“Study on the factors affecting the customer’s preference

for different products of Kotak life insurance and their

current market scenario”

SUBMITTED TO: SUBMITTED BY:

Professor Monika Mittal (faculty guide) Student Name- Abhishek Malik

Roll No- 10IN602

Mr. Sunil Nirwal (Industry guide) Course- PGDM(IBM)

Senior branch manager Batch- 2010-2012

Kotak life insurance

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 DECLARATION

I hereby declare that this project report titled “Study on the factors affecting the customer’s
preference for different products of kotak life insurance and their current market scenario”
Is executed as per the course requirement for the post graduate program in insurance business
management and it has not been submitted by me or any other person to any other university
or institution for degree or diploma. It’s my own work.

NAME: Abhishek Malik

SIGNATURE:

DATE:

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 INDUSTRY CERTIFICATE

Certificate of Summer Internship

Certified that the project “Study of the factors affecting the customers
preference for different products of Kotak life and their current market
scenario” is the bona fide work of

Mr. Abhishek Malik (10IN602)

PGDM, Birla Institute of Management Technology, Greater Noida

Who carried out the work at Kotak life during the period 25th April 2011 to 25th
June 2011 under my supervision.

His project deliverables are very much satisfactory. His conduct during the
course of training has been good and we found him a sincere and hardworking
student, eager to learn.

We wish him all success in life.

Regards,

Mr. Sunil Nirwal

Senior branch manager

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 Table of Contents
A ACKNOWLEDGEMENT 1
B INDUSTRY CERTIFICATE 2
C EXECUTIVE SUMMARY 5
D LITERATURE REVIEW 7
Chapter No. CONTENTS Page No.
1 INTRODUCTION
1.1 INDUSTRY OVERVIEW 9

1.2 KOTAK LIFE INSURANCE OVERVIEW 11

2 PROBLEM DEFINTION

2.1 Search for problem 13

2.2 Problem definition 14

3 APPROACH TO THE PROBLEMS

3.1 The problem 16

3.2 Approach to the problem 17

3.3 Broad research objective 17

3.4 Pursuit of the study 18

3.5 Scope of the study 18

4 RESEARCH DESIGN

4.1 Type of research design used 20

4.2 Scaling techniques 22

4.3 Questionnaire development and pretesting 23

4.4 Sampling Design process 24

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5 DATA ANALYSIS

5.1 Methodology 27

5.2 Data analysis and strategy 27

6 RESULTS AND DISCUSSIONS

6.1 Results and discussion of exploratory study 30

6.2 Results and discussion of descriptive study 31

7 LIMITATIONS AND CAVEATS

7.1 Limitations of the study 47

8 CONCLUSIONS AND RECOMMENDATIONS

8.1 Findings and conclusions 49

8.2 Recommendations 51

9 APPENDICES

9.1 QUESTIONNAIRE 54

10 REFERENCES 56

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 EXECUTIVE SUMMARY

The topic of the report is “Study on the factors affecting the customer’s preference for different
products of kotak life insurance and their current market scenario”.

The objectives of the report:-

1.) To study the factors affecting the buying decision of life insurance.
2.) Studying the importance of these factors across different products of Kotak Old mutual life
insurance Co.
3.) To study the effect of various factors on satisfaction of customers.
3.) Modifying the marketing efforts based on the study mentioned above.

Ten years from now, the Indian government finally gave green signal to the private players to enter
the Insurance Industry, prior to which the industry was ruled by a colossal government owned
enterprise, LIC. During these ten years, many joint ventures were formed. Some came out to be very
successful and created a separate niche for themselves. Among these, Kotak mahindra and Old
mutual’s joint venture stands apart in terms of providing excellent customer service. Its popularity and
market share has been increasing gradually. The Indian insurance market is now hogged by many
well-managed private players, but still it is the LIC which is leagues apart, as far as popularity among
the masses and preference of customers is concerned. Therefore, it became very intriguing to
understand why customers always prefer one product to the other, what are the underlying factors
which determine their selection and are products deliver their expectations? These questions were the
backbone of the present study.

The present study was mainly concentrated on finding the factors determining the customers’
preferences of life insurance products, under the purview of 7Ps of services marketing. The study was
able to reveal some of the very determining factors which affect the preferences of the customers. In
order to achieve this, proper research methodology was formulated and the data was collected from
the people. The analysis of the data collected was done with the help of appropriate statistical tools.
This in turn helped to unearth the most influencing factors. Some factors that came out to be greatly
determining were the Return on investment, Policy features, Tax savings , Security, length of
investment, financial health of the company, inter-personal skills of agents . The knowledge,
behaviour and appearance of agents were also given very high weight age. Therefore, the marketing
strategies of an insurance company should be more focused in terms of the above-mentioned relevant
factors, to become a household name in insurance industry.

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After the study, it was concluded that people do give importance to these factors while selecting any
product and also to the behavioural skills of the agents. Hence, as far as the training of the agents is
concerned, it needs to be formulated in a manner which provides adequate inter-personal skills and
ethical knowledge.

For this two surveys were conducted. Survey 1 was exploratory and had qualitative questions. Survey
1 was done to know which are the various factors associated with buying of insurance. The survey
was done to gain a qualitative understanding of the underlying reasons and motivations.

Survey 2 which was a descriptive survey and included questions to rate the product, rating of various
factors which they benefit from in their product. Satisfaction level of customers was also checked
through this survey. People were interviewed personally, on telephone and few customers were
contacted through mail. All the people interviewed were customers of Kotak life insurance.

The data collected was analysed using SPSS techniques which included Single way ANOVA, Chi-
square and Factor analysis.

MAJOR FINDINGS INCLUDED:-

1.) 13 factors could be summed up in 4 components through factor analysis. These factors were
considered the important factors mainly because of the ratings of people given to these
factors.
2.) Pearson chi-square results showed that ratings of different products used in the project were
dependent on the product itself. That means people using the product gave the ratings on what
they get out of the product which is true in fact and should be like this. This means that
satisfaction level is also dependent on the type of product.
3.) Pearson chi-square also showed that people who had other policies different from kotak were
also giving different ratings to the product they had of kotak life. This means that satisfaction
level is also dependent on the type of customers.
4.) Satisfaction level was not dependent on whether the customer was male or female.

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 LITERATURE REVIEW
The views of various writers on customer satisfaction and customer services from different
sources are as follows:-

In IRDA Journal of the month January, 2007-an article ‘Handle with care’ by Sanjeev Mago
mentions-

Redressal of customer’s grievances is just a reactive way of insurers providing the minimum
expected customer service. The need of the hour is a more proactive approach aimed at
seeking what additional elements would delight the customer more and more.

The insurer or his representative should ensure that all material information about the product
being sold is given and the customer is able to decide which the best cover is for him.

The complaints not only want quick resolution but also satisfaction results or a positive
outcome and therefore we always give weight age to customer voice.

Fairness, transparency and orderly conduct in financial markets dealing with insurance helps
an organization build a reliable management information system and enforce high standards
of financial soundness.

Latest Approaches To Understanding Customer Values & Satisfaction- by Robert Woodruff

& Sarah F. Gardial mentions in Chapter 9 of ‘ Measuring Customer Satisfaction’:-
Managing towards satisfaction means making a commitment to rely on data about customers
and markets to drive decisions. Your customer’s perception ultimately determines how they
respond to your offerings. You have to become adept at using data to track trends in customer
satisfaction levels and, most importantly, to understand what drives that satisfaction. When
an organization reaches this point in its thinking, CSM (Customer Satisfaction Measurement)
becomes a high priority.

In Creating Customer- Driven Quality by Akhilesh N Singh he mentions in Chapter 7 of

‘Quality of Performance’ that to produce and deliver high quality products and services,
essential product features need to be translated in terms of quality of design and quality of
conformance.

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 Chapter 1
INTRODUCTION

 Industry overview
 Company overview

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1.1. INDUSTRY OVERVIEW:

LIC (Life Insurance Corporation of India) still remains the largest life insurance company
accounting for 64% market share. ICICI Prudential Life Insurance Co Ltd is the biggest private life
insurance company in India. It experienced growth of 58% in new business premium. Bajaj Allianz
Life Insurance Co Ltd has ranked second (after LIC) in number of policies sold in 2007-08. SBI Life
Insurance Co Ltd in terms of new number of policies sold, the company ranked 6th in 2007-083.

The Insurance industry comprises of the following most prominent companies apart from HDFC
Standard Life Insurance:

1. Birla Sun Life Insurance Co Ltd: It moved to the 7th position in 2007-08.
Birla Sun Life offers extensive and thoughtfully devised financial services to its large base of
customers across the globe to help them manage their finance in the most effective way. You
can benefit a lot from its wide array of financial services in the areas of wealth management,
mutual funds and insurance plans. The life insurance business is taken care of by the Birla
Sun Life Insurance Company Limited (BSLI). The tie-up between Aditya Birla Group and
Canada-based Sun Life Financial Inc resulted in the existence of this one of the top-notch
insurance companies in India.
2. Max New York Life Insurance Co Ltd: It was pushed down to the 8th position from 7th in
2007-08. Max Life Insurance Company is one name in the field of insurance in India that
offers a diverse range of products for a wide ranging variety of customers. The company Max
New York Life Insurance is a joint business enterprise between India's leading Multi-business
Corporation Max India Limited and New York Life, a Fortune 100 Company. The company
aims to become the most admired life insurance company in India and has developed a strong
corporate governance model based on the central value of excellence, honesty, knowledge,
integrity and teamwork. Max offers a suite of products covering the sectors of both life
insurance and health insurance sectors. Merged in 2000, the company started its commercial
operations in India one year later in 2001. Max Life Insurance Company has around 87,688
agent advisors at 712 offices across 389 cities in the country. Besides this, the company also
has 36 referral tie-ups with banks, 24 partnership distribution and alliance marketing
relationships. The company has put in place a unique model of distribution to deepen our
rural penetration and has 137 offices dedicated to rural areas. Currently the company has
more than eleven thousand employees in India working in the various insurance divisions.

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 3. Aviva Life Insurance Company India Ltd: Its ranking dropped to 10th in 2007-08
from 9th last year. Aviva Life Insurance India is a private insurance company
formed from collaboration between the Aviva insurance group of UK and the Dabur
group, one of India's oldest and top producers of traditional health care products.
Aviva's products are meant to provide customers flexibility, transparency and value
for money.
4. Reliance Life Insurance Co Ltd: It ranks 5th in new business premium and 4th in
number of new policies sold in 2007-08. Reliance Life Insurance provides a number
of investment plans for individuals as well as group. Some of these plans include:
a. Protection Plans- with these plans one can protect his/her family. One can
choose between a limited period plan and a lifetime protection plan.
b. Savings & Investment Plans- these plans help one to save some money for
the specific future purposes. Now, one can provide for the family's daily needs
and also not worry about expenditures.
c. Retirement Plans- as the name suggests, these plans help one to save money
even after retirement. Now enjoy the freedom of being independent even after
your retirement.
d. Child Plans- if one is planning to secure one's child's future and then she can
invest in Reliance Child Plans

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1.2. COMPANY OVERVIEW OF KOTAK MAHINDRA OLD MUTUAL LIFE
INSURANCE

About Kotak Mahindra Old Mutual Life Insurance Ltd

Kotak Mahindra Old Mutual Life Insurance Ltd is a 74:26 joint venture between Kotak Mahindra
Bank Ltd., its affiliates and Old Mutual plc. A Company that combines its international strengths and
local advantages to offer its customers a wide range of innovative life insurance products, helping
them take important financial decisions at every stage in life and stay financially independent. The
company covers over 3 million lives and is one of the fastest growing insurance companies in India.

ABOUT KOTAK MAHINDRA

Kotak Mahindra is one of India's leading banking and financial services organizations, offering a wide
range of financial services that encompass every sphere of life. From commercial banking, to car
finance, to stock broking, to asset management, to life insurance, to investment banking, the group
caters to the financial needs of individuals and corporates. The group has a net worth of Rs 10,060 cr.
and has a distribution network through branches and franchisees across the country and offices in
New York, San Francisco, London, Dubai, Mauritius and Singapore, servicing close to 8 million
customer accounts

Old Mutual

Old Mutual plc is an international long-term savings, protection and investment Group. Originating in
South Africa in 1845, the Group provides life assurance, asset management, banking and general
insurance to more than 15 million customers in Europe, the Americas, Africa and Asia. Old Mutual
plc is listed on the London Stock Exchange and the Johannesburg Stock Exchange, among others. In
the year ended 31 December 2010, the Group reported adjusted operating profit before tax of £1.5
billion (on an IFRS basis) and had £309 billion of funds under management, from core operations

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 CHAPTER 2

PROBLEM DEFINITION

 HOW THE PROBLEMS WERE FOUND OUT?

 HOW THE PROBLEMS WERE DEFINED?
 STATEMENT OF THE DISCOVERED PROBLEMS.

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2.1. SEARCH FOR PROBLEMS:

A brief reconnaissance of the present scenario in the insurance industry would reveal the various
problems faced by the companies. Nevertheless, the search for problems as far as this report is
concerned, pertains to some prominent predicaments that the employees in KOTAK MAHINDRA
OLD MUTUAL LIFE INSURANCE, Hisar Branch and many people related to Insurance Industry,
had. The problems were found out by talking to many employees of the organization, people and a bit
of self-experience also helped to unearth the problems.

To find out the specific problems that the company was facing, an exploratory research was done. An
Exploratory Research was done because with a limited amount of experience and knowledge, it would
be difficult to pin-point the exact problems faced by the organization. Moreover, a more rigorous and
conclusive study cannot be started without adequate understanding of the problem. The details of the
Exploratory Research are discussed in the Research Methodology section.

2.2. PROBLEM DEFINITION:

After the exploratory research was done, it was necessary to segregate the symptoms from the
problem, because the information obtained from the study was qualitative and extreme care was taken
to interpret it. The various symptoms that were surfacing because of some hidden problems are given
below:

1. Company was finding difficulties in acquiring new customers.

2. Employees were getting setbacks while with the products that were sold,
people were not getting what they bought that product for.
3. Financial advisors relying most on their personal contact and sometimes,
they end up coaxing their relatives to buy policies so as to meet their
target.
4. Satisfaction level of customers was dropping down and people didn’t feel
safe to buy an insurance product/policy. So, the quality of products had to
be improved too.

Considering the above-mentioned symptoms the problems can be defined as below:

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 1. The problem is to create credibility and reliability of the organization
commensurate to that enjoyed by Government players.
2. The second problem is to change the product in a way so that customers get what
they except from it.
The definition of the problems cited above are the outcomes of the symptoms observed after
conducting the exploratory research. However, the main underlying problems can be stated as below:

Problem Statement 1: The first problem is to understand which factors are the most determining
ones, when a customer decides to buy an insurance policy.

Problem Statement 2: The second problem is to find out ways to improve marketing efforts of
products, so that they present what the customers expect from them.

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 CHAPTER 3

APPROACH TO THE PROBLEMS

 Approach to address the problems.

 Theoretical foundations that guided the research.
 Broad Research Objective.
 Pursuit of Objectives.
 Scope of the study.

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3.1. THE PROBLEMS:

The problems stated in the earlier chapter are the most ubiquitous problems faced by the private
players in the insurance industry. LIC being the oldest of them, still enjoys a mammoth market share
and the company’s name has become synonymous with insurance. Nevertheless, after the
government’s green signal to enter this industry, the private players have slowly and steadily carved a
niche for themselves and many companies are doing well.

The problems were stated as:

Problem Statement 1: The first problem is to understand which factors are the most determining
ones, when a customer decides to buy an insurance policy.

Problem Statement 2: The second problem is to find out ways to improve marketing efforts of
products, so that they present what the customers expect from them.

A better understanding of the problems would reveal that both the problems are related. Moment of
truth is the time when a customer comes in contact with the organization in any form like by viewing
an advertisement shown by the organization or by stepping into the organization’s office premises.
The importance of moment of truth is that the customer makes an instant impression about the
company. So, if a company can score well in these moments, then it will enjoy huge brand recall and
every time the customer thinks of insurance, he will definitely include the same organization in their
search. This is the main reason why LIC enjoys such a phenomenal popularity.

Insurance Advisors are the assets of the organization and bring business to the company. The way
they present themselves in front of the prospective customer reveals a lot about the company they
represent. A customer always checks the knowledge an insurance advisor has regarding the products
that he is selling. If the customer is convinced, then the job for the insurance advisor becomes easy.
So, it is very important for a company to train its financial agents in the best and appropriate ways, so
that the customers find in them what they expect to find i.e. knowledge about the products presented
in the most guileless and lucid manner. A knowledgeable and presentable financial consultant/advisor
always leaves a good impression about the company.

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3.2. APPROACH TO THE PROBLEMS:

Even though, it is very difficult to suggest a miraculous solution to the above mentioned problems so
that they get solved over-night, but some well-judged and appropriate steps can help the organization
in the long run to overcome these prevailing problems.

In order to solve the problems, it becomes very important to understand and find out the latent driving
forces that compel a customer to buy insurance policies. The following approach was followed:

1. At first the consumer buying decision process was studied, because every question can be
answered by knowing why and how a customer buys an insurance policy.
2. A better understanding of all the factors that influences their choice for a product is a must to
exterminate the cited problems. This was done with utmost sincerity.
3. An in-depth analysis of the factors that the customers consider while selecting a particular product
for buying an insurance policy is required. This will unveil the latent forces driving a customer to
select a particular product. This will also include what customers are getting from the product
they have bought.

3.3. BROAD RESEARCH OBJECTIVE:

“To find out the best ways to make Kotak Mahindra old mutual life insurance
the most preferred insurance company to the customers, especially by
emphasizing on creating excellent moment of truth and by providing better
existing and potential insurance products ,So that they get what they expect
from a product .”

The broad research objective is further broken up into two objectives, stated as below:

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Objective 1: To determine the important factors which influence a customer while selecting a
particular product for buying insurance policy?

Objective 2: To determine the best ways to improve the product and its marketing efforts.

3.4. PURSUIT TO MEET THE OBJECTIVES:

In order to meet the research objectives formulated after doing a rigorous exploratory research, a more
exhaustive study was done. The Descriptive research was the design used to further the study and
extensively analyze the information obtained from the exploratory research. Some statistical tools
were also used to analyze and interpret the information obtained from the descriptive study. The
techniques used to analyze the data can be enlisted as below:

1. Pie Charts: Pie charts will give a graphical representation of the percentage of respondents
selecting a particular option of a question in the questionnaire administered. These charts help
in the preliminary analysis of the data collected.
2. Single Factor ANOVA: The single factor analysis of variance will be applied to each of the
variables under the seven factors i.e. 7Ps of Services Marketing. This technique will help to
determine whether each of the variables under a particular factor is being considered as the
same or different by the respondents. The analysis will also help to find out which variable
under a particular factor is given more weightage by the respondents.
3. Chi-square: The chi-square test will be applied to different questions such as satisfaction and
if they have another policy and will check the dependency of such factors on satisfaction of a
customer. This test will help in checking the dependency of various factors on satisfaction
level of a customer.

3.5. SCOPE OF THE STUDY:

In accordance with the objectives, the study will make an effort to find out the various factors which
determine the customers’ choice of a particular product. The understanding will enlighten the hazy
picture of why a customer chooses one product and not the other. The findings will help the company
to make focused moves pertaining to the factors given more weightage by customers.

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 CHAPTER 4

RESEARCH DESIGN

 Types of the Research Design used.

 Data Collection.
 Scaling Techniques.
 Questionnaire development and Pretesting.
 Sampling Design Process.

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4.1. TYPES OF RESEARCH DESIGN USED:

In order to give the study a scientific framework two types of research design was used:

1. Exploratory Research Design.

2. Descriptive Research Design.

The Descriptive Research was done after diagnosing the present scenario with the help of
Exploratory Research. The Descriptive Research was done as a follow up for the relevant information
obtained from the exploratory research and to account for a more conclusive study.

4.1.1. EXPLORATORY RESEARCH:

Exploratory Research is used for qualitative analysis. It is a useful preliminary step that helps to get
an overview of the present prevailing scenario and also to diagnose the situation. In the present
study, exploratory research was done to throw some light over the hazy problem areas widespread
in the Insurance industry these days. The exploratory research proved to be an excellent tool to pin
point the actual setbacks faced by the company (Kotak). At the very outset, it was difficult to find out
the actual problem areas as it was difficult to separate the symptoms from the actual problem.

The Data collection in exploratory research was done with the help of:

1. Experience Surveys: To better understand the present scenario, many discussions

were done with the top executives like the Branch Manager, Assistant branch manager
and Sales Development Managers of the organisation (Kotak life, Hisar Branch), who
have had personal experience in the field. Brainstorming was also done with the
Insurance advisors of the organisation.
The discussions held with the knowledgeable people inside and outside the
organisation were informal in nature and more like conversations. The main objective
of the activity was to get ideas about the relevant factors of an insurance product.
Some specific and formal questions were asked to the respondents and the
respondents were in full liberty to answer them in a way that they preferred.
Knowledgeable people were selected as per convenience and no specific sampling
was done. The activity helped to formulate the problem and clarify the concepts.

2. Pilot Studies: Within the purview of exploratory research, a pilot study was done, in
which some aspects of the research like fieldwork was done in a small scale. In the

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 study, primary data was collected from the customers of Insurance products. The
respondents were asked open-ended questions. Fieldwork included visits to the
various residential areas in and around Hisar.
Depth Interviews were organised with the respondents who were willing to answer,
while very brief sessions were held with people who were not that willing to respond.
Sometimes, the laddering technique was used to probe in depth in which an answer
was followed by a question asking ‘why’. These sessions held with the respondents
helped extract the required information to aid in formulating the problem. The pilot
study preceded by the experience surveys helped a lot to zero in the exact problem.

4.1.2. DESCRIPTIVE RESEARCH:

The descriptive research was done as a follow up for the information obtained through the
exploratory research. It helped to provide a more rigorous and more conclusive study of the problem
areas discovered after the first step of exploratory research. The Data collection in the Descriptive
Research was done using the following methods:

1. Survey methods: In the survey method, the required information was obtained by
questioning the respondents. The questioning was done in a structured way i.e. a
formal questionnaire (Appendix) was prepared and the questions were asked in a
standardized prearranged order. The questionnaire consisted of fixed alternative
questions that require the respondents to select from a predetermined set of
responses9. In the present study, three major modes of questionnaire administration
were used:
a. Telephone Methods: This method included traditional telephone interviews
which involved questioning a sample of respondents. The respondents in this
case were chosen on the basis of convenience and mainly personal contacts
were exploited for this purpose, which can be included in the target population
selected for the study. As the number of contacts was limited, not many
responses were obtained.
b. Personal Methods: This method provided a huge chunk of responses as a large
number of respondents were available. Even though some of the methods used

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 were not very fruitful like the Personal In-Home Interviews. The personal In-
Home Interviews were not very convenient and productive as far as data
collection is concerned. People were not very willing to respond and spend
their precious time filling up somebody’s questionnaire. A considerable
number of homes were visited in hisar and the information was collected as
per the requirement. Customers of the company usually came to the office to
pay their premiums and then they were asked to fill the questionnaire. Many of
the responses came through this method. This method proved out to be the
most successful one.
2. Electronic Methods: The electronic survey was conducted by doing e-mail interviews. A
list of e-mail addresses were obtained from the company. Many e-mail addresses were
available, but those cannot be utilized, because the individuals cannot be included in the
target population. Nevertheless, some of the individuals were sent the questionnaire and
their responses helped a lot in expediting the study.

4.2. SCALING TECHNIQUES:

The quest for a descriptive research can never be completed without an appropriate measurement
and scaling technique. This step is very important because a suitable technique will help in the
proper analysis of the data collected from the fieldwork using statistical tools, which is essential for a
conclusive quantitative research. The different primary measurement scales were used in obtaining
the information with the help of questionnaire.

a. Nominal Scale: e.g. sex of the respondents.

b. Ordinal Scale: e.g. rankings of the preferences.
c. Ratio Scale: e.g. age of the respondents.

Two types of scaling techniques were used to get the suitable information while administering the
questionnaire. These are:

A. Comparative Scaling: Comparative Scales directly involve the direct comparison of

the stimulus objects. In comparative scaling the technique used is Rank Order
Scaling. The information regarding the consumer buying decision process was

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 gathered using rank order scaling in the questions. For example, the questions asking
the respondent to rank the predetermined factors which influences his choice for a
particular company while buying an insurance product and the factors which
influences his purchase decision.
B. Non- Comparative Scaling: In this type of scaling, the Itemized Rating Scale was
used. In order to find out the different factors which influences a customer’s choice
for a particular company to buy an insurance product, Likert Scale was used. The
Likert Scale was used because of convenience in working with the scale and
moreover, coding of the data obtained is uncomplicated which helps in applying the
statistical tools quite effortlessly.

4.3. QUESTIONNAIRE DEVELOPMENT AND PRETESTING:

To obtain the required information through exploratory research, no questionnaire was

administered for this purpose. But during the survey methods involved in the Descriptive Research, a
questionnaire was employed. The questionnaire was designed keeping in mind the information
requirements. The present study involved the understanding of the consumer buying behaviour to
as to meet the objectives. Therefore, special care was given to the different steps involved in the
consumer buying decision making process and the questions were set accordingly and
chronologically. Later on, after various sessions of brainstorming with friends and acquaintances, 12
variables were sorted out, which were presumed to be affecting the choice of a person for a
particular company while buying an insurance product. The variables were found out considering the
Seven P’s of Services Marketing. A Likert Scale was used to extract the information from the
respondents.

The Pretesting of the questionnaire was done to make it more accurate and relevant considering the
information required from the survey. The pretesting was done by conducting discussions with the
College Mentor and also with the Industrial Mentor. Many valuable suggestions were obtained to
improve the questionnaire. Discussions within the friend circle also helped to make the questions
more accurate and to the point. Many helpful suggestions were also imbibed in the questionnaire
after having one to one personal interviews with a small sample of the respondents. As the time

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period was limited so no further pretesting was done by analyzing the responses of the samples.
Nevertheless, the suggestions imbibed in the questionnaire after discussing with knowledgeable
people evolved the questionnaire a lot.

4.4. SAMPLING DESIGN PROCESS:

The main objective of a research project is to get information about the characteristics of a
population. A population is the aggregate set of all the elements that share some common set of
characteristics and which is of some interest to the marketing research. A sample is a subgroup of
the population selected for participation in the study. Sampling is important because it helps to
narrow down the horizon of data collection from the population. The sampling design process
involved the following steps:

1. Target Population: The target population is the collection of elements (individuals)

that possess the information sought and about which the inferences are to be made.
The target population for the research was defined as follows:
i. Elements: Male or female head of the household responsible for
buying insurance policies.
ii. Sampling units: Households.
iii. Extent: Hisar.
iv. Time: 25th April to 25th June, 2010.
2. Sampling Frame: Sampling Frame is the representation of the elements of the target
population. In this study, the sampling frame is the individuals having the insurance
policy of Kotak Mahindra old mutual life insurance.
3. Sample Size: for the present study the sample size was 164 respondents. The sample
was exclusively prepared for the descriptive research study and for the exploratory
research sampling was done of a small number of respondents.
4. Sampling Techniques: The sampling was done without replacement, i.e. once the
individual is quizzed he cannot be included in the sampling frame again. As the
sample size was small, so this technique helped to eradicate the problem of repetition.
For the exploratory research, the technique used was a Non-Probability Technique
called the Convenience Sampling. For the Descriptive research, a Probability

BIMTECH Page 24
 Technique was used called the Simple Random Sampling, in which each individual
in the target population has an equal probability of selection.

BIMTECH Page 25
 CHAPTER 5

DATA ANALYSIS

 Methodology
 Plan of data analysis

BIMTECH Page 26
5.1. METHODOLOGY:

The analysis of the data collected is the most important step in a research work. The analysis of the
data should be done with utmost care, because this will lead to the fulfilment of the objective and if
not, then the whole purpose of the study goes haywire. After the important step of data collection, the
next step is to prepare the data for analysis. The following steps were administered for the Data
Preparation process:

1. The initial step was to check all the filled questionnaires for completeness and quality.
2. Some editing was also done to increase the accuracy and precision of the
questionnaire.
3. Coding of the data collected was done so as to make the data compatible for analysis
with the different statistical tools like SPSS, Excel.

5.2. DATA ANALYSIS STRATEGY:

A. Analysis of the data collected from Exploratory Research: The exploratory

research was done to diagnose the present situation. The findings from the exploratory
research helped in the formulation of the problem statements. The data was collected
through experience surveys and pilot studies. The data collected was qualitative and
therefore no statistical tools were employed so analyse the data. The information
collected was self-descriptive.
B. Analysis of the data collected from Descriptive Research: The Descriptive
Research was done as a conclusive study to follow up the information obtained from
the exploratory research. The data was collected through survey methods using
questionnaire. The analysis of the data was done in accordance with the objectives as
follows:
A. One of the objectives of the study was to find out the factors which determine the
customers’ preference of an insurance company, by understanding “why a customer
buys a particular insurance product?” Therefore, the first step of the data analysis is
to evaluate the consumer buying decision making process. The evaluation will make

BIMTECH Page 27
 use of statistical tools like Excel and SPSS. Although a large part of the analysis will
be done with the help of SPSS.

B. The second objective was to see what a customer is getting through that product
which he buys and whether he is satisfied or not. Questionnaire was prepared to
understand the satisfaction level and factors associated with it. The first step was to
check the satisfaction level and whether it is associated with other factors or not such
as age, product, or even if he has another policy/product. The evaluation will make
use of SPSS statistical tool for analysis which gives out solid results.

BIMTECH Page 28
 CHAPTER 6

RESULTS AND DISCUSSION

 Results of Exploratory Research.

 Results of Descriptive Research.

BIMTECH Page 29
6.1. RESULTS AND DISCUSSION OF EXPLORATORY STUDY:

The exploratory research helped to gain insight of the present situation and to formulate the
problems. The formulation of the problem statements made easy the process to define the
objectives of the present study. The information obtained from the exploratory research can be
enlisted as below:

1. Difficulties in acquiring new customers: After discussing with many knowledgeable

employees of the organisation and through some personal experiences, it was found
out that the process of acquiring new customers is difficult. It was found that many of
the people who were approached for sales already have multiple insurance policies in
their name or are less eager to buy a policy from Kotak life. The main reason for this
observation might be the time period. The study was done after March, the month
when every employee has to show his investments to enjoy tax rebate. As the time of
peak sales was already over, acquisition of new customers was becoming difficult.
Therefore, this can be inferred from the observation that many customer buy
insurance policy to obtain tax rebate.
2. Complaints regarding the product/policy features: Customers Bought insurance
policy for many different reasons like investment, tax rebate, security, policy features.
They expected their product to give some kind of benefit they wanted but they were
not satisfied with what they were getting. For e.g. – people buying the product for
investment didn’t actually get any returns.
3. People did not pay their premium and their product/policy lapsed: This was one of
the problems of forced selling or could be people did not want that product/policy.
4. This exploratory study was also carried out to find out the factors that were related to
insurance policy/product buying decision or after buying. The factors that came to
highlight are stated below:
a. Returns on investment
b. Policy features

BIMTECH Page 30
 c. Security
d. Length of investment
e. Tax savings
f. Brand equity of the company
g. Financial health of the company
h. Core competency of the company in that sector
i. Inter-personal skills(sales staff)
j. Influence of relatives and friends
k. Post sales service support

These factors can be understood easily with the name itself.

6.2. RESULTS AND DISCUSSIONS OF DESCRIPTIVE STUDY:

The exploratory research helped in the formulation of the problems and thereby the objectives of
the present study. Questionnaire was designed to obtain the relevant information required to meet
the objectives. The analysis of the data collected provided the information sought for.

The demographics of the correspondents can be shown as below:

Respondents Profile Number of Respondents

Sex

Male 134

Female 30

Age(in years)

Below 21 2

21-30 60

31-40 78

41-50 22

Above 50 2

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 Gender distribution

30

Male
134 Female

Age distribution
22

22 Below
60 21
21-30

31-40
78
41-50

Above
50

Fig: Pie-charts showing distribution of age and gender

KMO and Bartlett’s Test

The KMO measure of sampling adequacy is calculated using correlations and partial correlations to
test whether the variables in our sample are adequate to correlate. That is, it calculates whether the
variables are so highly correlated that we cannot distinguish between them (multi co linearity). A
general thumb rule is that a KMO value should be greater than 0.5 for a satisfactory factor analysis
to proceed. The higher the value, the better.

In the following table, it is observed that our KMO value is .542. Therefore we can proceed with our
factor analysis.

BIMTECH Page 32
Bartlett’s test of sphericity lets us know if there is a relationship between the variables. If no
relationship is found, then there is no point in proceeding with the factor analysis. A

“p value”<0.05 indicates that it makes sense to continue with the factor analysis. Since we have
p=0.000, we can conclude that there are relationships between our variables.

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .542

Bartlett's Test of Sphericity Approx. Chi-Square 265.670

df 66

Sig. .000

Total Variance Explained

The "Total Variance Explained" table shows the Eigen values, which are the proportion of total
variance in all the variables which is accounted for by that factor. A factor's eigenvalue may be
computed as the sum of its squared factor loadings for all the variables. A factor's eigenvalue divided
by the number of variables (which equals the sum of variances because the variance of a standardized
variable equals 1) is the percent of variance in all the variables which it explains. If a factor has a low
Eigen value, then it is contributing little to the explanation of variances in the variables and may be
ignored as redundant with more important factors. The table shows 21 factors, one for each variable.
However, only the first seven are extracted for analysis because, under the Extraction options, SPSS
was told to extract only factors with eigenvalues of 1.0 or higher.

BIMTECH Page 33
 Total Variance Explained

Rotation Sums of Squared

Initial Eigenvalues Extraction Sums of Squared Loadings Loadings

Comp Cumulat
onent Total % of Variance Cumulative % Total % of Variance Cumulative % Total % of Variance ive %

1 2.082 17.354 17.354 2.082 17.354 17.354 1.760 14.668 14.668

2 1.777 14.812 32.165 1.777 14.812 32.165 1.755 14.628 29.296

3 1.600 13.332 45.497 1.600 13.332 45.497 1.640 13.667 42.963

4 1.086 9.052 54.550 1.086 9.052 54.550 1.390 11.587 54.550

5 .994 8.282 62.832

6 .974 8.113 70.944

7 .866 7.219 78.163

8 .676 5.630 83.793

9 .649 5.406 89.199

10 .498 4.152 93.351

11 .427 3.558 96.909

12 .371 3.091 100.000

Extraction Method: Principal Component Analysis.

In our analysis, we have told SPSS to use a Varimax rotation to improve the extraction of factors. The
values given for each factor after rotation is given in the “Rotation Sums of Squared Loadings”. The
Initial Eigenvalues and Extraction Sums of Squared Loadings columns are the same, except the latter
only lists factors which have actually been extracted in the solution.

BIMTECH Page 34
Component and Rotated Component Matrix

The Component Matrix given below gives us an idea of factor loadings. This gives us the main output
of factor analysis. Higher loadings are considered better. The rotated component Matrix is also given
below. Normally, a rotated component matrix is easier to interpret, as it is possible to associate the
original variables to the factors. A general thumb rule is that a variable makes a significant
contribution to the factor if the loading is 0.3 or greater.

Rotated Component Matrix

Component

1 2 3 4

roi -.077 .130 -.749 -.155 Roi- returns on investment

pf .082 .128 -.049 .607 Pf-policy features
sec .120 .135 .642 -.271 Sec-security
loi -.244 .309 -.014 .607 Loi- length of investment
ts -.134 .144 .709 .097 Ts-tax savings
be -.022 .730 .102 .095 Be-brand equity
fh .054 .839 .037 .075
Fh- financial health of the company
cc .384 .504 -.040 -.092
Cc- core competency of the company in
ips .566 .114 -.319 .195
that sector
irf .089 .243 -.121 -.673
ips- inter personal skills(sales staff)
pss .749 -.070 .053 -.158
irf- influence of relatives and friends
comp .785 .142 .169 -.085
pss- post sales service support
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
Comp- comparison with any other

a. Rotation converged in 5 iterations. financial product (e.g. - mutual fund)

In the Rotated Component Matrix, we apply Varimax Rotation. A Varimax rotation is a change of
coordinates used in principal component analysis and factor analysis that maximizes the sum of
the variances of the squared loadings. That is, it seeks a basis that most economically represents
each individual—so that each individual can be well described by a linear combination of only a few
basic functions

BIMTECH Page 35
Generally, we zero in on the variables affecting a certain factor by looking at the loading values. The
values that are the highest among their respective rows are loaded onto the factors that they fall
under. According to the Component as well as Rotated Component Matrix, the different factors
identified are as follows:

 Employees- inter personal skills, post sales service support

 Quality of the company- Brand equity , financial health, core competency of that
company
 Investment(Finance) - return on investment, Length of investment , Tax savings
 Product quality – Policy features etc.

One-way ANOVA

A one-way analysis of variance (ANOVA) is used when you have a categorical independent
variable (with two or more categories) and a normally distributed interval dependent variable
and you wish to test for differences in the means of the dependent variable broken down by
the levels of the independent variable.

The "Between Groups" row represents what is often called "explained variance" or
"systematic variance". We can think of this as variance that is due to the independent
variable, the difference among the three groups. The "Within Groups" variance represents
what is often called "error variance". This is the variance within your groups, variance that is
not due to the independent variable. Intuitively, it's important to understand that, at it's heart,
the analysis of variance and the F score it yields is a ratio of explained variance versus error.
This actual F score (ratio) is in the next to last column, and the probability of an F of this
magnitude is in the final column (sig.). If the F score is well below the .05 cut off, so that we
can conclude then that the groups are statistically significantly different from one another

BIMTECH Page 36
 ANOVA

Sum of Squares df Mean Square F Sig.

roi Between Groups 71.997 2 35.999 29.478 .000

Within Groups 196.613 161 1.221

Total 268.610 163

pf Between Groups 1.266 2 .633 .531 .589

Within Groups 191.710 161 1.191

Total 192.976 163

sec Between Groups 36.944 2 18.472 21.220 .000

Within Groups 140.153 161 .871

Total 177.098 163

loi Between Groups 1.116 2 .558 .445 .642

Within Groups 202.103 161 1.255

Total 203.220 163

ts Between Groups 59.265 2 29.632 23.938 .000

Within Groups 199.296 161 1.238

Total 258.561 163

be Between Groups .089 2 .045 .039 .962

Within Groups 184.398 161 1.145

Total 184.488 163

fh Between Groups 3.298 2 1.649 1.632 .199

Within Groups 162.677 161 1.010

Total 165.976 163

cc Between Groups 2.574 2 1.287 1.205 .302

Within Groups 171.866 161 1.067

Total 174.439 163

ips Between Groups 69.682 2 34.841 48.478 .000

Within Groups 115.709 161 .719

Total 185.390 163

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irf Between Groups 2.636 2 1.318 1.442 .239

Within Groups 147.144 161 .914

Total 149.780 163

pss Between Groups 3.929 2 1.964 1.987 .141

Within Groups 159.193 161 .989

Total 163.122 163

comp Between Groups 1.228 2 .614 .518 .597

Within Groups 190.869 161 1.186

Total 192.098 163

Hypotheses:
Null: There are no significant differences between the factors' mean of a group of products.
Alternate: There is a significant difference between the factors' mean of a group of products.

Test – As we can see the factors which show significance (p value) of < .05 are as follows –

 Return on investment
 Security
 Tax savings
 Inter-personal skills

Conclusion- There is a significant difference between of these factors across various

products. Null hypothesis is rejected but not for all the values but only the factors mentioned
above.

Products which I have used for my study are:-

 Capital multiplier plan

 Single invest (ULIP)
 Money back plan

Now we will discuss the which factor is most important among various products using post
hoc tests (Tukey’s B)

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Post Hoc Tests

Homogeneous Subsets
Tukey’s B test

Return on investment

Tukey Ba,,b

product
Subset for alpha = 0.05 1.0 product- Capital multiplier plan
s N 1 2 3 2.0 product- Single invest plan
3.00 54 2.5926 3.0 product- Money back
2.00 58 3.5517

1.00 52 4.2308

Means for groups in homogeneous subsets are displayed.

a. Uses Harmonic Mean Sample Size = 54.555.

b. The group sizes are unequal. The harmonic mean of the

group sizes is used. Type I error levels are not guaranteed.

This test shows that return on investment is different for the three products, and
showing that it is better in our 3 product which is money back plan.

Security

Tukey Ba,,b

Subset for alpha = 0.05

product
s N 1 2 3

1.00 52 3.1154

2.00 58 3.7241

3.00 54 4.2963

Means for groups in homogeneous subsets are displayed.

a. Uses Harmonic Mean Sample Size = 54.555.

BIMTECH Page 39
This test shows that Security is different among the products and it is utmost in 1
product which is capital multiplier plan.

Tax savings

Tukey Ba,,b

Subset for alpha = 0.05

product
s N 1 2 3

1.00 52 2.6154

2.00 58 3.3793

3.00 54 4.1111

Means for groups in homogeneous subsets are displayed.

a. Uses Harmonic Mean Sample Size = 54.555.

b. The group sizes are unequal. The harmonic mean of the

group sizes is used. Type I error levels are not guaranteed.

This test shows that tax savings is different among products, and it is the best in 1
product which is capital multiplier plan.

Inter personal skills

Tukey Ba,,b

Subset for alpha = 0.05

product
s N 1 2 3

3.00 54 2.1481

1.00 52 2.8846

2.00 58 3.7241

Means for groups in homogeneous subsets are displayed.

a. Uses Harmonic Mean Sample Size = 54.555.

b. The group sizes are unequal. The harmonic mean of the

group sizes is used. Type I error levels are not guaranteed.

BIMTECH Page 40
 This test shows that inter-personal skills are different among products,
the best in 3rd product which is money back plan.

Chi-square dependency checks

The chi-square test of independence is a test of the influence or impact that a subject’s value
on one variable has on the same subject’s value for a second variable.

 The research hypothesis states that the two variables are dependent or related. This
will be true if the observed counts for the categories of the variables in the sample are
different from the expected counts.

 The null hypothesis is that the two variables are independent. This will be true if the
observed counts in the sample are similar to the expected counts.

 The amount of difference needed to make a decision about difference or similarity is

the amount corresponding to the alpha level of significance, which will be 0.05.

 If the probability of the test statistic is less than or equal to the probability of the alpha
error rate, we reject the null hypothesis and conclude that our data supports the
research hypothesis. We conclude that there is a relationship between the variables.

 If the probability of the test statistic is greater than the probability of the alpha error
rate, we fail to reject the null hypothesis. We conclude that there is no relationship
between the variables, i.e. they are independent.

 Age satisfaction check

age * ratings Cross tabulation

Count

ratings

1 2 3 4 5 Total

age 21-30 8 20 16 10 6 60

31-40 12 40 14 12 0 78

41-50 2 14 6 0 0 22

above 50 0 0 0 2 0 2

BIMTECH Page 41
 below 21 0 2 0 0 0 2

Total 22 76 36 24 6 164

Chi-Square Tests The probability of the chi-square

Asymp. Sig. (2-
test statistic (chi-square=33.670)
was p=0.006, less than the alpha
Value df sided)
level of significance of 0.05. The null
Pearson Chi-Square 33.670a 16 .006 hypothesis that differences in
Likelihood Ratio 35.267 16 .004 "satisfaction level of customers” is
N of Valid Cases 164 independent of differences in "age"
is rejected.
a. 16 cells (64.0%) have expected count less than 5. The minimum
expected count is .07.

Null hypothesis: - differences in "satisfaction level of customers” is independent of differences in

"age".
Alternate hypothesis: - differences in "satisfaction level of customers” is dependent of differences
in "age".

As the asymptotic significance (p) = .006 which is less than the alpha level of significance
.05. So the null hypothesis is rejected.

Satisfaction level is definitely dependent on the age of customers.

 Product satisfaction check

Products * Ratings Cross tabulation

Count

BIMTECH Page 42
 Ratings

1 2 3 4 5 Total

Products CAPITAL MULTIPLIER 10 22 12 2 6 52

PLAN

MONEY BACK 6 26 12 14 0 58

SINGLE INVEST(ULIP) 6 28 12 8 0 54

Total 22 76 36 24 6 164

Chi-Square Tests The probability of the chi-square test

statistic (chi-square=23.211) was p=0..003,
Asymp. Sig. (2-
less than the alpha level of significance of
Value df sided)
0.05. The null hypothesis that differences
Pearson Chi-Square 23.211a 8 .003 in "satisfaction level of customers" is
Likelihood Ratio 25.103 8 .001 independent differences in "products" is
rejected.
N of Valid Cases 164

a. 3 cells (20.0%) have expected count less than 5. The minimum

expected count is 1.90.

Null hypothesis: - Differences in "satisfaction level of customers" is independent differences in

"products".
Alternate hypothesis: - Differences in “satisfaction level of customers” is dependent on
differences in “products”

Since the null hypothesis is rejected we see that, satisfaction depends on

what product you have.

 Gender satisfaction check

Gender * Ratings Cross tabulation

Count

BIMTECH Page 43
 Ratings

1.00 2.00 3.00 4.00 5.00 Total

Gender Female 4 14 4 8 0 30

Male 18 62 32 16 6 134

Total 22 76 36 24 6 164

The probability of the chi-square test

Chi-Square Tests
statistic (chi-square=6.219) was p=0..183,
Asymp. Sig. (2- greater than the alpha level of
Value df sided) significance of 0.05. The null hypothesis
that differences in "satisfaction level of
Pearson Chi-Square 6.219a 4 .183
customers" is independent differences in
Likelihood Ratio 6.919 4 .140
"gender" is not rejected.
N of Valid Cases 164

a. 4 cells (40.0%) have expected count less than 5. The minimum

expected count is 1.10.

Null hypothesis: - differences in "satisfaction level of customers" is independent differences in

"gender"

Alternate hypothesis: - differences in "satisfaction level of customers" is dependent differences in

"gender"

Since the value of p (asymptotic significance) is greater than the level of significance we do
not reject the null hypothesis.

We state that satisfaction level of customers is not dependent on gender.

 Type of Customer satisfaction check

BIMTECH Page 44
 Type of customer(policy) * Ratings Crosstabulation

Count

Ratings

1 2 3 4 5 Total

Type of 1 12 66 28 14 2 122
customer
2 10 10 8 10 4 42

Total 22 76 36 24 6 164

Chi-Square Tests Type of customer

Asymp. Sig. (2- 1. – Only 1 policy
Value df sided) 2. – More than 1 policy
Pearson Chi-Square 19.507a 4 .001

Likelihood Ratio 18.731 4 .001

Linear-by-Linear Association 2.794 1 .095

N of Valid Cases 164

a. 2 cells (20.0%) have expected count less than 5. The minimum

expected count is 1.54.

Null hypothesis: - differences in "satisfaction level of customers" is independent differences

in "Type of customer"
Alternate hypothesis: - differences in "satisfaction level of customers" is dependent
differences in "Type of customer"

As the asymptotic significance level ( p value ) < .001 , which means that our null hypothesis is
rejected .

SO, we can say that satisfaction level depends on the Type of the customer.

BIMTECH Page 45
 CHAPTER 7

LIMITATIONS AND CAVEATS

 Limitations of the study

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7.1. LIMITATIONS OF THE STUDY:

Every research work is bound to perform under certain inextricable limitations. These limitations are
found because of some external and some inherent factors. This study has been conducted with the
utmost consideration to the adequacy of data and quality of information, but still the probability of
some lacunae cannot be ruled out. The report involves the study in which an emphasis has been
made to find out the factors which are relevant and dictate the behavior of a customer when he
prefers a particular product/policy to others while buying. Although, the study is thorough
theoretically, but is subjected to the following caveats:

1. The sample size considered for the descriptive study is 164. The sample size is small,
so the inferences made from the study cannot be generalized for a larger population.
Nevertheless, the conclusions are backed by sufficient statistical analysis.
2. Due to the paucity of time, the study could not be done extensively. So, any
extrapolation of the inferences should be done with extra caution.
3. The extent of the study is only Hisar district. Any generalization external to the extent
might not be legitimate.
4. It was found during the survey that many of the respondents were not very willing to
fill-up the questionnaire and a little cajoling was required to convince them to fill it
up. So, a certain amount of biasness might be there in their responses.
5. It was felt very often that the respondents do not express their true feelings. In such
cases, the accurate judgement and evaluation of their habit, preferences and attitudes
is difficult.
6. The duration of the present study is two months, so all the data and their temporal
content would be limited to this specific time period only.
7. The data collected is limited to the method adopted. In this present study the data was
collected using the survey method using a structured questionnaire. So, the data is
limited to the extent of data generation feasible through this method.

BIMTECH Page 47
 CHAPTER 8

CONCLUSIONS AND RECOMMENDATIONS

 FINDINGS AND RECOMMENDATIONS

 CONCLUSIONS

BIMTECH Page 48
8.1. FINDINGS AND CONCLUSIONS:
The study helped a lot to understand the consumer buying decision process, thereby answering the
questions “why” and “how” a customer buys his insurance policies. The study also helped to find out
the importance given by the customers to the agent’s behaviour, knowledge and appearance. After the
analysis of the data collected using statistical tools and excel, the following conclusions can be drawn:

1. It was found that people, who have bought their policy because some agent coaxed them, are
not satisfied with their existing policy and some even remarked that life insurance is not
necessary at all in today’s scenario.
2. Life Insurance Corporation of India still enjoys massive popularity among the Indian crowd.
People still prefers LIC over other private players. In fact, people have made the name LIC
synonymous with insurance.
3. It was found that the most important reason, why a customer buys an insurance product is
Tax Rebate. This pattern is very prominent among the younger individuals, who have
recently become financially independent. Older people consider life coverage as the most
important reason.
4. When a person evaluates the alternatives available to him while buying an insurance policy,
his most important criterion is whether a company is public or private. Product features and
amount of premium are also considered as important criteria to select a particular product.
5. Most of the people admitted that their purchase decision was affected by the agents/ brokers.
This also signifies the importance of an agent in helping the customer to make the purchase
decision. Friends’ suggestions and advices also influence the purchase decision.
6. Most of the insurance policies were bought from the company’s agent. This suggests that
still agents are the most prolific distribution channel of an insurance company as far as
business is concerned.
7. Product features of an insurance policy like tax rebate, savings, investment and life cover are
strongly considered as the determining factor for selecting a company.
8. People consider that low amount of premium is always preferable. At times, they consider it
to be the deciding factor for choosing a particular company over others.
9. Agent’s knowledge influences greatly the purchase decision of a customer. The way he
behaves and presents himself also affect the buying decision of the customer. Therefore, it
can be concluded that only product knowledge is not sufficient to convince people. The
agents should be properly trained about the behavioural aspects as well. Proper emphasis
should be given to improve the soft skills of the agents.

BIMTECH Page 49
 10. A customer is also influenced by the office ambience when he decides which company to go
for. The ambience in the office can have a positive effect when a customer enters the office
premises.
11. Better claim settlements, convenient payment system and better complaint redressal are
some factors which positively affect the customer’s preference of an insurance company.
12. It was also found out that 13 factors were reduced to 4 components which formed the main
part of selling of a particular product. These 4 components were- employees, company itself,
financial factors, policy features.
13. Satisfaction level of customers was also dependent on what product they have, their age and
if they have any other policy or not.
14. There is a significant difference between some factors across various products which
are:

 Return on investment
 Tax savings
 Inter-personal skills
 Security

BIMTECH Page 50
8.2. RECOMMENDATIONS:
After the analysis of the data collected and review of the findings, it was found that the study served
its purpose by achieving the objectives. The findings provided insight into discovering the factors
which affects the customers’ preferences of an insurance company. The following recommendations
can be made based upon the findings and conclusion:
1. Training of Agents: The agents/ financial consultants are the person who comes in direct
contact with the customers most frequently. Therefore, it becomes imperative to provide
them the best of the training. The training should not be confined only to providing product
knowledge. Behavioural aspects, especially the soft skills are also very important. The agents
should also be given training in a way which will compel them to serve their duty ethically.
By making the agents ethically right, their tainted image can be wiped out.
2. Providing excellent moments of truth: Moments of truth are the instances when a customer
comes in contact with the organization. The company should consider all the necessary steps
which can provide the best moments of truth so that every time a person encounters
something related with the company, he should derive a favourable impression about it.
3. Product features: Product features are considered to be a great influence in the selection of
company. It should be considered with utmost importance while formulating any
communication strategy.
4. Communication Strategy: Advertising came out to be the most effective mode of
communication. Sales promotion and word of mouth are determining factors and influences
the customers’ preferences. Therefore, proper weightage should be given to advertising and
sales promotion. As far as favourable word of mouth is concerned, this can be achieved only
in the long run with dedicated service to the customers. Direct marketing approaches like
telemarketing, junk mails are considered to be discomforting and this mode of
communication should be used very cautiously.
5. Premium of the policies: Low premium are considered preferable by most of the people.
People considers premium Kotak life as a bit on the higher end. So, a little reduction in the
premium amount can help to cater for a larger customer base and even the rural areas can
also be entertained.

BIMTECH Page 51
 6. Accessibility: LIC enjoys huge popularity because of its easy accessibility. The number of
agents of LIC is far more than what Kotak life has. So, more emphasis should be given to
acquire efficient financial consultants. Nevertheless, the quality of the financial consultants
should not be compromised for quantity.
7. Office Ambience: People consider the office ambience to be very important and deciding.
The office ambience should be pleasing to the customers. Therefore, proper consideration
should be given to the office lightening, layout and cleanliness.
8. Processes: Some important processes like better claim settlement, convenient payment
system and better complaint redressal are prerequisite for a service industry company. So,
proper importance should be given to them and make these processes as customer friendly
and less troublesome as possible.

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 APPENDICES

 Questionnaire.

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 Questionnaire
NAME - AGE-

GENDER- KOTAK PRODUCT-

Sir/Madam,

This research project is a part of our curriculum. This is a general study of Insurance
Plans & thus I seek to know only your general views about products of Kotak Old mutual
Life insurance.

Please grade the following questions on the given 1 to 5 scale.

Features you get after the purchase of this Life Insurance (product).
(1 – Least essential.......5 – Most essential)

Please rate the factors

Sr. Factors
No.

1 Returns on Investment 1 2 3 4 5

2 Policy Features 1 2 3 4 5

3 Security 1 2 3 4 5

4 Length of Investment 1 2 3 4 5

5 Tax Savings 1 2 3 4 5

6 Brand Equity of the company 1 2 3 4 5

7 Financial Health (Company) 1 2 3 4 5

8 Core competency of the company in that sector. 1 2 3 4 5

9 Interpersonal Skills (Sales Staff) 1 2 3 4 5

10 Influence of Relatives/Friends in investment decision making 1 2 3 4 5

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11 Post Sales Services support. 1 2 3 4 5

12 Comparison with other Financial product (eg. Mutual Funds) 1 2 3 4 5

Q.) How will you rate this Product of KOTAK Life Insurance?

a) Excellent

b) Good

c) Moderate

d) Bad

e) Poor

Q.) How much are you satisfied with this plan?

(On a scale of 1-5)

1)Highly satisfied

2) Satisfied

3)Somewhat Satisfied, Somewhat Dissatisfied

4)Dissatisfied

5)Highly Dissatisfied

Q.) Do you have any other life insurance plans?

1) Yes
2) No
3) If yes, then which company and plan.....?

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 References

1. http://insurance.kotak.com/
2. <http://en.wikipedia.org/wiki/Life_insurance>
3. www.kotaklifeinsurance.com/.../insuranceguide/originoflife.htm.
4. Malhotra, Naresh K. and Dash, Satyabhusan. Marketing Research An Applied
Orientation , Sixth edition
5. http://www.statisticshell.com/factor.pdf
6. http://hmdc.harvard.edu/projects/SPSS_Tutorial/spsstut.shtml
7. http://www.ats.ucla.edu/stat/spss/whatstat/whatstat.htm

8. “Kotler Philip(2004),Marketing Management”

9. www.wikipedia.org
10. www.google.com
11. http://www.irda.gov.in

Personnel:-

1. Mr Sunil nirwal
2. Mr. Dinesh rana
3. Prof. Monika Mittal

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