CONSUMER PERCEPTION TOWARDS icici

8/19/2019 CONSUMER PERCEPTION TOWARDS icici

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CHAPTER 1

INDIAN INSURANCEINDUSTRY

“AN OVERVIEW”

Amity Global Business School Chandigarh


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THE INSURANCE INDUSTRY IN INDIA

INSURANCE:

Definition :

Insurance is a contract between a person and an insurance company in which that person pays

some amount or premium. So at the situation of some uncertainty or death or maturity or

disposal of some asset he gets some amount of Insured value.

The objective of insurance is generally:

a) Family protection and / or

b) rovision for old age.

c) rotection against ris!s

Why Insu !n"e#

• Insurance cover is essential because it provides the following benefits:• " lump sum payment to the nominees at the time of the death of the policy holder.• " regular payment to the nominees in the event of the death of the policy holder. Ta#

benefits$ as premiums paid reduce the liability of ta#.• %elieves economic hardships in the family on the uneventful death of the sole income

holder.• Inculcates the habit of savings.

NEED $OR INSURANCE:

&ho will ta!e care of my family if tomorrow something unfortunate happens to me'( If this

uestion bothers you$ then *ife Insurance is the answer.

+f course$ under any circumstances$ the loss of a loved one is a traumatic e#perience. ,ut$ if

your family is also left without sufficient money to meet basic living needs or prepare for

future goals$ they will have to cope with a financial crisis at the same time. " *ife Insurance



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plan ensures that your family is financially secure even if tomorrow you are no longer around

to care for them. *ife insurance$ especially tailored to meet your financial needs:

Nee% fo &ife Insu !n"e

Today$ there is no shortage of investment options for a person to choose from. -odern day

investments include gold$ property$ fi#ed income instruments$ mutual funds and of course$

life insurance. iven the plethora of choices$ it becomes imperative to ma!e the right choice

when investing your hard earned money. *ife insurance is a uni ue investment that helps you

to meet your dual needs saving for life0s important goals$ and protecting your assets. *et us

loo! at these uni ue benefits of life insurance in detail.

The t!'(e 'e(o) *i+es ! *ene !( *ui%e to the ,(!ns th!t ! e !,, o, i!te fo

%iffe ent (ife st!*es-

* &ife St!*e e P i. P i.! y Nee% ! yNee%

&ife Insu !n"e P o%u"t &ife Insu !n"eP o%u"t

1oung 2 Single "sset creation &ealth creation plans

1oung 2 3ust married "sset creation 2 protection

&ealth creation and mortgage protection plans

-arried with !ids 4hildren0s education$ "ssetcreation and protection

5ducation insurance $ mortgage protection 2 wealth creation plans

-iddle aged withgrown up !ids

lanning for retirement 2asset protection

%etirement solutions 2 mortgage protection

"cross all life stages 6ealth plans 6ealth Insurance

1-/ Ch! !"te isti"s of insu !n"e

• Sharing of ris!s• 5valuation of ris!• ayment on happening of a special event• The amount of payment depends on the nature of losses incurred.


http://www.iciciprulife.com/public/Life-plans/Wealth-Creation-Plans.htmhttp://www.iciciprulife.com/public/Life-plans/Wealth-Creation-Plans.htmhttp://www.iciciprulife.com/public/Life-plans/Education-Insurance-Plans.htmhttp://www.iciciprulife.com/public/Life-plans/Education-Insurance-Plans.htmhttp://www.iciciprulife.com/public/Retirement-Plans/Retirement-Plans-Need.htmhttp://www.iciciprulife.com/public/Retirement-Plans/Retirement-Plans-Need.htmhttp://www.iciciprulife.com/public/Health-plans/Whyhealthinsurance.htmhttp://www.iciciprulife.com/public/Health-plans/Whyhealthinsurance.htmhttp://www.iciciprulife.com/public/Health-plans/Whyhealthinsurance.htmhttp://www.iciciprulife.com/public/Life-plans/Wealth-Creation-Plans.htmhttp://www.iciciprulife.com/public/Life-plans/Education-Insurance-Plans.htmhttp://www.iciciprulife.com/public/Retirement-Plans/Retirement-Plans-Need.htmhttp://www.iciciprulife.com/public/Health-plans/Whyhealthinsurance.htmhttp://www.iciciprulife.com/public/Health-plans/Whyhealthinsurance.htmhttp://www.iciciprulife.com/public/Life-plans/Wealth-Creation-Plans.htm


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• The success of insurance business depends on the large number of people insured

against similar ris!.• Insurance is a plan$ which spreads the ris! and losses of few people among a large

number of people.• The insurance is a plan in which the insured transfers his ris! on the insurer.• Insurance is a legal contract which is based upon certain principles of insurance which

includes utmost good faith$ insurable interest$ contribution$ indemnity$ causes

pro#imal $ subrogation$ etc.• The scope of insurance is much wider and e#tensive.

$un"tions of insu !n"e:

P i.! y fun"tions:

7. P o+i%e , ote"tion : Insurance cannot chec! the happening of the ris!$ but can provide

for the losses of ris!.

8. Co((e"ti+e 'e! in* of is0 : Insurance is a device to share the financial

losses of few among many others.

9. Assess.ent of is0 : Insurance determines the probable volume of ris! by evaluatingvarious factors that give rise to ris!.

. P o+i%e "e t!inty : Insurance is a device$ which helps to change from uncertainty tocertainty.

Se"on%! y fun"tions:

7. P e+ention of (osses : Insurance cautions businessman and individualsto adoptsuitable device to prevent unfortunate conse uences of ris! by observing safety

instructions.

8. S.!(( "!,it!( to "o+e (! *e is0s : Insurance relives the businessman fromsecurity investment$ by paying small amount of insurance against larger ris!s and uncertainty.

9. Cont i'utes to)! %s %e+e(o,.ent of (! *e in%ust ies-

Othe $un"tion:



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-eans of savings and investment: Insurance companies are business houses. The product

they sell is financial protection. To succeed and survive$ they must cover their costs$ which

include payments to cover the losses of policyholders$ as well as sales and administrative

e#penses$ ta#es and dividends.



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CHAPTER 2

“CONSU3ER PERCEPTION ON&I$E INSURANCE”

INTRODUCTION

erception is the process by which organisms interpret and organi;e sensation to produce ameaningful e#perience of the world.

Thus$ perception in humans describes the process whereby sensory stimulation is translatedinto organi;ed e#perience.



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2-2 A4OUT CONSU3ER PERCEPTION:

4onsumer behavior studies the behavior of individual or a group of people. Thestudy of consumer behavior provides mar!eters to understand and predict the

future mar!et behavior.

2-/- INTRODUCTION:

4onsumer behavior is the process where the individual decides what$ when$ how

and from whom to purchase goods and services. 4onsumer behavior studies how

individuals$ groups and organi;ation select$ buy$ use dispose of goods$ services$

ideas or e#periences to satisfy their needs and desire.

The study of consumer behavior enables mar!eters to understand and predict

consumer behavior in the mar!et place in advance and it is concerned not only

with what consumers buy but also with why$ when$ where$ how and how often

they buy it.

4onsumer research is the methodology which is used to study consumer behavior

and it ta!es place at every phase of the consumption process during before and

after the purchase.



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CHAPTER /

“CO3PANY PRO$I&E:

ICICI P u%enti!(”

Co.,!ny P ofi(e

I4I4I rudential *ife Insurance 4ompany ingdom.

I4I4I rudential *ife was amongst the first private sector life insurance companies to beginoperations in ?ecember 8@@@ after receiving approval from Insurance %egulatory?evelopment "uthority of India


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the 4ompany garnered a total premium of %s. 7C9.@D billion. The company has assets undermanagement in e#cess of %s. 7@@7.A9 billion as on -arch 97$ 8@7C.

Vision 5 V!(uesOu +ision:

To be the dominant *ife$ 6ealth and ensions player built on trust by world class people and

service.

This we hope to achieve by:

• !nderstanding the needs o" customers and o#ering them su$erior$roducts and ser%ice&

• 'e%eraging technology to ser%ice customers (uic)ly* e+ciently andcon%eniently&

•

,e%elo$ing and im$lementing su$erior ris) management and in%estmentstrategies to o#er sustainable and stable returns to our $olicyholders&

• -ro%iding an enabling en%ironment to "oster gro.th and learning "or ourem$loyees&

• And abo%e all* building trans$arency in all our dealings/

%ange of roducts

"t I4I4I rudential *ife$ we understand that different individuals have different needs.

The ideal insurance plan is one that addresses the e#act insurance needs of the individualwhich depends on the age and life stage of the individual apart from a host of other factors.



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IRDAI6Insu !n"e Re*u(!to y !n% De+e(o,.ent Autho ity of In%i!7 Insurance %egulatory and ?evelopment "uthority of India


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%egulating and overseeing premium rates and terms of non life insurance covers

Specifying financial reporting norms of insurance companies

%egulating investment of policyholdersH funds by insurance companies

5nsuring the maintenance of solvency margin by insurance companies

5nsuring insurance coverage in rural areas and of vulnerable sections of society

In%i!n Insu !n"e 3! 0et

The insurance industry of India consists of C8 insurance companies of which 8 are in lifeinsurance business and 8A are non life insurers. "mong the life insurers$ *ife Insurance4orporation 6ealth Insurance 4ompany*td.

In addition to C8 insurance companies$ there is sole national re insurer$ namely$ eneralInsurance 4orporation of India. +ther sta!eholders in Indian Insurance mar!et include

licensed "gents


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Insurance penetration of India i.e. remium collected by Indian insurers is 9. @E of ? inF1 8@79 7 . er capita premium underwritten i.e. insurance density in India during F1 8@797 is =S C8.@.

CHAPTER 8

RESEARCH DESI9N



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RESEARCH 3ETHODO&O9Y:

D!t! "o((e"tion:

For data collection$ I developed a well defined uestionnaire as a research instrument$

consisting uestions aimed to measure the consumer perception about insurance company in

India$ their views and comments about 4ompanyHs structure. I conducted unstructuredinterviews


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Rese! "h %esi*n:

S!.,(in* ,(!n

Since it is not possible to study whole population$ it is necessary to obtain representative

samples from the population to understand its characteristics.

S!.,(in* Units:

Individual respondents for studying 4ustomer ,uying ,ehavior and -ar!et Segmentation$

selected randomly from different areas in 6imachal$ li!e various localities and mar!ets$

overnment +ffices ,usiness -en$ rofessionals and 6ouse &ives of for recruitment of *ife

Insurance "dvisors

S!.,(e Te"hni;ue:

%andom Sampling

Rese! "h Inst u.ent:

Structured Kuestionnaire

Cont!"t 3etho%:

ersonal Interview

S!.,(e si


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the research* the sam$le si e that .as "ound to be a$$ro$riate "or the

study .as 150/

Rese! "h (i.it!tions

JThe research is confined to a small town in 6imachal radesh and does not necessarily showa pattern applicable to all of country.

JSome respondents were reluctant to divulge personal information which can affect thevalidity of all responses.

• In a rapidly changing industry$ analysis on one day or in one segment can change veryuic!ly. The environmental changes are vital to be considered in order to assimilate

the findings /



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CHAPTER =

$INDIN9S 5 ANA&YSIS

I have presented below the project findings and analysis$ addressed to the respondents to

gauge the attitude$ perception and consumer behavior of the people toward life insurance.

=-1- SWOT ANA&YSIS O$ ICICI P u%enti!( &I$E INSURANCE:

An!(ysis of the in%ust y>s en+i on.ent:



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I4I4I rudential is a joint venture between I4I4I financial group and rudential *4 =.>.&hich provides it a domestic as well as international appeal' I4I4I rudential is IndiaHsleading insurance company after *I4 -a!ing it the first choice for consumers.

=-1-1- STREN9TH :

7. ?omestic image of I4I4I supported by rudentialHs international image is strength of the

company.

8. Strong and well spread networ! of ualified intermediaries and sales person.

9. Strong capital and reserve base.

. The company provides customer service of the highest order.

C. 6uge bas!et of product range which are suitable to all age and income groups.

B. *arge pool of technically s!illed manpower with in depth !nowledge and understanding of

the mar!et.

D. The company also provides innovative products to cater to different needs of different

customers.

=-1-2- WEA?NESS :

7. 6eavy management e#penses and administrative costs.

8. *ow customer confidence on the private players.

9. Lertical hierarchical reporting structure with many designations and cadres leading to power politics at all levels without any e#ception.

. oor retention percentage of tied up agents.

C. Tough fight from govt schemes

B. Fight from players li!e *I4.

=-1-/- OPPORTUNITIES :

7. Insurable population M"ccording to IN only 7@E of the population is insured$ whichrepresents around 9@E of the insurable population. This suggests more than 9@@m people$

with the potential to buy insurance$ remain uninsured.

8. There will be inflow of managerial and financial e#pertise from the worldHs leading

insurance mar!ets. Further the burden of educating consumers will also be shared among

many players.

9. International companies will help in building world class e#pertise in local mar!et by

introducing the best global practices.



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. Insurance liberali;ation in India is e#pected to result in a wider choice of major

commercial insurance covers$ such as fire$ e#port credit.

=-1-8- THREATS :

7. *egislation could impact.

8. reat ris! involved

9. Lery high competition prevailing in the industry.

. Lulnerable to reactive attac! by major competitors.

C. *ac! of infrastructure in rural areas could constrain investment.

B. 6igh volume/low cost mar!et is intensely competitive.

$in%in*s 9 !,hs

1- A*e 9 ou, of Res,on%ents



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4onclusion

&hen it comes to age factor out of 7C@ respondents [email protected] are below 9@$ 8 .BE are between

97 @$ 9B.BE are between 7 C@$ 77.99E are between C7 B@ and B.B@E are above B@ year of

age.

2- O""u,!tion



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4onclusion

+ut of 7C@ respondents 7 .B percent people are private employee$ B.BB were governmentemployee$ 9@E are self employed and others were A.BBE.



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/- Annu!( In"o.e

4onclusion

"nnual income of people are given below

,elow 7 *a!h A.BBE

7 9 *a!h A.BBE

9 C *a!h 8AE

"bove C *a!h 7 .BBE

8- Wh!t 0in% of in+est.ent %o you , efe #



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4onclusion

Investment preference

+ut of 7C@ respondents .BE li!e Short term policies$ B.BBE li!e long term policies andA.BBE li!e both.

=- Whi"h of these in+est.ents is 'est fo you#



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4onclusion

In this survey we discovered most of people li!e to invest in insurance or ban! deposite afterthat people also li!e gold and silver as well .

@- DO you h!+e !ny Insu !n"e Po(i"y#



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Con"(usion

In this survey D8E people had Insurance policies.



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- I$ yes )hi"h S"he.e you h!+e#

4onclusion

"ccording to study most of people around 9 .8C E people 6ave life plan followed by education andretirement plan then wealth and money plan.



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B- Whi"h P! !.ete s %o you (oo0 into )hi(e "hoosin* ,o(i"y#

4onclusion

In this study most of people are worried about premium and benefits provide by policy.

- DO you 0no) !'out ICICI P u%enti!(#



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4onclusion

In the study it was found most of people !now about I4I4I.

1 - Wou(% you (i0e to in+est in ICICI P u%enti!(#



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4onclusion

"round CA E people li!e to invest in I4I4I but the govt policies has also captured the charm.

11- If yes then )hi"h ;u!(ity of ICICI you (i0e the .ost .



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4onclusion

The best uality of I4I4I rudential was ,rand name and image other factor was not very importantfor respondents.



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Con"(usion

"fter the survey it was found that still major portion of customers go for public insurancecompanies$ but with the entry of more and more private companies the scenario is changingrapidly$ people need of more and better returns are opting for private companies$ and this can

be justified by the increasing mar!et share of private companies in the Indian insurancesector. There are various ways in which private companies are found much more lucrativethan public companies and the fact which support this statement are as follows:



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7. Lersatility of products

8. 5fficient and dedicated fund managers

9. ,etter customer services

. -ore returns

C. %egular follow up

B. Kuic!er settlement

D. -ore e services

CONC&USION:

I4I4I rudential is the renounce name in the insurance sector. It believes in uality not inuantity. I4I4I ru is a subsidiary of I4I4I roup. It is one the first rivate insurance

company who has gotten the license of insurance firstly in India. It has started its insuranceindustry with the joint venture of =.>. based rudential lc .In the insurance sector mainwor! is done by the local people li!e housewives$ businessmen$ local people of the native

place. So it gives priority to these locals so that they can penetrate the mar!et easily and get

better results.

The insurance mar!et in India is estimated to be around @@,n growing at an astounding rateof 9@E p.a. Still the e#perts believe that the potential is largely untapped. The insurancemar!et is dominated by the public sector giant *I4 with a mar!et share of around D7. E.&ith the private players leading the growth story$ this sector is witnessing more mar!etingactions than even the F-4 sector. Traditionally insurance are sold through direct selling thereason being purely the nature of product warrants direct communication with the consumer.>ilter categori;es Insurance as an O=nsoughtO product. =nsought products are those whichare ran!ed lowest in terms of consumer interest .4onsumers may not be even aware of eitherthe need or e#istence of this product. 6istorically$ Indian insurance products are sold forwrong reasons. eople buy insurance to avail the ta# benefit and not to ensure protection and*I4 was happy to oblige. 6ence most of the sales tal!s start with the uestion O 6ow muchta# do you pay'O . *ittle money was spent on brand building because there wasno competition for *I4. Things have now changed. &ith the increasing financial literacy$volatile economy and uncertain future are prompting Indians to loo! seriously at insurance asa means for protection rather than ta# saving instrument.

&ith more private players entering the domain$ the issues of differentiation and branding

became important. 6?F4 Standard *ife Insurance


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the scene in 8@@@. It is a joint venture between the housing finance major 6?F4 and the =>insurance giant Standard *ife.

Now a days we are seeing a lot of media action from this company."lthough a slow starter6?F4 S* was having a small share of the pie. It was eclipsed by I4I4I prudential with itsmedia and sales blit; ma!ing it second largest player in the Insurance mar!et. 8@@B saw asha!eup in this mar!et with ,ajaj "llian; edging out I4I4I from the second spot . ,ajaj havea mar!et share of around AE and 6?F4 S* and I4I4I fighting at 9rd place with aroundD.CE.6?F4 is currently focusing on The ension lan and the 4hild lan aiming to cash inon the potential of these segments.

The pension mar!et in India is estimated to be around 7@@@ crore with a huge potential forgrowth in the future. The change in the demographics is going to drive the pension mar!et inIndia. Traditionally in a 3oint family$ there was an inherent protection for elders. &ith the

urbani;ation and the evolution of Nuclear =rban Family$ elders are often forgotten. +ut of the97 men wor!ers in India only 77E has some sort of old age security. eople earlier dependon social security products li!e 5 F and F to build a corpus for their golden years. It is this

potential that has encouraged I4I4I rudential to promote its pension plans. This product has been well received by the consumers. The ads are well e#ecuted and revolve around the positioning of O%espect 1ourselfO The target segment being the 9@ year old family man. The basic theme of the campaign is to appeal to the self respect of these men who are in their prime of their career. O5ven after retirement let your hands give rather than receiveO is one ofthe best themes for a pension plan. Since I am going to in that category soon$ these ads stri!ea chord in me and remind me of the need to plan for my retirement. The same theme iscarried to the 4hild plan also. "lthough these campaigns will help to invo!e an interest in4hild lans$ the mar!et is in its nascent stage and lot of convincing has to be done to crac!this huge mar!et. +ne of the stumbling bloc! being the e#pensive annuity plans.For e#ample$ it ta!es a 8 la!h corpus to generate %s 7@@@ per month pension. "lso if you put7@@@@ per month in a pension plan if you are 9@ yrs old$

&hat you will get after 8@ years is a monthly pension of 7@@@@. So it loo!s unattractive inthe first loo! compared to -utual Funds. 6?F4 Standard *ife has correctly identified the

pulse of the target mar!et and is all set to reap the benefits.

&ith increase in population and income there is a wide scope in insurance sector. Insurancesector provides some security to the consumer for any type of miss happening. In this sector$I%?" plays an important role and time to time gives important guide lines to variouscompanies. Still$ *I4 plays an important role and has ma#imum share in this sector. %ecently

ban!ing sector has also moved towards insurance sector since they would get better dividendsthan the commission they would get by entering into partnerships with other major insurancemar!et players. =nion ,an!$ Federal ,an!$ "llahabad ,an!$ ,an! of India$ >arnata!a ,an!$Indian +verseas ,an!$ ,an! of -aharashtra$ ,an! of ,aroda$ unjab National ,an!$ and?ena ,an! are planning to enter in this sector. "mong private sectors -a# New 1or!

insurance company plays a vital role. There are various factors that affect the consumer buying decision and also influence consumer thin!ing when they are planning to invest in



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insurance scheme .-ajor respondents generally prefer insurance li!e vehicle insurance$ termcover insurance$ medical/health insurance and they also prefer sum assured of life insuranceless than %s 7@ la!h. -ost of the respondents show their interest in life insurance havinghigher ris! coverage and also for ta# saving purpose.

FACTORS INFLUENCING CONSUMER BEHAVIOUR:

1- So"i!( f!"to :Social factor divides the society into a hierarchy of distinct classes. The members of

each class have relatively the same status and members of other classes have either

more or less status. It includes family$ group$ celebrity etc.2- Cu(tu !( f!"to :

It has potent influences that are brought up to follow the beliefs$ values and customs

of their society and to avoid behavior that is judged acceptable. ,eliefs$ values and

customs set subculture apart from other members of the same society. Thus sub

culture is a distinct cultural group that e#ists as an identifiable segment$ within a

larger$ more comple# society./- Pe son!( f!"to :

It is a very important factor. ersonal factors also influence buyerHs behavior. They

include age$ income$ occupation$ life style. They simply direct our outer personality.8- Psy"ho(o*y f!"to :

The buying behavior of consumer is influenced by a number of psychological factors

which includes motivation$ perception$ learning$ beliefs and attitude and personality.

Re"o..en%!tions

SU99ESTION:

&hen we tal! about suggestion I thin! I have small e#perience of this sector but whatever I

have pointed out which are thus.

7. It should organi;e wea!ly meeting with Insurance advisors for the business and giveappraisal training to them. It wor!s as a performance appraisal of the them.



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8. It should give monthly party to the advisors for the attachment with the industry.

9. enerally we buy only that thing whatever we see. It means that it should spend more on

advertisement. +ther insurance industry li!e *I4 and 6?F4 advertise mostly through banner

on metro station$ on road and advertise in the cinema hall. "dd more and more movie hall for

the advertisement.

. The role of recruitment is not easy so it should increase commission or give salary instead

of commission so that advisors will ta!e more interest in sales of plans.

C. It should focus more on people who comes in middle class category for the post ofinsurance advisors.

&I3ITATIONS O$ THE STUDY:

The information given in the above part is based on mar!et survey$ meeting with the people$

and phone calls$ and the other medium li!e internet and website of I4I4I rudential. -y

project is based upon the interaction with the people for the purpose of mar!et research based

on consumer perception. -y study is totally based on the perception of the people that what

they thin! about the insurance when someone want to go for insurance. I analy;e that the

person who is needy for money and security for their family their life and their !ids and



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believes in insurance because this sector gives you a platform for security of family

investment for future.

Documents

CONSUMER PERCEPTION TOWARDS icici