr. IDBI Federal Life Insurance has total assets under
management of 4,893 croress and a robust capital base of over 800 croress, as on March 31,
2016.
IDBI Federal today is recognized as a customer-centric brand, with an array of awards to their
credit. They have been awarded the PMAA Awards (2009) for best Dealer/Sales force Activity,
EFFIE Award (2011) for effective advertising, and conferred with the status of ‗Master Brand
2012-13‘ by the CMO Council USA and CMO Asia.

13
 IDBI Bank
IDBI Bank Ltd. is a Universal Bank with its operations driven by a cutting edge core Banking IT
platform. The Bank offers personalized banking and financial solutions to its clients in the retail
and corporate banking arena through its large network of Branches and ATMs, spread across
length and breadth of India. We have also set up an overseas branch at Dubai and have plans to
open representative offices in various other parts of the Globe, for encasing emerging global
opportunities.
As on March 31, 2011, the Bank had a network of 816 Branches and 1372 ATMs. The Bank's
total business, during Fey 2010-11, reached Rs. 3,37,584 Crores, Balance sheet reached Rs.
2,53,377 Crores while it earned a net profit of Rs. 1650 Crores (up by 60%).
IDBI Bank Ltd. is today one of India's largest commercial Banks. For over 40 years, IDBI Bank
has essayed a key nation-building role, first as the apex Development Financial Institution (DFI)
(July 1, 1964 to September 30, 2004) in the realm of industry and thereafter as a full-service
commercial Bank (October 1, 2004 onwards). As a DFI, the erstwhile IDBI stretched its canvas
beyond mere project financing to cover an array of services that contributed towards balanced
geographical spread of industries, development of identified backward areas, emergence of a
new spirit of enterprise and evolution of a deep and vibrant capital market. On October 1, 2004,
the erstwhile IDBI Bank converted into a Banking company (as Industrial Development Bank of
India Limited) to undertake the entire gamut of Banking activities while continuing to play its
secular DFI role. Post the mergers of the erstwhile IDBI Bank with its parent company (IDBI
Ltd.) on April 2, 2005 (appointed date: October 1, 2004) and the subsequent merger of the
erstwhile United Western Bank Ltd. with IDBI Bank on October 3, 2006, the tech-savvy, new
generation Bank with majority Government shareholding today touches the lives of millions of
Indians through an array of corporate, retail, SME and Agri products and services.
Headquartered in Mumbai, IDBI Bank today rides on the back of a robust business strategy, a
highly competent and dedicated workforce and a state-of-the-art information technology
platform, to structure and deliver personalized and innovative Banking services and customized
financial solutions to its clients across various delivery channels.
As on March 31, 2013 IDBI Bank has a balance sheet of Rs. 3,22,769 Crores and business size
(deposits plus advances) of Rs 4,23,423 Crores. As a Universal Bank, IDBI Bank, besides its
core banking and project finance domain, has an established presence in associated financial
sector businesses like Capital Market, Investment Banking and Mutual Fund Business. Going
forward, IDBI Bank is strongly committed to work towards emerging as the 'Bank of choice' and
'the most valued financial conglomerate', besides generating wealth and value to all its
stakeholders.

14
 Federal Bank
Federal Bank Ltd is engaged in the banking business. The Bank operates in four segments:
treasury operations, wholesale banking, retail banking and other banking operations. Treasury
operations include investment and trading in securities, shares and debentures. The Bank's
products and services include working capital, term finance, trade finance, specialized corporate
finance products, structured finance, foreign exchange, syndication services and electronic
banking requirements. Federal Bank Ltd was incorporated on April 28, 1931 with the name
Travancore Federal Bank Ltd. The company was established with an authorized capital of rupees
five thousand at Nedumpuram, a place near Tiruvalla in Central Travancore under the
Travancore Company's Act. The Bank was founded by K.P.Hormis. They started business of
auction -chitty and other banking transactions connected with agriculture and industry. In May
18, 1945, the registered office of the Bank was shifted to Aluva. They opened their first branch at
Aluva and commenced operations. In the year 1946, they opened their second branch at
Angamally. In March 24, 1947, the name of the Bank was changed to Federal Bank Ltd. In April
1947, they opened their third branch of the Bank was at Perumbavoor. In July 11, 1959, the Bank
was licensed under Sec.22 of the Banking Companies Act, 1949. The Bank floated several kuries
one after another. They also introduced several new deposit schemes during the same period. In
the year 1964, the Bank took over the assets and liabilities of the Chalakudy Public Bank Ltd,
The Cochin Union Bank Ltd and The Alleppey Bank Ltd. In the year 1965, the St.George Union
Bank Ltd was amalgamated merged with the Bank. In the year 1968, The Marthandom
Commercial Bank Ltd was amalgamated with the Bank. In the year 1970, the Bank became a
Scheduled Commercial Bank. In the year 1973, the Bank became an Authorized Dealer in
Foreign Exchange and the International Banking Department of the bank was started functioning
from Mumbai. In the year 1975, the Bank opened 53 branches. In the year 1976, they opened 42
branches. In the year 1982, the Bank shifted the International Banking Department to Cochin as
part of consolidation and centralization of activities.

As part of the organization redesigning recommended by National Institute of Bank Management

(NIBM), the Agricultural Finance Department was set up in head office in November 1984. In
July 1985, the Bank set up Personnel and Industrial Relations Department. Also, they installed
the first Advanced Ledger Posting Machine (ALPM-a Wipro banker) at Br.Aluva-Bank Junction
branch. In the year 1987, they inaugurated the administrative building complex. In the year 1989,
the Bank entered into the Merchant Banking Operations. In March 1994, the Bank came out with
the public issue. In February 17, 1997, the bank inaugurated their first ATM at Ernakulum North.
In the year 2000, the Bank started their Any Where Banking (ABB) at Bangalore connecting all
branches located in the Bangalore metro. They launched Depository Services in association with
NSDL. Also, they commenced Internet Banking under the name of 'Fed Net' with software
support from Infosys Technologies Ltd. They entered into marketing pacts with some

15
commercial agencies for their E-commerce business. In the year 2001, the bank made a tie up
with Escortel Communications to launch mobile banking services using SMS technology. Also,
they launched a new deposit scheme christened as 'Suraksha' for senior citizens. The bank
became a member of INFINET, the financial network supported by RBI. In February 2002, they
set up full-fledged systems for the RBI's Negotiated Dealing Systems (NDS) at the Funds &
Investment Branch in Mumbai, enabling online trading in securities. In the year 2003, the Bank
unveiled the Anywhere Banking that provided the convenience of doing transactions from 300-
plus interconnected branches.

In the year 2004, the Bank obtained the level of 100% interconnectivity among all their
branches. Also, they launched an Equity Subscription Scheme, a new retail product for financing
the IPOs and public issue applications of their own customers. The Bank joined hands with
ICICI Prudential Life Insurance Company Ltd for premium collection through their branches and
introduced new Fed e-Pay services. In the year 2005, JRG Securities Ltd forged an alliance with
the Bank for providing loans for subscribing to initial public offers (IPOs). The bank emerged as
the first bank in India to offer Real Time Gross Settlement (RTGS) across all of their branches.
In September 2, 2006, Ganesh Bank was amalgamated with the Bank and the 32 branches of
erstwhile Ganesh Bank of Kurundwad Ltd were successfully integrated to bank's network.
During the period of 2006-07, the Bank entered into a joint venture agreement with IDBI Ltd &
Fortis Insurance International N V for incorporating a Life Insurance Company under the name
of IDBI Fortis Life Insurance Company Ltd. During the year 2007-08, the Bank opened their
Representative office at Abu Dhabi, Capital of UAE for the gateway of the bank to the whole of
Middle East and also as an interface between their existing customers of GCC countries and its
Branches /Offices in India. In March 2008, the Bank's joint venture life insurance company,
IDBI Fortis Life Insurance Company Ltd commenced their operation. During the year 2009-10,
the Bank opened 60 new branches and 115 new ATM centres. During the year 2010-11, they
opened 71 new branches and 73 new ATMs. As on March 31, 2011, the total number of branches
and ATMs of the Bank increased to 743 and 805 respectively, as against 672 and 732 in the last
financial year. As of March 31, 2011, the Bank had two A category branches and 78 branches
designated as B category for handling the foreign exchange business.

16
 Ageas
Ageas is an international insurance group with a heritage spanning more than 180 years. Ranked
among the top 20 insurance companies in Europe, Ageas has chosen to concentrate its business
activities in Europe and Asia, which together make up the largest share of the global insurance
market.

These are grouped around four segments: Belgium, United Kingdom, Continental Europe and
Asia and served through a combination of wholly owned subsidiaries and partnerships with
strong financial institutions and key distributors around the world. Ageas operates successful
partnerships in Belgium, UK, Luxembourg, Italy, Portugal, Turkey, China, Malaysia, India and
Thailand and has subsidiaries in France, Hong Kong and UK.

Ageas is the market leader in Belgium for individual life and employee benefits, as well as a
leading non-life player through AG Insurance. In the UK, Ageas has a strong presence as the
fourth largest player in private car insurance and the over 50‘s market. Ageas employs more than
13,000 people in the consolidated entities and over 20,000 in the non-consolidated partnerships
and has annual inflows of more than EUR 21 billion.

Ageas is an international insurance group with a heritage spanning more than 180 years. Ranked
among the top 20 insurance companies in Europe, Ageas has chosen to concentrate its business
activities in Europe and Asia, which together make up the largest share of the global insurance
market.

These are grouped around four segments: Belgium, United Kingdom, Continental Europe and
Asia and served through a combination of wholly owned subsidiaries and partnerships with
strong financial institutions and key distributors around the world. Ageas operates successful
partnerships in Belgium, UK, Luxembourg, Italy, Portugal, Turkey, China, Malaysia, India and
Thailand and has subsidiaries in France, Hong Kong and UK.

Ageas is the market leader in Belgium for individual life and employee benefits, as well as a
leading non-life player through AG Insurance. In the UK, Ageas has a strong presence as the
fourth largest player in private car insurance and the over 50‘s market. Ageas employs more than
13,000 people in the consolidated entities and over 20,000 in the non-consolidated partnerships
and has annual inflows of more than EUR 21 billion.

17
1.2.3 Nature of Business

 Channel Agency
 Bankassurance
 Direct Marketing

1.2.4 Mission, Vision and Values

Vision
To be the leading provider of wealth management, protection and retirement solutions that meets
the needs of our customers and adds value to their lives.

Mission

 To continually strive to enhance customer experience through innovative product

offerings, dedicated relationship management and superior service delivery while striving
to interact with our customers in the most convenient and cost effective manner.
 To be transparent in the way we deal with our customers and to act with integrity.
 To invest in and build quality human capital in order to achieve our mission.

Values
 Transparency: Crystal Clear communication to our partners and stakeholders
 Value to Customers: A product and service offering in which customers perceive value
 Rock Solid and Delivery on Promise: This translates into being financially strong,
operationally robust and having clarity in claims
 Customer-friendly: Advice and support in working with customers and partners
 Profit to Stakeholders: Balance the interests of customers, partners, employees,
shareholders and the community at large.

18
 1.2.5 Product Range of IDBI Federal

Incomesurance
Guaranteed Money Back Insurance Plan is a non- linked non-participating money back plan
which gives guaranteed returns on an investment, so that the customer stops worrying about the
future. With Incomesurance, they can guarantee a secure future for their families even when they
are not around.

Lifesurance
Lifesurance Savings Insurance Plan is a fixed term non-linked participating plan that provides
twin benefits of long-term savings and life cover. With Lifesurance Savings, customers‘ small
savings will help them realise their big dreams that they have for their self and their family. This
plan also offers the benefit of life cover that will provide financial security to their family in their
absence.

Wealthsurance
The Wealthsurance Milestone Plan is a unique Insured Wealth Plan designed to help cross
different milestones in one‘s life. It enables customers to save and build wealth under the
protection of Insurance to meet their financial goals. The Wealthsurance Milestone Plan offers a
wide range of Investment options, Insurance options and unmatched flexibility that allows
customers to customize a plan suited to their needs.

Childsurance
It is a non-linked participating endowment plan that ensures a child‘s future. Childsurance
Savings is designed to give the customers, guaranteed annual pay-outs and also aid the important
milestones in their child‘s life. In the unfortunate event of the parent not being around, the policy
will continue exactly as they had planned it, without any further premiums being paid. .In other
words, this plan ensures that their child gets to live his/her dream exactly as they have planned,
whether or not their parents are around.

19
 1.2.6 Size of the company
In terms of Manpower
 The Company has a strong and committed team of 1,972 employees as of May 31,
2017 and over 10,000 agents who are working for the company.

In terms of Turnover
 The size of the company in terms of turnover is approximate 1000 crores.

 The achieved its break even in just 5 years and is making huge profits.

Branches
 The company has more than 2900 branches (including the partner bank branches)
 The company has 7915 advisors across the country.

20
1.2.7 Organization Structure

21
 Chapter 2
2.1 Market Share & Position of the company
Market Share of all life insurance companies in India:

22
2.2 SWOT Analysis

2.2.1 Strength
 Large pool of technically skilled manpower with in depth knowledge and understanding
of the market.
 The company also provides innovative products to cater to different needs of different
customers.
 Dedicated workforce aiming at making a long-term career in the field.
 Strong and well spread network of qualified intermediaries and sales person.
 Strong capital and surplus reserve.
 Low management expenses and administrative costs.

2.2.2 Weaknesses
 Customer service staff needs training due to changing human behaviour.
 Product awareness is low in the market.
 Management cover insufficient.
 Sectored growth is constrained by low unemployment levels and competition for staff.
 Low customer confidence on the private players.

2.2.3 Opportunities

 Insurable population: According to IRDA only 10% of the population is insured which
represent around 30% of the insurable population. This suggests more than 300m people,
with the potential to buy insurance, remain uninsured.
 Fast growing economy and increasing per capita income in India.
 Growing rural and semi-urban markets.
 Inflow of managerial and financial expertise from the foreign company.

2.2.4 Threats
 Big public sector insurance companies like Life Insurance Corporation (LIC) of India,
National Insurance Company Limited, Oriental Insurance Limited, New India Assurance
Company Limited and United India Insurance Company Limited. People trust and go to
them more.
 Changing government regulations and financial crisis like recession.
23
  Increase in insurance frauds.
 People prefer short term investments rather than insurance

2.3 Net sales of the company

The total sum assured of the company as March 31st 2017 is more than 58000 croress

2.4 CRM Policies – IDBI Federal Life Insurance

Customer Relationship management (CRM) strategies have become increasingly important

worldwide due to these changes in expectations from customers as well as changes in the nature
of market. IDBI Federal gives special attention to its customers and tries to reten them with
following methods:

1) Going direct to the customers: The Company is moving more towards a direct-to-
customer business model which will help to maintain the customer relationship as they
have greater control of the company‘s brand and more access to customer data.
2) Honest about the policy: The Company is very transparent about its policies. As the
customers are very conscious these days, they want clarification of each and every
question before taking any insurance policy.
3) Avoid false selling: The Company does not promotes or appreciates the false selling
of policies by its employees as it ruins the relationship with the customer in the long run.

24
 2.5 Marketing Mix of IDBI Federal Life Insurance

2.5.1 Product
The various products are introduced by IDBI Federal covers the wide variety which caters the
different needs of customer like savings, protection, endowment, wealth growth etc.

The products are as follows:

1) Incomesurance 6 Pay

2) Lifesurance savings insurance plan

3) Wealthsurance growth insurance plan

4) Childsurance savings plan

2.5.2 Price
The price of the premium of different products are highly flexible which highly customer
friendly and can be adopted according to the customer‘s convenience. Incomesurance, which is
guaranteed money back plan, starts from Rs. 25000 per year and can go up to the customer‘s
willingness. Lifesurance is total life cover product starts from Rs. 25000 per year which also can
be paid monthly or half-yearly. Wealthsurance, which is ULIP product increases wealth of
customer, also starts from Rs. 30000 per year. Childsurance is to secure the future of the child ,
starts from Rs. 25000

2.5.3 Place
The main places through which these products are marketed are three:

1) Bancassurance: This is the main channel through which these products are made
available to the customer. This is done with the help of banks which allows to sell these
products through their branches.
2) Agency: There are outlets in different parts which sells these products through their own
way.

3) Sales Agents: These are individuals which sells these products on commission basis
which is provided on the basis amount of premium sold to the customers.

25
2.5.4 Promotion
IDBI Federal promotes its products through distinct approach and unique strategy. Company has
launched a campaign after a two year about the flagship product- Life insurance whole life plan.
While most companies advertising at the same time used emotional routes, IDBI Federal chose a
mix of humour and rational messaging to communicate the proposition of the plan. The result
was that the campaign and the brand stood out in the clutter of other life insurance and financial
services ads in that period. The TV campaign was supported by outdoor and cinema activation in
select cities. The campaign received a lot of positive feedback from the industry as well as the
advertising and marketing fraternity for its unique approach and ability to present the product
proposition in a simple and engaging style.

2.6 BCG Matrix for IDBI Federal

Stars: Can be the market leaders though require on-going investment to sustain. They generate
more ROI than other product categories. Wealthsurance will fall under this category. It is the star
of the IDBI Federal. It has high growth markets with high market share.

Cash Cows: Milk these products as much as possible without killing the cow!‘ Often mature
and well established products. Childsurance will fall under this category. It is in low growth
markets with high market share.

26
Dogs: The usual marketing advice is to remove any dogs from your product portfolio as they
are a drain on resources. Whole-life plan falls under this category. The usual marketing advice is
to remove any dogs from your product portfolio as they are a drain on resources

Question marks: Named this, as it‘s not known if they will become a star or drop into the
dog quadrant. These products often require significant investment to push them into the star
quadrant. The challenge is that a lot of investment may be required to get a return.

2.7 Segmentation of IDBI Federal

The customer segmentation of products of IDBI Federal is done in the following ways:

Age: The premium rates of IDBI federal insurance product depends on the age and gender of
the person buying the insurance.

Risk Appetite: More risk prone customers generally tend to buy the Wealthsurance product
of IDBI which is based on equity. Risk averse and risk neutral customers buy other products
depending on their risk appetite and future goals.

Income: Customers with higher income invests more money for better returns whereas
customer in lower income group tends towards policies with lower premiums.

27
 Chapter 3
3.1 Factors Affecting Buying Behaviour of Customers of life
insurance

3.1.1 Defining Consumer Behaviour

Consumer Behaviour may be defined as ―the interplay of forces that takes place during a
consumption process, within a consumers‘ self and his environment.

 This interaction takes place between three elements viz. knowledge, affect and behaviour;
 It continues through pre-purchase activity to the post purchase experience;
 It includes the stages of evaluating, acquiring, using and disposing of goods and services.

The ―consumer‖ includes both personal consumers and business/industrial/organizational

consumers.

Consumer behaviour explains the reasons and logic that underlie purchasing decisions and
consumption patterns; it explains the processes through which buyers make decisions.

The study includes within its purview, the interplay between cognition, affect and behaviour that
goes on within a consumer during the consumption process: selecting, using and disposing of
goods and services.

Cognition: This includes within its ambit the ―knowledge, information processing and thinking‖
part; It includes the mental processes involved in processing of information, thinking and
interpretation of stimuli (people, objects, things, places and events). In our case, stimuli would be
product or service offering.

Affect: This is the ―feelings‖ part. It includes the favourable or unfavourable feelings and
corresponding emotions towards a stimulus (eg. towards a product or service offering or a
brand). These vary in direction, intensity and persistence.

Behaviour: This is the ―visible‖ part. In our case, this could be the purchase activity: to buy or
not a buy (again specific to a product or service offering, a brand or even related to any of the 4
Ps).

The interaction is reciprocal between each of the three towards each other and with the
environment.

28
Studying consumer behaviour is important because it enables us to better focus our efforts where
we can get the results we want. By understanding consumer behaviour; our business will provide
the consumer with better goods and services. Better goods and services results in more sales and
therefore more profit. Not only is it important to improve goods and services; it is necessary to
know what type of products and what type of service to offer.

Consumer behaviour is strongly tied to their phase in the life cycle. Patterns of spending are
dictated by what is happening at a given time. Younger couples with no children have different
needs than those who have started a family. While teenagers and elderly people have more
discretionary income and can spend more freely.

Knowing this will help us decide who our core customer is. By using this information to
influence buying decisions; we can increase sales.

It is also important to plan marketing strategies that are focused on this group. These strategies
should target our market and focus on niche marketing. Resources should not be spent marketing
to consumers outside of our target.

We will begin to understand our market when we have satisfied certain questions about our
customers. Why do they choose one product over the next? What impact does the role of culture,
education and advertising has on the decision to choose a product? How and why is the
consumer planning to use the product? Why are they loyal to a specific brand? What are the risks
involved in using or switching to our brand?

Having the answer to these questions will help us gain consumer confidence. We may have the
best product, but the consumer does not know this. We will speak to them through our status in
the community, our good-will, our price points and the way our product relates to them. These
factors will help to determine who will become our customers and who won't.

Consumers have needs and wants, and our objective is to identify the need and create the want.
Our ultimate goal is to influence consumer behaviour and convert this into profits for our
company. Businesses that can predict consumer behaviour have the edge over their competitors.
To predict consumer behaviour requires knowledge of the consumers‘ values, goals and lifestyle.
Companies with this asset use it to develop better strategies, and are better able to win over
consumers. Hence, this study is very important.

29
3.1.2 Objective of the study
 To identify the main influences on customer buying behaviour and to distinguish the
factors influencing customer buying behaviour.
 Exploring the various factors influencing customer investment decision in Life Insurance.
 Evaluating the preferences of the customers while taking life insurance investment
decision.

3.1.3 Methodology:
The study was exploratory in nature with survey method being used to complete the study.

 Sampling Design Population: Population included potential investors who are

residence of India.
 Sample frame: Since the data was collected through personal contacts, the sample
frames were the individuals who are investing in life insurance policies.
 Sample Size: Sample size is 100 respondents. Tools Used for Data Collection Self
designed questionnaire was used for the evaluation of factors affecting consumer‘s
perception towards insurance. Data was collected on Likert‘s type scale, where 1 stood
for minimum agreement and 5 stood for maximum agreement.

30
3.1.4 Data Analysis

Age
2% 18-25

12% 26-35

8%
36-45

58% 46-55
20%

Above 55

31
32
33
34
35
36
37
38
 3.1.5 Findings

Brand Image:
There is a myth in the mind-set of the people that brand image plays a vital role while investing
in any kind of insurance as they think that higher the brand image higher will be the profit with
lower risk. Therefore, it is clear that brand image plays an important role in making an
investment decision.

Returns:
People expect high returns from investing in insurance. They also think that if they are getting
low returns while investing in insurance than there is no point in investing in them. Hence, high
returns play a vital role in making an investment decision.

Benefits:
One of the main parameter of investing in any kind of insurance is benefits such as life cover and
death benefits. People prefer those insurance policies which provide huge amount of life cover
and death benefit.

Brand knowledge:
Now-a-days TV advertisement has become an important part of promotional strategies of the
company as it provides information to the people about the product of the company which
enhance the knowledge of the people about the brand. Hence, TV advertisement affects the
buying decision of the consumer while making an investment decision.

Customer relationship:
In maintaining a good customer relationship agents plays a vital role as they are the one who
represents the company and its product. The agents with good sales pitch build a strong
connection with the customers and influence there buying decision.

39
Premium:
Premium is an important part of insurance. People are mainly attracted to the policies which have
lower premium amount than to those policies with higher premium. It is the main factor which
affects the investment decision of the consumer.

Taxes:
Most of the people invest in insurance in order to avoid or save taxes as insurance provide tax
rebate under section 80(D) and 10(10D). Hence taxes are one of the factors which affect the
investment decision of the consumer of life insurance.

40
 3.2 Observations and Learning
 People prefer to buy a policy which has less years of premium payment term.
 More than life insurance, people are interested in a investment scheme. The better
investment plan they get, the more is their tendency to buy the policy.
 Very less people are interested in a pure life insurance policy.
 Tax benefits are also a major factor why people like to buy a policy.
 They are interested more in monthly premium payment options rather than
annually or half yearly.
 Friends and family are major influencers on customers when it comes to the
decision of buying a life insurance policy.
 LIC is still the market leader in life insurance sector.
 Brand image and past record of performance are major stimuli in buying decision
 IDBI Federal has limited reach to prospective customers as compared to other
companies.

3.3 Recommendations & Suggestions

 We need to tap the young crowd in the age group 18-30 and convince them that buying a
life insurance policy is necessary because life is very unpredictable.
 More plans should be made that involve less period of premium payment.
 Company should focus on to increase the brand knowledge through promotions.
 Group insurance policies like ‗full family insurance‘ schemes should be made.
 Our insurance policies should have a range of premiums to suit every pocket size.
 Company should expand its market in rural and semi-urban areas.

41
 3.4 Conclusion
In present Indian market, the investment habits of Indian consumers are changing very
frequently. The individuals have their own perception towards various types of investment plans.

The study of this research work was focused over the factors which affects the buying behaviour
of the customer of life insurance. The objectives of the study were to evaluate the factors
underlying consumer buying behaviour while investing in life insurance policies.

Some actions are needed for developing insurance market. The major factors which affect the
buying behaviour of the consumer of Life Insurance Policies are Brand Image, Returns, Brand
knowledge, Premium, Taxes, and customer Relationship. Insurance industry has to go a long
way. Hence, company should expand its market in rural and semi-urban areas as there are lot of
potential buyers who don‘t have an insurance policy.

42
 3.4 Annexure
Questionnaire Design

Insurance Questionnaire
This is a questionnaire intended to determine the factors which lead to buying of insurance
products. Please answer all the questions by choosing amongst the various alternatives.

Name:

Age:

Gender:

Occupation:

Insurance investments are more profitable with the brand image of the organization.

Strongly
Disagree Mildly Disagree Neutral Mildly Agree Strongly Agree

1 2 3 4 5

My preference is to invest in reputed/branded insurance company only.

Strongly
Disagree Mildly Disagree Neutral Mildly Agree Strongly Agree

1 2 3 4 5

Investment in insurance sector is expected to give high returns.

Strongly
Disagree Mildly Disagree Neutral Mildly Agree Strongly Agree

1 2 3 4 5

If returns are low, there is no point of investing money in insurance sector.

43
Strongly
Disagree Mildly Disagree Neutral Mildly Agree Strongly Agree

1 2 3 4 5

Death benefit is crucial while investing in insurance

Strongly
Disagree Mildly Disagree Neutral Mildly Agree Strongly Agree

1 2 3 4 5

Life cover is vital in an insurance policy

Strongly
Disagree Mildly Disagree Neutral Mildly Agree Strongly Agree

1 2 3 4 5

TV Advertisements are influential in my knowledge of insurance products

Strongly
Disagree Mildly Disagree Neutral Mildly Agree Strongly Agree

1 2 3 4 5

44
 Whether IDBI Federal Life insurance co. advertisement are known to me or not.

Strongly
Disagree Mildly Disagree Neutral Mildly Agree Strongly Agree

1 2 3 4 5

Whether insurance agents are transparent about the product or not.

Strongly
Disagree Mildly Disagree Neutral Mildly Agree Strongly Agree

1 2 3 4 5

Good sales pitch might influence me to invest in insurance sector.

Strongly
Disagree Mildly Disagree Neutral Mildly Agree Strongly Agree

1 2 3 4 5

Premium amount is important criteria while selecting insurance product.

Strongly
Disagree Mildly Disagree Neutral Mildly Agree Strongly Agree

1 2 3 4 5

45
Insurance policies with lower premiums attract me for investment.

Strongly
Disagree Mildly Disagree Neutral Mildly Agree Strongly Agree

1 2 3 4 5

Tax savings is crucial for purchasing insurance

Strongly
Disagree Mildly Disagree Neutral Mildly Agree Strongly Agree

1 2 3 4 5

Insurance is a convenient way of avoiding taxes

Strongly
Disagree Mildly Disagree Neutral Mildly Agree Strongly Agree

1 2 3 4 5

46
 3.5 Bibliography
Internet:
 https://www.ibef.org/industry/insurance-sector-india.aspx
 https://www.indiainfoline.com/company/idbi-bank-ltd/summary/5433
 http://idbifortis.com/AboutUs/Pages/Company-Profile.aspx
 https://www.ukessays.com/essays/commerce/factors-affecting-investment-decisions-in-
different-insurance-policies-commerce-essay.php

Questionnaire:

 https://docs.google.com/forms/d/e/1FAIpQLSerqtXsfIj2kRbYPqgD
O7cp0UYqBnzsXH6z10H44Ve61p-rwA/viewform

47