Professional Documents
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SUBMITTED TO:
INSTITUTE CERTIFICATE
It is here by certified that the Summer Internship Report submitted in partial fulfillment of Master
of Business Administration at from Parul Institute of Management & Research, (MBA)
Vadodara by Mansi M. Patel, Enrolment No. 150617200123 has been completed under my
guidance and it is satisfactory.
Date:
DECLARATION:
I Patel Mansi Patel, hereby declare that the Research report entitled Consumer
buying behavior towards financial products of IDBI Federal is an original piece of
work done by me for the fulfillment of degree of Master of Business
Administration and whatever information has been taken from any source has been
duly acknowledged.
Date:
Student name: Mansi M. Patel
Signature:
ACKNOWLEDGEMENT
Training is major part of study in respect of MBA or any other course. Through these
report I want to express my whole gratitude towards all those persons who have
guided me in preparation of this report and also provided me organizational training.
It would like to my deferential thanks to, Dr.Bijal Zaveri (Dean, faculty of management
studies, Parul university of Baroda) for her encouragement and blessing on my way of
progress.
For this report I received full support from all quarters. Firstly I would be thankful to
Prof.Paresh Patel (Project Guide) who has advised me the right way for training and
I am also thankful to all the Management Faculties.
I am thankful to Miss Honey Javd, the trainer of IDBI Federal Life Insurance. who
has given me the permission for my summer training and provided me the useful
knowledge & training of Insurance.
Last but not least I am thankful to all other departmental head & staff of the company
who have shared their incredible knowledge and experience with me and given me
full support in preparation of this report.
MANSI M PATEL
PREFACE
The M.B.A program is well structured and integrated course of business studies. The main
objective of practical training at M.B.A level is to develop skill in student by supplement to the
theoretical study of business management in general. Industrial training helps to gain real life
knowledge about the industrial environment and business practices. The MBA program provides
student with a fundamental knowledge of business and organizational functions and activities, as
well as an exposure to strategic thinking of management.
In every professional course, training is an important factor. Profession gives me theoretical
knowledge of various subjects in the college but they are practically exposed of such subjects
when they get the training in the organization. It is only the training through which I come to
know that what an industry is and how it works. I can learn about various departmental
operations being performed in the industry, which would, in return, help me in the future when I
will enter the practical field.
Training is an integral part of MBA and each and every student has to undergo the training for 60
days in a company and then prepare a project report on the same after the completion of training.
During this whole training I got a lot of experience and came to know about the management
practices in real that how it differs from those of theoretical knowledge and the practically in the
real life.
In today's globalization world, where cut throat competition is prevailing in the market,
theoretical knowledge is not sufficient. Beside this one need to have practical knowledge, which
would help to individual in his/her carrier activities and it is true that "Experience is best
teacher".
EXECUTIVE SUMMERY
My internship in IDBI Federal Life Insurance Co Ltd started on 10th May 2016. As per the
program we had training for IRDA and the different products offered by the company to pitch for
our prospective clients.
The work assigned to me was to achieve a sales target of 2 policies each of minimum Rs. 15,000
annually in terms of premium collected. I managed to convert my pitches into sales and sell 2
policies for the company.
Along with selling I also worked on the project Consumer Buying Behavior towards financial
products of IDBI Federal. The project is focused on analyzing the factors which aim at
determining the customers buying behavior towards financial products of IDBI Federal. Buying
behavior is a vast and important marketing subject. It is mainly focused in trying to understand
the various key factors which influence a prospective consumer of life insurance the most when
considering the purchase of an insurance product. Understanding these factors is a critical task. A
questionnaire was prepared and I surveyed 100 respondents to understand their buying behavior
and pattern.
INDEX
SR
NO
TABLE OF CONTENTS
PAGE
NO.
Declaration
Acknowledgement
Preface
Executive summary
CH.1 INTRODUCTION
1.1
Problem Statement
1.2
1.3
2.1
History of Insurance
2.2
Industry background
10
11
11
12
15
17
2.3.3) HR Practices
19
SWOT Analysis
21
2.3
2.4
23
24
26
4.1
Research Objective
27
4.2
27
4.3
Research design
28
4.4
29
4.5
30
4.6
31
42
5.1
43
5.2
Conclusion
46
CH.6 RECOMMENDATIONS
47
6.1
48
6.2
50
6.3
51
References / Bibliography
52
ANNEXURE
53
CHAPTER 1: INTRODUCTION
1|Page
2|Page
To suggest ways for creating awareness about the products of IDBI Federal.
In todays corporate and competitive world, the insurance sector has a potential of huge
growth as compared to other sector. Insurance has maximum growth rate of 70-80% according to
the report by Market Research Firm RNCOS, analyzing the Indian Insurance Market. Large
insurance sector is a sector which is largely driven by propensity of people to save.
Yet nearly 80% of Indian population is without life insurance cover and this part of the
population is also subject T to weak social security and pension system with hardly any old age
income security. Thus it is an indicator that growth potential for the insurance sector is immense.
In the introduction stage of the product life cycle a firm seeks to create awareness and
develop a market for the product and IDBI Federal Life Insurance Co Ltd is in its introduction
stage of its PLC.
Thus this report will help me in understanding what are the consumers perception and
buying behavior towards IDBI Federal and will help me to recommend those crucial factors
which influence a prospective life insurance investor the most when they go ahead in purchasing
a life insurance product, so that they can create maximum awareness and attract maximum
customers and thus develop a market for their customers.
3|Page
- This interaction takes place between three elements viz. knowledge, affect and behavior;
- 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 behavior 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
behavior 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 favorable or unfavorable feelings and
corresponding emotions towards stimuli (e.g. towards a product or service offering or a
brand). These vary in direction, intensity and persistence.
Behavior: 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).
4|Page
5|Page
6|Page
7|Page
8|Page
Some of the important milestones in the life insurance business in India are:
1818: oriental Life Insurance Company, the first life insurance company on Indian soil
started functioning.
1870: Bombay Mutual Life Assurance Society, the first Indian life insurance company started its
business.
1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the
life insurance business.
1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical
information about both life and non -life insurance business.
9|Page
1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of
protecting the interests of the insuring public.
1956: 245 Indian and foreign insurers and provident societies are taken over by the central
government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a
capital contribution of Rs. 5 crores from the Government of India.
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Effective distribution channels The efficiency and cost of the various distribution strategies used by companies
are significant to their success in the insurance business. This particularly holds true for the retail business.
Focus on overall financial inclusion As time evolves, so must the approach of the insurance sector in India. The
objective of the insurance sector should ideally be to offer a broader range of activities to a wider populace.
Consumer needs and preferences The growth of India's insurance industry can be attributed to product
innovation, dynamic distribution channels, and vibrant publicity and promotional campaigns run by insurance
companies. Benefits attached to the products and the manner in which they are delivered (through various marketing
tie- ups) have helped bring customers and insurance companies closer to each other and made the latter more relevant
Life insurers undertake the Life Insurance business; general insurers handle the rest. The Business of
insurance essentially means defraying risks attached to an activity (including life) and sharing the
risks between various entities, both persons and organizations. Insurance companies are important
players in financial markets as they collect and invest large amounts of premium in various
investment instruments.
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Federal Bank is one of India's leading private sector banks, with a dominant presence in the state of
Kerala. It has a strong network of over 739 branches and 797 ATMs spread across India. The bank
provides over four million retail customers with a wide variety of financial products. Federal Bank is one of
the first large Indian banks to have an entirely automated and interconnected branch network. In addition to
interconnected branches and ATMs, the Bank has a wide range of services like Internet Banking, Mobile
Banking, Tele Banking, Any Where Banking, debit cards, online bill payment and call Centre facilities to
offer round the clock banking convenience to its customers. The Bank has been a pioneer in providing
innovative technological solutions to its customers and the Bank has won several awards and
recommendations.
Ageas is an international insurance company 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 its business activities
in Europe and Asia, which together make up the largest share of the global insurance market. They are
grouped around four segments: Belgium, United Kingdom, Continental Europe and Asia. It is an undisputed
leader in the Belgian market for individual life and employee benefits, as well as a leading non -life player,
through AG Insurance. Internationally Ageas has a strong presence in the UK, where it is the second
largest player in private car insurance. The company also has subsidiaries in France. Germany and I
long Kong. Ageas has a track record in developing partnerships with strong financial institutions and key
distributors in different markets around the world and successfully operates partnerships in Luxembourg,
Italy, Portugal, China, Malaysia, India and Thailand. Ages employs more than 13,000 people and has annual
inflows of almost EUR 18billion.
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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 their mission.
Values:
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
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2) IDBI Federal Childsurance Saving Protection Insurance Plan: is a non linked endowment
plan that ensures a child future. Childsurance plan is designed to give their customers
guaranteed annual payouts. In the unfortunate event of the parents not around the policy
would continue exactly as they have planned it without any further premium being paid. In
other words the plan ensures that their child gets to live his/her dream exactly they have
planned.
3) IDBI Federal Incomesurance Guaranteed Money Back Insurance Plan: is non- linked non participating money back plan which gives guaranteed return on an investment so that the
customers stop worrying about their future. This plan also guarantees a secure future for their
families even when they are not around.
4) Wealthsurance Growth Insurance Plan: is a unit -linked plan that gives customer the
freedom to build his wealth exactly the way he wants. The IDBI Federal Wealthsurance
Growth Insurance Plan is a regular premium unit -linked insurance plan. A plan that gives you
freedom to decide how much you want to invest and for how long you want to stay invested.
With a bouquet of 9 fund offerings, it gives you how long you want to stay invested. With a
bouquet of 9 fund offerings, it gives you the freedom to invest in one or more funds, basis
your risk appetite and financial goals in life. Plus it comes with a life cover benefit that
ensures financial security for your loved ones. In a nutshell, a smart investment plan that
helps you designs your investments, your way!
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Vighnesh Shahane
(MD and CEO)
Aneesh Khanna
(Country Head Sales)
Area Agency
Head
Area Agency
Head
Manager
Distribution
Deputy
Chief Senior
Manager
Distribution
Deputy
Senior
Manager
Distribution
Deputy
Chief Senior
Manager
Distribution
Deputy
Senior
Distributer
And Trainees
And Agencies
Distributer
And Trainees
And Agencies
Distributer
And Trainees
And Agencies
Distributer
And Trainees
And Agencies
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Country Head
NORTH
ZONEHEAD
EAST
ZONEHEAD
PUNJAB
MUMBAI
LUCKNOW
LUCKNOW
UP
ORISSA
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WEST
ZONEHEAD
SOUTH
ZONEHEAD
GUJARAT
COIMBA
TORE
JAIPUR
BANGLO
RE
HYDERA
BAD
2.3.3) HR Practices:
Around 2200 Employees and about 7500 agents are working for the organization. IDBI federal
Bank provides many facilities to the employees as well as agents. Let us see the Human resource
department structure, Recruitment process, Training process and other privileges of the
Organization. At IDBI Federal, the managerial style is Participative in nature.
Recruitment Process
The Recruitment process of IDBI Federal is completely through the resume screening and
interview methods. Based on the Real time experience the candidates are recruited to the
organization. The selected candidates are proposed to Achieve target policies. The Target of the
each employee is 5 products sale. So, each candidate should sell 5 products to make him as the
employee of the organization. This is the selection method where the organization is recruiting
the lower level managers which are based on the task performing.
Training
Training is must for every individual when he enters into the organization. Even though
the candidate has experience he also should get training. Why because the organization culture,
values and beliefs are different from one organization to other. Thats why the training program
plays a key role in every organization. Training program following by IDBI Federal is different
at various levels. Mainly in training program the company concentrates on sales managers,
agents, operations executives and tele-callers.
Performance Appraisal
The Performance appraisal of IDBI federal is based upon 2 types.
1. Employees Appraisal.
2. Agents Appraisal.
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Employees Appraisal: The Employee appraisal is based upon the target system. There are three
levels in the performance appraisal.
Lower level: For the Post of Manager Level, the employee must achieve the product sales
worth of 7.2 lakhs at the Annual period of the year.
Higher level: For the Post of Senior Manager Level, the employee must achieve the
product sales worth of 22.2 lakhs at the Annual period of the year
Agents Appraisal: The Agents are paid with commission percentage for every sale
which is depending upon the products.
AWARDS
The awards and the other grievances are provided only based upon the individual performance.
The Company Provides free foreign trip for the employees all the year and best performer
Awards of the year.
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Can learn from the mistakes of the first 17 life insurance companies of India
Uses a unique method of expansion, in which its next branch in a region is opened only
when, the earlier one reaches its break-even point.
Weaknesses:
Lack of knowledge about the company and the products of the company. Need brand
awareness and promotional activities.
Opportunities:
Abilities to tap the growing internet space for marketing and selling the products.
Prospective easing up of the FDI in insurance industry to 49% from the current 26%.
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Threats:
Presence of highly competitive market. Presence of established players such as LIC, SBI
life, ICICI prudential etc.
Increasing expenses and lowering margins due to cut throat competition are hitting hart
companies with low market share.
The insurance companies are being over regulated by IRDA. It is hampering the
Companies
Government regulations on issues like health care and terrorism can quickly change the
direction of insurance.
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Ravipa L. & Mark S. (2004) state that customer perceived that life insurance is a longterm investment. With the long-term policy of life insurance, customers want to confirm
that they understand how to receive their money back when the maturity date of
insurance policy in the future, or that their family knows how to get it when they have
any unfortunately happen. Fundamentally, customers need personal commitment from
salespeople whom they trust to make sure their money will not be lost cause of the poor
investment by the insurance company. Besides that, customers want to have someone
who will help them take care their interest and can be contacted easily when they need
claim for themselves.
Moller (2004) found that income and social security which are the own wages, ability to
provide for family, insurance against illness and death, and income in old age have been
regarded as one of the major pointers of quality of life, this point of view stresses the
importance of insurance to human life.
Tajudeen, Ayantunji and Dallah (2009) believed that people with education have more
positive attitude toward insurance than people who less education ones. Besides that, they
also find out the respondents who have highest positive attitude towards insurance is the
people in age group between 56 and 65 years than other age groups this is due to the
people in this age group are at the end of the active life and they are more aware of their
retirement life. They also found that high household income groups have highest positive
attitude toward insurance than the low household incomes groups, in fact, the wealthy
household comparatively feel protected commonly in Nigerian economic environment.
From the other point of view, the low household income groups are less authorized and
usually they feel that the insurance is further than their reach.
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Kunreuther (1979) It is not the magnitude of a potential loss that inspires people to buy
insurance voluntarily it is the frequency with which a loss is likely to occur.
Roger. A. Formisano (1981) examined, via consumer interviews, the impact of the
National Association of Insurance Commissioners Model Life Insurance Solicitation
Regulation as implemented in New Jersey. A substantial portion of the insurance buyers
sampled did not become aware of the provisions of the regulation aimed to improve their
buying ability. Further, many life insurance buyers were not well informed concerning
the nature and operation of life insurance contracts, and in particular, the life insurance
policies that they had purchased.
Dr. Praveen Sahu, Gaurav Jaiswal & Vijay Kumar Pandey (2009) stated that the
consumers perception towards Life Insurance Policies is positive. It developed a positive
mind sets for their investment pattern, in insurance policies. Still some actions are needed
for developing insurance market. The major factors playing the role in developing
consumers perception towards Life Insurance Policies are Consumer Loyalty, Service
Quality, Ease of Procedures, Satisfaction Level, Company Image, and Company-Client
Relationship.
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Data collection is an important aspect of any type of research study. It is a term used to describe
a process of preparing and collecting data from all sources and observations. Data has been
collected from both primary and secondary resources.
Primary Data: obtaining first hand by speaking to customers and getting the
questionnaire from filled by them about the insurance products of IDBI Federal and
observing their views, reactions and beliefs about the overall insurance products.
Consumer behavior includes not only the actual buyer and his act of buying but also the
various roles played by different individuals and the influence they exert on final
purchase decision.
In this project I will discover what are the featured that people consider before buying an
insurance policy and what is their buying behavior towards the products of IDBI Federal.
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2. Sample Frame: Due to the nature of the study, people residing or working in
Vadodara have been taken into consideration.
3. Sample Unit: People belonging to any age group with or without an insurance policy
have been taken into consideration.
4. Sample Size: Keeping in mind all the constraints the size of the sample of the study
was selected as 100.
5. Sampling Method: Simple Random Sampling method has been used wherein people
were taken into consideration on a completely random basis and questions were asked
from them. Research was conducted on clear assumption that the respondents would
give frank and fair answers in a pragmatic way and without any bias.
6. Time Frame: 60 days time frame was taken to conduct the research.
7. Data Analysis Technique: Analysis will be carried out through with help of software
like MS-Excel. Likert scale multiple choice questions will be used in the
questionnaire.
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Both primary and secondary methods have been used for data collection:-
Primary Data: - Primary data includes questionnaire having open and close ended
questions for the purpose of understanding the perception and buying behavior of
investors towards insurance policies provided by IDBI Federal Life insurance Co.Ltd.
Secondary Data: - Secondary data will be collected through company websites, journals
and magazines to find about the history of the organization and their position in the
market and their competitors.
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Due to constraints of time and resources, the study is likely to suffer from certain limitations.
Some of these are mentioned here under so that the findings of the study may be understood in a
proper perspective.
Some of the respondents of the survey were unwilling to share information. People retain
from giving personal details.
The research was carried out in a short period of 8 weeks. Therefore the sample size and
other parameter were selected accordingly so as to finish the work within the given time
frame.
The information given by the respondents might be biased because some of them might
not be interested to give correct information.
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Frequency
Percentage
Business
20
20%
Service
25
25%
Professional
8%
Retired
8%
Student
32
32%
Housewife
7%
OCCUPATION
7%
20%
business
service
professional
32%
retired
25%
student
housewife
8%
8%
Interpretation:
Majority of the respondent who were targeted were students, businessmen and people
working in some organization. The respondents were asked through what all sources do they
came to know about insurance policies.
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Frequency
Percentage
Newspapers
30
30.00%
Insurance Agents
40
40.00%
Internet
25
25.00%
45
45.00%
Television
40
40.00%
Telemarketing
20
20.00%
Others
0.00%
SOURCES
Others
Telemarketing
0.00%
20.00%
Television
40.00%
45.00%
25.00%
Insurance Agents
Newspapers
40.00%
30.00%
Interpretation:
Television, insurance agents and referrals from friends and families are some of the major
sources of awareness about insurance policies.
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(3)The respondents were asked what features they consider before taking an
insurance policy.
Table 3: Features investors consider before taking an insurance policy.
Frequency
Percentage
Insurance Coverage
70
70.00%
High Returns
55
55.00%
Low Premium
30
30.00%
Flexible Withdrawals
25
25.00%
Risk Involved
20
20.00%
Others
0.00%
Percentage
70.00%
70.00%
55.00%
60.00%
50.00%
40.00%
30.00%
25.00%
30.00%
20.00%
20.00%
10.00%
0.00%
0.00%
Insurance High Returns
Coverage
Low
Premium
Flexible
Withdrawals
Risk
Involved
Others
Interpretation:
Insurance coverage and high returns are some of the main features that an investor wants
to have in an insurance policy.
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Frequency
Percentage
Yes
71
71.00%
No
29
29.00%
INSURANCE POLICY
29.00%
Yes
No
71.00%
Interpretation:
It was found that 71% of the population under consideration has an insurance policy and
29% did not.
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(5) The respondents were asked that if they did not have an insurance policy
then the reason behind it is.
Table: 5. Reasons behind not investing in insurance policies.
Reasons
Frequency
Percentage
Lack of Awareness
6.00%
22
22.00%
Not Affordable
47
47.00%
Others
25
25.00%
REASONS
50.00%
47%
45.00%
40.00%
35.00%
30.00%
25%
25.00%
22.00%
20.00%
15.00%
10.00%
6.00%
5.00%
0.00%
Lack of Awareness
Not Affordable
Others
Interpretation:
Many people could not afford investing in insurance policies due to high premium
amount and that is a major reason why they did not purchase an insurance policy. Others people
thought that insurance policies do not give good returns.
35 | P a g e
(6) The respondents were asked in which bank they have an insurance policy.
Table: 6. most preferred banks of investors.
Bank
Frequency
Percentage
LIC
70
70.00%
SBI
20
20.00%
ICICI Prudential
08.00%
IDBI Federal
05.00%
Others
02.00%
BANK
70.00%
60.00%
50.00%
40.00%
70.00%
30.00%
20.00%
20.00%
10.00%
8.00%
5.00%
0.00%
LIC
SBI
ICICI
Prudential
IDBI Federal
2.00%
Others
Interpretation:
It was found out that LIC by a significant margin is the most preferred insurance company in
comparison to others. Most of the investors purchase insurance policies from LIC.
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(7) The respondents were asked the reason behind taking an Insurance policy.
Table: 7. Reason behind taking insurance policy.
Reasons
Frequency
Percentage
Risk Coverage
70
70.00%
Investment Purpose
50
50.00%
Pension Schemes
20
20.00%
Tax Benefits
25
25.00%
Others
0.00%
REASONS
70.00%
70.00%
60.00%
50.00%
50.00%
40.00%
25.00%
30.00%
20.00%
20.00%
10.00%
0.00%
0.00%
Risk Coverage
Investment
Purpose
Pension
Schemes
Tax Benefits
Others
Interpretation:
The risk that is covered by life insurance policies is the main purpose why people
purchase insurance policies. Second reason is for investment purpose.
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Frequency
Percentage
Brand Image
50
50.00%
Word of mouth
25
25.00%
Advertising
20
20.00%
Agents
25
25.00%
Others
10
10.00%
PROMPTED
60.00%
50.00%
50.00%
40.00%
30.00%
25.00%
25.00%
20.00%
20.00%
10.00%
10.00%
0.00%
Brand Image
Word of mouth
Advertising
Agents
Others
Interpretation:
Most of the people are prompted by the Brand image of the Insurance Company. And
other is prompted by word of mouth n agents.
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(9) The respondents were asked whether they are aware about the products
offered by IDBI Federal Life Insurance.
Table: 9. Awareness about products of IDBI Federal.
Awareness
Frequency
Percentage
Yes
62
62%
No
38
38%
AWARENESS
38%
YES
NO
62%
Interpretation:
The awareness level of IDBI Federal amongst the investor is very less. Almost 62% of
the population under consideration is not aware about the financial products offered by IDBI
Federal.
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(10) The respondents were asked whether they are a customer of IDBI
Federal Life Insurance Co. LTD.
Table: 10. Customers of IDBI Federal Life Insurance Co. LTD.
Customers
Frequency
Percentage
Yes
95
95.00%
No
05.00%
CUSTOMERS
100.00%
90.00%
80.00%
70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
95.00%
5.00%
YES
NO
Interpretation:
It was found out that out of the people surveyed only 5% (approximately) had invested in
IDBI Federal.
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(11) The respondents were asked whether they would like to invest in IDBI
Federal in future.
Table: 11. Investors who would like to invest in IDBI Federal in future.
Investors
Percentage
Yes
31%
No
69%
INVESTORS
31%
Yes
69%
No
Interpretation:
It was found out 31% of the people were interested in investing in IDBI Federal in the
future only if they were made fully aware about the products of the company and the returns
were higher. On the other hand 69% of the people were not interested.
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Majority of the respondents who were targeted were students, businessmen and people
working in some organizations belonging to the service sector.
Shares and Debentures are the most preferred option of investors to invest in as provide
greater returns than insurance policies.
Televisions, Insurance agents are some of the major sources of awareness about
insurance policies. Friends and Family are major influencers on customers when it comes
to the decision of buying a life insurance policy.
The main feature that investors consider before taking an insurance policy is the life
cover that insurance provides and also would like to get high returns from their insurance
policies.
Low premium amount is the also another which people consider before investing in
insurance schemes. Paying premium annually is the most preferred mode of payment
according to investors.
Approximately 71% of the respondents were insured and rest 29% had not invested in
insurance policies.
There is a good amount of people in the age group 18-30 who have not bothered to buy a
life insurance policy because they are very sure that nothing would happen to them as
they are fit and fine.
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Those who had not invested in insurance policies said that they could not afford
purchasing an insurance policy and wanted the annual premium amount to be low while
others did not feel the need of it at the moment.
LIC by a significant margin is the most preferred company by the investors and almost
82% of the respondents have purchased insurance policies from LIC. Brand image and
word of mouth in favor of LIC has significant impact on the selection of investors.
The risk that is covered by insurance policies is the main purpose or reason why people
purchase insurance policies. Second reason is investment purpose.
The awareness level amongst the consumers is very low. Approximately 63% of the
respondents were not aware about the products offered by IDBI Federal. Some were not
even aware about the companys existence as well.
Out of the 37% that aware about more than 95% of the respondents are not customers of
IDBI Federal.
Lack of knowledge or awareness about the products, other companies have better returns
are some of the major reasons why people are not investing in IDBI Federal. Some
already have enough insurance policies and hence do not want to buy another policy.
Some have not heard concrete positive reviews about the returns or performance of the
company from their friends or family members. LIC or other private banks provides
much better and beneficial plans in comparison to IDBI Federal.
Some were hesitant in giving their mobile or other contact numbers because they did not
wanted to be disturbed by the calls from the companys side.
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It was found that 31% of the people were interested in investing in IDBI Federal in the
future only if they were made fully aware about the products of the company and the
returns were higher. On the other hand 69% of the people were not interested.
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5.2) Conclusion:
While the fresh air of competition in every sector of economy brings in major changes in
consumer expectations, the insurance industry has experienced a few unique aspects, such as
regulation-inspired efforts to educate insurance buyers and a vast change of skills and
capabilities of the intermediaries involved in the distribution the life insurance industry in India
has immense potential with nearly 80% of the population without insurance cover. Life insurance
is a sector which is largest driven by propensity of people to save and in comparison to the west,
Indians have a higher propensity to save. Understanding the consumer buying behavior pattern
can give the companies a slight as to what a customer wants before investing in an insurance
policy. People are having good knowledge about insurance companies through advertisement
and insurance agents and most of the respondents at least once in their life have been approached
by an insurance agent.
With respect to life insurance, potential buyers are drivers of buying a policy for one or
more of these 3 major reasons: risk that is covered by insurance policies, for investment purpose
or for the availability of tax benefits. The challenge for the insurance companies is to address the
motivating factors of customers and come up with genuine solutions. The potential buyer
primarily expects that the saving should be a painless process and that the money saved should
be absolutely safe. The challenge is to provide not only convenient payment options, but also
mechanisms that could offer some measure of protection and relief to the customer if he is forced
to disrupt the payment arrangement for unforeseen reasons. People view insurance as tax saving
and investment as much as a protective one.
The comparatively new player IDBI Federal will have to and must advertise well enough
to make the people aware about their products and schemes because most of the time a
prospective insurance customer will look for a brand name like that of LIC. The company has a
potential of growing in the coming year as still more than half the population of India is still not
insured. Thus here lies the opportunity for IDBI Federal to increase their customer base by
increasing the awareness level of potential investors in regard to their products and by providing
schemes according to the needs and requirements of the customers.
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CHAPTER 6: RECOMMENDATIONS
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Most of the respondents had only one suggestion to make, and that is to increase
awareness through advertisements and promotional activities and keep them updated
about the products and their respective benefits from time to time.
Increasing awareness about the products offered by IDBI Federal is the first and the
foremost important aspects that IDBI should focus upon as a large chunk of people are
still not aware about the products of IDBI, and the company even.
As television and friends & families are major sources of awareness about insurance
policies, advertisements should be broadcasted on televisions which have an emotional
appeal. The advertisements or promotional activities should be friends and families
centered and trigger a feeling on uncertainty.
There are still a lot of people in the age group of 20-35 who has not invested in insurance
policies and IDBI should try to convince them life is full of uncertainties and is very
unpredictable. New schemes can be launched which are affordable by students or
freshers who do not earn much.
The rural areas are more also quiet heavily populated. Thus this rural population must be
made aware about the company and its offerings and gain their trust by appointing agents
from the rural areas itself. The plans should be affordable by these segments of the
society.
Insurance agents must be able to clearly tell all the benefits and features attached to a
particular policy to its customers and also provide after sales service to them to increase
customer satisfaction. Approach and conviction of agents is very important and so the
best efforts should be made to recruit and train their clients and handle potential
customers.
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Another suggestion from the respondents was that the returns are too low and the annual
premium amount is quiet high in comparison. Thus plans can be introduced which have
low premium amount along with flexible withdrawals and also provide good returns.
Since M-Commerce is the next big thing in the banking or insurance industry, IDBI
Federal should launch a mobile application of its own to make the investors aware about
their schemes and products.
The app will also help the customers in knowing about the next premium due dates and
also pay the premiums. This will save the time of the customers.
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During my internship with IDBI Federal Life Insurance Co. LTD I got valuable
knowledge about the insurance sector and growth potential in this sector is quiet high. A large
part of the population is still not insured.
As I had some sales target as well, I realized how difficult it was to approach,
demonstrate and convince a customer especially in the insurance industry while working for
IDBI which is still in its growing phase. Some people already have life insurance policies and
wont buy another one. Selling of life insurance indeed is very difficult and one can only master
it by meeting more and more customers daily.
Another important thing that I learned is that it is not important what the company thinks
about a product. What is important is that how customers perceive your product or services in
my case. The consumers have to be told how your product will provide them more benefits and
value added services in comparison to other companies.
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The data collected for this research was from a sample size of 100. Although the sample
size is quite small, still the responses are quite consistent. The same questionnaires can used to
survey a large sample to study the consumer behavior towards the insurance industry at large.
This research was carried out in the city of Vadodara and hence the results reflect the
sentiments of the urban population. This research could be further carried out in tier-2 and tier-3
cities. The questionnaire can be translated in the local language to conduct the same survey in
village dwellers are not proficient in English language.
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References / Bibliography:
www.idbifederal.com
www.idbifederal.com/Press/PressRelease
http://www.insidebusiness360.com/index.php/why-it-is-important-to-study-consumerbehavior-8478/
https://en.wikipedia.org/wiki/IDBI_Federal_Life_Insurance
http://www.policybazaar.com/life-insurance/companies/idbi-federal-life-insurancecompany-ltd/
https://apps.aima.in/ejournal_new/articlespdf/gaurav_jaiswal_nrc3_24080992200933892
94.pdf
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ANNEXURE
QUESTIONNAIRE
(Hello! Please help us by kindly filling up the following information. We appropriate your
response and thank you for your precious time)
Name:
Age:
Gender:
(a) Male
(b) Female
Occupation:
(a) Business
(b) Service
(c) Professional
(d) Retired
(e) Students
(f) Housewife
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How did you come to know about insurance policies? (You can
choose more than one)
(a) Newspapers
(c) Internet
(e) Television
(f) Telemarketing
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Yes
(c)
(b) No
Not affordable
LIC
(c) SBI
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(c) Advertising
(d) Agents
(b) No
(b) No
(b)
No
(Thank you for your time taken in completing this questionnaire. The
results of this work will be important for determining the consumer
buying behavior towards the financial products of IDBI Federal)
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