1

CHAPTER -- I INTRODUCTION

1.1 INTRODUCTION TO THE STUDY

Customer is the king and it is the customer who decides what a business is and therefore a sound marketing programme starts with a careful analysis of habits, attitudes, motives and needs of the customers. Definition of Buying Behavio ! Buying Behavior is the decision processes and acts of people involved in buying and using products. Cu"to#e $uying $ehavio ! Customer buying behavior refers to the buying behavior of the ultimate end user i.e. the customer. A firm needs to analyse the buying behavior for : Buyers 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 mi that satisfies a customer and therefore need to analy!e the what, where, when and how the customers buy. "arketers can better predict how customers will respond to marketing strategies.

Ho% Con"u#e Buy! 1. Nee&'(ant'De"i e i" e)ogni*e&!

#n the first step the customer has determined that for some reason he$she is not satisfied %i.e. customer&s perceived actual condition' and wants to improve his$her situation. ( ternal factors can also trigger the customer&s needs. "arketers are particularly good at this through advertising, in)store displays etc. undertake a search for information on possible solutions. The sources may be simple like the past e perience or the customer may e pend considerable effort
3

to locate information from outside sources %internet, etc.'. *ow much effort the customer directs towards searching depends on factors such as: The importance of satisfying the need +amiliarity with available sources The amount of time available for search.

+. Eva,uate o-tion"!
Customers search efforts may result in set of options from which a choice can be made. #t should be noted that there may be two levels to this stage. At level one the customer may create a set of possible solutions to their solution while at level two the customer may be evaluating particular products within each solution.

.. Pu )ha"e!
#n many cases the solution chose by the customer is the same as the product whose evaluation is highest. The intended purchase may be altered at the time of purchase for many reasons such as the product is out of stock, a competitor offering incentive at the time of purchase, the customer lacking in necessary of funds.

/. Afte -u )ha"e eva,uation!

,nce the customer has made the purchase they are faced with the evaluation of the decision. #f the product performs below the customer&s e pectation then he$she will re)evaluate the satisfaction with the decision, which at its e treme might result in the customer returning the product while in less e treme situations the customer will retain the product but may take a negative view of the product. -uch evaluations might occur in e pensive or highly important purchases. Customer service centre and follow-up market research are useful tools in helping to address the purchaser&s concern.
4

HD0C BAN1 PRO0I2E THE HISTORY O0 INDIAN INSURANCE HD0C BAN1 2I0E INSURANCE
#n ././ the British established the first insurance company in #ndia in Calcutta, the ,riental 0ife #nsurance Company. +irst attempts at regulation of the *1+C BA23 were made with the introduction of the #ndian 0ife Assurance Companies Act in .4.5. A number of amendments to this Act were made until the #nsurance Act was drawn up in .46/. 2oteworthy features in the Act were the power given to the 7overnment to collect statistical information about the insured and the high level of protection the Act gave to the public through regulation and control. 8hen the Act was changed in .49:, this meant far reaching changes in the *1+C BA23. The e tra re;uirements included a statutory re;uirement of a certain level of e;uity capital, a ceiling on share holdings in such companies to prevent dominant control %to protect the public from any adversarial policies from one single party', stricter control on investments and, generally, much tighter control. #n .49<, the market contained .9= #ndian and .< foreign life insurance companies. Business was heavily concentrated in urban areas and targeted the higher echelons of society. >?nethical practices adopted by some of the players against the interests of the
5

consumers@ then led the #ndian government to nationali!e the *1+C BA23. #n -eptember .49<, nationali!ation was completed, merging all these companies into the so) called 0ife #nsurance Corporation %0#C'. #t was felt that >nationali!ation has lent the *1+C BA23 fairness, solidity, growth and reach.@

So#e of the i#-o tant #i,e"tone" in the ,ife in"u an)e $u"ine"" in In&ia a e!
1314! The #ndian 0ife Assurance Companies Act enacted as the first statute to regulate the life insurance business. 1345! The #ndian #nsurance Companies Act enacted to enable the government to collect statistical information about both life and non)life insurance businesses.

6ENERA2 INSURANCE
The 7eneral #nsurance *1+C BA23 in #ndia dates back to the #ndustrial Aevolution and the subse;uent increase in trade across the oceans in the .Bth century. As for 0ife #nsurance, the British brought 7eneral #nsurance to #ndia, and a similar path was followed in the development of this *1+C BA23. A number of private companies were in e istence for years and years until, in .4B., the #ndian 7overnment decided that the public interest would be served by nationali!ing the *1+C BA23, merging all the .:B companies into four companies, depending on the sort of business transacted %"arine, +ire, "iscellaneous'. These were the 2ational #nsurance Company 0td., the ,riental #nsurance Company 0td., the 2ew #ndia Assurance Company 0td., and the ?nited #ndia #nsurance Company 0td. located in Calcutta, 2ew 1elhi, Bombay
6

and "adras respectively. The 7eneral #nsurance Corporation %7#C' was set up in .4B5 as a Cholding& company, having these four companies as its subsidiaries.

So#e of the i#-o tant #i,e"tone" in the gene a, in"u an)e $u"ine"" in In&ia a e!
1378! The In&ian 9e )anti,e In"u an)e 2t&. set up, the first company to transact all classes of general insurance business. 13/8! 6ene a, In"u an)e Coun)i,, a wing of the #nsurance Association of #ndia, frames a code of conduct for ensuring fair conduct and sound business practices. 13:5! The #nsurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up. 1384! The 7eneral #nsurance Business %2ationali!ation' Act, .4B5

nationali!e the general insurance business in #ndia with effect from .st Danuary .4B6. .:B insurers amalgamated and grouped into four companies vi!. the Nationa, In"u an)e Co#-any 2t&.; the Ne% In&ia A""u an)e Co#-any 2t&.; the O ienta, In"u an)e Co#-any 2t&. an& the Unite& In&ia In"u an)e Co#-any 2t& . 7#C incorporated as a company.

9A<OR P2AYERS IN THE INSURANCE HD0C BAN1 IN INDIA

2I0E INSURANCE CORPORATION O0 INDIA =2IC> 0ife #nsurance Corporation of #ndia %0#C' was established on . -eptember .49< to spread the message of life insurance in the country and mobilise people&s savings for nation) building activities. 0#C with its central office in "umbai
7

and seven !onal offices at "umbai, Calcutta, 1elhi, Chennai, *yderabad, 3anpur and Bhopal, operates through .:: divisional offices in important cities and 5,:=/ branch offices. 0#C has 9.94 lakh active agents spread over the country. The Corporation also transacts business abroad and has offices in +iEi, "auritius and ?nited 3ingdom. 0#C is associated with Eoint ventures abroad in the field of insurance, namely, 3en)#ndia Assurance Company 0imited, 2airobiF ?nited ,riental Assurance Company 0imited, 3uala 0umpurF and 0ife #nsurance Corporation %#nternational', (.C. Bahrain. #t has also entered into an agreement with the -un 0ife %?3' for marketing unit linked life insurance and pension policies in ?.3. #n .449)4<, 0#C had a total income from premium and investments of G 9 Billion while 7#C recorded a net premium of G ..6 Billion. 1uring the last .9 years, 0#CHs income grew at a healthy average of .: per cent as against the *1+C BA23Hs <.B per cent growth in the rest of Asia %6.= per cent in (urope, ..= per cent in the ?-'. 0#C has even provided insurance cover to five million people living below the poverty line, with 90 per cent subsidy in the premium rates. 0#CHs claims settlement ratio at 49 per cent and 7#CHs at B= per cent are higher than that of global average of =: per cent. Compounded annual growth rate for 0ife insurance business has been .4.55 per cent per annum.

6ene a, In"u an)e Co -o ation of In&ia =6IC> The general insurance *1+C BA23 in #ndia was nationali!ed and a government company known as 7eneral #nsurance Corporation of #ndia %7#C' was formed by the Central 7overnment in 2ovember .4B5. 8ith effect from . Danuary .4B6 the erstwhile .:B #ndian and foreign insurers which were operating in the country prior to nationali!ation, were grouped into four operating companies, namely, %i' 2ational #nsurance Company 0imitedF %ii' 2ew #ndia Assurance Company 0imitedF %iii' ,riental #nsurance Company 0imitedF and %iv' ?nited #ndia #nsurance Company 0imited. %*owever, with effect from 1ecH5:::, these subsidiaries have been de)linked from the parent company and made as independent insurance companies'. All the above four subsidiaries of 7#C operate all over the country competing with one another and underwriting various classes of general insurance business e cept for aviation insurance of national airlines and crop insurance which is handled by the 7#C. Besides the domestic market, the *1+C BA23 is presently operating in .B countries directly through branches or agencies and in .= countries through subsidiary and associate companies. IN ADDITION TO ABO?E STATE INSURERS THE 0O22O(IN6
9

HA?E BEEN PER9ITTED TO ENTER INTO INSURANCE BUSINESS! The introduction of private players in the *1+C BA23 has added to the colors in the dull *1+C BA23. The initiatives taken by the private players are very competitive and have given immense competition to the on time monopoly of the market 0#C. -ince the advent of the private players in the market the *1+C BA23 has seen new and innovative steps taken by the players in this sector. The new players have improved the service ;uality of the insurance. As a result 0#C down the years have seen the declining phase in its career. The market share was distributed among the private players.

10

.. HD0C Stan&a & 2ife In"u an)e Co#-any 2t&. *1+C -tandard 0ife #nsurance Company 0td. is one of #ndia&s leading private life insurance companies, which offers a range of individual and group insurance solutions. #t is a Eoint venture between *ousing 1evelopment +inance Corporation 0imited %*1+C 0td.', #ndia&s leading housing finance institution and The -tandard 0ife Assurance Company, a leading provider of financial services from the ?nited 3ingdom. Their cumulative premium income, including the first year premiums and renewal premiums is As. <B5.6 for the financial year, Apr)2ov 5::9. They have managed to cover over ..,::,::: individuals out of which over 6,=:,::: lives have been covered through our group business tie)ups. 5. 9a@ Ne% Yo A In"u an)e Co. 2t&. 2ife

"a 2ew Iork 0ife #nsurance Company 0imited is a Eoint venture that brings together two large forces - "a #ndia 0imited, a multi)business corporate, together with 2ew Iork 0ife #nternational, a global e pert in life insurance. 8ith their various Jroducts and Aiders, there are more than =:: product combinations to choose from. They have a national presence with a network of 9B offices in 6B cities across #ndia. +. ICICI P u&entia, 2ife In"u an)e Co#-any 2t&. #C#C# Jrudential 0ife #nsurance Company is a Eoint venture between #C#C# Bank, a premier financial powerhouse and prudential plc, a leading international financial services group head;uartered in the ?nited 3ingdom. #C#C# Jrudential was amongst the first private sector insurance companies to begin operations in 1ecember 5::: after receiving approval from #nsurance
11

Aegulatory 1evelopment Authority %#A1A'. The company has a network of about 9<,::: advisorsF as well as Bbanc assurance and .9: corporate agent.

12

.. O# 1otaA 9ahin& a 2ife In"u an)e Co. 2t&. 3otak "ahindra ,ld "utual 0ife #nsurance 0td. is a Eoint venture between 3otak "ahindra Bank 0td. %3"B0', and ,ld "utual plc. /.Bi ,a Sun 2ife In"u an)e Co#-any 2t&. Birla -un 0ife #nsurance Company is a Eoint venture between Aditya Birla 7roup and -un 0ife financial -ervices of Canada. Tata A#7 0ife #nsurance Company 0td. -B# 0ife #nsurance Company 0imited #27 Kysya 0ife #nsurance Company Jrivate 0imited BaEaE Allian! 0ife #nsurance Company 0td. "et0ife #ndia #nsurance Company Jvt. 0td. A"J -A2"AA Assurance Company 0td. 1abur C7? 0ife #nsurance Company Jvt. 0td.

:. Roya, Sun&a a# Co#-any 2i#ite&

A,,ian)e

In"u an)e

The Eoint venture bringing together Aoyal L -un Alliance #nsurance and -undaram +inance 0imited started its operations from "arch 5::.. The company is *ead Muartered at Chennai, and has two Aegional ,ffices, one at "umbai and another one at 2ew 1elhi. 8. BaBaB A,,ian* 6ene a, In"u an)e Co#-any 2i#ite& BaEaE Allian! 7eneral #nsurance Company 0imited is a Eoint venture between BaEaE Auto 0imited and Allian! A7 of 7ermany. Both enEoy a reputation of e pertise,
13

stabil BaEaE Allian! 7eneral #nsurance received the #nsurance Aegulatory and 1evelopment Authority %#A1A' certificate of Aegistration %A6' on "ay 5nd, 5::. to conduct 7eneral #nsurance business %including *ealth #nsurance business' in #ndia. The Company has an authori!ed and paid up capital of As ..: crores. BaEaE Auto holds B=N and Allian!, A7, holds the remaining 5<N 7ermany.

5. ICICI 2o#$a & Co#-any 2i#ite&

6ene a,

In"u an)e

#C#C# 0ombard 7eneral #nsurance Company 0imited is a Eoint venture between #C#C# Bank 0imited and the ?-)based G 5< billion +airfa +inancial *oldings 0imited. #C#C# Bank is #ndiaHs second largest bank, while +airfa +inancial *oldings is a diversified financial corporate engaged in general insurance, reinsurance, insurance claims management and investment management. 0ombard Canada 0td, a group company of +airfa +inancial *oldings 0imited, is one of CanadaHs oldest property and casualty insurers. #C#C# 0ombard 7eneral #nsurance Company received regulatory approvals to commence general insurance business in August 5::.. 3. Cho,a#an&a,a# Co#-any 2t&. 6ene a, In"u an)e

Cholamandalam "- 7eneral #nsurance Company 0imited %Chola)"-' is a Eoint venture of the "urugappa 7roup L "itsui -umitomo. Chola)"- commenced operations in ,ctober 5::5 and has issued more than ..= lakh policies in its first calendar year of operations. The company has a pan)#ndian presence with offices in Chennai, *yderabad, Bangalore, 3ochi,
14

Coimbatore, "umbai, June, #ndore, Ahmedabad, 1elhi, Chandigarh, and 3olkata.

17. TATA AI6 6ene a, In"u an)e Co#-any 2t&. Tata A#7 7eneral #nsurance Company 0td. is a Eoint venture company, formed from the Tata 7roup and American #nternational 7roup, #nc. %A#7'. Tata A#7 combines the strength and integrity of the Tata 7roup with A#7Hs international e pertise and financial strength. The Tata 7roup holds B= per cent stake in the two insurance ventures while A#7 holds the balance 5< per cent stake.

9AR1ETIN6 O0 INSURANCE IN INDIA

#nsurance is in a manner of speaking the last frontier in the financial sector to open. #t is also a sector, which leads to benefits across the full spectrum, from the individual who now have wider choices, to the economy, which see increased savings, to the infrastructure sector, which can look forward to long term funding being available. #n an under)insured economy, newer channels of distribution have to be utili!ed to intensify the reach of insurance both in urban and rural markets. This will create huge employment opportunities not only within insurance companies but also as agents and consultants of insurance companies.

9a Aeting 9i@ Po,i)ie" 1ifferent companies can choose to position themselves differently and hence
15

the "arketing "i adopt. P o&u)t!

is different. *owever, there are certain common

characteristics that one can cull out from the possible strategies that companies

The development of fle ible products to suit individual re;uirements is what will differentiate the winners from the also)rans. The key to success is in providing insurance solutions, not standardi!ed insurance products. The concept of riders$optional benefits has already been a huge innovation brought about by the new players, which has led to customi!ation of products for individual needs. *owever, companies may differentiate themselves on the basis of product segments that they choose to focus on and e cel in. P,a)e! 1ifferent companies may however choose different channels and different geographies to focus on. The channel options are - tied agency force, corporate agents and brokers and this is an area where different companies will make different choices. "any companies like *1+C -tandard 0ife are focusing on all channels whereas companies like "a 2ew Iork 0ife are focusing on the tied agency force only. Customer interface will be a key challenge for life insurance companies and includes every that interaction that the customer has with the company, such as sales, new business underwriting, policy servicing, premium payments, claim processing and so on. Technology can play a crucial role in delivering the highest standards of service set by the company and it will be imperative for any serious player to e cel in all of these. P i)e!
16

Jrice is a relevant differentiator only in two segments - pure term insurance and in pure annuities. *ere too, service delivery and financial strength will need to be present at a minimum acceptable level for price to be a relevant differentiator. #n case of savings oriented products, long)term returns generated are more relevant than Eust the price of the product. A focus on generating good investment performance and keeping a tight control on costs help in generating good long)term maturity value for customers. 2orms have been laid down on all of these by #A1A and adhering to these while delivering good returns will be a challenge. O P o#otion an& A&ve ti"ing! The level of demand is latent and will have to be activated considerably. The market needs to be developed. 7reater awareness of insurance and the need to have it as a protection tool rather than as a ta planning measure needs to be appreciated by the #ndian people. Karious communication tools including advertising, direct marketing and road shows contribute to all this and different companies take different approaches on these.

17

INSURANCE RE6U2ATORY AND DE?E2OP9ENT AUTHORITY

The In"u an)e Regu,ato y an& Deve,o-#ent Autho ity %#A1A' is a national agency of the 7overnment of #ndia, based in *yderabad. #n .444, the #nsurance Aegulatory and 1evelopment Authority %#A1A' was constituted as an autonomous body to regulate and develop the insurance *1+C BA23. The #A1A was incorporated as a statutory body in April, 5:::. The key obEectives of the #A1A include promotion of competition so as to enhance customersatisfaction through increased consumer choice and lower premiums, while ensuring the financial security of the insurance market. The #A1A opened up the market in August 5::: with the invitation for application for registrations. +oreign companies were allowed ownership of up to 5<N. The Authority has the power to frame regulations under -ection ..=A of the #nsurance Act, .46/ and has from 5::: onwards framed various regulations ranging from registration of companies for carrying on insurance business to protection of policyholders& interests.

Ro,e of IRDA!
Jrotecting the interests of policyholders. (stablishing guidelines for the operations of insurers, and brokers. -pecifying the code of conduct, ;ualifications, and training for insurance 8e at *1+C -tandard 0ife reali!e that not everyone has the same kind of needs. 3eeping this in mind, we have a varied range of Jroducts that you can choose from to suit all your needs. These will help secure your future as well as the future of your family.
18

P ote)tion P,an" Iou can protect your family against the loss of your income or the burden of a loan in the event of your unfortunate demise, disability or sickness. These plans offer valuable peace of mind at a small price. Term Assurance Jlan 0oan Cover Term Assurance Jlan ,ur investment products are well suited to meet your long)term needs. -ingle Jremium 8hole 0ife Jlan ,ur Jension Jlans help you secure your financial independence even after retirement. Jersonal Jension Jlan ?nit 0inked Jension Jlan ?nit 0inked Jension Jlus Pen"ion P,an"

Inve"t#ent P,an"

,ur #mmediate Annuity plan will aid you in receiving income post retirement and securing you financial independence.

Savi ng" P,an " ,ur -avings Jlans offer you fle ible options to build savings for your future needs such as buying a dream home or fulfilling your children&s immediate and future needs. ,ur -avings range includes (ndowment Assurance Jlan
19

 He a,t h P,a n"

?nit 0inked (ndowment ?nit 0inked (ndowment Jlus "oney Back Jlan ChildrenHs Jlan ?nit 0inked Ioung star ?nit 0inked Ioung star Jlus

,ur health plans provides you with timely support in case of any health related emergencies and helps you and your family to remain financially independent in difficult times Critical care plan -ur;i care plan

6 ouP o&u) t"! One-"to- "ho- fo e#-,oyee-$enefit "o,ution" *1+C -tandard 0ife has the most comprehensive list of products for progressive employers who wish to provide the best and most innovative employee benefit solutions to their employees. 8e offer different products for different needs of employers ranging from term insurance plans for pure protection to voluntary plans such as superannuation and leave encashment. 8e now offer the following group products to our esteemed corporate clients 7roup Term #nsurance 7roup Kariable Term #nsurance 7roup ?nit)0inked Jlan
20

So)ia, P o&u)t 1evelopment #nsurance plan is an insurance plan which provides life cover to members of a 1evelopment Agency for a term of one year. ,n the death of any member of the group insured during the year of cover, a lump sum is paid to that member&s beneficiaries to help meet some of the immediate financial needs following their loss. Othe - o&u)t! Aural products Ta benefits

The ?a,ue A&&e& Se vi)e" Offe e& By The HD0C "t&. ,ife in"u an)e! E,e)t oni) ),ea ing "y"te#! #t is a system where your premium gets directly debited from your bank account on your due dates. This helps the customer to pay the insurance premium with out to the insurance company. 0inan)ia, a&vi"o "! Advisors are the back is not Eust selling of the policies but listen to the customer like what they need, how much they can invest, which policy suits them the and what kind of policy e pect from us i.e. what kind of policies should be designed for them. Ea"e in ene%a, of the ,a-"e& -o,i)y! Jolicy holder can easily renew their policy without much more difficulties for these customers can seed the help of financial consultant. Othe "e vi)e!
21

Customi!ed products All the information about the companies and its products are available in company&s web site. #n case a customer wants to pay their premiums through che;ue then they can draw them in favors of the insurance company in which he has the policy.

"arket information: customers can check their policy status through online.

22

CHAPTER CII RESEARCH 9ETHODO2O6Y

23

1.4 OB<ECTI?ES O0 THE STUDY

PRI9ARY OB<ECTI?ES! To determine reasons behind opting for an insurance. To determine customers buying behaviour towards private insurance companies and their e pectation form private insurance companies. To determine the feedback on services provided by any other insurance agent. To study the types of benefits provided by insurance services.

SECONDARY OB<ECTI?ES! To know whether the service offered by the company has satisfied the needs of all groups of people. To find out the benefits preferred by the customers. To know about their views about the company and to assess to their views.

1.+. SCOPE O0 THE STUDY!

A big boom has been witnessed in #nsurance *1+C BA23 in recent
24

times. A large number of new players have entered the market and are trying to gain market share in this rapidly improving market. The study deals with *1+C -tandard 0ife in focus and the various segments that it caters to. The study then goes on to evaluate and analy!e the findings so as to present a clear picture of trends in the #nsurance sector.

1... 2I9ITATIONS O0 THE STUDY!

.' The research is confined to a certain parts of Coimbatore and does not necessarily show a pattern applicable to all parts of the Country. 5' -ome respondents were reluctant to divulge personal information, which can affect the validity of all responses. 6' #n a rapidly changing *1+C BA23, analysis on one day or in one segment can change very ;uickly. The environmental changes are vital to be considered in order to assimilate the findings. =.' The data collected from the customers may be biased.

4.1. RESEARCH DESI6N O0 THE STUDY!

"arketing research can be defined as the systematic design, collection, analysis, and reporting of the data and finding relevant to a specific marketing situation facing the company. Aesearch design is the basic plan which guides the researchers in the collection and analysis of data re;uired for practicing the research product. #n fact the research design is the conceptual structure with which research is conducted. #t consist the blue print for the collection, measurement and
25

analysis of the data that was followed completing the study to ensure that study is relevant to the problem and will follow the predetermined and set data. The main data feature of >Aesearch 1esign@ is that it specifies population to be studied. The main them of the chapter is to know the source of the data the researcher has collected. 1ata are raw facts of observation, typically about physical phenomenon. De") i-tive e"ea )h ! The research design selected for this research is descriptive research design.

4.4. 9ETHODO2O6Y!
Collection of the data for the study can be drawn from following methods for

study.

Sou )e" of the &ata! After determining the obEectives of study and research design, the ne t important step is data is step collection method. The information has to be collected from the retailers. 1uring the process of the study the data is collected from the target segment that is customers, dealers and distributors with help of a structured well designed ;uestionnaire. Data i" )o,,e)te& f o# P i #a y &at a #t was collected through ;uestionnaire prepared contains relevant ;uestions that are both close ended and opened. #ndividual and group
26

Jrimary data -econdary data

interviews also under taken with difference consumers, # have collected mainly the Jrimary 1ata for my study by utili!ing the ;uestionnaire and interview methods. Se)on &a y &ata These data are collected from published sources such as "aga!ines, 2(8papers, several books, and also from the help of web site www.hdfcsl.com. =A> Sa#-,ing -,an of the "tu&y! Sa#-,e "i*e! -ample si!e refers to number of elements to be included in the study several ;ualitative factors should also be taken into consideration when determining the sample si!e. These include the nature of research, number of variable, and nature of analysis, sample si!e used in similar studies incidence rates, completion rates, and resources constraints. 1uring the process of the study, survey has been conducted on 177 respondents. Sa#-,in g #etho&! The researcher had choice between probability and non probability sampling methods study simple non probability method namely convenience sampling adopted.

27

CHAPTERCIII INDUSTRY D CO9PANY PRO0I2E

28

INDUSTRY PRO0I2E THE HISTORY O0 INDIAN INSURANCE INDUSTRY

2I0E INSURANCE #n ././ the British established the first insurance company in #ndia in Calcutta, the ,riental 0ife #nsurance Company. +irst attempts at regulation of the industry were made with the introduction of the #ndian 0ife Assurance Companies Act in .4.5. A number of amendments to this Act were made until the #nsurance Act was drawn up in .46/. 2oteworthy features in the Act were the power given to the 7overnment to collect statistical information about the insured and the high level of protection the Act gave to the public through regulation and control. 8hen the Act was changed in .49:, this meant far reaching changes in the industry. The e tra re;uirements included a statutory re;uirement of a certain level of e;uity capital, a ceiling on share holdings in such companies to prevent dominant control %to protect the public from any adversarial policies from one single party', stricter control on investments and, generally, much tighter control. #n .49<, the market contained .9= #ndian and .< foreign life insurance companies. Business was heavily concentrated in urban areas and targeted the higher echelons of society. >?nethical practices adopted by some of the players against the interests of the consumers@ then led the #ndian government to nationali!e the industry. #n -eptember .49<, nationali!ation was completed, merging all these companies into the so) called 0ife #nsurance Corporation %0#C'. #t was felt that >nationali!ation has lent the industry fairness, solidity, growth and reach.@
29

So#e of the i#-o tant #i,e"tone" in the ,ife in"u an)e $u"ine"" in In&ia a e! 1314! The #ndian 0ife Assurance Companies Act enacted as the first statute to regulate the life insurance business. 1345! The #ndian #nsurance Companies Act enacted to enable the government to collect statistical information about both life and non)life insurance businesses. 13+5! (arlier legislation consolidated and amended to by the #nsurance Act with the obEective of protecting the interests of the insuring public. 13/:! The market contained .9= #ndian and .< foreign life insurance companies.

6ENERA2 INSURANCE The 7eneral #nsurance industry in #ndia dates back to the #ndustrial Aevolution and the subse;uent increase in trade across the oceans in the .Bth century. As for 0ife #nsurance, the British brought 7eneral #nsurance to #ndia, and a similar path was followed in the development of this industry. A number of private companies were in e istence for years and years until, in .4B., the #ndian
30

7overnment decided that the public interest would be served by nationali!ing the industry, merging all the .:B companies into four companies, depending on the sort of business transacted %"arine, +ire, "iscellaneous'. These were the 2ational #nsurance Company 0td., the ,riental #nsurance Company 0td., the 2ew #ndia Assurance Company 0td., and the ?nited #ndia #nsurance Company 0td. located in Calcutta, 2ew 1elhi, Bombay and "adras respectively. The 7eneral #nsurance Corporation %7#C' was set up in .4B5 as a Cholding& company, having these four companies as its subsidiaries.

So#e of the i#-o tant #i,e"tone" in the gene a, in"u an)e $u"ine"" in In&ia a e!

1378! The In&ian 9e )anti,e In"u an)e 2t&. set up, the first company to transact all classes of general insurance business. 13/8! 6ene a, In"u an)e Coun)i,, a wing of the #nsurance Association of #ndia, frames a code of conduct for ensuring fair conduct and sound business practices. 13:5! The #nsurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up. 1384! The 7eneral #nsurance Business %2ationali!ation' Act, .4B5 nationali!e the general insurance business in #ndia with effect from .st
31

Danuary .4B6. .:B insurers amalgamated and grouped into four companies vi!. the Nationa, In"u an)e Co#-any 2t&.; the Ne% In&ia A""u an)e Co#-any 2t&.; the O ienta, In"u an)e Co#-any 2t&. an& the Unite& In&ia In"u an)e Co#-any 2t& . 7#C incorporated as a company.

9A<OR P2AY P2AYERS IN THE INS INSURA URANCE INDU INDUSTR STRY IN INDIA

2I0E INSURANCE CORPORATION O0 INDIA =2IC> 0ife #nsurance Corporation of #ndia %0#C' was established on . -eptember .49< to spread the message of life insurance in the country and mobilise people&s savings for nation) building activities. 0#C with its central office in "umbai and seven !onal offices at "umbai, Calcutta, 1elhi, Chennai, *yderabad, 3anpur and Bhopal, operates through .:: divisional offices in
32

important cities and 5,:=/ branch offices. 0#C has 9.94 lakh active agents spread over the country. The Corporation also transacts business abroad and has offices in +iEi, "auritius and ?nited 3ingdom. 0#C is associated with Eoint ventures abroad in the field of insurance, namely, 3en)#ndia Assurance Company 0imited, 2airobiF ?nited ,riental Assurance Company 0imited, 3uala 0umpurF and 0ife #nsurance Corporation %#nternational', (.C. Bahrain. #t has also entered into an agreement with the -un 0ife %?3' for marketing unit linked life insurance and pension policies in ?.3. #n .449)4<, 0#C had a total income from premium and investments of G 9 Billion while 7#C recorded a net premium of G ..6 Billion. 1uring the last .9 years, 0#CHs income grew at a healthy average of .: per cent as against the industryHs <.B per cent growth in the rest of Asia %6.= per cent in (urope, ..= per cent in the ?-'. 0#C has even provided insurance cover to five million people living below the poverty line, with 90 per cent subsidy in the premium rates. 0#CHs claims settlement ratio at 49 per cent and 7#CHs at B= per cent are higher than that of global average of =: per cent. Compounded annual growth rate for 0ife insurance business has been .4.55 per cent per annum.

6ene a, In"u an)e Co -o ation of In&ia =6IC> The general insurance industry in #ndia was nationali!ed and a government company known as 7eneral #nsurance Corporation of #ndia %7#C' was formed
33

by the Central 7overnment in 2ovember .4B5. 8ith effect from . Danuary .4B6 the erstwhile .:B #ndian and foreign insurers which were operating in the country prior to nationali!ation, were grouped into four operating companies, namely, %i' 2ational #nsurance Company 2ew #ndia Assurance ,riental

0imitedF %ii'

Company 0imitedF %iii'

#nsurance Company 0imitedF and %iv' ?nited #ndia #nsurance Company 0imited. %*owever, with effect from 1ecH5:::, these subsidiaries have been de) linked from the parent company and made as independent insurance companies'. All the above four subsidiaries of 7#C operate all over the country competing with one another and underwriting various classes of general insurance business e cept for aviation insurance of national airlines and crop insurance which is handled by the 7#C. IN ADDITION TO ABO?E STATE INSURERS THE 0O22O(IN6 HA?E BEEN PER9ITTED TO ENTER INTO INSURANCE BUSINESS! The introduction of private players in the industry has added to the colors in the dull industry. The initiatives taken by the private players are very competitive and have given immense competition to the on time monopoly of the market 0#C. -ince the advent of the private players in the market the industry has seen new and innovative steps taken by the players in this sector. The new players have improved the service ;uality of the insurance. As a
34

result 0#C down the years have seen the declining phase in its career. The market share was distributed among the private players.

35

.. HD0C Stan&a & 2ife In"u an)e Co#-any 2t&. *1+C -tandard 0ife #nsurance Company 0td. is one of #ndia&s leading private life insurance companies, which offers a range of individual and group insurance solutions. #t is a Eoint venture between *ousing 1evelopment +inance Corporation 0imited %*1+C 0td.', #ndia&s leading housing finance institution and The -tandard 0ife Assurance Company, a leading provider of financial services from the ?nited 3ingdom. Their cumulative premium income, including the first year premiums and renewal premiums is As. <B5.6 for the financial year, Apr)2ov 5::9. They have managed to cover over ..,::,::: individuals out of which over 6,=:,::: lives have been covered through our group business tie)ups. 5. 9a@ Ne% Yo A In"u an)e Co. 2t&. 2ife

"a 2ew Iork 0ife #nsurance Company 0imited is a Eoint venture that brings together two large forces - "a #ndia 0imited, a multi)business corporate, together with 2ew Iork 0ife #nternational, a global e pert in life insurance. 8ith their various Jroducts and Aiders, there are more than =:: product combinations to choose from. They have a national presence with a network of 9B offices in 6B cities across #ndia. +. ICICI P u&entia, 2ife In"u an)e Co#-any 2t&. #C#C# Jrudential 0ife #nsurance Company is a Eoint venture between #C#C# Bank, a premier financial powerhouse and prudential plc, a leading international financial services group head;uartered in the ?nited 3ingdom. #C#C# Jrudential was amongst the first private sector insurance companies to
36

begin operations in 1ecember 5::: after receiving approval from #nsurance Aegulatory 1evelopment Authority %#A1A'. The company has a network of about 9<,::: advisorsF as well as Bbanc assurance and .9: corporate agent tie)ups.

.. O# 1otaA 9ahin& a 2ife In"u an)e Co. 2t&. 3otak "ahindra ,ld "utual 0ife #nsurance 0td. is a Eoint venture between 3otak "ahindra Bank 0td. %3"B0', and ,ld "utual plc. /.Bi ,a Sun 2ife In"u an)e Co#-any 2t&. Birla -un 0ife #nsurance Company is a Eoint venture between Aditya Birla 7roup and -un 0ife financial -ervices of Canada. Tata A#7 0ife #nsurance Company 0td. -B# 0ife #nsurance Company 0imited #27 Kysya 0ife #nsurance Company Jrivate 0imited BaEaE Allian! 0ife #nsurance Company 0td. "et0ife #ndia #nsurance Company Jvt. 0td. A"J -A2"AA Assurance Company 0td. 1abur C7? 0ife #nsurance Company Jvt. 0td.

:. Roya, Sun&a a# Co#-any 2i#ite&

A,,ian)e

In"u an)e

37

The Eoint venture bringing together Aoyal L -un Alliance #nsurance and -undaram +inance 0imited started its operations from "arch 5::.. The company is *ead Muartered at Chennai, and has two Aegional ,ffices, one at "umbai and another one at 2ew 1elhi. 8. BaBaB A,,ian* Co#-any 2i#ite& 6ene a, In"u an)e

BaEaE Allian! 7eneral #nsurance Company 0imited is a Eoint venture between BaEaE Auto 0imited and Allian! A7 of 7ermany. Both enEoy a reputation of e pertise, stability and strength.

BaEaE Allian! 7eneral #nsurance received the #nsurance Aegulatory and 1evelopment Authority %#A1A' certificate of Aegistration %A6' on "ay 5nd, 5::. to conduct 7eneral #nsurance business %including *ealth #nsurance business' in #ndia. The Company has an authori!ed and paid up capital of As ..: crores. BaEaE Auto holds B=N and Allian!, A7, holds the remaining 5<N 7ermany. 5. ICICI 2o#$a & Co#-any 2i#ite& 6ene a, In"u an)e

#C#C# 0ombard 7eneral #nsurance Company 0imited is a Eoint venture between #C#C# Bank 0imited and the ?-)based G 5< billion +airfa +inancial *oldings 0imited. #C#C# Bank is #ndiaHs second largest bank, while +airfa +inancial *oldings is a diversified financial corporate engaged in general insurance, reinsurance, insurance claims management and investment management. 0ombard Canada 0td, a group company of +airfa +inancial *oldings 0imited,
38

is one of CanadaHs oldest property and casualty insurers. #C#C# 0ombard 7eneral #nsurance Company received regulatory approvals to commence general insurance business in August 5::.. 3. Cho,a#an&a,a# Co#-any 2t&. 6ene a, In"u an)e

Cholamandalam "- 7eneral #nsurance Company 0imited %Chola)"-' is a Eoint venture of the "urugappa 7roup L "itsui -umitomo. Chola)"- commenced operations in ,ctober 5::5 and has issued more than ..= lakh policies in its first calendar year of operations. The company has a pan)#ndian presence with offices in Chennai, *yderabad, Bangalore, 3ochi, Coimbatore, "umbai, June, #ndore, Ahmedabad, 1elhi, Chandigarh, and 3olkata.

17. TATA AI6 6ene a, In"u an)e Co#-any 2t&.

Tata A#7 7eneral #nsurance Company 0td. is a Eoint venture company, formed from the Tata 7roup and American #nternational 7roup, #nc. %A#7'. Tata A#7 combines the strength and integrity of the Tata 7roup with A#7Hs international e pertise and financial strength. The Tata 7roup holds B= per cent stake in the two insurance ventures while A#7 holds the balance 5< per cent stake.
39

Tata A#7 7eneral #nsurance Company, which started its operations in #ndia on Danuary 55, 5::., offers the complete range of insurance for automobile, home, personal accident, travel, energy, marine, property and casualty, as well as several speciali!ed financial lines.

9AR1ETIN6 O0 INSURANCE IN INDIA

#nsurance is in a manner of speaking the last frontier in the financial sector to open. #t is also a sector, which leads to benefits across the full spectrum, from
40

the individual who now have wider choices, to the economy, which see increased savings, to the infrastructure sector, which can look forward to long term funding being available. #n an under)insured economy, newer channels of distribution have to be utili!ed to intensify the reach of insurance both in urban and rural markets. This will create huge employment opportunities not only within insurance companies but also as agents and consultants of insurance companies.

9a Aeting 9i@ Po,i)ie" 1ifferent companies can choose to position themselves differently and hence the "arketing "i adopt. O P o&u)t! The development of fle ible products to suit individual re;uirements is what will differentiate the winners from the also)rans. The key to success is in providing insurance solutions, not standardi!ed insurance products. The concept of riders$optional benefits has already been a huge innovation brought about by the new players, which has led to customi!ation of products for individual needs. *owever, companies may differentiate themselves on the basis of product segments that they choose to focus on and e cel in. is different. *owever, there are certain common characteristics that one can cull out from the possible strategies that companies

P,a)e! 1ifferent companies may however choose different channels and different geographies to focus on. The channel options are - tied agency force, corporate agents and brokers and this is an area where different companies will make different choices. "any
41

companies

42

like *1+C -tandard 0ife are focusing on all channels whereas companies like "a 2ew Iork 0ife are focusing on the tied agency force only. Customer interface will be a key challenge for life insurance companies and includes every that interaction that the customer has with the company, such as sales, new business underwriting, policy servicing, premium payments, claim processing and so on. Technology can play a crucial role in delivering the highest standards of service set by the company and it will be imperative for any serious player to e cel in all of these. P i)e! Jrice is a relevant differentiator only in two segments - pure term insurance and in pure annuities. *ere too, service delivery and financial strength will need to be present at a minimum acceptable level for price to be a relevant differentiator. #n case of savings oriented products, long)term returns generated are more relevant than Eust the price of the product. A focus on generating good investment performance and keeping a tight control on costs help in generating good long)term maturity value for customers. 2orms have been laid down on all of these by #A1A and adhering to these while delivering good returns will be a challenge. P o#otion an& A&ve ti"ing! The level of demand is latent and will have to be activated considerably. The market needs to be developed. 7reater awareness of insurance and the need to have it as a protection tool rather than as a ta planning measure needs to be appreciated by the #ndian people. Karious communication tools including advertising, direct marketing and road shows contribute to all this and different companies take different approaches on these.

43

INSURANCE RE6U2ATORY AND DE?E2OP9ENT AUTHORITY

The In"u an)e Regu,ato y an& Deve,o-#ent Autho ity %#A1A' is a national agency of the 7overnment of #ndia, based in *yderabad. #n .444, the #nsurance Aegulatory and 1evelopment Authority %#A1A' was constituted as an autonomous body to regulate and develop the insurance industry. The #A1A was incorporated as a statutory body in April, 5:::. The competition key so obEectives as of the #A1A include promotion of to enhance customersatisfaction through increased

consumer choice and lower premiums, while ensuring the financial security of the insurance market. The #A1A opened up the market in August 5::: with the invitation for application for registrations. +oreign companies were allowed ownership of up to 5<N. The Authority has the power to frame regulations under -ection ..=A of the #nsurance Act, .46/ and has from 5::: onwards framed various regulations ranging from registration of companies for carrying on insurance business to protection of policyholders& interests.

Ro,e of IRDA!
Jrotecting the interests of policyholders.
44

 (stablishing guidelines for the operations of insurers, and brokers. -pecifying the code of conduct, ;ualifications, and training for insurance intermediaries and agents. Jromoting efficiency in the conduct of insurance business. Aegulating the investment of funds by insurance companies. -pecifying the percentage of business to be written by insurers in rural sectors. *andling disputes between insurers and insurance intermediaries.

CO9PANY PRO0I2E
ABOUT HD0C STANDARD 2I0E INSURANCE *1+C -tandard 0ife #nsurance Company 0td. is one of #ndiaHs leading private #nsurance companies, which offers a range of individual and group insurance -olutions. #t is a Eoint venture between *ousing 1evelopment +inance Corporation 0imited %*1+C 0td.', #ndiaHs leading housing finance institution and a 7roup Company of the -tandard 0ife, ?3. *1+C as on 1ecember 6., 5::B holds B5.6/ Jercent of e;uity in the Eoint venture.

HD0C STANDARD 2I0E INSURANCE PARENTA6E *1+C 0imited. *1+C is #ndia leading housing finance institution and has helped build more than 56, ::,::: houses since its incorporation in .4BB. #n +inancial Iear 5::6):= its assets under management crossed
45

As. 6<,::: Cr. As at "arch 6., 5::=, outstanding deposits stood at As. B,/=: crores. The depositor base now stands at around . million depositors. Aated AAA by CA#-#0 and #CAA for the .:th consecutive year -table and e perienced management *igh service standards Awarded The (conomic Times Corporate Citi!en of the year Award for its long)standing commitment to community development. Jresented the 1ream *ome award for the best housing finance Jrovider in 5::= at the third Annual ,utlook "oney Awards.

Stan&a & 2ife 6 ou- =Stan&a & 2ife -,) an& it" "u$"i&ia ie"> -tandard 0ife 7roup %-tandard 0ife plc and its subsidiaries' financial needs of customers for over ./: years #t currently has a customer base of around B million people who rely on the company for their insurance, pension, investment, banking and health)care needs #ts investment manager currently administers PQ.59 billion in assets #t is a leading pensions provider in the ?3, and is rated by
46

The -tandard 0ife group has been looking after the

-tandard L JoorHs as HstrongH with a rating of AR and as HgoodH with a rating of A. by "oodyHs -tandard 0ife was awarded the HBest Jension JroviderH in 5::=, 5::9 and 5::< at the "oney "arketing Awards, and it was voted a 9 star life and pensions provider at the +inancial Adviser -ervice Awards for the last .: years running. The H9 -tar& accolade has also been awarded to -tandard 0ife #nvestments for the last .: years, and to -tandard 0ife Bank since its inception in .44/. -tandard 0ife Bank was awarded the HBest +le ible "ortgage 0enderH at the "ortgage "aga!ine Awards in 5::<

1EY STREN6 THS 1> 0INANCIA2 EEPERTISE

47

As a Eoint venture of financial services groups, hdfc standard life has the financial e pertise re;uired to manage your long)term investments safely and efficiently. 4> RAN6E O0 SO2UTIONS 8e have a range of individual and group solutions, which can be easily customised to specific needs. ,ur group solutions have been designed to offer you complete fle ibility combined with a low charging structure . +> TRAC1 RECORD SO 0AR ,ur gross premium income, for the year ending "arch 6., 5::/ stood at As.=,/94 crores and new business premium income stood at As. 5,</9 crores . The company has covered over 4,94,::0 lives year ending "arch 6., 5::/.

48

S(OT ANA2YSIS O0 HD0C-S2IC STREN6HTS!

..' 1omestic image of *1+C supported by -tandard 0ife&s international image is the strength of the company. 5.' -trong and well spread network og ;ualified intermediaries and sales person. 6.' -trong capital and reserve base. =.' The company provides customer service of the highest order. 9.' *uge basket of product range which are suitable for all age and income groups. <.' 0arge pool of technically skilled manpower with in depth knowledge and understanding of the market. B.' The company also provides innovative products to cater to different needs of different customers.

(EA1NESS!
..' *eavy management e penses and administrative costs. 5.' 0ow customer confidence on private players. 6.' Kertical hierarchical reporting structure with many designations and cadres leading to power politics at all levels without any e ception. =.' Joor retention percentage of tied up agents.

OPPORTUNITIES!
..' #nsurable population: According to #A1A only .:N of people are insured. This suggests that more than 6::m people, with the potential to buy insurance, remain uninsured.
49

5.' There will be inflow of managerial and financial e pertise from the world&s leading insurance markets. +urther the burden of educating consumers will also be shared among many players. 6.' #nternational companies will help in building world class e pertise in local market by introducing the best global practices.

THREATS!
..' ,ther private insurance companies also vying for the same uninsured population. 5.' Competition from public sector insurance companies like 0#C, 2ational #nsurance Company 0imited, ,riental #nsurance 0imited, 2ew #ndia Assurance Company 0imited and ?nited #ndia #nsurance Company 0imited. Jeople trust and go to them more. 6.' Joaching of customer base by other companies. =.' "ost people don&t understand the need or are not willing to take insurance CORPORATE OB<ECTI?ES

Ou ?i"ion HThe most successful and admired life insurance company, which means that we are the most trusted company, the easiest to deal with, offer the best value for money, and set the standards in the industryH. HThe most obvious choice for allH. Ou ?a,ue"
50

Kalues that we observe while we work #ntegrity #nnovation Customer centric Jeople Care ,ne for all and all for ones Teamwork Doy and -implicity

51

CHAPTER CI? ANA2YSIS D INTERPRETATION

52

TAB2E ..1! A6E 6ROUP O0 RESPONDENTS

Age 7roup Below 59 59 to 69 69 to =9

2o. of respondent 6 6 5

Jercentage 6 6 5

-ources: primary data collected through ;uestionnaire

53

0I6-..1! A6E 6ROUP O0 RESPONDENTS

45 40 35 30 25 No. of respondents 20 15 10 5 0 below 25 25 to 35 35 to 45 45 and above

#2T(AJA(TAT#,2:
The above figure reveals that most of the people 65N are working in government and 54Nare Business sector

54

Ta$,e ..4! OCCUPATION O0 THE RESPONDENTS

8orking sector 7ovt. #T (ducation +inance Business ,ther Total

2o. of respondent 6 . < . 5 = .:

Jercentage 65 .< < .6 54 = .::

-ources: primary data collected through ;uestionnaire

55

30 25 20 15 10 5 0 govt West North 3-D Column 4 3-D Column 5 3-D Column 6

0I6 - ..4! OCCUPATION O0 THE RESPONDENTS 1st Qtr

35

30

25

20 no. of respondents

15

10

0 Govt ! "d#$at%on &%nan$e '#s%ness (t)er

INTERPRETATION!
The above figure reveals that most of the people 65N are working in government and 54Nare Business sector

56

Ta$,e ..+! RESPONDENTS A(ARENESS O0 IN?EST9ENT OPTION

Awareness

2o. of respondent

Jercentage

Ie s

6 6

66 N

2 o

. =

.= N

*ave some knowledge

9 6

96 N

Tota l

.: :

.:: N

-ources: primary data collected through ;uestionnaire

57

0I6 - ..+! RESPONDENTS A(ARENESS O0 IN?EST9ENT OPTION

60

50

40

30

No.of *espondants

20

10

0 +es No ,ave so-e .nowled/e

INTERPRET ATION!
This graph shows that only 66N of people are aware of the investment option
58

0I6 - ..+! RESPONDENTS A(ARENESS O0 IN?EST9ENT OPTION

and 96N of people have some knowledge about it. But .=N of people are not aware of the investment option available to them

59

Ta$,e ...! PO2ICY RESPONDENTS HA?IN6 AN INSURANCE

Aesponse

2o .of respondents

percentage

Ie s

9 6

96 N

2 o

= B

=B N

Tota l

.: :

.:: N

-ources: primary data collected through ;uestionnaire

60

0I6 - ...! PO2ICY RESPONDENTS HA?IN6 AN INSURANCE

54 53 52 51 50 49 48 47 46 45 44 +es No no. of respondents

61

0I6 - ...! PO2ICY RESPONDENTS HA?IN6 AN INSURANCE

INTERPRETATION!
This graph shows that =BN of people not having an insurance policy and 96N of people having an insurance policy.

62

Ta$,e ../! RESPONDENT INTEREST O0 IN?ESTIN6 OPTIONS

2eed for investment

Aespondents

percentage

Aetirement

5 / 5 . 6 6 . / .: :

5/ N 5. N 66 N ./ N .:: N

Ta saving

(arnings

0i;uidity

Tota l

-ources: primary data collected through ;uestionnaire

63

0I6 - ../! RESPONDENT INTEREST O0 IN?ESTIN6 OPTIONS

35

30

25

20 15

No.of respondentas

10

0 *et%re-ent !a0 1av%n/ "arn%n/s 2%3#%d%t4

INTERPRETATION!
The figure shows 66N of people have insurance for future earnings and
64

0I6 - ../! RESPONDENT INTEREST O0 IN?ESTIN6 OPTIONS

5/N are investing for Aetirement.

65

Ta$,e ..:! TER9 O0 IN?EST9ENT PRE0ERRED

#nvestment "ethod

2o .of respondents

percentage

-hort term

6 5

65 N

"edium Term

5 5

55 N

0ong Term

= <

=< N

Tota l

.: :

.:: N

-ources: primary data collected through ;uestionnaire

66

0I6 - ..:! TER9 O0 IN?EST9ENT PRE0ERRED

50 45 40 35 30 25 20 15 10 5 0 1)ort !er5ed%#-!er2on/ !erNo. of respondants

INTERPRETATION!
The above figure shows =<N of respondents prefer long term investment where as 65N prefer medium term and only 55N prefer short term.
67

Ta$,e ..8! PERCEPTION ABOUT INSURANCE

RESPONSE

NO. O0 RESPONDEN TS

SHARE =F>

A saving tool

6 5

65 N

A ta saving device

5 4

54 N

A tool to protect your family

6 4

64 N

-ources: primary data collected through ;uestionnaire

68

0I6 - ..8! PERCEPTION ABOUT INSURANCE

INTERPRETATI ON
The above figure shows that 65N of the respondents have perception of #nsurance being a saving tool and 54N of the respondents have perception of #nsurance being a ta saving device.But 64N of the respondents are with the view that #nsurance is a
69

tool to protect your family.

70

Ta$,e ..5! 1IND O0 BUYIN6 PROCESS PRE0ERRED

BUYIN6 PROCESS

NO. O0 RESPONDEN TS

SHARE =F>

Customer approached #nsurance company$Agent

= =

== N

Company$agent approached customer

9 <

9< N

Tot al

.: :

.:: N

-ources: primary data collected through ;uestionnaire

71

0I6 - ..5! 1IND O0 BUYIN6 PROCESS PRE0ERRED

INTERPRETATION
S S ==N of the respondents approached the #nsurance Company $ Agent. 8hereas, 9<N of the respondents were approached by the Company $Agent.
72

Ta$,e ..3! (HAT PEOP2E 2OO1 0OR IN INSURANCE CO9PANYG

RESPONSE

NO. O0 RESPONDEN TS

SHARE =F>

A trusted name

5 4

54 N

+riendly service L responsivenes s 7ood plans

5 9

59 N

5 4

54 N

Accessibility

. B

.B N

-ources: primary data collected through ;uestionnaire

73

0I6 - ..3! (HAT PEOP2E 2OO1 0OR IN INSURANCE CO9PANYG

INTERPRETATION
S S 54N customers look for a Trusted name in a company for insurance. 54N customers look for a good plan in a company for insurance.
74

+riendly service L responsiveness and Accessibility are also important factors looked by customers in a company.

75

Ta$,e ..17! 0EATURES 9ADE YOU TO IN?EST IN HD0C STANDARD 2I0E INSURANCE

0EATURE

NO.O0 RESPONDENTS . 9 6 B B 6 : . . .: :

SHARE =F>

"oney Back 7uarantee

. 9 6 B B 6 : . . .: :

0arger Aisk Coverance

(asy Access to Agents 0ow Jremium Company&s Aeputation T,TA 0

-ources: primary data collected through ;uestionnaire

76

0I6 - ..17! 0EATURES 9ADE YOU TO IN?EST IN HD0C STANDARD 2I0E INSURANCE

INTERPRETATION! T "aEority of the respondent %6BN' found 0arger risk coverance as the most attracted feature of the all.
77

Ta$,e ..11! RESPONDENT PERCEPTION TO(ARDS THE HD0C STANDARD 2I0E INSURANCE CO9PANY

,pinio n Averag e Aggressive

2o .of respondents

Jercentage

5 4 5 . . = 6 < .: :

54 N 5. N .= N 6< N .:: N

( cellent

Jrofessional

Tota l

-ources: primary data collected through ;uestionnaire

78

0I6 - ..11! RESPONDENT PERCEPTION TO(ARDS THE HD0C STANDARD 2I0E INSURANCE CO9PANY

40 35 30 25 20 15 10 5 0 6vera/e 6//ress%ve "0$ellent profess%onal

No of respondents

INTERPRETATION!
The above graph shows that 6<N of Aespondents believes the operations of the company to be professional and 54N believe it is Average.
79

Ta$,e ..14! SATIS0ACTION O0 THE RESPONDENTS (ITH RESPECT TO PO2ICIES O00ERED.

RESPONSE

NO. O0 RESPONDEN TS

SHARE =F>

-atisfied

< :

<: N

2ot satisfied

= :

=: N

2ot Aesponded

: N

Tota l

.: :

.:: N

-ources: primary data collected through ;uestionnaire

80

0I6 - ..14! SATIS0ACTION O0 THE RESPONDENTS (ITH RESPECT TO PO2ICIES O00ERED.

INTERPRETATION
S <:N of the respondents are more or less satisfied with their e isting policy.
81

S S

=:N of the respondents are not satisfied with their e isting policy. #n this case all of those who have taken a policy have responded.

82

Ta$,e ..1+ RESPONDENTS PRE0ERENCE 0OR C2ARI0YIN6 ANY HUERY

-ervice s Adviso r company website

2o. of Aespondents

Jercentage

6 4 . < 5 / . B .: :
83

64 N .< N 5/ N .B N .:: N

customer care

branch manager

Tota l

Ta$,e ..1+ RESPONDENTS PRE0ERENCE 0OR C2ARI0YIN6 ANY HUERY

-ources: primary data collected through ;uestionnaire

84

0I6 - ..1+! RESPONDENTS PRE0ERENCE 0OR C2ARI0YIN6 ANY HUERY

45 40 35 30 25

20 No. of respondents

15 10 5 0 6dv%sor $o-pan4 webs%te $#sto-er $are bran$) -ana/er

INTERPRET ATION!
85

0I6 - ..1+! RESPONDENTS PRE0ERENCE 0OR C2ARI0YIN6 ANY HUERY

The above graph shows that 64N people believes in Advisor, 5/N of people believes Customer care while company website and branch "anager Jeople clarify any ;uery first respectively .<N and .BN

86

Ta$,e ..1.! BENE0ITS O0 INSURANCE PERCIE?ED BY RESPONDENTS

BENE0ITS

NO.O0 RESPONDEN TS

SHARE =F>

Cover +uture ?ncertainty

9 9 5 : 5 9 .: :

9 9 5 : 5 9 .: :

Ta 1eductions

+uture #nvestment

T,TA 0

-ources: primary data collected through ;uestionnaire

87

0I6 - ..1.! BENE0ITS O0 INSURANCE PERCIE?ED BY RESPONDENTS

INTERPRETATION
99N of the respondents believe that covering future uncertainty is the
88

0I6 - ..1.! BENE0ITS O0 INSURANCE PERCIE?ED BY RESPONDENTS

biggest benefit of an insurance policy. 8hereas, 5:N and 59N of them believe that the other benefits are Ta deduction and future investments respectively

89

Ta$,e ..1/! SATIS0ACTION O0 CURRENT PO2ICY

-atisfaction level

2o. of Aespondents

Jercentage

Ies

/5

/5N

2o

./

./N

Total

.::

.::N

-ources: primary data collected through ;uestionnaire

90

0I6 - ..1/! SATIS0ACTION O0 CURRENT PO2ICY

90 80 70 60 50 40 30 20 10 0

82

18

No. of respondents

+es

No

INTERPRETATION!
The above figure shows that /5N of respondents are satisfied with their current policy and only ./N of people are not happy with their policy.
91

CHAPTE R I? 0INDIN6S D SU66ESTIONS

92

93

/.1 0INDIN 6S!

S S

#t reveals that 64N of respondents belong to 59 to 69 age group and 6.N are belong to below 59 ages. % Aef: Table =..' The survey shows that ma imum 65N of the respondents are in working govt. sector. % Aef: Table =.5'

S ,ut of .::respondents 66N of the respondents were well known about *1+C-0 investment option. % Aef: Table =.6' S 96N of the people having a insurance policy. % Aef: Table =.=' S 66N of respondents are indented to invest on their earning only. % Aef: Table =.9' S =<N of respondents are preferred long term investment term in *1+C)-0#C. % Aef: Table =.<' S 9<N of the respondents prefer the buying process of the company$agent approaching the customer while ==N prefer vice)versa. % Aef: Table =./' S 6<N of the respondents perception about *1+C)-0#C is professional, and 5.N has told that it is being aggressive and .=N are ( cellent. % Aef: Table =...' S <:N of the respondents are satisfied with the policies offered in *1+C)-0#C. % Aef: Table =..5' S 64N of the respondents using Advisor service which the service offered by the *1+C)-0#C. % Aef: Table =..6' S 99N of the respondents perceive the benefits of insurance as a cover for future uncertainity. % Aef: Table =..='
94

S /5N of respondents are satisfied with current policy offered by *1+C) -0#C. % Aef: Table =..9'

95

/.4 SU66EST IONS!

#n Coimbatore most of the people are working in 7overnment and Business sector and they don&t have much financial planning. Another important point is they have good compensation package. -o the company should bring more innovative and should carry out more promotional activities in government fields. Better promotion of unit linked plans can generate more sales to the company. *1+C -TA21AA1 0#+( #2-?AA2C( C,"JA2I&s unit linked insurance plans can effectively meet the re;uirements of the customers, because unit linked plans are directly related to the market, so the customers can creates more wealth through fund and they can enEoy the ta benefit, and also the insurance cover. The pressure on the sales team would be lessoned by increasing the awareness among the people about the credibility of the companies and need for capitali!ing on the various insurance plans offered by the private life insurance companies. S As the awareness of insurance is less among the people, its awareness should be creating among the people by conducting stage shows and e plaining its need and importance. S S S S #nsurance should not be considered only as a risk cover element but also as a long term investment #t is also recommended to concentrate to on lower income group people. "ore efforts should be taken by the company&s financial consultants to convert the leads into policy holder of *1+C)-0#C. +ollow up should be taken and customer relation should be maintained by the inviting the e isting customers to the seminars
96

conducted when launching a new product or any changes are made to the products or rules to retain them. S Coming with new promotional activities like giving new advertisements, keeping stalls, conducting seminars in companies, and giving ads through -"- can be done by *1+C -tandard 0ife insurance Co. to create awareness among customers.

97

CHAPTER I ?I CONC2USION

98

99

CONC2USION
,ur e haustive research in the field of 0ife #nsurance threw up some interesting trends which can be seen in the above analysis. A general impression that we gathered during 1ata collection was the immense awareness and knowledge among people about various companies and their insurance products. Jeople are beginning to look beyond 0#C for their insurance needs and are willing to trust private players with their hard earned money. Jeople in general have been impressed by the marketing and advertising campaigns of insurance companies. A high penetration of print, radio and Television ad campaigns over the years is beginning to have its impact now. Another heartening trend was in terms of people viewing insurance as a ta saving and investment instrument as much as a protective one. A very high number of respondents have opted for insurance for such purposes and it shows how insurance companies have been successful to attract public money in recent times. The general satisfaction levels among public with regards to policy and agents still re;uires improvement. But therein lies the opportunity for a relative new comer like *1+C -tandard 0ife #nsurance Company 0td. 0#C has never been known for prompt service or customer oriented methods and *1+C -tandard 0ife can build on these factors.

100

101

BIB2IO6 RAPHY
(EBSITES RE00ERED! www.irda.com www.hdfcinsurance.com www.insurance.ind.com www.moneyoutlook.com

BOO1S D <OURNA2S RE00ERED! "arketing "anagement) Jhilip kotler. Aesearch "ethodology) C.A. 3othari. #A1A Dournal. ,utlook U The layman&s guide to insurance.

102

103

ANNEE URE
M?(-T#, 22AA(: # am Anand.2, "BA second year student of -A" ?niversity currently doing my proEect in *1+C -tandard 0ife #nsurance Company. As a part of my study # am collecting information of the e isting customers to know the CC?-T,"(A) B?I#27 B(*AK#,?A #2 0#+( #2-?AA2C( *1+C BA23&. # kindly re;uest you to fill the following ;uestionnaire. %.' %5' %6' 8hat is your nameV -e : W X"ale W X+emale 8hich age group do you belong toV W X less than 59years, W X 59 to 69 tears, W X 69 to =9 years W X above =9years %=' 8hich sector are you working inV W X (ducation W X 7overnment %9' availableV W X Ies W X *ave some knowledge
104

W X +inance W X Business W X #T W X others W X 2o

Are you aware of the all the #nvestment options

%<'

1o have any insurance policyV W X Ies W X 2o

105

%B'

8hy do you want to invest in to insuranceV W X Aetirement W X (arnings W X Ta saving W X 0i;uidity

%/'

8hich term of investment preferredV W X -hort term term W X A saving tool W X "edium term W X 0ong

%4' 8hat is your perception about insuranceV W X A ta saving device W X A tool to protect your family %.:' 8hat kind of buying process do you preferV W XCustomer approached #nsurance company$Agent W X Company$agent approached customer %..' 8hat do you look for in an insurance companyV W X A trusted name responsiveness W X 7ood plans W X +riendly service L W X Accessibility

%.5' 8hich features made you to invest in *1+C -tandard 0ife #nsuranceV W X "oney Back 7uarantee W X 0arger Aisk Coverance W X (asy Access to Agents W X Company&s Aeputation %.6' 8hat is your opinion towards the services provided by *1+C -tandard
106

W X 0ow Jremium

0ife #nsuranceV W X Average W X ( cellent W X Aggressive W X professional

107

%.=' Are you satisfied with the policies of the insurance providerV W X -atisfied 2ot satisfied W X 2ot Aesponded %.9' #f you want to clarify any ;uery to whom you consult firstV W X advisor W X customer care W X company website W X branch manager WX

%.<'*ow do you perceive the benefits of insurance providedV W X Cover +uture ?ncertainty W X Ta 1eductions W X +uture #nvestment %.B' Are you satisfied with your current policyV W X Ies W X 2o Any more information you would like to share regarding your perception about *1+C)-0#C.

T*A 23 I,?
108

109