Free Business Essays - Consumer Life Insurance
Awareness of Financial Planning and Consumer’s Perception about Life Insurance Industry
Executive Summary
- HDFC Standard Life Insurance has core competence in selling and has a very aggressive sales team. Since it is a services industry where word of mouth is very important. A negative word of mouth may remove 10 existing customers on the other hand a positive word of mouth may earn 10 customers. So service should be besieged at a level, which not only should meet the customer’s expectation but also exceed it.
- However understanding the market, consumer preference and introducing new products to suit different tastes and at the same time offering a value product would prove to be the key steps to fight competition.
- An important activity in any organization’s sales strategy is marketing. Marketing helps in promoting the products and create a recall value and branding to the products in the targeted market. Marketing department perform the initial market study for the suitability of the product launches; study the market requirements in the existing markets to further strengthen the market capitalization identity the feature need for a longevity of a product.
- The whole project work of 2 months gave an understanding that the insurance is one of the most difficult product to sell because of its nature being intangible. Insurance sector has a huge potential in India to grow, keeping in mind the huge unexplored market and increasing per capita income of the country. People today are more educated and hence more aware and receptive towards the concept of life insurance.
- Private players in the market have really revolutionized the insurance industry by providing immaculate services, unique policy options , great distribution channels and great awareness through advertisement.
- The real difference today lies in how much, the customers are aware of the brand and how much do they have faith in the brand. The distribution channel and reaching the customer first is also a major aspect to counter the competition.
- Insurance is a product that is sold my putting the hands over the nerve of emotion so that the product and the company should be positioned as a family member to the client.
- Major thing is to do the marketing at two levels both internal as well as external. In this business, because the products are almost same for all the companies, the real edge can be provided if the life advisors or agents of the company themselves have real faith on their products and integrity of the company. Only a well motivated and aware sales person can make the great sales. The other type of marketing is external marketing, which is done for the end customer of the product and this marketing should also be appropriate providing the company a great positioning in the minds of the customer.
- I have learned a lot during my training in HDFC-SLIC. My seniors taught me different aspects of the corporate world and how to make effective sales. They gave me the deep insight of the insurance sector. My Industry guide did not provide me with any kind of leads and databases, so that I could put my efforts and generate my own leads.
- During my training, I interacted with many people who were unknown to me and in the nascent stages I was having a little bit of hitch but later on I started enjoying while interacting with the customers.
- I brought business for the company by selling two ULIP’s and bringing 3 recruitments for Financial Consultant.
Introduction
Insurance Industry
The insurance sector in India
With the establishment of a British firm,life insurance came to India from the United Kingdom. After Oriental Life Insurance Company in Calcutta in 1818, Bombay Life Insurance Assurance Company in 1823, the Madras Equitable Life Insurance Society in 1829. & the Oriental Go as sub-standard & charged extra premium of 15% to 20%.
Bombay Mutual Life Assurance Society, an Indian insurer which came into existence in 1871, was the first to cover Indian lives at normal rates. Government Security Life Assurance Company in 1874.Prior to 1871 Indian lives were treated
The Indian Life Assurance Companies Act. 1912 was the first statutory measure to regulate life insurance business. Later in 1928, the Indian Insurance Companies Act was enacted, to enable the govt. to collect statistical information about both life & non-life insurance business transacted in India by Indian & foreign insurers, including the provident insurance society.
Comprehensive arrangements were, however, brought into effect with the enactment of the Insurance Act. 1938. Efforts in this direction continued progressively & the Act was amended in l950, making far reaching changes, such as requirement of equity capital for companies carrying on life insurance business, stricter controls on investment of life insurance companies, ceiling on the expenses of management & agency commission etc.
By 1956, 154 insurers, 16 non-Indian insurers & 75 provident societies were carrying on life insurance business in India. On 19n January 1956, the management of the entire life insurance business of 229 Indian insurers & provident insurance societies & the Indian life insurance business of 16 non-Indian life insurance companies then operating in India, was taken over by the central govt. & then nationalized on 1st September 1956 when Life Insurance Corporation came into existence.
An ordinance was passed in 1968 to amend the Insurance Act to regulate/control non-life insurance resulting in set up of GIC in 1973. Malhotra committee submitted its report in 1994 & recommended means to reintroduce an element of, competition by withdrawing the exclusivity of LIC & GIC. In 1997, Insurance Regulatory Authority (IRA) was established which was later re-styled as IRDA in 1999.
The Insurance Regulatory and Development Authority (IRDA) reforms in the Insurance sector came up after approval of IRDA Bill in Parliament in December 1999. Since the incorporation of IRDA as a statutory body in April 2000 it has focused on scheduling of framing regulations and registering the private insurance companies.
Another decisions were taken simultaneously to provide the supporting systems to the insurance sector and in particular the life insurance companies was the launch of the IRDA’s online service for issue and renewal of licenses to agents.
The sanction of institutions for giving training to agents ensures that the insurance companies would have a trained workforce of insurance agents for selling their products.
Globally compatible regulations have been set up by IRDA after being set up as an independent statutory body.
History of Insurance
Insurance has been an institution of human society for thousands of years, having been practiced by Babylonian traders as long ago as the 2nd millennium BCE. Ultimately it was given legal mention in the Code of Hammurabi, and practiced by early Mediterranean sailing merchants.
The Greeks and Romans had "benevolent societies" which acted to be concerned for the families and funeral expenses of members upon death. Guilds in the middle ages used to serve a similar purpose. Insurance became much more complicated in post-Renaissance Europe, and specialized varieties developed.
In America, Benjamin Franklin had helped to popularize and create standard the practice of insurance, particularly against fire. The 19th century saw a rise in the government regulation of insurance, and the 20th century had seen further specialization and, in the United States, a bit of deregulation that allowed other financial institutions, such as banks, to offer insurance. The growing ability of science to predict catastrophes of any measure or variety continues to affect the way insurance is conducted.
What is Insurance?
Insurance is a legal contract that protects people from the financial costs those results from loss of life, loss of health, lawsuits, or property damage. Insurance provides a means for individuals & society to cope up with some of the risks faced in every day life by every body. People purchase contracts of insurance, called a Policy, from various insurance companies.
Almost every person existing in this world is associated with insurance, directly or indirectly. Directly, in the sense that he/she has insured his/her life by some kind of insurance policy from any company. Indirectly, in the sense they must have insured the assets of their own for example their house, car. or any thing else.
Types of insurance companies
Insurance companies may be classified as:
1. Life insurance companies who are having business of selling life insurance, annuities and pensions products. 2. Non-life or general insurance companies, who are having business of selling other types of insurance.
In many countries, life and non-life insurers are subject to different regulations, tax and accounting rules. The main purpose for the distinction between the two types of company is that life business is very long term in nature - coverage for life assurance or a pension can cover risks over many decades.
By contrast, non-life insurance cover covers shorter periods such as one year. Companies even sells both life and non life insurance, in which case they are sometimes known as composite insurance companies.
Reason for insurance
In life, losses are sometimes unavoidable. People may fall seriously sick or lose income or savings to pay off medical bills. Individuals or their relatives may come across untimely death, whatsoever the reason may be. The assets of people may get damaged due to some heavenly act or by some nuisance creator.
No one can telling advance that when a loss will occur or how serious that loss will be. The ambiguity surrounding potential losses is known as risk. Insurance offers a way for people to replace risk with known costs- the costs of buying & maintaining insurance policies.
Insurance pools risks shared by many people, thereby, reducing the risks faced by a group. People pay to buy insurance coverage for protection from risk. In exchange, all policy holders for people who own insurance policies receive a promise that the group of policy holders as represented by the insurance organization will pay when any policy holder experience any kind of loss.
Financial Consultant
Financial Consultants are those sources of a company who have their own relations and personal contacts among common public that they use to generate business through. Company has a set of criterias to recruit these Financial Consultants. The following are the basic requirements.
- Person should be at least 12th passed.
- Person should complete IRDA training.
- Person should clear the IRDA exam.
Some other criteria:
- Person should have good personal contacts.
- Person should have convincing power.
- Person should be above 18th year old.
When a person applies for becoming a FC, he has to submit some documents to initiate the process. These documents include:
- Rs 825 (Online Examination) or Rs. 925 (Manual Examination)
- PAN Card
- Address Proof
- Education Proof
- 10 Photograph
- Cheque (Cancelled with signature)
When he submits all the above documents, he gets registered and the date of exam gets generated accordingly. He get a Pre-Recruitment book By IRDA and he has to attend 50 hours online training.
Once he go through all these steps of recruitment, he becomes the legal Financial Consultant of the company and reserve the right to sale the policy to any prospect client also he is paid the commission a certain percentage. There are some reward and tour package which are also given to them.
Company Profile
HDFC Standard Life Insurance Company Limited
Introduction
HDFC is a professionally managed organization with a board of directors consisting of eminent persons who represent various fields including finance, taxation, construction and urban policy & development. The board primarily focuses on strategy formulation, policy and control, designed to increasing value to shareholders.
About HDFC:
- HDFC is India’s leading housing finance institution and has helped build more than 23, 00,000 houses since its incorporation in 1977.
- In Financial Year 2003-04, HDFC’s assets under management crossed Rs. 36,000 Cr.
- As at March 31, 2004, exceptional deposits stood at Rs. 7,840 crores. The depositor base is around 1 million depositors.
- It has been rated ‘AAA’ by CRISIL and ICRA for the 10th consecutive year
- It is enriched with stable and experienced management
- It has high service standards
- Enen it is awarded The Economic Times Corporate Citizen of the year Award for its long-standing commitment to community development.
- HDFC was presented the ‘Dream Home’ award for the best housing finance provider in 2004 at the third Annual Outlook Money Awards.
- It entered into various sectors and offering services like banking, mutual funds etc, and with the privatization in insurance sector, it also entered into insurance mark
About Standard Life:
- The Standard Life group has been looking after the financial needs of customers for over 180 years
- It currently has a customer base of around 7 million people who rely on the company for their insurance, pension, investment, banking and health-care needs
- Its investment manager currently administers £125 billion in assets
- It is a leading pensions provider in the UK, and is rated by Standard & Poor's as 'strong' with a rating of A+ and as 'good' with a rating of A1 by Moody's
- Standard Life was awarded the 'Best Pension Provider' in 2004, 2005 and 2006 at the Money Marketing Awards, and it was voted a 5 star life and pension’s provider at the Financial Adviser Service Awards for the last 10 years running. The '5 Star' honor has also been awarded to Standard Life Investments for the last 10 years, and to Standard Life Bank since its inception in 1998. Standard Life Bank was awarded the 'Best Flexible Mortgage Lender' at the Mortgage Magazine Awards in 2006
- Its business operates within six areas: UK Life & pensions, Bank, Healthcare, Investments, Canada and International.
The Partnership:
HDFC and standard life insurance first came together for a joint venture to enter life insurance market, in January 1995. It was clear from the outset both companies shared values and beliefs and a strong relationship quickly formed. In October 1995 the company had signed a 3-year joint venture agreement.
Around this time, standard life purchased a 5% stake in HDF, further strengthening the relationship.
In October 1998, the joint venture agreement was renewed and additional resource had been made available. In January 2000, an export team from the UK joined pocked team from HDFC to r\from the core project team, based in Mumbai. Around this time standard life purchased a further 5% stake in HDFC and 5% stake in HDFC Bank.
For further development, standard life agreed to participates in the Asset Management Company promoted by HDFC to enter the mutual fund market. The mutual fund were launched on 20th July 2000.
Key Players
Mr. Deepak S. Parekh , Chairman of the company is also the executive chairman of housing development finance corporation limited (HDFC limited).
Mr. Deepak M. Satwalekar is the MD and CEO of the company since November, 2000.
Group Companies
- HDFC Bank: World class Indian bank- among the top private banks in India.
- HDFC Amc: One of the top 3 amcs in India- preferred investment manager.
- Intelenet Global: BPO services for international customers.
- Cibil: Credit information bureau India limited.
- HDFC Chubb: Upcoming Private Companies in the field of general insurance.
- HDFC mutual fund
- HDFC reality.com: It helps to search properties in all major cities in India
- HDFC securities
Corporate Objective
Mission
To be the top new life insurance company in the market. This does not just mean being the largest or the most productive company in the market, rather it is a combination of several things like-
- Customer service of the highest order
- Value for money for customers
- Professionalism in carrying out business
- Innovative products to cater to different needs of different customers
- Use of technology to improve service standards
- Increasing market share
Vision 'The most successful and admired life insurance company, which means that we are the most trusted company, the easiest to deal with, offer the best value for money, and set the standards in the industry’ the most obvious choice for all'. Values
- Integrity
- Innovation
- Customer centric
- People care one for all
- Teamwork
- Joy and simplicity
Product Scope
The products of the company are categorized into various sections which are as follows:
- Individual products
- Group products
- Rural products
- Social products
- Tax benefits
Individual Products
- HDFC Children's Plan,
- HDFC Unit Linked Young Star,
- HDFC Unit Linked Pension,
- HDFC Loan Cover Term Assurance Plan,
- HDFC Endowment Assurance Plan,
- HDFC Unit Linked Young Star Plus
- HDFC Money Back Plan,
- HDFC Personal Pension Plan,
- HDFC Unit Linked Endowment,
- HDFC Unit Linked Pension Plus,
- HDFC Single Premium Whole Of Life Plan,
- HDFC Term Assurance Plan,
- HDFC Unit Linked Endowment Plus,
At HDFC Standard Life, realize that not everyone has the same kind of needs. Keeping this in mind, varied range of products that customer can choose from to suit all needs. These will help secure customer future as well as the future of family.
Protection Plans
Customer can protect his family against the loss of his income or the burden of a loan in the event of his unfortunate demise, disability or sickness. These plans offer valuable peace of mind at a small price.
HDFC Standard Life Protection range includes Term Assurance Plan & Loan Cover Term Assurance Plan.
Investment Plans
HDFC Standard Life Single Premium Whole of Life plan is well suited to meet long term investment needs. HDFC Standard Life provides with attractive long term returns through regular bonuses.
Pension Plans
HDFC Standard Life Pension Plans help secure financial independence even after retirement. Pension range includes Personal Pension Plan, Unit Linked Pension, and Unit Linked Pension plus Savings Plans.
Savings Plans
HDFC Standard Life Savings Plans offer flexible options to build savings for future needs such as buying a dream home or fulfilling children’s immediate and future needs.
Group Products
- Gratuity Group Unit Linked Plan,
- Leave Encashment,
- Superannuation Group Unit Linked Plan,
- Group Term Insurance,
- Group Variable Term Insurance,
- Group Unit Linked Plan
Objective
The main aim of the study is to accomplish the following objective:
- To know the customers awareness about financial planning as per their age groups and occupations.
- To know the motivational factors those made them buy an insurance policy from the company.
- To know the image of the private and public life insurance companies in the minds of the customers.
- To know the preferences of the people in the taking policies by conducting market survey.
- To know the Brand awareness of HDFC Standard Life Insurance
Research Design
A Research Design is the framework or plan for a study which is used as a guide in collecting and analyzing the data collected. It is the blue print that is followed in completing the study. The basic objective of research cannot be attained without a proper needed to conduct the research effectively.
It is the overall operational pattern of the project that stipulates what information needs to be collected, from which sources and by what methods.
Research design is needed because it facilitates the smooth selling of the various research operations. Research design stands for advance planning of the methods to be adopted for collecting the relevant data and techniques to be used in their analysis keeping in the view the objective of the research and the availability of the staff, time and money. In this research, it was EXPLORATORY RESEARCH and DESCRIPTIVE RESEARCH.
Exploratory research is one in which we don’t know about the problem. We have to find out the problem and then work on solving the problem whereas in case of descriptive research, we know the problem. We just have to find the solution to the problem.
As in first case we tried to find out the problem area, as in initially there was problem in pitching the right thing to the customer and finding out the right customer who is actually interested in entering into insurance market. Once the problem was known, the descriptive research was applied as to what benefits and extra things could be given to customer so as to attract them.
Sampling Plan
Sampling
It is the process of selecting a small number of elements from a larger defined target group of elements i.e. Population, such that the information gathered from the small group will allow judgments to be made about the larger groups.
Sample Design
Probability sampling is used to gather the data, as there is no preference given to any sample unit and each has equal chance of getting selected to study. Further in probability sampling the Area Sampling is used because the data collected for the project is according to the area i.e. the data is gathered from the particular area.
Sample Size
The sample size is 100 respondents. And the results & interpretations are totally based on data gathered from these Respondents.
This is the first time when you interact with a person and try to get the information from him about the industry or the company and understand the customer’s insight i.e. what actually does a customer expects from the companies.
The objective was to know the awareness about the financial planning among the customers and it was done by getting a questionnaire filled by them.
Area of Operation
Faridabad, Connaught Place and Vikaspuri.
Methods of Data Collection
In the project, there is the main requirement of the Primary Data. So to gather primary data, a well structured Questionnaire is used.
Limitations
- Feedback from the respondents may be biased.
- Sample Size: the sample size is only 100, which may not give a true picture of the consumer Preference pattern.
Objective
The main aim of the study is to accomplish the following objective:
- To know the customers awareness about financial planning as per their age groups and occupations.
- To know the motivational factors those made them buy an insurance policy from the company.
- To know the image of the private and public life insurance companies in the minds of the customers.
- To know the preferences of the people in the taking policies by conducting market survey.
- To know the Brand awareness of HDFC Standard Life Insurance
Research Design
A Research Design is the framework or plan for a study which is used as a guide in collecting and analyzing the data collected. It is the blue print that is followed in completing the study.
The basic objective of research cannot be attained without a proper needed to conduct the research effectively. It is the overall operational pattern of the project that stipulates what information needs to be collected, from which sources and by what methods.
Research design is needed because it facilitates the smooth selling of the various research operations. Research design stands for advance planning of the methods to be adopted for collecting the relevant data and techniques to be used in their analysis keeping in the view the objective of the research and the availability of the staff, time and money. In this research, it was EXPLORATORY RESEARCH and DESCRIPTIVE RESEARCH.
Exploratory research is one in which we don’t know about the problem. We have to find out the problem and then work on solving the problem whereas in case of descriptive research, we know the problem. We just have to find the solution to the problem.
As in first case we tried to find out the problem area, as in initially there was problem in pitching the right thing to the customer and finding out the right customer who is actually interested in entering into insurance market. Once the problem was known, the descriptive research was applied as to what benefits and extra things could be given to customer so as to attract them.
Sampling Plan
Sampling
It is the process of selecting a small number of elements from a larger defined target group of elements i.e. Population, such that the information gathered from the small group will allow judgments to be made about the larger groups.
Sample Design
Probability sampling is used to gather the data, as there is no preference given to any sample unit and each has equal chance of getting selected to study. Further in probability sampling the Area Sampling is used because the data collected for the project is according to the area i.e. the data is gathered from the particular area.
Sample Size
The sample size is 100 respondents. And the results & interpretations are totally based on data gathered from these Respondents.
This is the first time when you interact with a person and try to get the information from him about the industry or the company and understand the customer’s insight i.e. what actually does a customer expects from the companies.
The objective was to know the awareness about the financial planning among the customers and it was done by getting a questionnaire filled by them.
Area of Operation
Faridabad, Connaught Place and Vikaspuri.
Methods of Data Collection
In the project, there is the main requirement of the Primary Data. So to gather primary data, a well structured Questionnaire is used.
Limitations
- Feedback from the respondents may be biased.
- Sample Size: the sample size is only 100, which may not give a true picture of the consumer Preference pattern.
Data Collection
The primary data from the market is gathered with the help of questionnaire. During the data gathering the main focus was on knowing that are respondents are aware of Financial Planning and if they are aware about it than are they taking life insurance.
Than next thing to be analyzed was that from which sector, they are preferring Life insurance policies i.e. from LIC or Private Players. Another thing which research will help to know is that where will a respondent will like to invest its savings.
The remaining research is based on to know about the preferences that make people to invest in insurance and things which drive them to buy insurance. Data is mainly collected from people of age group 35-45 years. The respondents are mainly from business class and other major respondents are from employees group that’s why the respondents are from income group above 2 Lakhs so they are best samples to be used for research. They are earning group so they are also saving and one means to invest saving is
Insurance Analysis & Interpretation
Figure 1:
Interpretation:
The above graph represents the percent of respondents of different age groups. The highest number of respondents (40%) belongs to 35-45 yrs of age. And minimum respondents are below 25 yrs.
Figure 2:Interpretation:
The above graph represents the percent of male and female respondents. Our analysis caters the preference of 69% males and 31 % females.
Figure 3:
Interpretation:
The above graph represents the marital status of the respondents. The major chunk of respondents belongs to Married group of people i.e. 72 %
Figure 4:
Interpretation:
The above graph represents the percent of different occupation of the respondents. Mainly the respondents are of Business group (46 %) and than are from employees group i.e. 33%.Our analysis less focuses on students (9%).
Figure 5:
Interpretation:
The above graph represents annual income of the respondents. Maximum respondents have there income between 2-10 Lakhs as respondents belongs to business group and are employees group. Since they belong to high earning group they may be investing there savings in Insurance and other sectors for Tax benefit and other benefits.
Figure 6:
Interpretation:
The above graph the percent of awareness about financial planning related to different age group. People belonging to less than 25 yrs are the only one who has no information about it. Even there are many respondents who are not having full information about financial planning.
Figure 7:
Interpretation:
The above graph represents the awareness level among the respondents as per their occupation. 100% of not at all knowledge about Financial Planning is among the students. Other groups have some awareness about it. But they even do not have full information.
Figure 8:
Interpretation:
The above graph represents the awareness among different respondents as per there annual income. People who are not earning consist of respondents who are not at all aware about what is Financial Planning.
Table 1:
Correlations
Interpretation:
The above table represents the saving pattern of respondents as per different age groups. Since less than 25 yrs. Persons are from student group so they are not having any income so they are not saving anything to invest. People of 25-35 yrs are the one who mainly invest in insurance as that age is when they start planning for future. Age group of 35-45 yrs and above 45 yrs is having almost same preference to invest in insurance.
Figure 9:Interpretation:
The above graph represents that the students not able to invest as they are not earning and therefore are not able invest. Employees are mainly interested in putting there money in share markets. Business men are investing their earnings in insurance, banks mutual funds and real estates.
Figure 10:
Interpretation:
The above graph represents the percent of respondents who have insurance depending upon the age group. Respondents belonging to age group above 35 yrs have insurance. And age group of 25-35 yrs is the people who should be targeted by the insurance companies as they are potential customers as they prefer investing in insurance.
Figure 11:
Interpretation:
The above graph depicts the percent share of LIC, Pvt. Players and LIC & Pvt. Companies. LIC & Pvt. Co. enjoys the major share of 43.53 %. Than comes LIC having 30.59 % and than the remaining is covered by Pvt. Companies. So LIC is the biggest player in insurance companies as people easily trust on it.
Figure 12:Interpretation:
The above graph shows the reasons for not investing in insurance by different respondents. The main reason is that they do not have funds and even they do not have proper knowledge. Other reasons for not investing are insurance is too risky affairs and investing in it is wastage of funds.
Figure 13:
Interpretation:
The above graph represents the pattern in which respondents like to pay the premium amount. Mainly respondents like to invest monthly because paying installment in small amount is more convenient to pay in huge amount. But 26 % of respondents like to pay premium in yearly basis. Quarterly installment is least preferred.
Figure 14:
Interpretation:
The above graphs shows the reasons which make a person select an insurance companty.31% respondents base their choice by the personal relation they have with the Financial Consultant or the person who is selling insurance to them. Policy features also plays important role in selection of company. Other reasons which affect choice are the brand image (16%) and advertising (12%)
Figure 15:
Interpretation:
The above graph represents the number of respondent selection pattern as per their age. Generally age group 35-45 yrs base their decision on trust so they prefer taking policy from the persons who have good relation with them.25-35 yrs age group person give importance to all the reasons like brand image , advertising policy features and so on.
Figure 16:
Interpretation:
The above graph reveals that 58 % of customers think that they are not told every aspect of the policy at the time of purchasing by the agent or the person selling it.
Figure 17:
Interpretation:
The above graph shows that 69% of respondents would like to go for traditional plan over ULIP at the current market situation as returns are not affected by the market situation and risk is very low. Some people are risk seekers and want high returns so they prefer ULIP.
Figure 18:
Interpretation:
The above graph emphasizes on the means by which people get informed about the life insurance and its benefits. Mainly Friends are the means for gaining information. Even insurance companies and advertisement spread information about insurance and its benefits.
Figure 19:
Interpretation:
The above graph depicts the purpose of taking life insurance by the respondents. The major reason for taking insurance is to save tax or tax benefit (33%). 23% of respondents opt for insurance for protection of there life. Investment and retirement planning are also prominent reasons for taking life insurance.
Figure 20:
Interpretation:
The above graph depicts that almost all the respondents are aware that HDFC is also in business of selling Life Insurance Policy.
Figure 21:
Interpretation:
The above graph represents the percent of preference of person from whom to buy insurance by respondents. Mainly this decision is based on trust so respondents prefer to buy insurance from their friends or relatives (47%). 38% respondents like to buy insurance from Insurance agents and 12% will like to buy on advise of or from employer or company.
Conclusion
- There has been a tremendous change in the insurance industry and with it, there has been continuous growth in the sector both in indian as well as world context.
- Though the awareness and people opting for LIC plans are more as compared to other private players but the later are gaining momentum in the market day by day.
- The demand for insurance is likely to increase with rising per capita income, rising literacy rates and growth of service sector. Infact opening up of the insurance sector is an integral part of the liberalization process being persued by many developing counties
- Employees are mainly interested in putting there money in share markets
- Respondents belonging to age group above 35 yrs have insurance and below 25 yrs age does not have life insurance policy.
- Respondents under 35-45 yrs are the number of persons investing in mutual funds & share markets is quiet high. Since people prefer to invest in LIC it shows that they do not have trust in private companies.
- Those who do not have insurance and have funds, major reason for this is they do not have knowledge and think it is too risky.
- Most of respondents prefer monthly payment of premium. The major factor which influences the choice of an insurance company is personal relation.
- In the present market scenario people do not prefer to invest in ULIP’s instead they prefer traditional plans.
- The intermediaries need to be empowered with the right learning , training and sales tools and technology enablers. Coupled with the right product mix, this will help the insurers to survive and fluorish in this competitive market scenario.
Suggestions
- Since there are many people who have no or very little knowledge about financial planning so steps should be taken to make them aware about the benefits of FP.
- Employees are much more risk seeker so they can be targeted to sell ULIP’s.
- People above age group of 35 yrs and above should be targeted for traditional plans as their investing pattern shows that they are less risk lovers.
- People belonging to age group 25-35 years are the most potential customers so company should formulate policies to tap this group.
- People do not buy policies as they do not have proper knowledge or they believe that its just a wastage of their funds so company should make them known of benefits of life insurance.
- Positioning insurance as a means to fulfilling one’s duties during one’s lifetime.
- The benefits of insurance plan and the fact that high risk venture has high returns and viva-verse should be made known to people who feel insurance to be risky.
- Since the selection of insurance is based on factors like public relation so company should have FCs who are good in maintaining relationships and try to build strong relationship with the existing customers
- Even they should focus on enhancing policy features and advertising.
- Many people think that insurer hides information so the company should try to remove this by giving more time to customers to ask their questions.
- Since Ads plays a reasonable role in attracting people so they should be based on emphasizing on features like tax benefits and protection of life.
- More focus should be made on branding.
Need for Branding in Insurance:
Branding plays a very important role in insurance sector by helping company to face the problem of securing and retaining customers and experiencing the need for heightened relevance of brand proposition as brand has termed to be new religion.
In rural India, the LIC is especially synonymous with insurance. But in the wake of competition insurance , companies have to do a considerable brand building exercise atleast in urban India. Adequate investment, time and long term management of the brand is required for success and survival. The brand should be believed and lived by management and employees
- The spotlight should be on various segments to survive in a competitive environment. Each company has to select its own unique positioning based on its strength which is unique in nature. Below mentioned positioning alternatives can be worth considering.
Bibliography
- Philip Kotler, 1995, Marketing Management Analysis Planning implementation and Control , Eigth Edition, Prentice Hall of India.
- Naresh K. Malhotra, 2007, Marketing Research- An Applied Orientation, 5th Edition, Prentice-Hall of India, New Delhi.
- Guide Book to IRDA
- http://www.oppapers.com/essays/Swot-Analysis-Hdfc-Standard-Life- Insurance/177286
- http://www.hdfcinsurance.com/AboutUs/BoardMembers.aspx
- http://new.valueresearchonline.com/story/storyview.asp%3Fstr%3D11425
- http://www.indianmoneyplus.com/2008_07_01_archive.html
