A Project Report

On

“Consumer Perception Towards Insurance Sector”

A detailed study done in “MARKETING”

SUBMITTED IN THE PARTIAL FULFILLMENT OF REQUIREMENT

FOR THE AWARD OF THE DEGREE OF BACHELOR OF BUSINESS
ADMINIDTRATION (BBA) UNDER BHARATI VIDYAPEET DEEMED
UNIVERSITY, PUNE

Submitted by, Amey Ashok Koli Roll no-22

Batch: 2020-2023

Under the guidance of Prof: Sameer Sonawane

 ACKNOWLEDGEMENT
I am Very Delighted to submit the project for year 2022
The project Title is “Consumer Perception Towards Insurance
Sector ”. I have
competed this Project on the basis of Secondary Information.
I would Like to Thank Dr. Premashish Roy Director of Bharti
Vidyapeeth Institute of Management Studies for giving me this
opportunity to Present this project.
This project has been a great learning experience for me. I take this
opportunity to thanks Prof. Sameer Sonawane, my internal guide to the
project. He has helped me in guiding and correcting various documents
of mine with attention and care. He has taken pain to go through the
project and make necessary corrections as and when needed.
I would also thank my institution Bharti Vidyapeeth institute of
Entrepreneurship Development, also my faculty members without whom
this project would have been a distant reality. Last but not the least, I am
thankful to all those who indirectly extended their co-operation and
invaluable support to me.

Amey Ashok Koli

 CERTIFICATE

This is to certify that the Summer Internship Project (SIP) titled

Consumer perception towards Insurance sector. Is successfully done
by Amey Koli, Roll no.22 of Batch 2020-2023, Academic Year 2022-
2023, a student of Bharati Vidyapeeth (Deemed to be University)
Institute of Management and Entrepreneurship Development, Navi
Mumbai, submitted in partial fulfilment of BBA – Bachelor of Business
Administration programme affiliated to the Bharati Vidyapeeth (Deemed
to be University), Pune.

Date:

Prof. Sameer Sonawane Dr. Vijay Bidnur

Project Guide Co-ordinator
BVIMED, Navi
Mumbai
EXECUTIVE SUMMARY
 TABLE OF CONTENTS
S.No TOPIC PAGE.
NO.

CHAPTER – 1: INTRODUCTION
1.1 Industry Profile
1.2 Company Profile
1.3 Product Profile
CHAPTER – 2: DEVELOPMENT OF MAIN
THEME

2.1 Need of the study

2.2 Objectives of the study
2.3 Scope of the study
2.4 Limitations of the study
2.5 Review of Literature
CHAPTER – 3: ANALYSIS &
INTERPRETATION

3.1 Research Methodology

3.2 Analysis & Interpretation
3.3 Findings
3.4 Suggestions
3.5 Conclusion

Bibliography
Questionnaire
Chapter-1

Introduction
 1.1 INDUSTRY PROFILE

OVERVIEW OF CURRENT INSURANCE INDUSTRY

1. WHAT IS INSURANCE?

Insurance is a tool by which fatalities of a small number are

compensated out of funds (premium payment) collected from plenteous. Insurance is a
safeguard against uncertain events that may occur in the future.

It is an arrangement where the losses experienced by a few are extended over

several who are exposed to similar risks. It is a protection against financial loss arising on
the happening of an unexpected event. Insurance companies collect premium to provide
security for the purpose. Loss is paid out of the premium collected from people and the
insurance companies act as trustees to the amount so collected. These companies have
proposal forms which are filled to give details of insurance required. Depending upon the
answers in the proposal form insurance companies assess the risk and decide on the
premium. insurance can be defined as a tool in which a sum of money as a premium is
paid by the insured in consideration of the insurer’s bearing the risk of paying a large sum
.it may also be defined as a contract wherein one party (insurer) agrees to pay the other
party (insured) or his beneficiary, a certain sum upon a given contingency against which
insurance is required.Insurance industry commands massive funds through sales of
insurance products to large number of clients. Insurers also create liabilities and commit
themselves to compensate for losses occurring to the policyholders on future date. It also
plays an important role in process of capital formation.
2. NATURE OF INSURANCE

a) Risk sharing and risk transfer : Insurance is used to share the financial losses
that might occur to an individual or his family on the happening of specified events. The
loss arising from such events are shared by all the insured in the form of premium.

Example: suppose in a village, there are 250 houses, each valued at Rs.200000.Every
year one house gets burnt, resulting into a total loss of Rs 200000.If all the 250 owners
come together and contribute Rs.800 each, the common fund would be Rs200000.This is
enough to pay to the owner whose house gets burnt. Thus the risk of one owner is spread
over 250 house owners of the village.

b) Risk assessment in advance: Insurance companies are risk bearers. They assess the
risk before insuring to charge the amount of premium.

c) Its not gambling or charity: The uncertainty is changed to certainty by insuring

property and life because the insurer promises to pay a definite sum at damage or death.
Insurance is antithesis of gambling. Failure of insurance amounts to gambling because
the uncertainty of loss is always looming. Moreover insurance is not possible without
premium. So it is different from charity because charity is given without consideration.

3. SEMANTICS

1. Risk: It is defined as an uncertainty of a financial loss. It is the unintentional

decline in or disappearance of value arising from contingency.
2. Policy: It is the document which embodies the insurance contract
3. Whole life policy: It is the policy under which the amount of policy will be paid
only on death of the insured. Premiums may be payable throughout the life or for a
limited period.
4. Endowment policy: Endowment policies entitle the insured to receive the amount
of the policy on his reaching a certain age and premiums also stops. If death
occurs earlier, amount of the policy will be paid at that time and payment of
premium will also stop at that time.
5. Claim: It is the amount which an insurer has to pay against a policy.
6. Reinsurance: It refers to placing a part of the risk by an insurer with another
insurer. The object is to reduce the possible loss to be borne by the original
insurer, who pays premiums at the ordinary rates to the reinsurer. Reinsure must
pay commission to the original insurer.
7. Premium: A periodic payment made on an insurance policy.
8. Insurance penetration: It is defined as insurance premium as a share of gross
domestic product.
9. Insurance density: Insurance density is defined as per capita expenditure on
insurance premium i.e. premium per capita.
10. Actuary: The actuary is a specialist who combines an understanding of risks and
mathematical technique to develop financial products to manage these risks, price
these products. He helps in designing insurance plans and then evaluates the
financial risk of the company which it takes while selling an insurance policy.
HISTORY OF INSURANCE INDUSTRY IN INDIA

The insurance industry in India over the past century has gone through big
changes. In India this industry reveals the 360 degree turn. It turn means that it started in
India from being an open competitive market to nationalization and back to a liberalized
market again.

Insurance industry in India started as a fully private system with no restriction on

foreign participation in the Nineteenth Century. Before independence, a few British
insurance companies dominated the Market. Life insurance was first set up in India
through a British company called the Oriental Life Insurance Company in 1818, followed
by the Bombay Assurance Company in 1823 and the Madras Equitable Life Insurance
Society in 1829.All of these companies operated in India but did not insure the lives of
Indians. They were there insuring the lives of Europeans living in India. Some of the
companies that started later did provide insurance for Indians. But, they were treated as
"substandard" and therefore had to pay an extra premium of 20% or more. The first
company that had policies that could be bought by Indians with "fair value" was the
Bombay Mutual Life Assurance Society starting in 1871.

The first general insurance company, Triton Insurance Company Ltd., was
established in 1850. It was owned and operated by the British. The first general insurance
company was the Indian Mercantile Insurance Company Limited set up in Bombay in
1907.By 1938; the insurance market in India had nearly 176 companies (both life and
non-life).
8. LIFE INSURANCE

After the entry of new players and increase in the penetration levels, could see the
insurance sector cross the Rs 2,00,000-core mark in business by 2010.The current size of
the sector is estimated to be at Rs 50,000 crore, which has seen a compound annual
growth rate (CAGR) of around 175 percent in the last few years.

The insurance sector, both life and non life, is likely to grow by over 200 percent,
and private insurers are expected to achieve a growth rate of 140 percent as a result of
aggressive marketing technique. It added that state owned insurance companies are likely
to be 35-40 percent.

On account of intense marketing strategies adopted by the private insurance

players, the market share of state-owned insurance companies like GIC, LIC and others
has come down to 70 percent in last 4-5 years from over 97 percent. Despite regulation,
the private players are offering 35 percent rate of return to is policy holders against 20
percent by public-sector insurers.

The industry body also noted that India’s life insurance premium is 1.8 percent as
a percentage of GDP whereas it is 5.2 percent in the US, 6.5 percent in the South Korea.

The services sector offers immense opportunities for expansion opportunities for
expansion opportunities and the rural market, also, offers tremendous growth
opportunities for insurance companies.
 11. PRIVATE PLAYERS IN THE LIFE INSURANCE SECTOR
The different private players in the life insurance sector and their associations with
foreign companies are being given below:

COMPAN INDIAN FOREIGN TOTAL FDI FOREIG

Y PROMOTER/PARTN INSURER CAPITA N
(%)
ER L CAPITAL

(RS MN.) (RS MN.)

AMP RELIANCE None 2,170 0 0

SANMAR GROUP(ADAG)

Aviva Life Dabur Aviva (UK) 4,590 26 1193.4

Bajaj- Bajaj Auto Allianz (Germany) 3680 26 960

Allianz

Birla Sun Aditya Birla Group SunLife (Canada) 4,000 26 1,040

Life

HDFC HDFC StandardLife (UK) 2,500 18.9 470

Standard

ICICI ICICI Bank Prudential (UK) 10,850 26 2,820

Prudential

Some of the new companies who are waiting to come in to the life insurance sector are:

a. IDBI-FORTIS.
b. Syndicate Bank
c. Etc.
 1.2 COMPANY PROFILE

The Industrial Credit and Investment Corporation of India Limited (ICICI) was formed in
1955 which is incorporated at the initiative of the World Bank, the Government of India and
representatives of Indian industry, with the objective of creating a development financial
institution for providing medium-term and long-term project financing to Indian businesses.
Mr.A.Ramaswami Mudaliar elected as the first Chairman of ICICI Limited. ICICI emerges as
the major source of foreign currency loans to Indian industry. Besides funding from the World
Bank and other multi-lateral agencies, ICICI was also among the first Indian companies to raise
funds from international markets.

1. WHAT IS ‘ICICI GROUP’?

We are a part of the renowned ICICI Group, a diversified universal banking group, with a
track record of over 50 years in a variety of financial services.
ICICI was formed in 1955, as a result of the focused efforts of the World Bank, the
Government of India and the representatives of Indian Industry. Today, ICICI Bank has grown
to become India’s second largest bank, with over 24 million customers worldwide. It is also the
first bank from Asia (excluding Japan) to be listed on the NYSE.
ICICI Bank is a truly global bank, with presence at key locations across the globe in
Bahrain, Bangladesh, Belgium, Canada, China, Dubai, Hong Kong, Indonesia,
Malaysia, Russia, Singapore, South Africa, Sri Lanka, Thailand, UK, USA and Quatar.
ICICI Group’s expertise spans a vast range of financial services, including banking, broking,
mutual funds, insurance, home loans, venture funds and much more. The Group is the
largest consumer credit provider and the biggest private sector, life and general insurer in
India. Expertise across a vast range of products. All blended to bring you seamless financial
solutions that ensure you have the advantage in every financial decision. Wherever you may be
in the world.
2. STRUCTURE OF ‘ICICI GROUP’

3. OBJECTIVES OF ICICI GROUP

TRUST

We view each client relationship as a “partnership for success”. We regard your financial needs
as our own and aim to achieve your investment goals with you. We put our best resources behind
you to ensure that your investment objectives are more than met.

AGILITY

We seek to deliver superior value to you. We respond quickly and efficiently to market
opportunities, and offer the most apt financial solutions so that you can reap the best possible
benefits.
4. ICICI BANK

ICICI Bank is India's second-largest bank with total assets of Rs. 3,767.00 billion
(US$ 96 billion) at December 31, 2007 and profit after tax of Rs. 30.08 billion for the
nine months ended December 31, 2007. ICICI Bank is second amongst all the companies
listed on the Indian stock exchanges in terms of free float market capitalization*. The
Bank has a network of about 955 branches and 3,687 ATMs in India and presence in 18
countries. ICICI Bank offers a wide range of banking products and financial services to
corporate and retail customers through a variety of delivery channels and through its
specialised subsidiaries and affiliates in the areas of investment banking, life and non-life
insurance, venture capital and asset management. The Bank currently has subsidiaries in
the United Kingdom, Russia and Canada, branches in Unites States, Singapore, Bahrain,
Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre and representative
offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia
and Indonesia. Our UK subsidiary has established branches in Belgium.

ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the
National Stock Exchange of India Limited and its
Departments:

The various departments that can be seen in an insurance organization and that has been
observed by me are as follows:

a. Marketing Department: This department mainly deals with the marketing

and promotion part of the Insurance Company. They spend most of their time in
formulating strategies to make their products known to the common people and to
promote the same in a easy and cost effective way.

Sales Department: This department mainly deals with the sales part of the Insurance
Company; the department includes designations like Sales Manager and Financial
Advisor who personally contacts with people for performing the task of sales of various
products

a. Accounts/ Financial Department: This department has the task of keeping

track of the various expenses incurred by the various other departments of the
organization and also performs the task of allocating various funds to different
departments according to their requirements.
b. Human Resource Department: This department is handled by the Human
Resource manager of the company. The function of this department involves the
well being of the employees of the company, I,e, to see whether there is employee
grievance in the organization or not and if it is there what are the possible causes
for that and also try to find out solutions for the same if possible.
c. Actuarial Department: This department is under the supervision of an
Actuary who decides the premiums and charges to be taken from the policy holder
on the basis of certain information’s (like Age, Annual Income etc.) provided by
the prospective customer. The task also involves the calculation of mortality
charges which requires high statistical knowledge from one’s point of view. So,
this department involves in the calculation of various amounts to be charged from
the prospective customers.
Health Solutions -

 Health Assure Plus: Health Assure is a regular premium plan which provides long
term cover against 6 critical illnesses by providing policyholder with financial
assistance, irrespective of the actual medical expenses. Health Assure Plus offers the
added advantage of an equivalent life insurance cover.
 Cancer Care: is a regular premium plan that pays cash benefit on the diagnosis as
well as at different stages in the treatment of various cancer conditions.
 Cancer Care Plus: is a wellness plan that includes all the benefits of Cancer Care
and also provides an additional benefit of free periodical cancer screenings.
 Diabetes Care: Diabetes Care is a unique critical illness product specially
developed for individuals with Type 2 diabetes and pre-diabetes. It makes payments
on diagnosis on any of 6 diabetes related critical illnesses, and also offers a
coordinated care approach to managing the condition. Diabetes Care Plus also offers
life cover.
 Diabetes Care Plus: is a unique insurance policy that provides an additional
benefit of life cover for Type 2 diabetics and pre-diabetics
 Hospital Care: is a fixed benefit plan covering various stages of treatment -
hospitalisation, ICU, procedures & recuperating allowance. It covers a range of
medical conditions (900 surgeries) and has a long term guaranteed coverage upto 20
years.
 Crisis Cover : is a 360-degree product that will provide long-term coverage against
35 critical illnesses, total and permanent disability, and death .

Group Insurance Solutions

ICICI Prudential Life also offers Group Insurance Solutions for companies seeking to
enhance benefits to their employees.

Flexible Rider Options

ICICI Prudential Life offers flexible riders, which can be added to the basic policy at a
marginal cost, depending on the specific needs of the customer.
 1.3 PRODUCT PROFILE

Marine Insurance

ICICI Prudential's brings to India a wide range of marine cargo products from various
international markets. Their products considerably widen the scope of coverage presently
enjoyed by the insured population without necessarily involving a high premium.

Burglary insurance

Burglary Insurance for machinery, stock in trade, furniture, fixtures & fittings and for goods
held in trust or on commission for the insured is responsible. Burglary Insurance covers
burglary or housebreaking accompanied by either forcible or violent entry into/exit from the
premises and hold-up.

Engineering Insurance:

Ø Erection All Risks Insurance

The Erection All Risks policy is a comprehensive insurance, which provides complete
protection against all types of risks associated with erection, testing, commissioning of
machinery, plant and equipment during constructional stage.

Ø Boiler & Pressure Plant Insurance

It covers the risk of explosion and collapse of any boiler or other pressure plant in the course
of ordinary working.

Ø Contractor's All Risks Insurance

All types of civil engineering works, ranging from small buildings to massive dams are
exposed to damage from a wide range of causes such as fire, lightning, flood, inundation,
storm, cyclone and other accidental damages. It is a comprehensive insurance which provides
complete protection against all types of civil construction risks.
 Ø Machinery Breakdown Insurance
A COMPANY extends its hand offering Machinery Breakdown Insurance Cover ably
supported by most capable technocrats to throw more light about the mechanical side of all
machines.

Ø Marine-Cum-Erection Insurance
It is developed as a comprehensive product to manage the risk and insurance needs in course
of erection as well as during transit. It is a combination of Erection-All-Risks and Marine
Insurance to cater to the needs of the client where Marine/Transit insurance is connected with
Erection All Risks Insurance of any project.

Ø Contractor's Plant & Machinery

Contractor's Plant & Machinery is an exclusive all risks policy covering the plant &
machinery used by the contractors at the site for various projects. It covers the property
whether they are at work or at rest or being dismantled for the purpose of cleaning or
overhauling, or in the course of operations or when being shifted within the premises or
during subsequent re-erection, but in any case only after successful commissioning.

Liability Insurance:

Ø Product Liability Insurance

Liability arises from a civil wrong or breach of personal duty imposed by law on a person
and owed to his/her fellow citizens. In some countries legal rights and duties are framed in a
Civil Code. In others they are not codified but drawn from the precedent of decisions handed
down in the courts over the centuries; this is known as "Common Law".
 Ø Public Liability Act
It provides indemnity against the Insured's liability at law to the public in general (excluding
employees) for bodily injury and loss of or damage to property due to the business activities
carried on in insured's premises.

Business solutions:

Ø Industrial All Risks Policy

It’s a wide and comprehensive cover for the large sized business where the assets at all
locations of the insured exceed Rs.100 Corers. It is an All Risks Policy covering a wide
range of perils such as fire and allied perils, burglary, accidental damage, breakdown as well
as business interruption.

Ø Office Shield
A flexible policy specifically designed to meet the insurance needs of your modern office,
irrespective of the number of locations.

Ø Hotel Shield
Tailor-made cover designed to suit the specific needs of the Hotel Industry .

Ø Enterprise Shield.
It is a newly devised package providing total insurance solutions for industries. You do not
need to analyze and evaluate a large number of insurance policies to insure your business
completely.

Ø Education Shield
Tailor-made cover designed to suit the specific needs of Education Industry .

Ø Traders Shield
It is an attractive policy that provides shopkeepers with a basic insurance package and a
further range of optional covers.
 Ø All Risks Policy for Portable Equipment's
It offers an overall solution to cover portable items like laptops, mobiles, cameras and
projectors.

Ø Standard Fire and Special Perils Policy

It offers cover against fire and allied perils and the perils of nature. The policy can cover
building (including plinth and foundation), plant and machinery, stocks, furniture, fixtures
and fittings and other contents.

Ø Consequential Loss (Fire) Insurance

It provides protection against loss of profits in business due to an interruption in business
consequent upon an insured peril covered under the material damage policy.

Employee solutions:

Ø Group Personal Accident Policy

It is a worldwide cover providing protection for the employees against any accidental injuries
sustained by the individuals resulting in death and disablement.

Ø Group Health
Health Premium Platinum is a comprehensive health insurance package, designed for the
employees of company and their family members.

Ø Workmen's Compensation
Workmen's Compensation provides cover to target clients as required by law in support to
project insurances or property insurances.
 CHAPTER-2

DEVELOPMENT OF MAIN
THEME
 2.1 NEED OF THE STUDY

This study helps the company to identify its competitive position among its industrial
competitors by which the company can further improve its performance to enjoy high
reputation among clients.

This study also helps in making necessary changes in the attributes of the insurance
cover offered by the company so that the customers can enjoy the benefits of the
insurance cover.

The need for the study also arises to identify and offer additional insurance products
according to the expectations of the customers.
 2.2 OBJECTIVES OF THE STUDY

PRIMARY OBJECTIVES

Ø To compare the performance of ICICI with other competitors in the general

insurance industry.
SECONDARY OBJECTIVES

Ø To identify the position ICICI holds among other private players.

Ø To find out the strengths and weaknesses of the company’s insurance

schemes

Ø To study consumer’s awareness towards insurance products

Ø To identify the customer’s perception about the company and its products.

Ø To know about the various Investment alternatives that is mostly preferred by

the people.

Ø To find out the important criteria that people think about before investing in a
life insurance policy.

Ø To find out whether gender bias involved in investing life insurance or not.
Ø To find out the awareness of ICICI Prudential Life Insurance among the
people.
 2.3 SCOPE OF THE STUDY

This study has a wider scope among the insurance sector. The study which focuses on
various aspects such as competitive position of ICICI, strengths and weaknesses of
insurance covers, customer’s perception, etc. also holds good for other companies in
the life and non-life insurance segment.

The outcome of the study, which are based on the above aspects can be utilized by
the marketing department of both life and non-life insurance companies.

 The result of this research would help the company to have a better
understanding about the consumer’s perception towards life insurance.
 The study helps the company by creating awareness about the consumers of
different ages and income levels.
 The study also enables the company to focus the consumer’s preferences and
expectations on the product which they offer.
 1. LIMITATIONS OF THE STUDY

There were certain limitations in undertaking this research work. As it is understood

that the limitations are a part of the project, they have been overshadowed by the
benefits of the study.

Ø The survey conducted may not be considered as comprehensive as only

limited respondents could be contacted because of the time constraint.

Ø Objectives and the purposes of the study and the questions had to be
explained to the respondents and their responses may be biased.

Ø Some of the respondents were reluctant to give their responses.

Ø Only limited sample size had been considered for the study and
therefore, the conclusions drawn based on this may not be a reflection
of the entire population. The sample size chosen for the questionnaire
was only 100 and that may not represent the true picture of the
consumer perception about the Life Insurance sector.
a. Nearly 98% of the respondent belonged to the age group of 20-50 years
and only 2% were above 50 years. So, the responses and the opinions of
the experienced and aged were not available. So, the findings may not
be correct when we think about the opinion of the elderly people about
the life insurance.

b. The selection of people for the questionnaire was done on the basis of
convenient random sampling, so, there were certain cases in which the
people selected did not have any life insurance policy, so they could not
give any positive feedback regarding the important criteria to be
considered before taking a life insurance policy. So, this further reduced
the actual number of respondents to 76 from 100.
a. The product offered by different companies had different options and
names in them, so at the time of comparison it became very difficult.
The parameters for comparison were also different in the selected
companies.

b. One of the important criteria that was selected by the respondents

which they consider before taking an insurance policy was ‘Company
Image’, but there was no parameter available to compare criteria like
this between the companies.
 2.5 REVIEW OF LITERATURE

According to the recent report of Lloyd, the Indian insurance market is likely to
change in the next few years significantly largely due to regulatory changes. In
addition, premium growth is being driven by other factors such as the growing
consumer class, increased foreign direct investment, infrastructure development, and
an increased awareness of catastrophe exposure.

Despite significant positive changes, the insurance market must still face the challenge
of poor customer perceptions and the danger that the pace of reform will slow. Several
significant structural changes are expected in the insurance market that will influence
the country’s development in the medium to long term

So far, the entry of a large number of Indian and foreign private companies has led to
greater choice in terms of products and services for Indian consumers. A growing
realization of the benefits and importance of sophisticated insurance and reinsurance
tools has broadened the pool of potential buyers of insurance. Given this backdrop,
the Indian insurance market has experienced considerable growth since its
liberalization in 2000. Over the next three years, the Indian insurance market is likely
to see its process of maturation accelerate. Regulatory changes in the four areas–
products, market players, distribution and reinsurance – will drive change in the
Indian insurance market in the medium term.
• Price competition has already begun to increase and is likely to continue to do so for
the next 18 to 24months.

• The practice of cross-subsidization is likely to be phased out as risk-based pricing is

used increasingly for all products.

• As Indian insurers build a profitable portfolio, they are likely to have increased
access to the international reinsurance markets.

• Finally, rising demand for insurance is likely to be met by increased capacity as

foreign insurers look to access this growing market.

As per the recent research by Moody’s – ICRA Global Insurance, the following facts
relating to the performance of both private and public sector general insurance
companies were made.

Private Sector’s Growing Influence

The private sector has been steadily growing market share despite the fact that public
sector companies have been around for a lot longer. The private insurers enjoy
considerable operational flexibility, whereas the public sector companies have been
constrained by their traditions and inability to innovate.
Client Servicing

The public insurers have also been hampered in claims servicing by their process
oriented approach and limited operational flexibility. They have been unable to
expedite claim settlements through out-of-court negotiations since a large proportion
of their claims pertain to the third party motor segment, which is subject to
adjudication by the Motor Accident Claim Tribunal. The result is a time-consuming
and involved process.

Strong Infrastructure and Systems

Private players are not hindered by their charters or legacy systems and have
constructed technologically advanced infrastructure. They started with large
investments in technology, which helped them to build robust data management
systems. This characteristic enables in turn quick and effective decision-making for
pricing and claims settlements, attributes vital to building franchises.

On the other hand, public entities have only recently upgraded their systems and have
to grapple with transition issues, such as moving from paper to paper-less systems.
They are encumbered by legacy systems and fragmented databases, and have not fully
used their past claim experiences, something which could give them a strong pricing
edge in a de-tariffed environment.

Focused Underwriting Strategy

The private players, especially during their initial years, have selectively targeted the
more profitable lines of the public sector companies for growth. They benefit from the
experiences of the public sector as well as their international joint-venture partners.
They have drawn talent from public sector companies
Distribution – Rise of Bancassurance

The Indian general insurance industry has historically been dominated by the agency
channel, through which 75% of total premium income is sourced. But in recent
periods other channels – for example, bancassurance, brokers, corporate agents, direct
marketing and direct sales channels -- are gaining importance. Most insurers now
have tie-ups with the banks, which act as corporate agents and are remunerated on a
commission basis. For example, ICICI Lombard sources a major portion of its
business from a tie-up with ICICI Bank. Similarly, Bajaj Allianz General Insurance
Company Limited (BAIL, second largest private player) has tie-ups with large number
of banks, which contribute a big share of its total premium income.

As of December 31 2007, 267 brokers were registered with IRDA, including 228
direct brokers, 33 composite brokers and 6 reinsurance brokers. In a deregulated
environment, the broking community will have plenty of opportunity to become an
integral part of the insurance and risk financing process. At this time, low cost
channels like tele-sales and the internet are still not developed in India, mainly due to
relatively poor knowledge about insurance products and low internet penetration.

One conclusion is certain– the Indian non-life market is set to grow dramatically over
the next few years. The simplest forecasts suggest that premium income could double
in the next few years to reach USD11.6bn in 2010. When the structural changes above
are taken into consideration, this growth becomes exponential, with relatively slow
growth in 2007 rising to rapid growth by 2010.
 CHAPTER -3

ANALYSIS &
INTERPRETATION
 3.1 RESEARCH METHODOLOGY

Methodology is a systematic way of solving a problem it includes the research

methods for solving a problem it includes the research methods for solving the
problem.

Type of research - Descriptive research

Data source -Primary and Secondary data

Data collection method -Interview and survey

Data collection tools -Questionnaires

Sampling universe -Shahjahanpur

Sample size -100

SAMPLE DESIGN

The target population of the study consists of various respondents of various

places. This survey was done by collecting the data from the respondents.

SAMPLE SIZE

After due consultation with the company supervisor as well as with the college
guide, also keeping in mind the requirements of the company for the research, the
sample size that was found to be appropriate for the study was 100.
SAMPLING TECHNIQUE

The sampling technique that adapted to conduct the survey was ‘Convenient Random
Sampling’ and the area of the research was concentrated in the city of Erode only. The survey
was conducted by visiting different places like colleges, corporate offices, respondent’s home
etc...

DATA SOURCE

The task of data collection begins after a research problem has been defined. In this study
data was collected through both primary and secondary data source.

A. PRIMARY DATA

A primary data is a data, which is collected for gathering information first time and to
analyze the problem. In this study the primary data was collected among the consumers using
questionnaire.

B. SECONDARY DATA

Secondary data consist of information that already exits somewhere, having been
collected for some other purpose. In this study secondary data was collected from company
websites, magazines and brochures.

STATISTICAL TOOLS

Simple percentage analysis, ranking method and chi square analysis are the main

statistical tool used for the study.

 SIMPLE PERCENTAGE ANALYSIS

Percentage refers o a special king of ratio in making comparison between two

or more data and to describe relationships. Percentage can also be used to compare the
relation terms between two or more sources of data.

Percentage of respondents = Number of respondents * 100

Total respondents

RANKING METHOD (WEIGHTED AVERAGE METHOD)

This technique was used to rank out the opinion about the consumers
preference towards different investment alternatives. The order of merit given by the
respondents was converted into ranks by using the following formula .

Weightage Score =  Wi * Xj

Where Wi = Weightage value and Xj = Ranking position value

CHI SQUARE TEST

Chi Square is a statistical measure used in the context of sampling analysis for
comparing the variance to a theoretical variance. In order to judge the significance of
association between two attributes, we make use of chi square test by finding the
values of chi square using the chi square distribution.
 3.2ANALYSIS AND INETERPRETATION
Market share of LIC and Private Players

Market Players Market share in

percentage
Private players 28.44
LIC 71.56
Total 100

Interpretation:
LIC market share continued to decline in the period up to June 2007, it declined to
71.56% from 78.23% in the same period last year. On the other hand the market share
of the private players is continuously growing up; it increased to 28.44% from 21.77%
in terms of insurance premium.

Market share of LIC and Private Players

 Market Share among Private players

Private players Market share in Market share

percentage change in
percentage
ICICI Prudential 29 4

Bajaj Allianz 21 1

SBI Life 10 0
HDFC Standard 9 1
Reliance Life 9 0
Birla Sunlife 5 -1
Kotak Mahindra 3 0
Old Mutual

Met Life 3 1
Aviva 3 0
Tata AIG 3 1
Max New York 2 -4
ING Vysya 2 -1
Bharti Axa Life 1 0

Sahara Life 0 0

Shriram Life 0 -1

Private total 100

 Market Share among Private players

Market share among private players ICICI Prudential

Bajaj Allianz
5%
SBI Life
9% 3% HDFC Standard
9%
3% Reliance Life
3% Birla Sunlife
10% 2% Kotak Mahindra
3%
Met Life
5% Aviva
2%
Tata AIG
21% 1% Max New York
0% ING Vysya
29% Bharti Axa Life
0%
Sahara Life
Shriram Life
Interpretation:

ICICI PRUDENTIAL BECOMES THE MARKET LEADER AMONG

PRIVATE PLAYERS:

ICICI Prudential strengthens its position at the top of the heap by increasing its market
share by 4% in the month of Jan 2008, followed by Bajaj Allianze with 21% market
share. These two private players contribute 50% of the total insurance market among
the private players.
 Various investment alternatives available to consumers

Let us see what are the various investment alternatives that are available to the people
and among that which are the most preferred one. Now, from the data collected from
the 100 respondents which were surveyed through the questionnaire, the following
representation can be made:

Investment Total Rank

Alternatives score
Bank Deposits 6.75 I

Insurance 6.46 II

Post office 5.57 III

Gold & Silver 5.33 IV

Real Estate 5.07 V

Mutual fund 4.83 VI

Equity/Shares 3.84 VII

Public Provident 3.78 VIII
Fund(PPF)
Bond & Debentures 1.74 IX

Interpretation:
From the above table-2.5 it can be seen that ranks for theses investment alternatives where
analyzed by weighted average method. From this analyze we found Bank Deposits is the
most preferred investment alternative among the people with the average of 6.75, secondly
Insurance with the average of 6.46, followed by other investment alternatives like Post
Office (5.57), Gold and Silver (5.33), Real Estate (5.07), Mutual Fund (4.83), Equity (3.84),
PPF (3.78) and least preferred alternative is that Bond and Debenture (1.74).we understood
from this analyze that people prefer the safe and secure investment alternatives like bank
deposits, insurance, real estates,
Segmentation of the respondents on the basis of certain important criteria:

Now, let us turn our attention towards the respondent who were covered under this study.
These respondents can be categorized on the basis of certain important criteria like age
group, annual income, life insurance policy holders and awareness of ICICI Prudential Life
Insurance in the following way

Age Group
Age Group No of Percentage
Respondent
Below 30 Yrs 50 50
31-40 Yrs 32 32
41-50 Yrs 16 16
51-60 2 2
Above 60 Yrs 0 0
Total 100 100

Interpretation:
From this table-2.6 we can see that 50% of the respondent belonged to the age group of
below 30 years, followed by 32% who belonged to the age group between 31-40 years, then
16% of respondents belong to 41-50 years and only 2% from the respondents belong to 51-
60 years but there is no respondent from the age group above 60
 Hold Life Insurance Policy

Important criteria before taking an life insurance

On the basics of insurance policy:

Now, let us see what criteria people consider most important before taking a life
insurance policy (the criteria for the study have been mentioned before). Here, the
highly important criterion as perceived by the people is rated as 5, if people perceived
that is only important it is rated 4, if people perceived that it can be only neutrally
important is rated as 3, then the least important criterion is being rated as 2 and if
perceived that it is not important it is rated as 1(as there are 8 criteria that have been
suggested under the research study). Here the number of respondent is only 76,
because those 26 people who do not have any life insurance policy have been
excluded from the purview of the study.
To find whether gender bias influenced for investing in life insurance
Table given below shows the data obtained during study of life insurance
Having Not having Total
insurance insurance
Male 47(44.84) 12(14.16) 41
Female 29(31.16) 12(9.84) 59
Total 76 24 100

Sources are
Null Hypothesis

(Ho): There is no gender bias for investing in insurance

Alternative Hypothesis

(H1): There is gender bias for investing in insurance .

Chi square test

Factor Level of Degree of Table value Chi square

significance freedom
Gender 5% 1 3.84 1.059

Result:

Chi square is less than the table value.

Hence accept the null hypothesis (Ho)
We can conclude that gender bias doesn’t influence for investing in life insurance.
 3.3 FINDINGS

The findings that can be drawn from the survey conducted by us can be
summarized in the following way:

a. Bank Deposits are the most preferred investment alternative which is available
to people followed by alternatives such as Insurance, Real Estate, Gold and
Silver, Mutual etc.
b. It was found that 61 respondents were willing to take a life insurance under LIC
and 33 respondents under ICICI Prudential Life Insurance.
c. Among the 76 insurance holders 63 have policy of LIC whereas only 11
respondents have policy of ICICI Prudential Life Insurance.
d. Only 47% of the total respondents are aware of the joint venture between ICICI
bank with Prudential of UK to form a company called ICICI Prudential Life
Insurance in the year 2000. 22 respondents are interested to invest in ICICI
because of the company’s growth potential and brand image that ICICI has.
e. The scheme mostly preferred by insurance holders was life protection schemes
like death benefits followed by money growth plans like wealth creation and
high return plans.
f. It was found that nearly 50% of the respondents usually save less than 15% and
the kind of investment mostly preferred by the respondents were both long and
short term.
g. According to the survey safety is the most important criterion which is
excepted among all the respondents towards their investment alternatives
followed by Return, Brand Name, Tax Benefits, Liquidity and Capital Growth.
h. According to the study company image is to be the highly important criteria
which we consider before taking up a life insurance this is mainly because
people expect safety and security for their money which they invest, followed
by the factor Premium which we pay to the insurer and then Bonus and Interest
paid by the company, services etc.

a. People who belong to different age groups have different perception regarding
the most important criteria before taking the decision on a life insurance policy.
b. People who belong to different income groups also have different perception
regarding the important criteria concerned with the life insurance.
 3.4 SUGGESTIONS

1. Consumer should be aware of company’s profile and returns associated with

insurance.

2. The Financial advisor should be right enough to serve the consumers. The
consumer

should also be aware of the advisor or others who is looking after their
investments.

3. Company should publish their performance by comparing it with their

competitors.

4. Company should adopt strategies to explore that private insurance companies

are

safer and securer than public insurance company like LIC.

5. Middle income people suggest that premium can be collected on monthly basis
instead

of twice a year.

6. Company’s reputation is more important because bad impression on image or

brand name is considered while decision making among consumers.

 3.5 CONCLUSION

Insurance is a tool by which fatalities of a small number are compensated

out of funds collected from plenteous. Insurance is a safeguard against uncertain
events that may occur in the future. Over the last 5 to 6 years, the ICICI Prudential
life insurance company have tripled investors' money than the other competent,
this progress leads to increase the company image and makes a way to lead the
total insurance market.

Thus, the study also comprise company image is the highly important
criteria that consumers consider before taking up a life insurance. This is mainly
because people expect safety and secure for their money which they invest,
followed by the factor Premium which we pay to the insurer and then Bonus and
Interest paid by the company, services etc.
 Bibliography

v Books & Magazines

Ø Kothari, C.R, "Research Methodology" Wishwa Prakashan, Delhi,

2004
Ø Sawyer, A.G and Howard, David J, Journal of Marketing Research
1999
Ø Business World and Business India Magazine
Varshney, P.N “Banking law and Practice
 APPENDIX

A Study of Consumer’s Perception Towards Insurance Sector

Questionnaire

Name -

Q1. What is your age

o 15 – 30
o 31 – 45
o 46 – 60
o 60 Plus
Q2. Educational Qualification:
o Under Graduate
o Post graduate
o Diploma
o Other

Q3. Occupation:
o Student
o Employed
o Self-employed
o Other

Q4. Annuel Income Level

o Below 1 Lakh
o 1 – 3 Lakh
o 3 – 5 Lakh
o Above 5 Lakh
Q5. What percentage of your Salary do you usually save?
o Less than 15%
o 15 – 20 %
o 20 – 25 %
o Greater than 25 %

Q6. What kind of investment do you prefer

o Short term
o Long term
o Both

Q7. Do you have life Insurance Policy? (If ‘NO’ then please go to question no. 14)
o Yes
o No

Q8. If ‘Yes’ Which Insurance Company Policy, do you have?

o LIC
o HDFC
o RELIANCE LIFE

Q9. What scheme of Insurance Policy have you taken?

o Life protection plan
o Health plan
o Education
o Others
Q10. Among the following Life Insurance Companies in which company
you will be Willing to take a life insurance?
o Bajaj Allianz
o SBI
o Reliance
o Sahara
o HDFC
o LIC
o ICICI
o TATA AIG

Suggestions _______________________________________
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