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S TUDY OF FACTORS AFEECTING CONSUMERSrsquo PERCEPTION AND BUYING BEHAVIOUR WHILE PURCHASING L IFE I NSURANCE P OLICIES
A report on Internship Training Undergone at
ICICI PRUDENTIAL LIFE INSURANCE Ltd PRIORITY CIRCLE
NOIDA SECTOR 18
Submitted in partial fulfillment of the Requirement for the award of the degree of POST GRADUATE DIPLOMA IN MANAGEMENT
1
INTRODUCTION
INDUSTRY PROFILE
INSURANCE INDIA
Insurance in law and economics is a form of risk management primarily used to hedge
against the risk of a contingent loss Insurance is defined as the equitable transfer of the
risk of a potential loss from one entity to another in exchange for a premium Insurance
is a federal subject in India and has a history dating back to 1818 Life and general
insurance in India is still a nascent sector with huge potential for various global players
with the life insurance premiums accounting to 25 of the countrys GDP while general
insurance premiums to 065 of Indias GDP The Insurance sector in India has gone
through a number of phases and changes particularly in the recent years when the Govt
of India in 1999 opened up the insurance sector by allowing private companies to solicit
insurance and also allowing FDI up to 26 Ever since the Indian insurance sector is
considered as a booming market with every other global insurance company wanting to
have a lions share Currently the largest life insurance company in India is still owned
by the government
In order to provide strict state control over Insurance business many acts were
passed th first being The Insurance Act 1938 The Life Insurance in India was
completely nationalised only on 19th Janurary 1956 through the Life Insurance
Corporation Act 1956 Nationalization was accomplished by the government acquisition
of the management of the existing insurance companies This resulted in the formation of
the Life Insurance Corporation of India on 1st September 1956 which enjoyed complete
monopoly in the life insurance industry till the year 1999
The remaining 100 odd General Insurance companies were nationalized by the
General Insurance Business (Nationalisation) Act 1972 subsequently merging them into
four companies All the companies were amalgamated into National Insurance New
2
India Assurance Oriental Insurance United India Insurance which were headquartered in
each of the four metropolitan cities
Till end of 1999-2000 fiscal year two state-run insurance companies namely
Life Insurance Corporation (LIC) and General Insurance Corporation (GIC) were the
monopoly insurance (both life and non-life) providers in IndiaThe year 1999 saw the
entrance of private insurance companies in Indian insurance sector The Govt of India
then introduced the Insurance Regulatory and Development Authority Act (IRDA) in
1999 thereby de-regulating the insurance sector and allowing private companies into the
insurance Further foreign investment was also allowed and capped at 26 holding in
the Indian insurance companies
MAJOR PLAYERS
The private insurance joint ventures have collected the premium of Rs101909
crore with the investment of just Rs3 000 crore in three years of liberalization The
private life insurance players have been significantly improving their market share when
compared to 50 years Old Corporation (ie LIC) As per the figures compiled by IRDA
the Life Insurance Industry recorded a total premium underwritten of Rs 1070796 crore
for the period under review Of this private players contributed to Rs1 01909 crore
accounting for 10 percent Life Insurance Corporation of India (LIC) the public sector
giant continued to lead with a premium collection of Rs968887 crore translating into a
market share of 90 per cent In terms of number of policies and schemes sold private
sector accounted for only 377per cent as compared to 9623 per cent share of LIC (The
Economic Times 21 March 2004)
The ICICI Prudential topped among the private players in terms of premium
collection It recorded a market share of 25 per cent followed by Birla SunLife with 15
3
percent HDFC Standard and Max New York Life with a market share of approximately
15 per cent each
In case of private non-life insurance players which their market share raised to
1413 per cent recorded a growth of 7075 per cent on an annual basis while the market
share of public sector stood at 8587 per cent registering a marginal growth of 634 per
cent The overall market has recorded a growth of 1232 per cent by the end of January
2004 Among the private non-life insurance players ICICI Lombard topped the list with
a market share of 305 per cent in one year period and with an annual growth rate of
1316 per cent followed by Bajaj Allianz with 291 per cent market share and Tata AIG
with 227 per cent market share and with an annual growth rate of 6260 per cent
LIFE INSURERS
1113090 Life Insurance Corporation of India
1113090 SBI Life Insurance Co Ltd
1113090 Allianz Bajaj Life Insurance Co Ltd
1113090 Om Kotak Mahindra Life Insurance Co Ltd
ICICI Prudential Life Insurance Co Ltd
1113090 HDFC Standard Life Insurance Co Ltd
1113090 Birla Sunlife Insurance Co Ltd
1113090 I1113090G Vysya Life Insurance Co Ltd
1113090 Tata-AIG Life Insurance CoLtd
1113090 Metlife India Insurance Co Pvt Ltd
1113090 AMP Sanmar Assurance Co Ltd
1113090 Dabur CGU Life Insurance Co Pvt Ltd
1113090 Max 1113090ew York Life Insurance Co Ltd
4
COMPANY PROFILE
Indias Number One private life insurer ICICI Prudential Life Insurance
Company is a joint venture between ICICI Bank Ltd-one of Indias foremost financial
services company- and Prudential plc - a leading international financial services group
headquartered in the United Kingdom Total capital infusion stands at Rs 2060 billion
with ICICI Bank holding a stake of 74 and Prudential plc holding 26
Indiarsquos number One private insurerICICI Prudential Life Insurance Company is a joint venture
between icici bank ltd one of India foremost financial services company and prudential plc a
leading international financial services group headquartered in uk tatal capital infusion stands at rs
2060 billionwith icici bank holding a stake of 74 and prudentail
They began their operations in December 2000 after receiving approval from
Insurance Regulatory Development Authority (IRDA) and are headquartered in Mumbai
Today their nation-wide team comprises of over 580 offices over 234000 advisors and
22 banc assurance partners
INTRODUCTION OF ICICI PRUDENTIAL
ICICI Prudential was the first life insurer in India to receive a National Insurer
Financial Strength rating of AAA (Ind) from Fitch ratings For three years in a row
ICICI Prudential has been voted as Indias Most Trusted Private Life Insurer by The
Economic Times - AC Nielsen ORG Marg survey of Most Trusted Brands
The ICICI Prudential edge comes from the commitment to their customers in all
that they do ndash be it product development distribution the sales process or servicing
ICICI Prudential products have been developed after a clear and thorough understanding
of customer needs Having the right products is the first step but itrsquos equally important to
ensure that customers can access them easily and quickly To this end ICICI Prudential
has an advisor base across the length and breadth of the country and also partners with
leading banks corporate agents and brokers to distribute their products Robust risk
management and underwriting practices form the core of their business With clear
guidelines in place they ensure a smooth and hassle-free claims process
5
Entrusted with helping customers meet their long-term goals they adopt an
investment philosophy that aims to achieve risk adjusted returns over the long-term
Their 16000+ strong staff is given the opportunity to learn and grow everyday in a
multitude of ways This keeps them engaged and enthusiastic so that they can deliver on
the promise to cover customer at every step of life
For the past six years ICICI Prudential has retained its position as the No 1
private life insurer in the country with a wide range of flexible products that meet the
needs of the Indian customer at every step in life
PLANS
There are two main types of plans ndash ULIP and Traditional
Unit Linked Insurance Product
ULIPs have gained high acceptance due to attractive features they offer These
include
1113090 Flexibility Flexibility to choose sum assured Flexibility to choose premium
amount Option to change level of Premium Sum Assured even after the plan has
started Flexibility to change asset allocation by switching between funds
1113090 Transparency Charges in the plan and net amount invested are known to the
customer Customer has the convenience of tracking hisher investment performance
on a daily basis
1113091 Liquidity Customer has the option to withdraw money after few years ie the option
of low minimum tenure Partial or systematic withdrawals are allowed
1113090 Fund Options A choice of funds is provided to customers ranging from equity debt
cash or a combination They can choose the fund mix based on desired asset
allocation
Traditional Endowment Plans
These are the old type of plans available These plans cater to customers with a
low risk appetite Some of the common features of the traditional plans are
1113090 Steady Investment Major chunk of investible funds are in debt instruments Though
6
low but steady and almost assured returns are expected over the long term
1113091 Death Benefit death benefit is sum assured with guaranteed and vested bonus
1113090 Asset Creation Helps in asset creation as they are for a long tenure
1113091 Fixed Ratios Premium to sum assured ratios is fixed for each plan and age
1113090 Withdrawals Withdrawals are generally not allowed before maturity
PRODUCTS
INSURANCE SOLUTIONS FOR INDIVIDUALS
ICICI Prudential Life Insurance offers a range of innovative customer-centric products
that meet the needs of customers at every life stage Its products can be enhanced up to 4
riders to create a customized solution for each policyholder
Savings amp Wealth Creation Solutions
1113090 Cash Plus is a transparent feature-packed savings plan that offers 3 levels of
protection as well as liquidity options
1113090 Save n Protect is a traditional endowment savings plan that offers life protection
along with adequate returns
1113091 CashBak is an anticipated endowment policy ideal for meeting milestone expenses
like a childs marriage expenses for a childs higher education or purchase of an
asset It is available for terms of 15 and 20 years
1113091 LifeTime Super amp LifeTime Plus are unit-linked plans that offer customers the
flexibility and control to customize the policy to meet the changing needs at
different life stages Each offer 4 fund options - Preserver Protector Balancer and
Maximizer
1113091 Life Link Super is a single premium unit linked insurance Plan which combines life
insurance cover with the opportunity to stay invested in the stock market
1113090 Premier Life Gold is a limited premium paying plan specially structured for long-
term wealth creation
1113090 Invest Shield Life is a unit linked plan that provides premium guarantee on the
7
invested premiums and ensures that the customer receives only the benefits of fund
appreciation without any of the risks of depreciation
1113090 Invest Shield Cash back is a unit linked plan that provides premium guarantee
on the invested premiums along with flexible liquidity options
Protection Solutions
1113090 LifeGuard is a protection plan which offers life cover at low cost It is available in
3 options - level term assurance level term assurance with return of premium amp
single premium
1113090 HomeAssure is a mortgage reducing term assurance plan designed specifically to
help customers cover their home loans in a simple and cost-effective manner
Child Plans
1113090 Education insurance under the Smart Kid brand provides guaranteed educational
benefits to a child along with life insurance cover for the parent who purchases the
policy The policy is designed to provide money at important milestones in the
childs life Smart Kid plans are also available in unit-linked form - both single
premium and regular premium
Retirement Solutions
1113090 ForeverLife is a traditional retirement product that offers guaranteed returns for the
first 4 years and then declares bonuses annually
1113090 LifeTime Super Pension is a regular premium unit linked pension plan that helps
one accumulate over the long term and offers an annuity option (guaranteed income
for life) at the time of retirement
1113090 LifeLink Super Pension is a single premium unit linked pension plan
1113090 Immediate Annuity is a single premium annuity product that guarantees income for
life at the time of retirement It offers the benefit of 5 payout options
Health Solutions
1113090 Health Assure and Health Assure Plus Health Assure is a regular premium plan
which provides long term cover against 6 critical illnesses by providing policyholder
8
with financial assistance irrespective of the actual medical expenses Health Assure
Plus offers the added advantage of an equivalent life insurance cover
1113090 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
1113090 Diabetes Care Diabetes Care is the first ever critical illness product especially for
individuals with Type 2 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
1113090 Hospital Care Hospital Care is structured to ensure customers receive a pre-
determined insurance amount for each procedure or hospitalization even if they
spend less Further its long-term design of a term between 10-20 years assures
policyholders the guaranteed cushion of insurance cover even if they make a claim
during the term Available for individuals between the ages of 1-60 years this is one
of the first products that will cover people up to the age of 80 years
GROUP INSURANCE SOLUTIONS
ICICI Prudential also offers Group Insurance Solutions for companies seeking to enhance
benefits to their employees
1113090 Group Gratuity Plan ICICI Prudentials group gratuity plan helps employers fund
their statutory gratuity obligation in a scientific manner The plan can also be
customized to structure schemes that can provide benefits beyond the statutory
obligations
1113090 Group Superannuation Plan ICICI Prudential offers both defined contribution
(DC) and defined benefit (DB) superannuation schemes to optimize returns for the
members of the trust and rationalize the cost Members have the option of choosing
from various annuity options or opting for a partial commutation of the annuity at
the time of retirement
1113090 Group Immediate Annuities In addition to the annuities offered to existing
superannuation customers they offer immediate annuities to superannuation funds
not managed by them
1113090 Group Term Plan ICICI Prudentials flexible group term solution helps provide
affordable cover to members of a group The cover could be uniform or based on
designationrank or a multiple of salary The benefit under the policy is paid to the
9
beneficiary nominated by the member on hisher death
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
1113090 Accident amp disability benefit If death occurs as the result of an accident during the
term of the policy the beneficiary receives an additional amount equal to the rider sum assured
under the policy If the death occurs while traveling in an authorized
mass transport vehicle the beneficiary will be entitled to twice the sum assured as
additional benefit
1113090 Critical Illness Benefit protects the insured against financial loss in the event of 9
specified critical illnesses Benefits are payable to the insured for medical expenses
prior to death
1113090 Income Benefit This rider pays the 10 of the sum assured to the nominee every
year till maturity in the event of the death of the life assured It is available on
SmarKid and CashPlus
1113090 Waiver of Premium In case of total and permanent disability due to an accident
the future premiums continue to be paid by the company till the time of maturity
This rider is available with LifeTime Super LifeTime Super Pension and CashPlus
HISTORY OF ICICI PRUDENTIAL
As mentioned earlier ICICI Prudential Life Insurance Company is a joint venture
between ICICI Bank - one of Indias foremost financial services company - and
Prudential plc - a leading international financial services group headquartered in the
United Kingdom
HISTORY OF ICICI PRUDENTIAL
As mentioned earlier icici prudential life insurance company is a joint venture between icici bank
one of India foremost financial services company and prudential plc a leading international
financial services group headquarterd in tha united kingdom
10
ICICI Bank
ICICI Bank (1113090YSEIB1113090) is Indias second largest bank and largest private sector bank
with over 50 years presence in financial services and with assets of over Rs 344658 bn
(USD 79 billion) as on March 31 2007 The 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 specialized subsidiaries in the areas of investment
banking life and non-life insurance private equity and asset management ICICI Bank is
a leading player in the retail banking market and services its large customer base through
a network of over 950 branches and extension counters 3300 ATMs call centers and
internet banking to ensure that customers have access to its services at all times
Prudential Plc
Established in London in 1848 Prudential plc through its businesses in the UK and
Europe the US and Asia provides retail financial services products and services to more
than 20 million customers policyholder and unit holders and manages over pound251 billion
of funds worldwide (as of 31 December 2006) In Asia Prudential is the leading
European life insurance company with life operations in China Hong Kong India
Indonesia Japan Korea Malaysia the Philippines Singapore Taiwan Thailand and
Vietnam Prudential is the second largest retail fund manager for Asian sourced assets ex-
Japan as at June 2006 Its fund management business has expanded into a total of ten markets
China Hong Kong India Japan Korea Malaysia Singapore Taiwan Vietnam
and United Arab Emirates
ICICI Prudential has been the market leader in the private life insurance sector
contributing to 30 of the growth share followed by the SBI Life Insurance with 18
share Members like Ms Shikha Sharma CEO amp MD Ms Anita Pai EVP ndash
Customer Service amp Technology Mr Puneet Nanda CIO Mr Binayak Dutta Chief ndash
Sales amp Distribution have been with the company since its inception in 2000 and are
instrumental in developing ICIC Prudential to this level
The first policy was sold on 12th December 2000 Within 1 year ICICI Prudential
achieved 25000 policies and thereby growing at a faster rate achieved 1 million policies
by October 2004 By 2010 ICICI Prudential has a target to achieve 20 million customers
AWARDS amp RECOGNITION
AWARDS
11
1113090 Indias Most Customer Responsive Insurance Company
Avaya GlobalConnect - Economic Times
Customer Responsiveness Awards
1113090 Most Trusted Private Life Insurer
The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003
2004 and 2005
1113090 Prudence Customer Centricity Award 2004 amp 2005
Prudential Corporation Asia
1113090 Best Life Insurer 2003
Outlook Money Awards 2003 amp 2004
1113090 Superbrand 2003-04
1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising
campaign
Effies 2003
RECOGNITIONS
1113090 IMM Award for Excellence
Institute of Marketing amp Management
1113090 Organisation with Innovative HR Practices
Indira Group of Institutes
1113090 Most Trusted Private Life Insurer
The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003
2004 and 2005
1113090 Prudence Customer Centricity Award 2004 amp 2005
Prudential Corporation Asia
1113090 Best Life Insurer 2003
Outlook Money Awards 2003 amp 2004
1113090 Superbrand 2003-04
1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising
campaign
Effies 2003
12
Review of Literature
Mehr and Cammack (1976) agrees that insurance is usually thought of as a product that spreads the
risk of serious but low-probability losses among a group of individuals thus providing some
financial protection to each individual Kunreuther (1979) said that his product makes good sense
particularly when the protection is purchased against potential losses so large as to be catastrophic
such as total destruction of ones home a large accident liability judgment or death of primary
family breadwinner However it has long been recognized that this sensible product is difficult to
sellv
Kahneman amp Tversky (1984) stated indeed repeated demonstrations have shown most people lack
an adequate understanding of probability and risk concepts Dhar (1997) Greenleaf and Lehmann
(1995) Tversky and Shafir (1992) have shown that offering more options can generate decision
conflict and preference uncertainty leading to decision deferral
Kotler (1973) considers insurance to be in the category of unsought goods along with products
such as preventive dental services and burial plotsHe notes that unsought goods pose special
challenges to the marketer
Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) found that subjects were more likely
to buy insurance against small high-probability losses than insurance against large low- probability
losses Hershey and Schoemaker (1980) reported the opposite result
Kunreuther (1979) ldquoIt is not the magnitude of a potential loss that inspires people to buy insurance
voluntarily ndash it is the frequency with which a loss is likely to occurrdquo
Michael L Smith (1982) said that a typical life insurance contract provides a package of options or
rights to the policy owner that is not precisely duplicated by any other combination of commonly
available contracts Viewed from this perspective life insurance enjoys a unique position in the
field of investments and should be judged in this light The paper shows that an options viewpoint
provides a more complete explanation of policy owner behavior towards life insurance than the
conventional savings-and-protection view
13
Michael L Walden (1985) told that the options package view of the whole a
whole life policy is a package of options each of which has value and is expected to influence the
price of the policy This viewpoint implies the general hypothesis that price differences between
whole life policies can be explained by differences in policy contract provisions and differences in
selected company characteristics
OBJECTIVE
o To evaluate the factors underlying consumer perception towards investment in life insurance
policies
o To compare the differences in consumer perception of male and
female consumers
RESEARCH METHODOLOGY
The Study The study was exploratory in nature with survey method being used to complete the
study
Sampling Design
Population
Population included investors in NCR region
Sample frame
Since the data was collected through personal contacts the sample frames were the individuals who
are investing in life insurance policies
Sampling elements
Individual respondents were the sampling elements
14
Sampling Techniques
Random sampling technique was used to select the samples
Sample Size
Sample size was 150 respondents
Tools Used for Data Collection
Self designed questionnaire was used for the evaluation of factors affecting consumerrsquos perception
towards insurance Data was collected on Likertrsquos type scale where 1 stood for minimum
agreement and 7 stood for maximum agreement
Tools Used for Data Analysis
Item to total correlation was applied to check the internal consistency of the questionnaire The
measures were standardized through computation of reliability and validity
Factor analysis was applied to identify the underlying factors
Z-test was applied to find out the significant differences between male and
female investors
Results and Discussions
Consistency Measure
Firstly consistency of all the items in the questionnaire is checked through item to total correlation
Under this correlation of every item with total is measured and the computed value is compared
with standard value (ie 01590) If the computed value is found less than standard value then
whole factorstatement is dropped and will be termed as inconsistent
15
SNO ITEMS COMPUTED
CORRELATIO
N VALUE
CONSISTE
NT
ACCEPTED
DROPPED
1 Awareness about terms and conditions of
policy
0671575 Consistent Accepted
2 Provide services on time 0651847 Consistent Accepted
3 Provide satisfactory services 0573518 Consistent Accepted
4 Goodwill of the company 0607722 Consistent Accepted
5 Agent is well informed about policies 0640696 Consistent Accepted
6 Co-operative and friendly agent 0598089 Consistent Accepted
7 Agent respond promptly 0696914 Consistent Accepted
8 Proper reminder of installments by
agents
0531124 Consistent Accepted
9 Employees responsible towards
customers
0685817 Consistent Accepted
10 Benefits are met by policy 0510702 Consistent Accepted
11 Selection of highly reputed company 0634614 Consistent Accepted
12 Reputation of the insurance company 0582977 Consistent Accepted
13 Hassle free settlements 0594282 Consistent Accepted
14 Personal attention on every costumer 0640192 Consistent Accepted
15 Understand Customerrsquos financial needs 0603133 Consistent Accepted
16 Fulfill its promise towards policy 0613243 Consistent Accepted
17 Provides the claims on time 0474994 Consistent Accepted
18 Settlement of claims easy and timely 0569959 Consistent Accepted
19 Satisfy with relationship to company 0621496 Consistent Accepted
20 Company able to fulfill expectation 0594265 Consistent Accepted
21 Only company I want to associate
myself
0519161 Consistent Accepted
22 Purchase more policies from the same
company
0502876 Consistent Accepted
16
23 Suggest friends and family to purchase
policy from the same company
0540626 Consistent Accepted
24 Policy benefits benchmarks 062874 Consistent Accepted
25 Investment in life insurance is more
secure than stock market
0376874 Consistent Accepted
26 Purchase further policies from other
companies
0091102 Inonsistent Dropped
Reliability
Reliability test was carried out using SPSS software and the reliability of the items was measured
The result is as follows
Cronbachrsquos Alpha 0919
It can be seen that the reliability value is more than 07 So the questionnaire is
highly reliable
Description of factors
1 Company Loyalty
This factor includes that this is the only company the consumer wants to associate himself with in
future (0814) himself would purchase more policies from the same company (0799) suggest
friends and family to purchase policy from the same company (0790) company able to fulfill
expectation (0599) Policy benefits benchmarks (0545) The highest Eigen value lies in this factor
35213 So it is been considered as the highly contributing factor towards study Therefore it is
clear that company loyalty plays an important role in investment decisions of investors
17
2 Services Quality
This factor includes hassle free settlements (0693) employees responsible towards customers
(0631) agents respond promptly (0611) investment in life insurance is more secure than stock
market (0563) satisfy with relationship to company (0537) As we can see that the Eigen value for
factor service quality is 9753 which is also a contributing factor towards the study so it can also be considered as an the study
3 Ease of Procedures
This factor includes the company provides claims on time (0852) co- operative and friendly agent
(0662) settlement of claims easy and timely (0651) agent is well informed about policies (0486) As
we can see that the Eigen value for factor ease of procedures is 5830 which is also a contributing
factor towards the study so it can also be considered as an important factor inconsumerrsquos financial
needs (0404) As we can see that the Eigen value for factor company client relationship is 4051
which is also a contributing factor towards the study so it can also be considered as an important factor
in the study
4 Satisfaction Level
This factor includes that the suggested benefits of Insurance Policy should be met to the investors
( 0774) Company provides them satisfactory services (0631) fulfill its promise about life
insurance policy (0575) Services should be provided on time(0515) and awareness of terms and
conditions of policies As we can see that the Eigen value for factor satisfaction level is 5008
which is also a contributing factor towards the study so it can also be considered as an important
factor in the study
5 Company Image
This factor includes that the insurance company should be well known in the industry (0777)
insurance provider should have goodwill in market (0758) and company of high repute (0428)As
we can see that the Eigen value for factor company image is 4878 which is also a contributing
factor towards the study so it can also be considered as an important factor in the study
18
6 Company-Client Relationship
This factor includes that the agent remind about premium installments (0778) pay personal
attention on every consumer (0505) and understand consumerrsquos financial needs (0404) As
we can see that the Eigen value for factor company client relationship is 4051 which is also a
contributing factor towards the study so it can also be considered as an important factor in the
study
Z-Test
Z-test was applied to find out significant difference between male and female investorrsquos perception
towards investment in life insurance policies
For applying Z-test mean and standard deviation was calculated then values were put in formula to
calculate standard error
Null Hypothesis Ho It states that there is no significant difference between the perception of male
and female investors towards investment in life insurance policies
GENDER MEAN SD SAMPLE
SIZE
SQUARE
OF
SD
MALE 14104 20078 75 403146
FEMALE 14594 17701 75 313348
Z = 15877
Since the value of Z is less than the standard value 196 at 5 level of significance so the null
hypothesis is accepted Therefore there is no significant difference between the perception of male
and female investors towards investment in life insurance policies
19
CONCLUSION
In present Indian market the investment habits of Indian consumers are changing very frequently
The individuals have their own perception towards various types of investment plans The study of
this research work was focused over consumerrsquos perception on investment towards Life Insurance
Services The objectives of the study were to evaluate the factors underlying consumer perception
towards investment in life insurance policies and to compare the differences in consumer
perception of male and female consumers The tests that were used for our research activities were-
Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25
items being accepted Next was Reliability Test to check the reliability of the items The
result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis
Test and the six factors that came out were Consumer Loyalty Service Quality Ease of
Procedures Satisfaction Level Company Image and Company-Client Relationship
The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind
sets for their investment pattern in insurance policies Still some actions are needed for
developing insurance market The major factors playing the role in developing
consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality
Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship
Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in
developing the market share loyalty and further development in insurance sector
20
References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)
21
Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in
Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)
22
INTRODUCTION
INDUSTRY PROFILE
INSURANCE INDIA
Insurance in law and economics is a form of risk management primarily used to hedge
against the risk of a contingent loss Insurance is defined as the equitable transfer of the
risk of a potential loss from one entity to another in exchange for a premium Insurance
is a federal subject in India and has a history dating back to 1818 Life and general
insurance in India is still a nascent sector with huge potential for various global players
with the life insurance premiums accounting to 25 of the countrys GDP while general
insurance premiums to 065 of Indias GDP The Insurance sector in India has gone
through a number of phases and changes particularly in the recent years when the Govt
of India in 1999 opened up the insurance sector by allowing private companies to solicit
insurance and also allowing FDI up to 26 Ever since the Indian insurance sector is
considered as a booming market with every other global insurance company wanting to
have a lions share Currently the largest life insurance company in India is still owned
by the government
In order to provide strict state control over Insurance business many acts were
passed th first being The Insurance Act 1938 The Life Insurance in India was
completely nationalised only on 19th Janurary 1956 through the Life Insurance
Corporation Act 1956 Nationalization was accomplished by the government acquisition
of the management of the existing insurance companies This resulted in the formation of
the Life Insurance Corporation of India on 1st September 1956 which enjoyed complete
monopoly in the life insurance industry till the year 1999
The remaining 100 odd General Insurance companies were nationalized by the
General Insurance Business (Nationalisation) Act 1972 subsequently merging them into
four companies All the companies were amalgamated into National Insurance New
2
India Assurance Oriental Insurance United India Insurance which were headquartered in
each of the four metropolitan cities
Till end of 1999-2000 fiscal year two state-run insurance companies namely
Life Insurance Corporation (LIC) and General Insurance Corporation (GIC) were the
monopoly insurance (both life and non-life) providers in IndiaThe year 1999 saw the
entrance of private insurance companies in Indian insurance sector The Govt of India
then introduced the Insurance Regulatory and Development Authority Act (IRDA) in
1999 thereby de-regulating the insurance sector and allowing private companies into the
insurance Further foreign investment was also allowed and capped at 26 holding in
the Indian insurance companies
MAJOR PLAYERS
The private insurance joint ventures have collected the premium of Rs101909
crore with the investment of just Rs3 000 crore in three years of liberalization The
private life insurance players have been significantly improving their market share when
compared to 50 years Old Corporation (ie LIC) As per the figures compiled by IRDA
the Life Insurance Industry recorded a total premium underwritten of Rs 1070796 crore
for the period under review Of this private players contributed to Rs1 01909 crore
accounting for 10 percent Life Insurance Corporation of India (LIC) the public sector
giant continued to lead with a premium collection of Rs968887 crore translating into a
market share of 90 per cent In terms of number of policies and schemes sold private
sector accounted for only 377per cent as compared to 9623 per cent share of LIC (The
Economic Times 21 March 2004)
The ICICI Prudential topped among the private players in terms of premium
collection It recorded a market share of 25 per cent followed by Birla SunLife with 15
3
percent HDFC Standard and Max New York Life with a market share of approximately
15 per cent each
In case of private non-life insurance players which their market share raised to
1413 per cent recorded a growth of 7075 per cent on an annual basis while the market
share of public sector stood at 8587 per cent registering a marginal growth of 634 per
cent The overall market has recorded a growth of 1232 per cent by the end of January
2004 Among the private non-life insurance players ICICI Lombard topped the list with
a market share of 305 per cent in one year period and with an annual growth rate of
1316 per cent followed by Bajaj Allianz with 291 per cent market share and Tata AIG
with 227 per cent market share and with an annual growth rate of 6260 per cent
LIFE INSURERS
1113090 Life Insurance Corporation of India
1113090 SBI Life Insurance Co Ltd
1113090 Allianz Bajaj Life Insurance Co Ltd
1113090 Om Kotak Mahindra Life Insurance Co Ltd
ICICI Prudential Life Insurance Co Ltd
1113090 HDFC Standard Life Insurance Co Ltd
1113090 Birla Sunlife Insurance Co Ltd
1113090 I1113090G Vysya Life Insurance Co Ltd
1113090 Tata-AIG Life Insurance CoLtd
1113090 Metlife India Insurance Co Pvt Ltd
1113090 AMP Sanmar Assurance Co Ltd
1113090 Dabur CGU Life Insurance Co Pvt Ltd
1113090 Max 1113090ew York Life Insurance Co Ltd
4
COMPANY PROFILE
Indias Number One private life insurer ICICI Prudential Life Insurance
Company is a joint venture between ICICI Bank Ltd-one of Indias foremost financial
services company- and Prudential plc - a leading international financial services group
headquartered in the United Kingdom Total capital infusion stands at Rs 2060 billion
with ICICI Bank holding a stake of 74 and Prudential plc holding 26
Indiarsquos number One private insurerICICI Prudential Life Insurance Company is a joint venture
between icici bank ltd one of India foremost financial services company and prudential plc a
leading international financial services group headquartered in uk tatal capital infusion stands at rs
2060 billionwith icici bank holding a stake of 74 and prudentail
They began their operations in December 2000 after receiving approval from
Insurance Regulatory Development Authority (IRDA) and are headquartered in Mumbai
Today their nation-wide team comprises of over 580 offices over 234000 advisors and
22 banc assurance partners
INTRODUCTION OF ICICI PRUDENTIAL
ICICI Prudential was the first life insurer in India to receive a National Insurer
Financial Strength rating of AAA (Ind) from Fitch ratings For three years in a row
ICICI Prudential has been voted as Indias Most Trusted Private Life Insurer by The
Economic Times - AC Nielsen ORG Marg survey of Most Trusted Brands
The ICICI Prudential edge comes from the commitment to their customers in all
that they do ndash be it product development distribution the sales process or servicing
ICICI Prudential products have been developed after a clear and thorough understanding
of customer needs Having the right products is the first step but itrsquos equally important to
ensure that customers can access them easily and quickly To this end ICICI Prudential
has an advisor base across the length and breadth of the country and also partners with
leading banks corporate agents and brokers to distribute their products Robust risk
management and underwriting practices form the core of their business With clear
guidelines in place they ensure a smooth and hassle-free claims process
5
Entrusted with helping customers meet their long-term goals they adopt an
investment philosophy that aims to achieve risk adjusted returns over the long-term
Their 16000+ strong staff is given the opportunity to learn and grow everyday in a
multitude of ways This keeps them engaged and enthusiastic so that they can deliver on
the promise to cover customer at every step of life
For the past six years ICICI Prudential has retained its position as the No 1
private life insurer in the country with a wide range of flexible products that meet the
needs of the Indian customer at every step in life
PLANS
There are two main types of plans ndash ULIP and Traditional
Unit Linked Insurance Product
ULIPs have gained high acceptance due to attractive features they offer These
include
1113090 Flexibility Flexibility to choose sum assured Flexibility to choose premium
amount Option to change level of Premium Sum Assured even after the plan has
started Flexibility to change asset allocation by switching between funds
1113090 Transparency Charges in the plan and net amount invested are known to the
customer Customer has the convenience of tracking hisher investment performance
on a daily basis
1113091 Liquidity Customer has the option to withdraw money after few years ie the option
of low minimum tenure Partial or systematic withdrawals are allowed
1113090 Fund Options A choice of funds is provided to customers ranging from equity debt
cash or a combination They can choose the fund mix based on desired asset
allocation
Traditional Endowment Plans
These are the old type of plans available These plans cater to customers with a
low risk appetite Some of the common features of the traditional plans are
1113090 Steady Investment Major chunk of investible funds are in debt instruments Though
6
low but steady and almost assured returns are expected over the long term
1113091 Death Benefit death benefit is sum assured with guaranteed and vested bonus
1113090 Asset Creation Helps in asset creation as they are for a long tenure
1113091 Fixed Ratios Premium to sum assured ratios is fixed for each plan and age
1113090 Withdrawals Withdrawals are generally not allowed before maturity
PRODUCTS
INSURANCE SOLUTIONS FOR INDIVIDUALS
ICICI Prudential Life Insurance offers a range of innovative customer-centric products
that meet the needs of customers at every life stage Its products can be enhanced up to 4
riders to create a customized solution for each policyholder
Savings amp Wealth Creation Solutions
1113090 Cash Plus is a transparent feature-packed savings plan that offers 3 levels of
protection as well as liquidity options
1113090 Save n Protect is a traditional endowment savings plan that offers life protection
along with adequate returns
1113091 CashBak is an anticipated endowment policy ideal for meeting milestone expenses
like a childs marriage expenses for a childs higher education or purchase of an
asset It is available for terms of 15 and 20 years
1113091 LifeTime Super amp LifeTime Plus are unit-linked plans that offer customers the
flexibility and control to customize the policy to meet the changing needs at
different life stages Each offer 4 fund options - Preserver Protector Balancer and
Maximizer
1113091 Life Link Super is a single premium unit linked insurance Plan which combines life
insurance cover with the opportunity to stay invested in the stock market
1113090 Premier Life Gold is a limited premium paying plan specially structured for long-
term wealth creation
1113090 Invest Shield Life is a unit linked plan that provides premium guarantee on the
7
invested premiums and ensures that the customer receives only the benefits of fund
appreciation without any of the risks of depreciation
1113090 Invest Shield Cash back is a unit linked plan that provides premium guarantee
on the invested premiums along with flexible liquidity options
Protection Solutions
1113090 LifeGuard is a protection plan which offers life cover at low cost It is available in
3 options - level term assurance level term assurance with return of premium amp
single premium
1113090 HomeAssure is a mortgage reducing term assurance plan designed specifically to
help customers cover their home loans in a simple and cost-effective manner
Child Plans
1113090 Education insurance under the Smart Kid brand provides guaranteed educational
benefits to a child along with life insurance cover for the parent who purchases the
policy The policy is designed to provide money at important milestones in the
childs life Smart Kid plans are also available in unit-linked form - both single
premium and regular premium
Retirement Solutions
1113090 ForeverLife is a traditional retirement product that offers guaranteed returns for the
first 4 years and then declares bonuses annually
1113090 LifeTime Super Pension is a regular premium unit linked pension plan that helps
one accumulate over the long term and offers an annuity option (guaranteed income
for life) at the time of retirement
1113090 LifeLink Super Pension is a single premium unit linked pension plan
1113090 Immediate Annuity is a single premium annuity product that guarantees income for
life at the time of retirement It offers the benefit of 5 payout options
Health Solutions
1113090 Health Assure and Health Assure Plus Health Assure is a regular premium plan
which provides long term cover against 6 critical illnesses by providing policyholder
8
with financial assistance irrespective of the actual medical expenses Health Assure
Plus offers the added advantage of an equivalent life insurance cover
1113090 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
1113090 Diabetes Care Diabetes Care is the first ever critical illness product especially for
individuals with Type 2 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
1113090 Hospital Care Hospital Care is structured to ensure customers receive a pre-
determined insurance amount for each procedure or hospitalization even if they
spend less Further its long-term design of a term between 10-20 years assures
policyholders the guaranteed cushion of insurance cover even if they make a claim
during the term Available for individuals between the ages of 1-60 years this is one
of the first products that will cover people up to the age of 80 years
GROUP INSURANCE SOLUTIONS
ICICI Prudential also offers Group Insurance Solutions for companies seeking to enhance
benefits to their employees
1113090 Group Gratuity Plan ICICI Prudentials group gratuity plan helps employers fund
their statutory gratuity obligation in a scientific manner The plan can also be
customized to structure schemes that can provide benefits beyond the statutory
obligations
1113090 Group Superannuation Plan ICICI Prudential offers both defined contribution
(DC) and defined benefit (DB) superannuation schemes to optimize returns for the
members of the trust and rationalize the cost Members have the option of choosing
from various annuity options or opting for a partial commutation of the annuity at
the time of retirement
1113090 Group Immediate Annuities In addition to the annuities offered to existing
superannuation customers they offer immediate annuities to superannuation funds
not managed by them
1113090 Group Term Plan ICICI Prudentials flexible group term solution helps provide
affordable cover to members of a group The cover could be uniform or based on
designationrank or a multiple of salary The benefit under the policy is paid to the
9
beneficiary nominated by the member on hisher death
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
1113090 Accident amp disability benefit If death occurs as the result of an accident during the
term of the policy the beneficiary receives an additional amount equal to the rider sum assured
under the policy If the death occurs while traveling in an authorized
mass transport vehicle the beneficiary will be entitled to twice the sum assured as
additional benefit
1113090 Critical Illness Benefit protects the insured against financial loss in the event of 9
specified critical illnesses Benefits are payable to the insured for medical expenses
prior to death
1113090 Income Benefit This rider pays the 10 of the sum assured to the nominee every
year till maturity in the event of the death of the life assured It is available on
SmarKid and CashPlus
1113090 Waiver of Premium In case of total and permanent disability due to an accident
the future premiums continue to be paid by the company till the time of maturity
This rider is available with LifeTime Super LifeTime Super Pension and CashPlus
HISTORY OF ICICI PRUDENTIAL
As mentioned earlier ICICI Prudential Life Insurance Company is a joint venture
between ICICI Bank - one of Indias foremost financial services company - and
Prudential plc - a leading international financial services group headquartered in the
United Kingdom
HISTORY OF ICICI PRUDENTIAL
As mentioned earlier icici prudential life insurance company is a joint venture between icici bank
one of India foremost financial services company and prudential plc a leading international
financial services group headquarterd in tha united kingdom
10
ICICI Bank
ICICI Bank (1113090YSEIB1113090) is Indias second largest bank and largest private sector bank
with over 50 years presence in financial services and with assets of over Rs 344658 bn
(USD 79 billion) as on March 31 2007 The 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 specialized subsidiaries in the areas of investment
banking life and non-life insurance private equity and asset management ICICI Bank is
a leading player in the retail banking market and services its large customer base through
a network of over 950 branches and extension counters 3300 ATMs call centers and
internet banking to ensure that customers have access to its services at all times
Prudential Plc
Established in London in 1848 Prudential plc through its businesses in the UK and
Europe the US and Asia provides retail financial services products and services to more
than 20 million customers policyholder and unit holders and manages over pound251 billion
of funds worldwide (as of 31 December 2006) In Asia Prudential is the leading
European life insurance company with life operations in China Hong Kong India
Indonesia Japan Korea Malaysia the Philippines Singapore Taiwan Thailand and
Vietnam Prudential is the second largest retail fund manager for Asian sourced assets ex-
Japan as at June 2006 Its fund management business has expanded into a total of ten markets
China Hong Kong India Japan Korea Malaysia Singapore Taiwan Vietnam
and United Arab Emirates
ICICI Prudential has been the market leader in the private life insurance sector
contributing to 30 of the growth share followed by the SBI Life Insurance with 18
share Members like Ms Shikha Sharma CEO amp MD Ms Anita Pai EVP ndash
Customer Service amp Technology Mr Puneet Nanda CIO Mr Binayak Dutta Chief ndash
Sales amp Distribution have been with the company since its inception in 2000 and are
instrumental in developing ICIC Prudential to this level
The first policy was sold on 12th December 2000 Within 1 year ICICI Prudential
achieved 25000 policies and thereby growing at a faster rate achieved 1 million policies
by October 2004 By 2010 ICICI Prudential has a target to achieve 20 million customers
AWARDS amp RECOGNITION
AWARDS
11
1113090 Indias Most Customer Responsive Insurance Company
Avaya GlobalConnect - Economic Times
Customer Responsiveness Awards
1113090 Most Trusted Private Life Insurer
The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003
2004 and 2005
1113090 Prudence Customer Centricity Award 2004 amp 2005
Prudential Corporation Asia
1113090 Best Life Insurer 2003
Outlook Money Awards 2003 amp 2004
1113090 Superbrand 2003-04
1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising
campaign
Effies 2003
RECOGNITIONS
1113090 IMM Award for Excellence
Institute of Marketing amp Management
1113090 Organisation with Innovative HR Practices
Indira Group of Institutes
1113090 Most Trusted Private Life Insurer
The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003
2004 and 2005
1113090 Prudence Customer Centricity Award 2004 amp 2005
Prudential Corporation Asia
1113090 Best Life Insurer 2003
Outlook Money Awards 2003 amp 2004
1113090 Superbrand 2003-04
1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising
campaign
Effies 2003
12
Review of Literature
Mehr and Cammack (1976) agrees that insurance is usually thought of as a product that spreads the
risk of serious but low-probability losses among a group of individuals thus providing some
financial protection to each individual Kunreuther (1979) said that his product makes good sense
particularly when the protection is purchased against potential losses so large as to be catastrophic
such as total destruction of ones home a large accident liability judgment or death of primary
family breadwinner However it has long been recognized that this sensible product is difficult to
sellv
Kahneman amp Tversky (1984) stated indeed repeated demonstrations have shown most people lack
an adequate understanding of probability and risk concepts Dhar (1997) Greenleaf and Lehmann
(1995) Tversky and Shafir (1992) have shown that offering more options can generate decision
conflict and preference uncertainty leading to decision deferral
Kotler (1973) considers insurance to be in the category of unsought goods along with products
such as preventive dental services and burial plotsHe notes that unsought goods pose special
challenges to the marketer
Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) found that subjects were more likely
to buy insurance against small high-probability losses than insurance against large low- probability
losses Hershey and Schoemaker (1980) reported the opposite result
Kunreuther (1979) ldquoIt is not the magnitude of a potential loss that inspires people to buy insurance
voluntarily ndash it is the frequency with which a loss is likely to occurrdquo
Michael L Smith (1982) said that a typical life insurance contract provides a package of options or
rights to the policy owner that is not precisely duplicated by any other combination of commonly
available contracts Viewed from this perspective life insurance enjoys a unique position in the
field of investments and should be judged in this light The paper shows that an options viewpoint
provides a more complete explanation of policy owner behavior towards life insurance than the
conventional savings-and-protection view
13
Michael L Walden (1985) told that the options package view of the whole a
whole life policy is a package of options each of which has value and is expected to influence the
price of the policy This viewpoint implies the general hypothesis that price differences between
whole life policies can be explained by differences in policy contract provisions and differences in
selected company characteristics
OBJECTIVE
o To evaluate the factors underlying consumer perception towards investment in life insurance
policies
o To compare the differences in consumer perception of male and
female consumers
RESEARCH METHODOLOGY
The Study The study was exploratory in nature with survey method being used to complete the
study
Sampling Design
Population
Population included investors in NCR region
Sample frame
Since the data was collected through personal contacts the sample frames were the individuals who
are investing in life insurance policies
Sampling elements
Individual respondents were the sampling elements
14
Sampling Techniques
Random sampling technique was used to select the samples
Sample Size
Sample size was 150 respondents
Tools Used for Data Collection
Self designed questionnaire was used for the evaluation of factors affecting consumerrsquos perception
towards insurance Data was collected on Likertrsquos type scale where 1 stood for minimum
agreement and 7 stood for maximum agreement
Tools Used for Data Analysis
Item to total correlation was applied to check the internal consistency of the questionnaire The
measures were standardized through computation of reliability and validity
Factor analysis was applied to identify the underlying factors
Z-test was applied to find out the significant differences between male and
female investors
Results and Discussions
Consistency Measure
Firstly consistency of all the items in the questionnaire is checked through item to total correlation
Under this correlation of every item with total is measured and the computed value is compared
with standard value (ie 01590) If the computed value is found less than standard value then
whole factorstatement is dropped and will be termed as inconsistent
15
SNO ITEMS COMPUTED
CORRELATIO
N VALUE
CONSISTE
NT
ACCEPTED
DROPPED
1 Awareness about terms and conditions of
policy
0671575 Consistent Accepted
2 Provide services on time 0651847 Consistent Accepted
3 Provide satisfactory services 0573518 Consistent Accepted
4 Goodwill of the company 0607722 Consistent Accepted
5 Agent is well informed about policies 0640696 Consistent Accepted
6 Co-operative and friendly agent 0598089 Consistent Accepted
7 Agent respond promptly 0696914 Consistent Accepted
8 Proper reminder of installments by
agents
0531124 Consistent Accepted
9 Employees responsible towards
customers
0685817 Consistent Accepted
10 Benefits are met by policy 0510702 Consistent Accepted
11 Selection of highly reputed company 0634614 Consistent Accepted
12 Reputation of the insurance company 0582977 Consistent Accepted
13 Hassle free settlements 0594282 Consistent Accepted
14 Personal attention on every costumer 0640192 Consistent Accepted
15 Understand Customerrsquos financial needs 0603133 Consistent Accepted
16 Fulfill its promise towards policy 0613243 Consistent Accepted
17 Provides the claims on time 0474994 Consistent Accepted
18 Settlement of claims easy and timely 0569959 Consistent Accepted
19 Satisfy with relationship to company 0621496 Consistent Accepted
20 Company able to fulfill expectation 0594265 Consistent Accepted
21 Only company I want to associate
myself
0519161 Consistent Accepted
22 Purchase more policies from the same
company
0502876 Consistent Accepted
16
23 Suggest friends and family to purchase
policy from the same company
0540626 Consistent Accepted
24 Policy benefits benchmarks 062874 Consistent Accepted
25 Investment in life insurance is more
secure than stock market
0376874 Consistent Accepted
26 Purchase further policies from other
companies
0091102 Inonsistent Dropped
Reliability
Reliability test was carried out using SPSS software and the reliability of the items was measured
The result is as follows
Cronbachrsquos Alpha 0919
It can be seen that the reliability value is more than 07 So the questionnaire is
highly reliable
Description of factors
1 Company Loyalty
This factor includes that this is the only company the consumer wants to associate himself with in
future (0814) himself would purchase more policies from the same company (0799) suggest
friends and family to purchase policy from the same company (0790) company able to fulfill
expectation (0599) Policy benefits benchmarks (0545) The highest Eigen value lies in this factor
35213 So it is been considered as the highly contributing factor towards study Therefore it is
clear that company loyalty plays an important role in investment decisions of investors
17
2 Services Quality
This factor includes hassle free settlements (0693) employees responsible towards customers
(0631) agents respond promptly (0611) investment in life insurance is more secure than stock
market (0563) satisfy with relationship to company (0537) As we can see that the Eigen value for
factor service quality is 9753 which is also a contributing factor towards the study so it can also be considered as an the study
3 Ease of Procedures
This factor includes the company provides claims on time (0852) co- operative and friendly agent
(0662) settlement of claims easy and timely (0651) agent is well informed about policies (0486) As
we can see that the Eigen value for factor ease of procedures is 5830 which is also a contributing
factor towards the study so it can also be considered as an important factor inconsumerrsquos financial
needs (0404) As we can see that the Eigen value for factor company client relationship is 4051
which is also a contributing factor towards the study so it can also be considered as an important factor
in the study
4 Satisfaction Level
This factor includes that the suggested benefits of Insurance Policy should be met to the investors
( 0774) Company provides them satisfactory services (0631) fulfill its promise about life
insurance policy (0575) Services should be provided on time(0515) and awareness of terms and
conditions of policies As we can see that the Eigen value for factor satisfaction level is 5008
which is also a contributing factor towards the study so it can also be considered as an important
factor in the study
5 Company Image
This factor includes that the insurance company should be well known in the industry (0777)
insurance provider should have goodwill in market (0758) and company of high repute (0428)As
we can see that the Eigen value for factor company image is 4878 which is also a contributing
factor towards the study so it can also be considered as an important factor in the study
18
6 Company-Client Relationship
This factor includes that the agent remind about premium installments (0778) pay personal
attention on every consumer (0505) and understand consumerrsquos financial needs (0404) As
we can see that the Eigen value for factor company client relationship is 4051 which is also a
contributing factor towards the study so it can also be considered as an important factor in the
study
Z-Test
Z-test was applied to find out significant difference between male and female investorrsquos perception
towards investment in life insurance policies
For applying Z-test mean and standard deviation was calculated then values were put in formula to
calculate standard error
Null Hypothesis Ho It states that there is no significant difference between the perception of male
and female investors towards investment in life insurance policies
GENDER MEAN SD SAMPLE
SIZE
SQUARE
OF
SD
MALE 14104 20078 75 403146
FEMALE 14594 17701 75 313348
Z = 15877
Since the value of Z is less than the standard value 196 at 5 level of significance so the null
hypothesis is accepted Therefore there is no significant difference between the perception of male
and female investors towards investment in life insurance policies
19
CONCLUSION
In present Indian market the investment habits of Indian consumers are changing very frequently
The individuals have their own perception towards various types of investment plans The study of
this research work was focused over consumerrsquos perception on investment towards Life Insurance
Services The objectives of the study were to evaluate the factors underlying consumer perception
towards investment in life insurance policies and to compare the differences in consumer
perception of male and female consumers The tests that were used for our research activities were-
Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25
items being accepted Next was Reliability Test to check the reliability of the items The
result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis
Test and the six factors that came out were Consumer Loyalty Service Quality Ease of
Procedures Satisfaction Level Company Image and Company-Client Relationship
The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind
sets for their investment pattern in insurance policies Still some actions are needed for
developing insurance market The major factors playing the role in developing
consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality
Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship
Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in
developing the market share loyalty and further development in insurance sector
20
References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)
21
Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in
Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)
22
India Assurance Oriental Insurance United India Insurance which were headquartered in
each of the four metropolitan cities
Till end of 1999-2000 fiscal year two state-run insurance companies namely
Life Insurance Corporation (LIC) and General Insurance Corporation (GIC) were the
monopoly insurance (both life and non-life) providers in IndiaThe year 1999 saw the
entrance of private insurance companies in Indian insurance sector The Govt of India
then introduced the Insurance Regulatory and Development Authority Act (IRDA) in
1999 thereby de-regulating the insurance sector and allowing private companies into the
insurance Further foreign investment was also allowed and capped at 26 holding in
the Indian insurance companies
MAJOR PLAYERS
The private insurance joint ventures have collected the premium of Rs101909
crore with the investment of just Rs3 000 crore in three years of liberalization The
private life insurance players have been significantly improving their market share when
compared to 50 years Old Corporation (ie LIC) As per the figures compiled by IRDA
the Life Insurance Industry recorded a total premium underwritten of Rs 1070796 crore
for the period under review Of this private players contributed to Rs1 01909 crore
accounting for 10 percent Life Insurance Corporation of India (LIC) the public sector
giant continued to lead with a premium collection of Rs968887 crore translating into a
market share of 90 per cent In terms of number of policies and schemes sold private
sector accounted for only 377per cent as compared to 9623 per cent share of LIC (The
Economic Times 21 March 2004)
The ICICI Prudential topped among the private players in terms of premium
collection It recorded a market share of 25 per cent followed by Birla SunLife with 15
3
percent HDFC Standard and Max New York Life with a market share of approximately
15 per cent each
In case of private non-life insurance players which their market share raised to
1413 per cent recorded a growth of 7075 per cent on an annual basis while the market
share of public sector stood at 8587 per cent registering a marginal growth of 634 per
cent The overall market has recorded a growth of 1232 per cent by the end of January
2004 Among the private non-life insurance players ICICI Lombard topped the list with
a market share of 305 per cent in one year period and with an annual growth rate of
1316 per cent followed by Bajaj Allianz with 291 per cent market share and Tata AIG
with 227 per cent market share and with an annual growth rate of 6260 per cent
LIFE INSURERS
1113090 Life Insurance Corporation of India
1113090 SBI Life Insurance Co Ltd
1113090 Allianz Bajaj Life Insurance Co Ltd
1113090 Om Kotak Mahindra Life Insurance Co Ltd
ICICI Prudential Life Insurance Co Ltd
1113090 HDFC Standard Life Insurance Co Ltd
1113090 Birla Sunlife Insurance Co Ltd
1113090 I1113090G Vysya Life Insurance Co Ltd
1113090 Tata-AIG Life Insurance CoLtd
1113090 Metlife India Insurance Co Pvt Ltd
1113090 AMP Sanmar Assurance Co Ltd
1113090 Dabur CGU Life Insurance Co Pvt Ltd
1113090 Max 1113090ew York Life Insurance Co Ltd
4
COMPANY PROFILE
Indias Number One private life insurer ICICI Prudential Life Insurance
Company is a joint venture between ICICI Bank Ltd-one of Indias foremost financial
services company- and Prudential plc - a leading international financial services group
headquartered in the United Kingdom Total capital infusion stands at Rs 2060 billion
with ICICI Bank holding a stake of 74 and Prudential plc holding 26
Indiarsquos number One private insurerICICI Prudential Life Insurance Company is a joint venture
between icici bank ltd one of India foremost financial services company and prudential plc a
leading international financial services group headquartered in uk tatal capital infusion stands at rs
2060 billionwith icici bank holding a stake of 74 and prudentail
They began their operations in December 2000 after receiving approval from
Insurance Regulatory Development Authority (IRDA) and are headquartered in Mumbai
Today their nation-wide team comprises of over 580 offices over 234000 advisors and
22 banc assurance partners
INTRODUCTION OF ICICI PRUDENTIAL
ICICI Prudential was the first life insurer in India to receive a National Insurer
Financial Strength rating of AAA (Ind) from Fitch ratings For three years in a row
ICICI Prudential has been voted as Indias Most Trusted Private Life Insurer by The
Economic Times - AC Nielsen ORG Marg survey of Most Trusted Brands
The ICICI Prudential edge comes from the commitment to their customers in all
that they do ndash be it product development distribution the sales process or servicing
ICICI Prudential products have been developed after a clear and thorough understanding
of customer needs Having the right products is the first step but itrsquos equally important to
ensure that customers can access them easily and quickly To this end ICICI Prudential
has an advisor base across the length and breadth of the country and also partners with
leading banks corporate agents and brokers to distribute their products Robust risk
management and underwriting practices form the core of their business With clear
guidelines in place they ensure a smooth and hassle-free claims process
5
Entrusted with helping customers meet their long-term goals they adopt an
investment philosophy that aims to achieve risk adjusted returns over the long-term
Their 16000+ strong staff is given the opportunity to learn and grow everyday in a
multitude of ways This keeps them engaged and enthusiastic so that they can deliver on
the promise to cover customer at every step of life
For the past six years ICICI Prudential has retained its position as the No 1
private life insurer in the country with a wide range of flexible products that meet the
needs of the Indian customer at every step in life
PLANS
There are two main types of plans ndash ULIP and Traditional
Unit Linked Insurance Product
ULIPs have gained high acceptance due to attractive features they offer These
include
1113090 Flexibility Flexibility to choose sum assured Flexibility to choose premium
amount Option to change level of Premium Sum Assured even after the plan has
started Flexibility to change asset allocation by switching between funds
1113090 Transparency Charges in the plan and net amount invested are known to the
customer Customer has the convenience of tracking hisher investment performance
on a daily basis
1113091 Liquidity Customer has the option to withdraw money after few years ie the option
of low minimum tenure Partial or systematic withdrawals are allowed
1113090 Fund Options A choice of funds is provided to customers ranging from equity debt
cash or a combination They can choose the fund mix based on desired asset
allocation
Traditional Endowment Plans
These are the old type of plans available These plans cater to customers with a
low risk appetite Some of the common features of the traditional plans are
1113090 Steady Investment Major chunk of investible funds are in debt instruments Though
6
low but steady and almost assured returns are expected over the long term
1113091 Death Benefit death benefit is sum assured with guaranteed and vested bonus
1113090 Asset Creation Helps in asset creation as they are for a long tenure
1113091 Fixed Ratios Premium to sum assured ratios is fixed for each plan and age
1113090 Withdrawals Withdrawals are generally not allowed before maturity
PRODUCTS
INSURANCE SOLUTIONS FOR INDIVIDUALS
ICICI Prudential Life Insurance offers a range of innovative customer-centric products
that meet the needs of customers at every life stage Its products can be enhanced up to 4
riders to create a customized solution for each policyholder
Savings amp Wealth Creation Solutions
1113090 Cash Plus is a transparent feature-packed savings plan that offers 3 levels of
protection as well as liquidity options
1113090 Save n Protect is a traditional endowment savings plan that offers life protection
along with adequate returns
1113091 CashBak is an anticipated endowment policy ideal for meeting milestone expenses
like a childs marriage expenses for a childs higher education or purchase of an
asset It is available for terms of 15 and 20 years
1113091 LifeTime Super amp LifeTime Plus are unit-linked plans that offer customers the
flexibility and control to customize the policy to meet the changing needs at
different life stages Each offer 4 fund options - Preserver Protector Balancer and
Maximizer
1113091 Life Link Super is a single premium unit linked insurance Plan which combines life
insurance cover with the opportunity to stay invested in the stock market
1113090 Premier Life Gold is a limited premium paying plan specially structured for long-
term wealth creation
1113090 Invest Shield Life is a unit linked plan that provides premium guarantee on the
7
invested premiums and ensures that the customer receives only the benefits of fund
appreciation without any of the risks of depreciation
1113090 Invest Shield Cash back is a unit linked plan that provides premium guarantee
on the invested premiums along with flexible liquidity options
Protection Solutions
1113090 LifeGuard is a protection plan which offers life cover at low cost It is available in
3 options - level term assurance level term assurance with return of premium amp
single premium
1113090 HomeAssure is a mortgage reducing term assurance plan designed specifically to
help customers cover their home loans in a simple and cost-effective manner
Child Plans
1113090 Education insurance under the Smart Kid brand provides guaranteed educational
benefits to a child along with life insurance cover for the parent who purchases the
policy The policy is designed to provide money at important milestones in the
childs life Smart Kid plans are also available in unit-linked form - both single
premium and regular premium
Retirement Solutions
1113090 ForeverLife is a traditional retirement product that offers guaranteed returns for the
first 4 years and then declares bonuses annually
1113090 LifeTime Super Pension is a regular premium unit linked pension plan that helps
one accumulate over the long term and offers an annuity option (guaranteed income
for life) at the time of retirement
1113090 LifeLink Super Pension is a single premium unit linked pension plan
1113090 Immediate Annuity is a single premium annuity product that guarantees income for
life at the time of retirement It offers the benefit of 5 payout options
Health Solutions
1113090 Health Assure and Health Assure Plus Health Assure is a regular premium plan
which provides long term cover against 6 critical illnesses by providing policyholder
8
with financial assistance irrespective of the actual medical expenses Health Assure
Plus offers the added advantage of an equivalent life insurance cover
1113090 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
1113090 Diabetes Care Diabetes Care is the first ever critical illness product especially for
individuals with Type 2 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
1113090 Hospital Care Hospital Care is structured to ensure customers receive a pre-
determined insurance amount for each procedure or hospitalization even if they
spend less Further its long-term design of a term between 10-20 years assures
policyholders the guaranteed cushion of insurance cover even if they make a claim
during the term Available for individuals between the ages of 1-60 years this is one
of the first products that will cover people up to the age of 80 years
GROUP INSURANCE SOLUTIONS
ICICI Prudential also offers Group Insurance Solutions for companies seeking to enhance
benefits to their employees
1113090 Group Gratuity Plan ICICI Prudentials group gratuity plan helps employers fund
their statutory gratuity obligation in a scientific manner The plan can also be
customized to structure schemes that can provide benefits beyond the statutory
obligations
1113090 Group Superannuation Plan ICICI Prudential offers both defined contribution
(DC) and defined benefit (DB) superannuation schemes to optimize returns for the
members of the trust and rationalize the cost Members have the option of choosing
from various annuity options or opting for a partial commutation of the annuity at
the time of retirement
1113090 Group Immediate Annuities In addition to the annuities offered to existing
superannuation customers they offer immediate annuities to superannuation funds
not managed by them
1113090 Group Term Plan ICICI Prudentials flexible group term solution helps provide
affordable cover to members of a group The cover could be uniform or based on
designationrank or a multiple of salary The benefit under the policy is paid to the
9
beneficiary nominated by the member on hisher death
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
1113090 Accident amp disability benefit If death occurs as the result of an accident during the
term of the policy the beneficiary receives an additional amount equal to the rider sum assured
under the policy If the death occurs while traveling in an authorized
mass transport vehicle the beneficiary will be entitled to twice the sum assured as
additional benefit
1113090 Critical Illness Benefit protects the insured against financial loss in the event of 9
specified critical illnesses Benefits are payable to the insured for medical expenses
prior to death
1113090 Income Benefit This rider pays the 10 of the sum assured to the nominee every
year till maturity in the event of the death of the life assured It is available on
SmarKid and CashPlus
1113090 Waiver of Premium In case of total and permanent disability due to an accident
the future premiums continue to be paid by the company till the time of maturity
This rider is available with LifeTime Super LifeTime Super Pension and CashPlus
HISTORY OF ICICI PRUDENTIAL
As mentioned earlier ICICI Prudential Life Insurance Company is a joint venture
between ICICI Bank - one of Indias foremost financial services company - and
Prudential plc - a leading international financial services group headquartered in the
United Kingdom
HISTORY OF ICICI PRUDENTIAL
As mentioned earlier icici prudential life insurance company is a joint venture between icici bank
one of India foremost financial services company and prudential plc a leading international
financial services group headquarterd in tha united kingdom
10
ICICI Bank
ICICI Bank (1113090YSEIB1113090) is Indias second largest bank and largest private sector bank
with over 50 years presence in financial services and with assets of over Rs 344658 bn
(USD 79 billion) as on March 31 2007 The 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 specialized subsidiaries in the areas of investment
banking life and non-life insurance private equity and asset management ICICI Bank is
a leading player in the retail banking market and services its large customer base through
a network of over 950 branches and extension counters 3300 ATMs call centers and
internet banking to ensure that customers have access to its services at all times
Prudential Plc
Established in London in 1848 Prudential plc through its businesses in the UK and
Europe the US and Asia provides retail financial services products and services to more
than 20 million customers policyholder and unit holders and manages over pound251 billion
of funds worldwide (as of 31 December 2006) In Asia Prudential is the leading
European life insurance company with life operations in China Hong Kong India
Indonesia Japan Korea Malaysia the Philippines Singapore Taiwan Thailand and
Vietnam Prudential is the second largest retail fund manager for Asian sourced assets ex-
Japan as at June 2006 Its fund management business has expanded into a total of ten markets
China Hong Kong India Japan Korea Malaysia Singapore Taiwan Vietnam
and United Arab Emirates
ICICI Prudential has been the market leader in the private life insurance sector
contributing to 30 of the growth share followed by the SBI Life Insurance with 18
share Members like Ms Shikha Sharma CEO amp MD Ms Anita Pai EVP ndash
Customer Service amp Technology Mr Puneet Nanda CIO Mr Binayak Dutta Chief ndash
Sales amp Distribution have been with the company since its inception in 2000 and are
instrumental in developing ICIC Prudential to this level
The first policy was sold on 12th December 2000 Within 1 year ICICI Prudential
achieved 25000 policies and thereby growing at a faster rate achieved 1 million policies
by October 2004 By 2010 ICICI Prudential has a target to achieve 20 million customers
AWARDS amp RECOGNITION
AWARDS
11
1113090 Indias Most Customer Responsive Insurance Company
Avaya GlobalConnect - Economic Times
Customer Responsiveness Awards
1113090 Most Trusted Private Life Insurer
The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003
2004 and 2005
1113090 Prudence Customer Centricity Award 2004 amp 2005
Prudential Corporation Asia
1113090 Best Life Insurer 2003
Outlook Money Awards 2003 amp 2004
1113090 Superbrand 2003-04
1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising
campaign
Effies 2003
RECOGNITIONS
1113090 IMM Award for Excellence
Institute of Marketing amp Management
1113090 Organisation with Innovative HR Practices
Indira Group of Institutes
1113090 Most Trusted Private Life Insurer
The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003
2004 and 2005
1113090 Prudence Customer Centricity Award 2004 amp 2005
Prudential Corporation Asia
1113090 Best Life Insurer 2003
Outlook Money Awards 2003 amp 2004
1113090 Superbrand 2003-04
1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising
campaign
Effies 2003
12
Review of Literature
Mehr and Cammack (1976) agrees that insurance is usually thought of as a product that spreads the
risk of serious but low-probability losses among a group of individuals thus providing some
financial protection to each individual Kunreuther (1979) said that his product makes good sense
particularly when the protection is purchased against potential losses so large as to be catastrophic
such as total destruction of ones home a large accident liability judgment or death of primary
family breadwinner However it has long been recognized that this sensible product is difficult to
sellv
Kahneman amp Tversky (1984) stated indeed repeated demonstrations have shown most people lack
an adequate understanding of probability and risk concepts Dhar (1997) Greenleaf and Lehmann
(1995) Tversky and Shafir (1992) have shown that offering more options can generate decision
conflict and preference uncertainty leading to decision deferral
Kotler (1973) considers insurance to be in the category of unsought goods along with products
such as preventive dental services and burial plotsHe notes that unsought goods pose special
challenges to the marketer
Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) found that subjects were more likely
to buy insurance against small high-probability losses than insurance against large low- probability
losses Hershey and Schoemaker (1980) reported the opposite result
Kunreuther (1979) ldquoIt is not the magnitude of a potential loss that inspires people to buy insurance
voluntarily ndash it is the frequency with which a loss is likely to occurrdquo
Michael L Smith (1982) said that a typical life insurance contract provides a package of options or
rights to the policy owner that is not precisely duplicated by any other combination of commonly
available contracts Viewed from this perspective life insurance enjoys a unique position in the
field of investments and should be judged in this light The paper shows that an options viewpoint
provides a more complete explanation of policy owner behavior towards life insurance than the
conventional savings-and-protection view
13
Michael L Walden (1985) told that the options package view of the whole a
whole life policy is a package of options each of which has value and is expected to influence the
price of the policy This viewpoint implies the general hypothesis that price differences between
whole life policies can be explained by differences in policy contract provisions and differences in
selected company characteristics
OBJECTIVE
o To evaluate the factors underlying consumer perception towards investment in life insurance
policies
o To compare the differences in consumer perception of male and
female consumers
RESEARCH METHODOLOGY
The Study The study was exploratory in nature with survey method being used to complete the
study
Sampling Design
Population
Population included investors in NCR region
Sample frame
Since the data was collected through personal contacts the sample frames were the individuals who
are investing in life insurance policies
Sampling elements
Individual respondents were the sampling elements
14
Sampling Techniques
Random sampling technique was used to select the samples
Sample Size
Sample size was 150 respondents
Tools Used for Data Collection
Self designed questionnaire was used for the evaluation of factors affecting consumerrsquos perception
towards insurance Data was collected on Likertrsquos type scale where 1 stood for minimum
agreement and 7 stood for maximum agreement
Tools Used for Data Analysis
Item to total correlation was applied to check the internal consistency of the questionnaire The
measures were standardized through computation of reliability and validity
Factor analysis was applied to identify the underlying factors
Z-test was applied to find out the significant differences between male and
female investors
Results and Discussions
Consistency Measure
Firstly consistency of all the items in the questionnaire is checked through item to total correlation
Under this correlation of every item with total is measured and the computed value is compared
with standard value (ie 01590) If the computed value is found less than standard value then
whole factorstatement is dropped and will be termed as inconsistent
15
SNO ITEMS COMPUTED
CORRELATIO
N VALUE
CONSISTE
NT
ACCEPTED
DROPPED
1 Awareness about terms and conditions of
policy
0671575 Consistent Accepted
2 Provide services on time 0651847 Consistent Accepted
3 Provide satisfactory services 0573518 Consistent Accepted
4 Goodwill of the company 0607722 Consistent Accepted
5 Agent is well informed about policies 0640696 Consistent Accepted
6 Co-operative and friendly agent 0598089 Consistent Accepted
7 Agent respond promptly 0696914 Consistent Accepted
8 Proper reminder of installments by
agents
0531124 Consistent Accepted
9 Employees responsible towards
customers
0685817 Consistent Accepted
10 Benefits are met by policy 0510702 Consistent Accepted
11 Selection of highly reputed company 0634614 Consistent Accepted
12 Reputation of the insurance company 0582977 Consistent Accepted
13 Hassle free settlements 0594282 Consistent Accepted
14 Personal attention on every costumer 0640192 Consistent Accepted
15 Understand Customerrsquos financial needs 0603133 Consistent Accepted
16 Fulfill its promise towards policy 0613243 Consistent Accepted
17 Provides the claims on time 0474994 Consistent Accepted
18 Settlement of claims easy and timely 0569959 Consistent Accepted
19 Satisfy with relationship to company 0621496 Consistent Accepted
20 Company able to fulfill expectation 0594265 Consistent Accepted
21 Only company I want to associate
myself
0519161 Consistent Accepted
22 Purchase more policies from the same
company
0502876 Consistent Accepted
16
23 Suggest friends and family to purchase
policy from the same company
0540626 Consistent Accepted
24 Policy benefits benchmarks 062874 Consistent Accepted
25 Investment in life insurance is more
secure than stock market
0376874 Consistent Accepted
26 Purchase further policies from other
companies
0091102 Inonsistent Dropped
Reliability
Reliability test was carried out using SPSS software and the reliability of the items was measured
The result is as follows
Cronbachrsquos Alpha 0919
It can be seen that the reliability value is more than 07 So the questionnaire is
highly reliable
Description of factors
1 Company Loyalty
This factor includes that this is the only company the consumer wants to associate himself with in
future (0814) himself would purchase more policies from the same company (0799) suggest
friends and family to purchase policy from the same company (0790) company able to fulfill
expectation (0599) Policy benefits benchmarks (0545) The highest Eigen value lies in this factor
35213 So it is been considered as the highly contributing factor towards study Therefore it is
clear that company loyalty plays an important role in investment decisions of investors
17
2 Services Quality
This factor includes hassle free settlements (0693) employees responsible towards customers
(0631) agents respond promptly (0611) investment in life insurance is more secure than stock
market (0563) satisfy with relationship to company (0537) As we can see that the Eigen value for
factor service quality is 9753 which is also a contributing factor towards the study so it can also be considered as an the study
3 Ease of Procedures
This factor includes the company provides claims on time (0852) co- operative and friendly agent
(0662) settlement of claims easy and timely (0651) agent is well informed about policies (0486) As
we can see that the Eigen value for factor ease of procedures is 5830 which is also a contributing
factor towards the study so it can also be considered as an important factor inconsumerrsquos financial
needs (0404) As we can see that the Eigen value for factor company client relationship is 4051
which is also a contributing factor towards the study so it can also be considered as an important factor
in the study
4 Satisfaction Level
This factor includes that the suggested benefits of Insurance Policy should be met to the investors
( 0774) Company provides them satisfactory services (0631) fulfill its promise about life
insurance policy (0575) Services should be provided on time(0515) and awareness of terms and
conditions of policies As we can see that the Eigen value for factor satisfaction level is 5008
which is also a contributing factor towards the study so it can also be considered as an important
factor in the study
5 Company Image
This factor includes that the insurance company should be well known in the industry (0777)
insurance provider should have goodwill in market (0758) and company of high repute (0428)As
we can see that the Eigen value for factor company image is 4878 which is also a contributing
factor towards the study so it can also be considered as an important factor in the study
18
6 Company-Client Relationship
This factor includes that the agent remind about premium installments (0778) pay personal
attention on every consumer (0505) and understand consumerrsquos financial needs (0404) As
we can see that the Eigen value for factor company client relationship is 4051 which is also a
contributing factor towards the study so it can also be considered as an important factor in the
study
Z-Test
Z-test was applied to find out significant difference between male and female investorrsquos perception
towards investment in life insurance policies
For applying Z-test mean and standard deviation was calculated then values were put in formula to
calculate standard error
Null Hypothesis Ho It states that there is no significant difference between the perception of male
and female investors towards investment in life insurance policies
GENDER MEAN SD SAMPLE
SIZE
SQUARE
OF
SD
MALE 14104 20078 75 403146
FEMALE 14594 17701 75 313348
Z = 15877
Since the value of Z is less than the standard value 196 at 5 level of significance so the null
hypothesis is accepted Therefore there is no significant difference between the perception of male
and female investors towards investment in life insurance policies
19
CONCLUSION
In present Indian market the investment habits of Indian consumers are changing very frequently
The individuals have their own perception towards various types of investment plans The study of
this research work was focused over consumerrsquos perception on investment towards Life Insurance
Services The objectives of the study were to evaluate the factors underlying consumer perception
towards investment in life insurance policies and to compare the differences in consumer
perception of male and female consumers The tests that were used for our research activities were-
Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25
items being accepted Next was Reliability Test to check the reliability of the items The
result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis
Test and the six factors that came out were Consumer Loyalty Service Quality Ease of
Procedures Satisfaction Level Company Image and Company-Client Relationship
The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind
sets for their investment pattern in insurance policies Still some actions are needed for
developing insurance market The major factors playing the role in developing
consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality
Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship
Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in
developing the market share loyalty and further development in insurance sector
20
References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)
21
Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in
Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)
22
percent HDFC Standard and Max New York Life with a market share of approximately
15 per cent each
In case of private non-life insurance players which their market share raised to
1413 per cent recorded a growth of 7075 per cent on an annual basis while the market
share of public sector stood at 8587 per cent registering a marginal growth of 634 per
cent The overall market has recorded a growth of 1232 per cent by the end of January
2004 Among the private non-life insurance players ICICI Lombard topped the list with
a market share of 305 per cent in one year period and with an annual growth rate of
1316 per cent followed by Bajaj Allianz with 291 per cent market share and Tata AIG
with 227 per cent market share and with an annual growth rate of 6260 per cent
LIFE INSURERS
1113090 Life Insurance Corporation of India
1113090 SBI Life Insurance Co Ltd
1113090 Allianz Bajaj Life Insurance Co Ltd
1113090 Om Kotak Mahindra Life Insurance Co Ltd
ICICI Prudential Life Insurance Co Ltd
1113090 HDFC Standard Life Insurance Co Ltd
1113090 Birla Sunlife Insurance Co Ltd
1113090 I1113090G Vysya Life Insurance Co Ltd
1113090 Tata-AIG Life Insurance CoLtd
1113090 Metlife India Insurance Co Pvt Ltd
1113090 AMP Sanmar Assurance Co Ltd
1113090 Dabur CGU Life Insurance Co Pvt Ltd
1113090 Max 1113090ew York Life Insurance Co Ltd
4
COMPANY PROFILE
Indias Number One private life insurer ICICI Prudential Life Insurance
Company is a joint venture between ICICI Bank Ltd-one of Indias foremost financial
services company- and Prudential plc - a leading international financial services group
headquartered in the United Kingdom Total capital infusion stands at Rs 2060 billion
with ICICI Bank holding a stake of 74 and Prudential plc holding 26
Indiarsquos number One private insurerICICI Prudential Life Insurance Company is a joint venture
between icici bank ltd one of India foremost financial services company and prudential plc a
leading international financial services group headquartered in uk tatal capital infusion stands at rs
2060 billionwith icici bank holding a stake of 74 and prudentail
They began their operations in December 2000 after receiving approval from
Insurance Regulatory Development Authority (IRDA) and are headquartered in Mumbai
Today their nation-wide team comprises of over 580 offices over 234000 advisors and
22 banc assurance partners
INTRODUCTION OF ICICI PRUDENTIAL
ICICI Prudential was the first life insurer in India to receive a National Insurer
Financial Strength rating of AAA (Ind) from Fitch ratings For three years in a row
ICICI Prudential has been voted as Indias Most Trusted Private Life Insurer by The
Economic Times - AC Nielsen ORG Marg survey of Most Trusted Brands
The ICICI Prudential edge comes from the commitment to their customers in all
that they do ndash be it product development distribution the sales process or servicing
ICICI Prudential products have been developed after a clear and thorough understanding
of customer needs Having the right products is the first step but itrsquos equally important to
ensure that customers can access them easily and quickly To this end ICICI Prudential
has an advisor base across the length and breadth of the country and also partners with
leading banks corporate agents and brokers to distribute their products Robust risk
management and underwriting practices form the core of their business With clear
guidelines in place they ensure a smooth and hassle-free claims process
5
Entrusted with helping customers meet their long-term goals they adopt an
investment philosophy that aims to achieve risk adjusted returns over the long-term
Their 16000+ strong staff is given the opportunity to learn and grow everyday in a
multitude of ways This keeps them engaged and enthusiastic so that they can deliver on
the promise to cover customer at every step of life
For the past six years ICICI Prudential has retained its position as the No 1
private life insurer in the country with a wide range of flexible products that meet the
needs of the Indian customer at every step in life
PLANS
There are two main types of plans ndash ULIP and Traditional
Unit Linked Insurance Product
ULIPs have gained high acceptance due to attractive features they offer These
include
1113090 Flexibility Flexibility to choose sum assured Flexibility to choose premium
amount Option to change level of Premium Sum Assured even after the plan has
started Flexibility to change asset allocation by switching between funds
1113090 Transparency Charges in the plan and net amount invested are known to the
customer Customer has the convenience of tracking hisher investment performance
on a daily basis
1113091 Liquidity Customer has the option to withdraw money after few years ie the option
of low minimum tenure Partial or systematic withdrawals are allowed
1113090 Fund Options A choice of funds is provided to customers ranging from equity debt
cash or a combination They can choose the fund mix based on desired asset
allocation
Traditional Endowment Plans
These are the old type of plans available These plans cater to customers with a
low risk appetite Some of the common features of the traditional plans are
1113090 Steady Investment Major chunk of investible funds are in debt instruments Though
6
low but steady and almost assured returns are expected over the long term
1113091 Death Benefit death benefit is sum assured with guaranteed and vested bonus
1113090 Asset Creation Helps in asset creation as they are for a long tenure
1113091 Fixed Ratios Premium to sum assured ratios is fixed for each plan and age
1113090 Withdrawals Withdrawals are generally not allowed before maturity
PRODUCTS
INSURANCE SOLUTIONS FOR INDIVIDUALS
ICICI Prudential Life Insurance offers a range of innovative customer-centric products
that meet the needs of customers at every life stage Its products can be enhanced up to 4
riders to create a customized solution for each policyholder
Savings amp Wealth Creation Solutions
1113090 Cash Plus is a transparent feature-packed savings plan that offers 3 levels of
protection as well as liquidity options
1113090 Save n Protect is a traditional endowment savings plan that offers life protection
along with adequate returns
1113091 CashBak is an anticipated endowment policy ideal for meeting milestone expenses
like a childs marriage expenses for a childs higher education or purchase of an
asset It is available for terms of 15 and 20 years
1113091 LifeTime Super amp LifeTime Plus are unit-linked plans that offer customers the
flexibility and control to customize the policy to meet the changing needs at
different life stages Each offer 4 fund options - Preserver Protector Balancer and
Maximizer
1113091 Life Link Super is a single premium unit linked insurance Plan which combines life
insurance cover with the opportunity to stay invested in the stock market
1113090 Premier Life Gold is a limited premium paying plan specially structured for long-
term wealth creation
1113090 Invest Shield Life is a unit linked plan that provides premium guarantee on the
7
invested premiums and ensures that the customer receives only the benefits of fund
appreciation without any of the risks of depreciation
1113090 Invest Shield Cash back is a unit linked plan that provides premium guarantee
on the invested premiums along with flexible liquidity options
Protection Solutions
1113090 LifeGuard is a protection plan which offers life cover at low cost It is available in
3 options - level term assurance level term assurance with return of premium amp
single premium
1113090 HomeAssure is a mortgage reducing term assurance plan designed specifically to
help customers cover their home loans in a simple and cost-effective manner
Child Plans
1113090 Education insurance under the Smart Kid brand provides guaranteed educational
benefits to a child along with life insurance cover for the parent who purchases the
policy The policy is designed to provide money at important milestones in the
childs life Smart Kid plans are also available in unit-linked form - both single
premium and regular premium
Retirement Solutions
1113090 ForeverLife is a traditional retirement product that offers guaranteed returns for the
first 4 years and then declares bonuses annually
1113090 LifeTime Super Pension is a regular premium unit linked pension plan that helps
one accumulate over the long term and offers an annuity option (guaranteed income
for life) at the time of retirement
1113090 LifeLink Super Pension is a single premium unit linked pension plan
1113090 Immediate Annuity is a single premium annuity product that guarantees income for
life at the time of retirement It offers the benefit of 5 payout options
Health Solutions
1113090 Health Assure and Health Assure Plus Health Assure is a regular premium plan
which provides long term cover against 6 critical illnesses by providing policyholder
8
with financial assistance irrespective of the actual medical expenses Health Assure
Plus offers the added advantage of an equivalent life insurance cover
1113090 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
1113090 Diabetes Care Diabetes Care is the first ever critical illness product especially for
individuals with Type 2 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
1113090 Hospital Care Hospital Care is structured to ensure customers receive a pre-
determined insurance amount for each procedure or hospitalization even if they
spend less Further its long-term design of a term between 10-20 years assures
policyholders the guaranteed cushion of insurance cover even if they make a claim
during the term Available for individuals between the ages of 1-60 years this is one
of the first products that will cover people up to the age of 80 years
GROUP INSURANCE SOLUTIONS
ICICI Prudential also offers Group Insurance Solutions for companies seeking to enhance
benefits to their employees
1113090 Group Gratuity Plan ICICI Prudentials group gratuity plan helps employers fund
their statutory gratuity obligation in a scientific manner The plan can also be
customized to structure schemes that can provide benefits beyond the statutory
obligations
1113090 Group Superannuation Plan ICICI Prudential offers both defined contribution
(DC) and defined benefit (DB) superannuation schemes to optimize returns for the
members of the trust and rationalize the cost Members have the option of choosing
from various annuity options or opting for a partial commutation of the annuity at
the time of retirement
1113090 Group Immediate Annuities In addition to the annuities offered to existing
superannuation customers they offer immediate annuities to superannuation funds
not managed by them
1113090 Group Term Plan ICICI Prudentials flexible group term solution helps provide
affordable cover to members of a group The cover could be uniform or based on
designationrank or a multiple of salary The benefit under the policy is paid to the
9
beneficiary nominated by the member on hisher death
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
1113090 Accident amp disability benefit If death occurs as the result of an accident during the
term of the policy the beneficiary receives an additional amount equal to the rider sum assured
under the policy If the death occurs while traveling in an authorized
mass transport vehicle the beneficiary will be entitled to twice the sum assured as
additional benefit
1113090 Critical Illness Benefit protects the insured against financial loss in the event of 9
specified critical illnesses Benefits are payable to the insured for medical expenses
prior to death
1113090 Income Benefit This rider pays the 10 of the sum assured to the nominee every
year till maturity in the event of the death of the life assured It is available on
SmarKid and CashPlus
1113090 Waiver of Premium In case of total and permanent disability due to an accident
the future premiums continue to be paid by the company till the time of maturity
This rider is available with LifeTime Super LifeTime Super Pension and CashPlus
HISTORY OF ICICI PRUDENTIAL
As mentioned earlier ICICI Prudential Life Insurance Company is a joint venture
between ICICI Bank - one of Indias foremost financial services company - and
Prudential plc - a leading international financial services group headquartered in the
United Kingdom
HISTORY OF ICICI PRUDENTIAL
As mentioned earlier icici prudential life insurance company is a joint venture between icici bank
one of India foremost financial services company and prudential plc a leading international
financial services group headquarterd in tha united kingdom
10
ICICI Bank
ICICI Bank (1113090YSEIB1113090) is Indias second largest bank and largest private sector bank
with over 50 years presence in financial services and with assets of over Rs 344658 bn
(USD 79 billion) as on March 31 2007 The 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 specialized subsidiaries in the areas of investment
banking life and non-life insurance private equity and asset management ICICI Bank is
a leading player in the retail banking market and services its large customer base through
a network of over 950 branches and extension counters 3300 ATMs call centers and
internet banking to ensure that customers have access to its services at all times
Prudential Plc
Established in London in 1848 Prudential plc through its businesses in the UK and
Europe the US and Asia provides retail financial services products and services to more
than 20 million customers policyholder and unit holders and manages over pound251 billion
of funds worldwide (as of 31 December 2006) In Asia Prudential is the leading
European life insurance company with life operations in China Hong Kong India
Indonesia Japan Korea Malaysia the Philippines Singapore Taiwan Thailand and
Vietnam Prudential is the second largest retail fund manager for Asian sourced assets ex-
Japan as at June 2006 Its fund management business has expanded into a total of ten markets
China Hong Kong India Japan Korea Malaysia Singapore Taiwan Vietnam
and United Arab Emirates
ICICI Prudential has been the market leader in the private life insurance sector
contributing to 30 of the growth share followed by the SBI Life Insurance with 18
share Members like Ms Shikha Sharma CEO amp MD Ms Anita Pai EVP ndash
Customer Service amp Technology Mr Puneet Nanda CIO Mr Binayak Dutta Chief ndash
Sales amp Distribution have been with the company since its inception in 2000 and are
instrumental in developing ICIC Prudential to this level
The first policy was sold on 12th December 2000 Within 1 year ICICI Prudential
achieved 25000 policies and thereby growing at a faster rate achieved 1 million policies
by October 2004 By 2010 ICICI Prudential has a target to achieve 20 million customers
AWARDS amp RECOGNITION
AWARDS
11
1113090 Indias Most Customer Responsive Insurance Company
Avaya GlobalConnect - Economic Times
Customer Responsiveness Awards
1113090 Most Trusted Private Life Insurer
The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003
2004 and 2005
1113090 Prudence Customer Centricity Award 2004 amp 2005
Prudential Corporation Asia
1113090 Best Life Insurer 2003
Outlook Money Awards 2003 amp 2004
1113090 Superbrand 2003-04
1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising
campaign
Effies 2003
RECOGNITIONS
1113090 IMM Award for Excellence
Institute of Marketing amp Management
1113090 Organisation with Innovative HR Practices
Indira Group of Institutes
1113090 Most Trusted Private Life Insurer
The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003
2004 and 2005
1113090 Prudence Customer Centricity Award 2004 amp 2005
Prudential Corporation Asia
1113090 Best Life Insurer 2003
Outlook Money Awards 2003 amp 2004
1113090 Superbrand 2003-04
1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising
campaign
Effies 2003
12
Review of Literature
Mehr and Cammack (1976) agrees that insurance is usually thought of as a product that spreads the
risk of serious but low-probability losses among a group of individuals thus providing some
financial protection to each individual Kunreuther (1979) said that his product makes good sense
particularly when the protection is purchased against potential losses so large as to be catastrophic
such as total destruction of ones home a large accident liability judgment or death of primary
family breadwinner However it has long been recognized that this sensible product is difficult to
sellv
Kahneman amp Tversky (1984) stated indeed repeated demonstrations have shown most people lack
an adequate understanding of probability and risk concepts Dhar (1997) Greenleaf and Lehmann
(1995) Tversky and Shafir (1992) have shown that offering more options can generate decision
conflict and preference uncertainty leading to decision deferral
Kotler (1973) considers insurance to be in the category of unsought goods along with products
such as preventive dental services and burial plotsHe notes that unsought goods pose special
challenges to the marketer
Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) found that subjects were more likely
to buy insurance against small high-probability losses than insurance against large low- probability
losses Hershey and Schoemaker (1980) reported the opposite result
Kunreuther (1979) ldquoIt is not the magnitude of a potential loss that inspires people to buy insurance
voluntarily ndash it is the frequency with which a loss is likely to occurrdquo
Michael L Smith (1982) said that a typical life insurance contract provides a package of options or
rights to the policy owner that is not precisely duplicated by any other combination of commonly
available contracts Viewed from this perspective life insurance enjoys a unique position in the
field of investments and should be judged in this light The paper shows that an options viewpoint
provides a more complete explanation of policy owner behavior towards life insurance than the
conventional savings-and-protection view
13
Michael L Walden (1985) told that the options package view of the whole a
whole life policy is a package of options each of which has value and is expected to influence the
price of the policy This viewpoint implies the general hypothesis that price differences between
whole life policies can be explained by differences in policy contract provisions and differences in
selected company characteristics
OBJECTIVE
o To evaluate the factors underlying consumer perception towards investment in life insurance
policies
o To compare the differences in consumer perception of male and
female consumers
RESEARCH METHODOLOGY
The Study The study was exploratory in nature with survey method being used to complete the
study
Sampling Design
Population
Population included investors in NCR region
Sample frame
Since the data was collected through personal contacts the sample frames were the individuals who
are investing in life insurance policies
Sampling elements
Individual respondents were the sampling elements
14
Sampling Techniques
Random sampling technique was used to select the samples
Sample Size
Sample size was 150 respondents
Tools Used for Data Collection
Self designed questionnaire was used for the evaluation of factors affecting consumerrsquos perception
towards insurance Data was collected on Likertrsquos type scale where 1 stood for minimum
agreement and 7 stood for maximum agreement
Tools Used for Data Analysis
Item to total correlation was applied to check the internal consistency of the questionnaire The
measures were standardized through computation of reliability and validity
Factor analysis was applied to identify the underlying factors
Z-test was applied to find out the significant differences between male and
female investors
Results and Discussions
Consistency Measure
Firstly consistency of all the items in the questionnaire is checked through item to total correlation
Under this correlation of every item with total is measured and the computed value is compared
with standard value (ie 01590) If the computed value is found less than standard value then
whole factorstatement is dropped and will be termed as inconsistent
15
SNO ITEMS COMPUTED
CORRELATIO
N VALUE
CONSISTE
NT
ACCEPTED
DROPPED
1 Awareness about terms and conditions of
policy
0671575 Consistent Accepted
2 Provide services on time 0651847 Consistent Accepted
3 Provide satisfactory services 0573518 Consistent Accepted
4 Goodwill of the company 0607722 Consistent Accepted
5 Agent is well informed about policies 0640696 Consistent Accepted
6 Co-operative and friendly agent 0598089 Consistent Accepted
7 Agent respond promptly 0696914 Consistent Accepted
8 Proper reminder of installments by
agents
0531124 Consistent Accepted
9 Employees responsible towards
customers
0685817 Consistent Accepted
10 Benefits are met by policy 0510702 Consistent Accepted
11 Selection of highly reputed company 0634614 Consistent Accepted
12 Reputation of the insurance company 0582977 Consistent Accepted
13 Hassle free settlements 0594282 Consistent Accepted
14 Personal attention on every costumer 0640192 Consistent Accepted
15 Understand Customerrsquos financial needs 0603133 Consistent Accepted
16 Fulfill its promise towards policy 0613243 Consistent Accepted
17 Provides the claims on time 0474994 Consistent Accepted
18 Settlement of claims easy and timely 0569959 Consistent Accepted
19 Satisfy with relationship to company 0621496 Consistent Accepted
20 Company able to fulfill expectation 0594265 Consistent Accepted
21 Only company I want to associate
myself
0519161 Consistent Accepted
22 Purchase more policies from the same
company
0502876 Consistent Accepted
16
23 Suggest friends and family to purchase
policy from the same company
0540626 Consistent Accepted
24 Policy benefits benchmarks 062874 Consistent Accepted
25 Investment in life insurance is more
secure than stock market
0376874 Consistent Accepted
26 Purchase further policies from other
companies
0091102 Inonsistent Dropped
Reliability
Reliability test was carried out using SPSS software and the reliability of the items was measured
The result is as follows
Cronbachrsquos Alpha 0919
It can be seen that the reliability value is more than 07 So the questionnaire is
highly reliable
Description of factors
1 Company Loyalty
This factor includes that this is the only company the consumer wants to associate himself with in
future (0814) himself would purchase more policies from the same company (0799) suggest
friends and family to purchase policy from the same company (0790) company able to fulfill
expectation (0599) Policy benefits benchmarks (0545) The highest Eigen value lies in this factor
35213 So it is been considered as the highly contributing factor towards study Therefore it is
clear that company loyalty plays an important role in investment decisions of investors
17
2 Services Quality
This factor includes hassle free settlements (0693) employees responsible towards customers
(0631) agents respond promptly (0611) investment in life insurance is more secure than stock
market (0563) satisfy with relationship to company (0537) As we can see that the Eigen value for
factor service quality is 9753 which is also a contributing factor towards the study so it can also be considered as an the study
3 Ease of Procedures
This factor includes the company provides claims on time (0852) co- operative and friendly agent
(0662) settlement of claims easy and timely (0651) agent is well informed about policies (0486) As
we can see that the Eigen value for factor ease of procedures is 5830 which is also a contributing
factor towards the study so it can also be considered as an important factor inconsumerrsquos financial
needs (0404) As we can see that the Eigen value for factor company client relationship is 4051
which is also a contributing factor towards the study so it can also be considered as an important factor
in the study
4 Satisfaction Level
This factor includes that the suggested benefits of Insurance Policy should be met to the investors
( 0774) Company provides them satisfactory services (0631) fulfill its promise about life
insurance policy (0575) Services should be provided on time(0515) and awareness of terms and
conditions of policies As we can see that the Eigen value for factor satisfaction level is 5008
which is also a contributing factor towards the study so it can also be considered as an important
factor in the study
5 Company Image
This factor includes that the insurance company should be well known in the industry (0777)
insurance provider should have goodwill in market (0758) and company of high repute (0428)As
we can see that the Eigen value for factor company image is 4878 which is also a contributing
factor towards the study so it can also be considered as an important factor in the study
18
6 Company-Client Relationship
This factor includes that the agent remind about premium installments (0778) pay personal
attention on every consumer (0505) and understand consumerrsquos financial needs (0404) As
we can see that the Eigen value for factor company client relationship is 4051 which is also a
contributing factor towards the study so it can also be considered as an important factor in the
study
Z-Test
Z-test was applied to find out significant difference between male and female investorrsquos perception
towards investment in life insurance policies
For applying Z-test mean and standard deviation was calculated then values were put in formula to
calculate standard error
Null Hypothesis Ho It states that there is no significant difference between the perception of male
and female investors towards investment in life insurance policies
GENDER MEAN SD SAMPLE
SIZE
SQUARE
OF
SD
MALE 14104 20078 75 403146
FEMALE 14594 17701 75 313348
Z = 15877
Since the value of Z is less than the standard value 196 at 5 level of significance so the null
hypothesis is accepted Therefore there is no significant difference between the perception of male
and female investors towards investment in life insurance policies
19
CONCLUSION
In present Indian market the investment habits of Indian consumers are changing very frequently
The individuals have their own perception towards various types of investment plans The study of
this research work was focused over consumerrsquos perception on investment towards Life Insurance
Services The objectives of the study were to evaluate the factors underlying consumer perception
towards investment in life insurance policies and to compare the differences in consumer
perception of male and female consumers The tests that were used for our research activities were-
Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25
items being accepted Next was Reliability Test to check the reliability of the items The
result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis
Test and the six factors that came out were Consumer Loyalty Service Quality Ease of
Procedures Satisfaction Level Company Image and Company-Client Relationship
The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind
sets for their investment pattern in insurance policies Still some actions are needed for
developing insurance market The major factors playing the role in developing
consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality
Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship
Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in
developing the market share loyalty and further development in insurance sector
20
References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)
21
Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in
Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)
22
COMPANY PROFILE
Indias Number One private life insurer ICICI Prudential Life Insurance
Company is a joint venture between ICICI Bank Ltd-one of Indias foremost financial
services company- and Prudential plc - a leading international financial services group
headquartered in the United Kingdom Total capital infusion stands at Rs 2060 billion
with ICICI Bank holding a stake of 74 and Prudential plc holding 26
Indiarsquos number One private insurerICICI Prudential Life Insurance Company is a joint venture
between icici bank ltd one of India foremost financial services company and prudential plc a
leading international financial services group headquartered in uk tatal capital infusion stands at rs
2060 billionwith icici bank holding a stake of 74 and prudentail
They began their operations in December 2000 after receiving approval from
Insurance Regulatory Development Authority (IRDA) and are headquartered in Mumbai
Today their nation-wide team comprises of over 580 offices over 234000 advisors and
22 banc assurance partners
INTRODUCTION OF ICICI PRUDENTIAL
ICICI Prudential was the first life insurer in India to receive a National Insurer
Financial Strength rating of AAA (Ind) from Fitch ratings For three years in a row
ICICI Prudential has been voted as Indias Most Trusted Private Life Insurer by The
Economic Times - AC Nielsen ORG Marg survey of Most Trusted Brands
The ICICI Prudential edge comes from the commitment to their customers in all
that they do ndash be it product development distribution the sales process or servicing
ICICI Prudential products have been developed after a clear and thorough understanding
of customer needs Having the right products is the first step but itrsquos equally important to
ensure that customers can access them easily and quickly To this end ICICI Prudential
has an advisor base across the length and breadth of the country and also partners with
leading banks corporate agents and brokers to distribute their products Robust risk
management and underwriting practices form the core of their business With clear
guidelines in place they ensure a smooth and hassle-free claims process
5
Entrusted with helping customers meet their long-term goals they adopt an
investment philosophy that aims to achieve risk adjusted returns over the long-term
Their 16000+ strong staff is given the opportunity to learn and grow everyday in a
multitude of ways This keeps them engaged and enthusiastic so that they can deliver on
the promise to cover customer at every step of life
For the past six years ICICI Prudential has retained its position as the No 1
private life insurer in the country with a wide range of flexible products that meet the
needs of the Indian customer at every step in life
PLANS
There are two main types of plans ndash ULIP and Traditional
Unit Linked Insurance Product
ULIPs have gained high acceptance due to attractive features they offer These
include
1113090 Flexibility Flexibility to choose sum assured Flexibility to choose premium
amount Option to change level of Premium Sum Assured even after the plan has
started Flexibility to change asset allocation by switching between funds
1113090 Transparency Charges in the plan and net amount invested are known to the
customer Customer has the convenience of tracking hisher investment performance
on a daily basis
1113091 Liquidity Customer has the option to withdraw money after few years ie the option
of low minimum tenure Partial or systematic withdrawals are allowed
1113090 Fund Options A choice of funds is provided to customers ranging from equity debt
cash or a combination They can choose the fund mix based on desired asset
allocation
Traditional Endowment Plans
These are the old type of plans available These plans cater to customers with a
low risk appetite Some of the common features of the traditional plans are
1113090 Steady Investment Major chunk of investible funds are in debt instruments Though
6
low but steady and almost assured returns are expected over the long term
1113091 Death Benefit death benefit is sum assured with guaranteed and vested bonus
1113090 Asset Creation Helps in asset creation as they are for a long tenure
1113091 Fixed Ratios Premium to sum assured ratios is fixed for each plan and age
1113090 Withdrawals Withdrawals are generally not allowed before maturity
PRODUCTS
INSURANCE SOLUTIONS FOR INDIVIDUALS
ICICI Prudential Life Insurance offers a range of innovative customer-centric products
that meet the needs of customers at every life stage Its products can be enhanced up to 4
riders to create a customized solution for each policyholder
Savings amp Wealth Creation Solutions
1113090 Cash Plus is a transparent feature-packed savings plan that offers 3 levels of
protection as well as liquidity options
1113090 Save n Protect is a traditional endowment savings plan that offers life protection
along with adequate returns
1113091 CashBak is an anticipated endowment policy ideal for meeting milestone expenses
like a childs marriage expenses for a childs higher education or purchase of an
asset It is available for terms of 15 and 20 years
1113091 LifeTime Super amp LifeTime Plus are unit-linked plans that offer customers the
flexibility and control to customize the policy to meet the changing needs at
different life stages Each offer 4 fund options - Preserver Protector Balancer and
Maximizer
1113091 Life Link Super is a single premium unit linked insurance Plan which combines life
insurance cover with the opportunity to stay invested in the stock market
1113090 Premier Life Gold is a limited premium paying plan specially structured for long-
term wealth creation
1113090 Invest Shield Life is a unit linked plan that provides premium guarantee on the
7
invested premiums and ensures that the customer receives only the benefits of fund
appreciation without any of the risks of depreciation
1113090 Invest Shield Cash back is a unit linked plan that provides premium guarantee
on the invested premiums along with flexible liquidity options
Protection Solutions
1113090 LifeGuard is a protection plan which offers life cover at low cost It is available in
3 options - level term assurance level term assurance with return of premium amp
single premium
1113090 HomeAssure is a mortgage reducing term assurance plan designed specifically to
help customers cover their home loans in a simple and cost-effective manner
Child Plans
1113090 Education insurance under the Smart Kid brand provides guaranteed educational
benefits to a child along with life insurance cover for the parent who purchases the
policy The policy is designed to provide money at important milestones in the
childs life Smart Kid plans are also available in unit-linked form - both single
premium and regular premium
Retirement Solutions
1113090 ForeverLife is a traditional retirement product that offers guaranteed returns for the
first 4 years and then declares bonuses annually
1113090 LifeTime Super Pension is a regular premium unit linked pension plan that helps
one accumulate over the long term and offers an annuity option (guaranteed income
for life) at the time of retirement
1113090 LifeLink Super Pension is a single premium unit linked pension plan
1113090 Immediate Annuity is a single premium annuity product that guarantees income for
life at the time of retirement It offers the benefit of 5 payout options
Health Solutions
1113090 Health Assure and Health Assure Plus Health Assure is a regular premium plan
which provides long term cover against 6 critical illnesses by providing policyholder
8
with financial assistance irrespective of the actual medical expenses Health Assure
Plus offers the added advantage of an equivalent life insurance cover
1113090 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
1113090 Diabetes Care Diabetes Care is the first ever critical illness product especially for
individuals with Type 2 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
1113090 Hospital Care Hospital Care is structured to ensure customers receive a pre-
determined insurance amount for each procedure or hospitalization even if they
spend less Further its long-term design of a term between 10-20 years assures
policyholders the guaranteed cushion of insurance cover even if they make a claim
during the term Available for individuals between the ages of 1-60 years this is one
of the first products that will cover people up to the age of 80 years
GROUP INSURANCE SOLUTIONS
ICICI Prudential also offers Group Insurance Solutions for companies seeking to enhance
benefits to their employees
1113090 Group Gratuity Plan ICICI Prudentials group gratuity plan helps employers fund
their statutory gratuity obligation in a scientific manner The plan can also be
customized to structure schemes that can provide benefits beyond the statutory
obligations
1113090 Group Superannuation Plan ICICI Prudential offers both defined contribution
(DC) and defined benefit (DB) superannuation schemes to optimize returns for the
members of the trust and rationalize the cost Members have the option of choosing
from various annuity options or opting for a partial commutation of the annuity at
the time of retirement
1113090 Group Immediate Annuities In addition to the annuities offered to existing
superannuation customers they offer immediate annuities to superannuation funds
not managed by them
1113090 Group Term Plan ICICI Prudentials flexible group term solution helps provide
affordable cover to members of a group The cover could be uniform or based on
designationrank or a multiple of salary The benefit under the policy is paid to the
9
beneficiary nominated by the member on hisher death
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
1113090 Accident amp disability benefit If death occurs as the result of an accident during the
term of the policy the beneficiary receives an additional amount equal to the rider sum assured
under the policy If the death occurs while traveling in an authorized
mass transport vehicle the beneficiary will be entitled to twice the sum assured as
additional benefit
1113090 Critical Illness Benefit protects the insured against financial loss in the event of 9
specified critical illnesses Benefits are payable to the insured for medical expenses
prior to death
1113090 Income Benefit This rider pays the 10 of the sum assured to the nominee every
year till maturity in the event of the death of the life assured It is available on
SmarKid and CashPlus
1113090 Waiver of Premium In case of total and permanent disability due to an accident
the future premiums continue to be paid by the company till the time of maturity
This rider is available with LifeTime Super LifeTime Super Pension and CashPlus
HISTORY OF ICICI PRUDENTIAL
As mentioned earlier ICICI Prudential Life Insurance Company is a joint venture
between ICICI Bank - one of Indias foremost financial services company - and
Prudential plc - a leading international financial services group headquartered in the
United Kingdom
HISTORY OF ICICI PRUDENTIAL
As mentioned earlier icici prudential life insurance company is a joint venture between icici bank
one of India foremost financial services company and prudential plc a leading international
financial services group headquarterd in tha united kingdom
10
ICICI Bank
ICICI Bank (1113090YSEIB1113090) is Indias second largest bank and largest private sector bank
with over 50 years presence in financial services and with assets of over Rs 344658 bn
(USD 79 billion) as on March 31 2007 The 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 specialized subsidiaries in the areas of investment
banking life and non-life insurance private equity and asset management ICICI Bank is
a leading player in the retail banking market and services its large customer base through
a network of over 950 branches and extension counters 3300 ATMs call centers and
internet banking to ensure that customers have access to its services at all times
Prudential Plc
Established in London in 1848 Prudential plc through its businesses in the UK and
Europe the US and Asia provides retail financial services products and services to more
than 20 million customers policyholder and unit holders and manages over pound251 billion
of funds worldwide (as of 31 December 2006) In Asia Prudential is the leading
European life insurance company with life operations in China Hong Kong India
Indonesia Japan Korea Malaysia the Philippines Singapore Taiwan Thailand and
Vietnam Prudential is the second largest retail fund manager for Asian sourced assets ex-
Japan as at June 2006 Its fund management business has expanded into a total of ten markets
China Hong Kong India Japan Korea Malaysia Singapore Taiwan Vietnam
and United Arab Emirates
ICICI Prudential has been the market leader in the private life insurance sector
contributing to 30 of the growth share followed by the SBI Life Insurance with 18
share Members like Ms Shikha Sharma CEO amp MD Ms Anita Pai EVP ndash
Customer Service amp Technology Mr Puneet Nanda CIO Mr Binayak Dutta Chief ndash
Sales amp Distribution have been with the company since its inception in 2000 and are
instrumental in developing ICIC Prudential to this level
The first policy was sold on 12th December 2000 Within 1 year ICICI Prudential
achieved 25000 policies and thereby growing at a faster rate achieved 1 million policies
by October 2004 By 2010 ICICI Prudential has a target to achieve 20 million customers
AWARDS amp RECOGNITION
AWARDS
11
1113090 Indias Most Customer Responsive Insurance Company
Avaya GlobalConnect - Economic Times
Customer Responsiveness Awards
1113090 Most Trusted Private Life Insurer
The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003
2004 and 2005
1113090 Prudence Customer Centricity Award 2004 amp 2005
Prudential Corporation Asia
1113090 Best Life Insurer 2003
Outlook Money Awards 2003 amp 2004
1113090 Superbrand 2003-04
1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising
campaign
Effies 2003
RECOGNITIONS
1113090 IMM Award for Excellence
Institute of Marketing amp Management
1113090 Organisation with Innovative HR Practices
Indira Group of Institutes
1113090 Most Trusted Private Life Insurer
The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003
2004 and 2005
1113090 Prudence Customer Centricity Award 2004 amp 2005
Prudential Corporation Asia
1113090 Best Life Insurer 2003
Outlook Money Awards 2003 amp 2004
1113090 Superbrand 2003-04
1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising
campaign
Effies 2003
12
Review of Literature
Mehr and Cammack (1976) agrees that insurance is usually thought of as a product that spreads the
risk of serious but low-probability losses among a group of individuals thus providing some
financial protection to each individual Kunreuther (1979) said that his product makes good sense
particularly when the protection is purchased against potential losses so large as to be catastrophic
such as total destruction of ones home a large accident liability judgment or death of primary
family breadwinner However it has long been recognized that this sensible product is difficult to
sellv
Kahneman amp Tversky (1984) stated indeed repeated demonstrations have shown most people lack
an adequate understanding of probability and risk concepts Dhar (1997) Greenleaf and Lehmann
(1995) Tversky and Shafir (1992) have shown that offering more options can generate decision
conflict and preference uncertainty leading to decision deferral
Kotler (1973) considers insurance to be in the category of unsought goods along with products
such as preventive dental services and burial plotsHe notes that unsought goods pose special
challenges to the marketer
Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) found that subjects were more likely
to buy insurance against small high-probability losses than insurance against large low- probability
losses Hershey and Schoemaker (1980) reported the opposite result
Kunreuther (1979) ldquoIt is not the magnitude of a potential loss that inspires people to buy insurance
voluntarily ndash it is the frequency with which a loss is likely to occurrdquo
Michael L Smith (1982) said that a typical life insurance contract provides a package of options or
rights to the policy owner that is not precisely duplicated by any other combination of commonly
available contracts Viewed from this perspective life insurance enjoys a unique position in the
field of investments and should be judged in this light The paper shows that an options viewpoint
provides a more complete explanation of policy owner behavior towards life insurance than the
conventional savings-and-protection view
13
Michael L Walden (1985) told that the options package view of the whole a
whole life policy is a package of options each of which has value and is expected to influence the
price of the policy This viewpoint implies the general hypothesis that price differences between
whole life policies can be explained by differences in policy contract provisions and differences in
selected company characteristics
OBJECTIVE
o To evaluate the factors underlying consumer perception towards investment in life insurance
policies
o To compare the differences in consumer perception of male and
female consumers
RESEARCH METHODOLOGY
The Study The study was exploratory in nature with survey method being used to complete the
study
Sampling Design
Population
Population included investors in NCR region
Sample frame
Since the data was collected through personal contacts the sample frames were the individuals who
are investing in life insurance policies
Sampling elements
Individual respondents were the sampling elements
14
Sampling Techniques
Random sampling technique was used to select the samples
Sample Size
Sample size was 150 respondents
Tools Used for Data Collection
Self designed questionnaire was used for the evaluation of factors affecting consumerrsquos perception
towards insurance Data was collected on Likertrsquos type scale where 1 stood for minimum
agreement and 7 stood for maximum agreement
Tools Used for Data Analysis
Item to total correlation was applied to check the internal consistency of the questionnaire The
measures were standardized through computation of reliability and validity
Factor analysis was applied to identify the underlying factors
Z-test was applied to find out the significant differences between male and
female investors
Results and Discussions
Consistency Measure
Firstly consistency of all the items in the questionnaire is checked through item to total correlation
Under this correlation of every item with total is measured and the computed value is compared
with standard value (ie 01590) If the computed value is found less than standard value then
whole factorstatement is dropped and will be termed as inconsistent
15
SNO ITEMS COMPUTED
CORRELATIO
N VALUE
CONSISTE
NT
ACCEPTED
DROPPED
1 Awareness about terms and conditions of
policy
0671575 Consistent Accepted
2 Provide services on time 0651847 Consistent Accepted
3 Provide satisfactory services 0573518 Consistent Accepted
4 Goodwill of the company 0607722 Consistent Accepted
5 Agent is well informed about policies 0640696 Consistent Accepted
6 Co-operative and friendly agent 0598089 Consistent Accepted
7 Agent respond promptly 0696914 Consistent Accepted
8 Proper reminder of installments by
agents
0531124 Consistent Accepted
9 Employees responsible towards
customers
0685817 Consistent Accepted
10 Benefits are met by policy 0510702 Consistent Accepted
11 Selection of highly reputed company 0634614 Consistent Accepted
12 Reputation of the insurance company 0582977 Consistent Accepted
13 Hassle free settlements 0594282 Consistent Accepted
14 Personal attention on every costumer 0640192 Consistent Accepted
15 Understand Customerrsquos financial needs 0603133 Consistent Accepted
16 Fulfill its promise towards policy 0613243 Consistent Accepted
17 Provides the claims on time 0474994 Consistent Accepted
18 Settlement of claims easy and timely 0569959 Consistent Accepted
19 Satisfy with relationship to company 0621496 Consistent Accepted
20 Company able to fulfill expectation 0594265 Consistent Accepted
21 Only company I want to associate
myself
0519161 Consistent Accepted
22 Purchase more policies from the same
company
0502876 Consistent Accepted
16
23 Suggest friends and family to purchase
policy from the same company
0540626 Consistent Accepted
24 Policy benefits benchmarks 062874 Consistent Accepted
25 Investment in life insurance is more
secure than stock market
0376874 Consistent Accepted
26 Purchase further policies from other
companies
0091102 Inonsistent Dropped
Reliability
Reliability test was carried out using SPSS software and the reliability of the items was measured
The result is as follows
Cronbachrsquos Alpha 0919
It can be seen that the reliability value is more than 07 So the questionnaire is
highly reliable
Description of factors
1 Company Loyalty
This factor includes that this is the only company the consumer wants to associate himself with in
future (0814) himself would purchase more policies from the same company (0799) suggest
friends and family to purchase policy from the same company (0790) company able to fulfill
expectation (0599) Policy benefits benchmarks (0545) The highest Eigen value lies in this factor
35213 So it is been considered as the highly contributing factor towards study Therefore it is
clear that company loyalty plays an important role in investment decisions of investors
17
2 Services Quality
This factor includes hassle free settlements (0693) employees responsible towards customers
(0631) agents respond promptly (0611) investment in life insurance is more secure than stock
market (0563) satisfy with relationship to company (0537) As we can see that the Eigen value for
factor service quality is 9753 which is also a contributing factor towards the study so it can also be considered as an the study
3 Ease of Procedures
This factor includes the company provides claims on time (0852) co- operative and friendly agent
(0662) settlement of claims easy and timely (0651) agent is well informed about policies (0486) As
we can see that the Eigen value for factor ease of procedures is 5830 which is also a contributing
factor towards the study so it can also be considered as an important factor inconsumerrsquos financial
needs (0404) As we can see that the Eigen value for factor company client relationship is 4051
which is also a contributing factor towards the study so it can also be considered as an important factor
in the study
4 Satisfaction Level
This factor includes that the suggested benefits of Insurance Policy should be met to the investors
( 0774) Company provides them satisfactory services (0631) fulfill its promise about life
insurance policy (0575) Services should be provided on time(0515) and awareness of terms and
conditions of policies As we can see that the Eigen value for factor satisfaction level is 5008
which is also a contributing factor towards the study so it can also be considered as an important
factor in the study
5 Company Image
This factor includes that the insurance company should be well known in the industry (0777)
insurance provider should have goodwill in market (0758) and company of high repute (0428)As
we can see that the Eigen value for factor company image is 4878 which is also a contributing
factor towards the study so it can also be considered as an important factor in the study
18
6 Company-Client Relationship
This factor includes that the agent remind about premium installments (0778) pay personal
attention on every consumer (0505) and understand consumerrsquos financial needs (0404) As
we can see that the Eigen value for factor company client relationship is 4051 which is also a
contributing factor towards the study so it can also be considered as an important factor in the
study
Z-Test
Z-test was applied to find out significant difference between male and female investorrsquos perception
towards investment in life insurance policies
For applying Z-test mean and standard deviation was calculated then values were put in formula to
calculate standard error
Null Hypothesis Ho It states that there is no significant difference between the perception of male
and female investors towards investment in life insurance policies
GENDER MEAN SD SAMPLE
SIZE
SQUARE
OF
SD
MALE 14104 20078 75 403146
FEMALE 14594 17701 75 313348
Z = 15877
Since the value of Z is less than the standard value 196 at 5 level of significance so the null
hypothesis is accepted Therefore there is no significant difference between the perception of male
and female investors towards investment in life insurance policies
19
CONCLUSION
In present Indian market the investment habits of Indian consumers are changing very frequently
The individuals have their own perception towards various types of investment plans The study of
this research work was focused over consumerrsquos perception on investment towards Life Insurance
Services The objectives of the study were to evaluate the factors underlying consumer perception
towards investment in life insurance policies and to compare the differences in consumer
perception of male and female consumers The tests that were used for our research activities were-
Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25
items being accepted Next was Reliability Test to check the reliability of the items The
result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis
Test and the six factors that came out were Consumer Loyalty Service Quality Ease of
Procedures Satisfaction Level Company Image and Company-Client Relationship
The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind
sets for their investment pattern in insurance policies Still some actions are needed for
developing insurance market The major factors playing the role in developing
consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality
Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship
Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in
developing the market share loyalty and further development in insurance sector
20
References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)
21
Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in
Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)
22
Entrusted with helping customers meet their long-term goals they adopt an
investment philosophy that aims to achieve risk adjusted returns over the long-term
Their 16000+ strong staff is given the opportunity to learn and grow everyday in a
multitude of ways This keeps them engaged and enthusiastic so that they can deliver on
the promise to cover customer at every step of life
For the past six years ICICI Prudential has retained its position as the No 1
private life insurer in the country with a wide range of flexible products that meet the
needs of the Indian customer at every step in life
PLANS
There are two main types of plans ndash ULIP and Traditional
Unit Linked Insurance Product
ULIPs have gained high acceptance due to attractive features they offer These
include
1113090 Flexibility Flexibility to choose sum assured Flexibility to choose premium
amount Option to change level of Premium Sum Assured even after the plan has
started Flexibility to change asset allocation by switching between funds
1113090 Transparency Charges in the plan and net amount invested are known to the
customer Customer has the convenience of tracking hisher investment performance
on a daily basis
1113091 Liquidity Customer has the option to withdraw money after few years ie the option
of low minimum tenure Partial or systematic withdrawals are allowed
1113090 Fund Options A choice of funds is provided to customers ranging from equity debt
cash or a combination They can choose the fund mix based on desired asset
allocation
Traditional Endowment Plans
These are the old type of plans available These plans cater to customers with a
low risk appetite Some of the common features of the traditional plans are
1113090 Steady Investment Major chunk of investible funds are in debt instruments Though
6
low but steady and almost assured returns are expected over the long term
1113091 Death Benefit death benefit is sum assured with guaranteed and vested bonus
1113090 Asset Creation Helps in asset creation as they are for a long tenure
1113091 Fixed Ratios Premium to sum assured ratios is fixed for each plan and age
1113090 Withdrawals Withdrawals are generally not allowed before maturity
PRODUCTS
INSURANCE SOLUTIONS FOR INDIVIDUALS
ICICI Prudential Life Insurance offers a range of innovative customer-centric products
that meet the needs of customers at every life stage Its products can be enhanced up to 4
riders to create a customized solution for each policyholder
Savings amp Wealth Creation Solutions
1113090 Cash Plus is a transparent feature-packed savings plan that offers 3 levels of
protection as well as liquidity options
1113090 Save n Protect is a traditional endowment savings plan that offers life protection
along with adequate returns
1113091 CashBak is an anticipated endowment policy ideal for meeting milestone expenses
like a childs marriage expenses for a childs higher education or purchase of an
asset It is available for terms of 15 and 20 years
1113091 LifeTime Super amp LifeTime Plus are unit-linked plans that offer customers the
flexibility and control to customize the policy to meet the changing needs at
different life stages Each offer 4 fund options - Preserver Protector Balancer and
Maximizer
1113091 Life Link Super is a single premium unit linked insurance Plan which combines life
insurance cover with the opportunity to stay invested in the stock market
1113090 Premier Life Gold is a limited premium paying plan specially structured for long-
term wealth creation
1113090 Invest Shield Life is a unit linked plan that provides premium guarantee on the
7
invested premiums and ensures that the customer receives only the benefits of fund
appreciation without any of the risks of depreciation
1113090 Invest Shield Cash back is a unit linked plan that provides premium guarantee
on the invested premiums along with flexible liquidity options
Protection Solutions
1113090 LifeGuard is a protection plan which offers life cover at low cost It is available in
3 options - level term assurance level term assurance with return of premium amp
single premium
1113090 HomeAssure is a mortgage reducing term assurance plan designed specifically to
help customers cover their home loans in a simple and cost-effective manner
Child Plans
1113090 Education insurance under the Smart Kid brand provides guaranteed educational
benefits to a child along with life insurance cover for the parent who purchases the
policy The policy is designed to provide money at important milestones in the
childs life Smart Kid plans are also available in unit-linked form - both single
premium and regular premium
Retirement Solutions
1113090 ForeverLife is a traditional retirement product that offers guaranteed returns for the
first 4 years and then declares bonuses annually
1113090 LifeTime Super Pension is a regular premium unit linked pension plan that helps
one accumulate over the long term and offers an annuity option (guaranteed income
for life) at the time of retirement
1113090 LifeLink Super Pension is a single premium unit linked pension plan
1113090 Immediate Annuity is a single premium annuity product that guarantees income for
life at the time of retirement It offers the benefit of 5 payout options
Health Solutions
1113090 Health Assure and Health Assure Plus Health Assure is a regular premium plan
which provides long term cover against 6 critical illnesses by providing policyholder
8
with financial assistance irrespective of the actual medical expenses Health Assure
Plus offers the added advantage of an equivalent life insurance cover
1113090 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
1113090 Diabetes Care Diabetes Care is the first ever critical illness product especially for
individuals with Type 2 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
1113090 Hospital Care Hospital Care is structured to ensure customers receive a pre-
determined insurance amount for each procedure or hospitalization even if they
spend less Further its long-term design of a term between 10-20 years assures
policyholders the guaranteed cushion of insurance cover even if they make a claim
during the term Available for individuals between the ages of 1-60 years this is one
of the first products that will cover people up to the age of 80 years
GROUP INSURANCE SOLUTIONS
ICICI Prudential also offers Group Insurance Solutions for companies seeking to enhance
benefits to their employees
1113090 Group Gratuity Plan ICICI Prudentials group gratuity plan helps employers fund
their statutory gratuity obligation in a scientific manner The plan can also be
customized to structure schemes that can provide benefits beyond the statutory
obligations
1113090 Group Superannuation Plan ICICI Prudential offers both defined contribution
(DC) and defined benefit (DB) superannuation schemes to optimize returns for the
members of the trust and rationalize the cost Members have the option of choosing
from various annuity options or opting for a partial commutation of the annuity at
the time of retirement
1113090 Group Immediate Annuities In addition to the annuities offered to existing
superannuation customers they offer immediate annuities to superannuation funds
not managed by them
1113090 Group Term Plan ICICI Prudentials flexible group term solution helps provide
affordable cover to members of a group The cover could be uniform or based on
designationrank or a multiple of salary The benefit under the policy is paid to the
9
beneficiary nominated by the member on hisher death
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
1113090 Accident amp disability benefit If death occurs as the result of an accident during the
term of the policy the beneficiary receives an additional amount equal to the rider sum assured
under the policy If the death occurs while traveling in an authorized
mass transport vehicle the beneficiary will be entitled to twice the sum assured as
additional benefit
1113090 Critical Illness Benefit protects the insured against financial loss in the event of 9
specified critical illnesses Benefits are payable to the insured for medical expenses
prior to death
1113090 Income Benefit This rider pays the 10 of the sum assured to the nominee every
year till maturity in the event of the death of the life assured It is available on
SmarKid and CashPlus
1113090 Waiver of Premium In case of total and permanent disability due to an accident
the future premiums continue to be paid by the company till the time of maturity
This rider is available with LifeTime Super LifeTime Super Pension and CashPlus
HISTORY OF ICICI PRUDENTIAL
As mentioned earlier ICICI Prudential Life Insurance Company is a joint venture
between ICICI Bank - one of Indias foremost financial services company - and
Prudential plc - a leading international financial services group headquartered in the
United Kingdom
HISTORY OF ICICI PRUDENTIAL
As mentioned earlier icici prudential life insurance company is a joint venture between icici bank
one of India foremost financial services company and prudential plc a leading international
financial services group headquarterd in tha united kingdom
10
ICICI Bank
ICICI Bank (1113090YSEIB1113090) is Indias second largest bank and largest private sector bank
with over 50 years presence in financial services and with assets of over Rs 344658 bn
(USD 79 billion) as on March 31 2007 The 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 specialized subsidiaries in the areas of investment
banking life and non-life insurance private equity and asset management ICICI Bank is
a leading player in the retail banking market and services its large customer base through
a network of over 950 branches and extension counters 3300 ATMs call centers and
internet banking to ensure that customers have access to its services at all times
Prudential Plc
Established in London in 1848 Prudential plc through its businesses in the UK and
Europe the US and Asia provides retail financial services products and services to more
than 20 million customers policyholder and unit holders and manages over pound251 billion
of funds worldwide (as of 31 December 2006) In Asia Prudential is the leading
European life insurance company with life operations in China Hong Kong India
Indonesia Japan Korea Malaysia the Philippines Singapore Taiwan Thailand and
Vietnam Prudential is the second largest retail fund manager for Asian sourced assets ex-
Japan as at June 2006 Its fund management business has expanded into a total of ten markets
China Hong Kong India Japan Korea Malaysia Singapore Taiwan Vietnam
and United Arab Emirates
ICICI Prudential has been the market leader in the private life insurance sector
contributing to 30 of the growth share followed by the SBI Life Insurance with 18
share Members like Ms Shikha Sharma CEO amp MD Ms Anita Pai EVP ndash
Customer Service amp Technology Mr Puneet Nanda CIO Mr Binayak Dutta Chief ndash
Sales amp Distribution have been with the company since its inception in 2000 and are
instrumental in developing ICIC Prudential to this level
The first policy was sold on 12th December 2000 Within 1 year ICICI Prudential
achieved 25000 policies and thereby growing at a faster rate achieved 1 million policies
by October 2004 By 2010 ICICI Prudential has a target to achieve 20 million customers
AWARDS amp RECOGNITION
AWARDS
11
1113090 Indias Most Customer Responsive Insurance Company
Avaya GlobalConnect - Economic Times
Customer Responsiveness Awards
1113090 Most Trusted Private Life Insurer
The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003
2004 and 2005
1113090 Prudence Customer Centricity Award 2004 amp 2005
Prudential Corporation Asia
1113090 Best Life Insurer 2003
Outlook Money Awards 2003 amp 2004
1113090 Superbrand 2003-04
1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising
campaign
Effies 2003
RECOGNITIONS
1113090 IMM Award for Excellence
Institute of Marketing amp Management
1113090 Organisation with Innovative HR Practices
Indira Group of Institutes
1113090 Most Trusted Private Life Insurer
The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003
2004 and 2005
1113090 Prudence Customer Centricity Award 2004 amp 2005
Prudential Corporation Asia
1113090 Best Life Insurer 2003
Outlook Money Awards 2003 amp 2004
1113090 Superbrand 2003-04
1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising
campaign
Effies 2003
12
Review of Literature
Mehr and Cammack (1976) agrees that insurance is usually thought of as a product that spreads the
risk of serious but low-probability losses among a group of individuals thus providing some
financial protection to each individual Kunreuther (1979) said that his product makes good sense
particularly when the protection is purchased against potential losses so large as to be catastrophic
such as total destruction of ones home a large accident liability judgment or death of primary
family breadwinner However it has long been recognized that this sensible product is difficult to
sellv
Kahneman amp Tversky (1984) stated indeed repeated demonstrations have shown most people lack
an adequate understanding of probability and risk concepts Dhar (1997) Greenleaf and Lehmann
(1995) Tversky and Shafir (1992) have shown that offering more options can generate decision
conflict and preference uncertainty leading to decision deferral
Kotler (1973) considers insurance to be in the category of unsought goods along with products
such as preventive dental services and burial plotsHe notes that unsought goods pose special
challenges to the marketer
Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) found that subjects were more likely
to buy insurance against small high-probability losses than insurance against large low- probability
losses Hershey and Schoemaker (1980) reported the opposite result
Kunreuther (1979) ldquoIt is not the magnitude of a potential loss that inspires people to buy insurance
voluntarily ndash it is the frequency with which a loss is likely to occurrdquo
Michael L Smith (1982) said that a typical life insurance contract provides a package of options or
rights to the policy owner that is not precisely duplicated by any other combination of commonly
available contracts Viewed from this perspective life insurance enjoys a unique position in the
field of investments and should be judged in this light The paper shows that an options viewpoint
provides a more complete explanation of policy owner behavior towards life insurance than the
conventional savings-and-protection view
13
Michael L Walden (1985) told that the options package view of the whole a
whole life policy is a package of options each of which has value and is expected to influence the
price of the policy This viewpoint implies the general hypothesis that price differences between
whole life policies can be explained by differences in policy contract provisions and differences in
selected company characteristics
OBJECTIVE
o To evaluate the factors underlying consumer perception towards investment in life insurance
policies
o To compare the differences in consumer perception of male and
female consumers
RESEARCH METHODOLOGY
The Study The study was exploratory in nature with survey method being used to complete the
study
Sampling Design
Population
Population included investors in NCR region
Sample frame
Since the data was collected through personal contacts the sample frames were the individuals who
are investing in life insurance policies
Sampling elements
Individual respondents were the sampling elements
14
Sampling Techniques
Random sampling technique was used to select the samples
Sample Size
Sample size was 150 respondents
Tools Used for Data Collection
Self designed questionnaire was used for the evaluation of factors affecting consumerrsquos perception
towards insurance Data was collected on Likertrsquos type scale where 1 stood for minimum
agreement and 7 stood for maximum agreement
Tools Used for Data Analysis
Item to total correlation was applied to check the internal consistency of the questionnaire The
measures were standardized through computation of reliability and validity
Factor analysis was applied to identify the underlying factors
Z-test was applied to find out the significant differences between male and
female investors
Results and Discussions
Consistency Measure
Firstly consistency of all the items in the questionnaire is checked through item to total correlation
Under this correlation of every item with total is measured and the computed value is compared
with standard value (ie 01590) If the computed value is found less than standard value then
whole factorstatement is dropped and will be termed as inconsistent
15
SNO ITEMS COMPUTED
CORRELATIO
N VALUE
CONSISTE
NT
ACCEPTED
DROPPED
1 Awareness about terms and conditions of
policy
0671575 Consistent Accepted
2 Provide services on time 0651847 Consistent Accepted
3 Provide satisfactory services 0573518 Consistent Accepted
4 Goodwill of the company 0607722 Consistent Accepted
5 Agent is well informed about policies 0640696 Consistent Accepted
6 Co-operative and friendly agent 0598089 Consistent Accepted
7 Agent respond promptly 0696914 Consistent Accepted
8 Proper reminder of installments by
agents
0531124 Consistent Accepted
9 Employees responsible towards
customers
0685817 Consistent Accepted
10 Benefits are met by policy 0510702 Consistent Accepted
11 Selection of highly reputed company 0634614 Consistent Accepted
12 Reputation of the insurance company 0582977 Consistent Accepted
13 Hassle free settlements 0594282 Consistent Accepted
14 Personal attention on every costumer 0640192 Consistent Accepted
15 Understand Customerrsquos financial needs 0603133 Consistent Accepted
16 Fulfill its promise towards policy 0613243 Consistent Accepted
17 Provides the claims on time 0474994 Consistent Accepted
18 Settlement of claims easy and timely 0569959 Consistent Accepted
19 Satisfy with relationship to company 0621496 Consistent Accepted
20 Company able to fulfill expectation 0594265 Consistent Accepted
21 Only company I want to associate
myself
0519161 Consistent Accepted
22 Purchase more policies from the same
company
0502876 Consistent Accepted
16
23 Suggest friends and family to purchase
policy from the same company
0540626 Consistent Accepted
24 Policy benefits benchmarks 062874 Consistent Accepted
25 Investment in life insurance is more
secure than stock market
0376874 Consistent Accepted
26 Purchase further policies from other
companies
0091102 Inonsistent Dropped
Reliability
Reliability test was carried out using SPSS software and the reliability of the items was measured
The result is as follows
Cronbachrsquos Alpha 0919
It can be seen that the reliability value is more than 07 So the questionnaire is
highly reliable
Description of factors
1 Company Loyalty
This factor includes that this is the only company the consumer wants to associate himself with in
future (0814) himself would purchase more policies from the same company (0799) suggest
friends and family to purchase policy from the same company (0790) company able to fulfill
expectation (0599) Policy benefits benchmarks (0545) The highest Eigen value lies in this factor
35213 So it is been considered as the highly contributing factor towards study Therefore it is
clear that company loyalty plays an important role in investment decisions of investors
17
2 Services Quality
This factor includes hassle free settlements (0693) employees responsible towards customers
(0631) agents respond promptly (0611) investment in life insurance is more secure than stock
market (0563) satisfy with relationship to company (0537) As we can see that the Eigen value for
factor service quality is 9753 which is also a contributing factor towards the study so it can also be considered as an the study
3 Ease of Procedures
This factor includes the company provides claims on time (0852) co- operative and friendly agent
(0662) settlement of claims easy and timely (0651) agent is well informed about policies (0486) As
we can see that the Eigen value for factor ease of procedures is 5830 which is also a contributing
factor towards the study so it can also be considered as an important factor inconsumerrsquos financial
needs (0404) As we can see that the Eigen value for factor company client relationship is 4051
which is also a contributing factor towards the study so it can also be considered as an important factor
in the study
4 Satisfaction Level
This factor includes that the suggested benefits of Insurance Policy should be met to the investors
( 0774) Company provides them satisfactory services (0631) fulfill its promise about life
insurance policy (0575) Services should be provided on time(0515) and awareness of terms and
conditions of policies As we can see that the Eigen value for factor satisfaction level is 5008
which is also a contributing factor towards the study so it can also be considered as an important
factor in the study
5 Company Image
This factor includes that the insurance company should be well known in the industry (0777)
insurance provider should have goodwill in market (0758) and company of high repute (0428)As
we can see that the Eigen value for factor company image is 4878 which is also a contributing
factor towards the study so it can also be considered as an important factor in the study
18
6 Company-Client Relationship
This factor includes that the agent remind about premium installments (0778) pay personal
attention on every consumer (0505) and understand consumerrsquos financial needs (0404) As
we can see that the Eigen value for factor company client relationship is 4051 which is also a
contributing factor towards the study so it can also be considered as an important factor in the
study
Z-Test
Z-test was applied to find out significant difference between male and female investorrsquos perception
towards investment in life insurance policies
For applying Z-test mean and standard deviation was calculated then values were put in formula to
calculate standard error
Null Hypothesis Ho It states that there is no significant difference between the perception of male
and female investors towards investment in life insurance policies
GENDER MEAN SD SAMPLE
SIZE
SQUARE
OF
SD
MALE 14104 20078 75 403146
FEMALE 14594 17701 75 313348
Z = 15877
Since the value of Z is less than the standard value 196 at 5 level of significance so the null
hypothesis is accepted Therefore there is no significant difference between the perception of male
and female investors towards investment in life insurance policies
19
CONCLUSION
In present Indian market the investment habits of Indian consumers are changing very frequently
The individuals have their own perception towards various types of investment plans The study of
this research work was focused over consumerrsquos perception on investment towards Life Insurance
Services The objectives of the study were to evaluate the factors underlying consumer perception
towards investment in life insurance policies and to compare the differences in consumer
perception of male and female consumers The tests that were used for our research activities were-
Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25
items being accepted Next was Reliability Test to check the reliability of the items The
result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis
Test and the six factors that came out were Consumer Loyalty Service Quality Ease of
Procedures Satisfaction Level Company Image and Company-Client Relationship
The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind
sets for their investment pattern in insurance policies Still some actions are needed for
developing insurance market The major factors playing the role in developing
consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality
Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship
Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in
developing the market share loyalty and further development in insurance sector
20
References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)
21
Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in
Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)
22
low but steady and almost assured returns are expected over the long term
1113091 Death Benefit death benefit is sum assured with guaranteed and vested bonus
1113090 Asset Creation Helps in asset creation as they are for a long tenure
1113091 Fixed Ratios Premium to sum assured ratios is fixed for each plan and age
1113090 Withdrawals Withdrawals are generally not allowed before maturity
PRODUCTS
INSURANCE SOLUTIONS FOR INDIVIDUALS
ICICI Prudential Life Insurance offers a range of innovative customer-centric products
that meet the needs of customers at every life stage Its products can be enhanced up to 4
riders to create a customized solution for each policyholder
Savings amp Wealth Creation Solutions
1113090 Cash Plus is a transparent feature-packed savings plan that offers 3 levels of
protection as well as liquidity options
1113090 Save n Protect is a traditional endowment savings plan that offers life protection
along with adequate returns
1113091 CashBak is an anticipated endowment policy ideal for meeting milestone expenses
like a childs marriage expenses for a childs higher education or purchase of an
asset It is available for terms of 15 and 20 years
1113091 LifeTime Super amp LifeTime Plus are unit-linked plans that offer customers the
flexibility and control to customize the policy to meet the changing needs at
different life stages Each offer 4 fund options - Preserver Protector Balancer and
Maximizer
1113091 Life Link Super is a single premium unit linked insurance Plan which combines life
insurance cover with the opportunity to stay invested in the stock market
1113090 Premier Life Gold is a limited premium paying plan specially structured for long-
term wealth creation
1113090 Invest Shield Life is a unit linked plan that provides premium guarantee on the
7
invested premiums and ensures that the customer receives only the benefits of fund
appreciation without any of the risks of depreciation
1113090 Invest Shield Cash back is a unit linked plan that provides premium guarantee
on the invested premiums along with flexible liquidity options
Protection Solutions
1113090 LifeGuard is a protection plan which offers life cover at low cost It is available in
3 options - level term assurance level term assurance with return of premium amp
single premium
1113090 HomeAssure is a mortgage reducing term assurance plan designed specifically to
help customers cover their home loans in a simple and cost-effective manner
Child Plans
1113090 Education insurance under the Smart Kid brand provides guaranteed educational
benefits to a child along with life insurance cover for the parent who purchases the
policy The policy is designed to provide money at important milestones in the
childs life Smart Kid plans are also available in unit-linked form - both single
premium and regular premium
Retirement Solutions
1113090 ForeverLife is a traditional retirement product that offers guaranteed returns for the
first 4 years and then declares bonuses annually
1113090 LifeTime Super Pension is a regular premium unit linked pension plan that helps
one accumulate over the long term and offers an annuity option (guaranteed income
for life) at the time of retirement
1113090 LifeLink Super Pension is a single premium unit linked pension plan
1113090 Immediate Annuity is a single premium annuity product that guarantees income for
life at the time of retirement It offers the benefit of 5 payout options
Health Solutions
1113090 Health Assure and Health Assure Plus Health Assure is a regular premium plan
which provides long term cover against 6 critical illnesses by providing policyholder
8
with financial assistance irrespective of the actual medical expenses Health Assure
Plus offers the added advantage of an equivalent life insurance cover
1113090 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
1113090 Diabetes Care Diabetes Care is the first ever critical illness product especially for
individuals with Type 2 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
1113090 Hospital Care Hospital Care is structured to ensure customers receive a pre-
determined insurance amount for each procedure or hospitalization even if they
spend less Further its long-term design of a term between 10-20 years assures
policyholders the guaranteed cushion of insurance cover even if they make a claim
during the term Available for individuals between the ages of 1-60 years this is one
of the first products that will cover people up to the age of 80 years
GROUP INSURANCE SOLUTIONS
ICICI Prudential also offers Group Insurance Solutions for companies seeking to enhance
benefits to their employees
1113090 Group Gratuity Plan ICICI Prudentials group gratuity plan helps employers fund
their statutory gratuity obligation in a scientific manner The plan can also be
customized to structure schemes that can provide benefits beyond the statutory
obligations
1113090 Group Superannuation Plan ICICI Prudential offers both defined contribution
(DC) and defined benefit (DB) superannuation schemes to optimize returns for the
members of the trust and rationalize the cost Members have the option of choosing
from various annuity options or opting for a partial commutation of the annuity at
the time of retirement
1113090 Group Immediate Annuities In addition to the annuities offered to existing
superannuation customers they offer immediate annuities to superannuation funds
not managed by them
1113090 Group Term Plan ICICI Prudentials flexible group term solution helps provide
affordable cover to members of a group The cover could be uniform or based on
designationrank or a multiple of salary The benefit under the policy is paid to the
9
beneficiary nominated by the member on hisher death
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
1113090 Accident amp disability benefit If death occurs as the result of an accident during the
term of the policy the beneficiary receives an additional amount equal to the rider sum assured
under the policy If the death occurs while traveling in an authorized
mass transport vehicle the beneficiary will be entitled to twice the sum assured as
additional benefit
1113090 Critical Illness Benefit protects the insured against financial loss in the event of 9
specified critical illnesses Benefits are payable to the insured for medical expenses
prior to death
1113090 Income Benefit This rider pays the 10 of the sum assured to the nominee every
year till maturity in the event of the death of the life assured It is available on
SmarKid and CashPlus
1113090 Waiver of Premium In case of total and permanent disability due to an accident
the future premiums continue to be paid by the company till the time of maturity
This rider is available with LifeTime Super LifeTime Super Pension and CashPlus
HISTORY OF ICICI PRUDENTIAL
As mentioned earlier ICICI Prudential Life Insurance Company is a joint venture
between ICICI Bank - one of Indias foremost financial services company - and
Prudential plc - a leading international financial services group headquartered in the
United Kingdom
HISTORY OF ICICI PRUDENTIAL
As mentioned earlier icici prudential life insurance company is a joint venture between icici bank
one of India foremost financial services company and prudential plc a leading international
financial services group headquarterd in tha united kingdom
10
ICICI Bank
ICICI Bank (1113090YSEIB1113090) is Indias second largest bank and largest private sector bank
with over 50 years presence in financial services and with assets of over Rs 344658 bn
(USD 79 billion) as on March 31 2007 The 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 specialized subsidiaries in the areas of investment
banking life and non-life insurance private equity and asset management ICICI Bank is
a leading player in the retail banking market and services its large customer base through
a network of over 950 branches and extension counters 3300 ATMs call centers and
internet banking to ensure that customers have access to its services at all times
Prudential Plc
Established in London in 1848 Prudential plc through its businesses in the UK and
Europe the US and Asia provides retail financial services products and services to more
than 20 million customers policyholder and unit holders and manages over pound251 billion
of funds worldwide (as of 31 December 2006) In Asia Prudential is the leading
European life insurance company with life operations in China Hong Kong India
Indonesia Japan Korea Malaysia the Philippines Singapore Taiwan Thailand and
Vietnam Prudential is the second largest retail fund manager for Asian sourced assets ex-
Japan as at June 2006 Its fund management business has expanded into a total of ten markets
China Hong Kong India Japan Korea Malaysia Singapore Taiwan Vietnam
and United Arab Emirates
ICICI Prudential has been the market leader in the private life insurance sector
contributing to 30 of the growth share followed by the SBI Life Insurance with 18
share Members like Ms Shikha Sharma CEO amp MD Ms Anita Pai EVP ndash
Customer Service amp Technology Mr Puneet Nanda CIO Mr Binayak Dutta Chief ndash
Sales amp Distribution have been with the company since its inception in 2000 and are
instrumental in developing ICIC Prudential to this level
The first policy was sold on 12th December 2000 Within 1 year ICICI Prudential
achieved 25000 policies and thereby growing at a faster rate achieved 1 million policies
by October 2004 By 2010 ICICI Prudential has a target to achieve 20 million customers
AWARDS amp RECOGNITION
AWARDS
11
1113090 Indias Most Customer Responsive Insurance Company
Avaya GlobalConnect - Economic Times
Customer Responsiveness Awards
1113090 Most Trusted Private Life Insurer
The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003
2004 and 2005
1113090 Prudence Customer Centricity Award 2004 amp 2005
Prudential Corporation Asia
1113090 Best Life Insurer 2003
Outlook Money Awards 2003 amp 2004
1113090 Superbrand 2003-04
1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising
campaign
Effies 2003
RECOGNITIONS
1113090 IMM Award for Excellence
Institute of Marketing amp Management
1113090 Organisation with Innovative HR Practices
Indira Group of Institutes
1113090 Most Trusted Private Life Insurer
The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003
2004 and 2005
1113090 Prudence Customer Centricity Award 2004 amp 2005
Prudential Corporation Asia
1113090 Best Life Insurer 2003
Outlook Money Awards 2003 amp 2004
1113090 Superbrand 2003-04
1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising
campaign
Effies 2003
12
Review of Literature
Mehr and Cammack (1976) agrees that insurance is usually thought of as a product that spreads the
risk of serious but low-probability losses among a group of individuals thus providing some
financial protection to each individual Kunreuther (1979) said that his product makes good sense
particularly when the protection is purchased against potential losses so large as to be catastrophic
such as total destruction of ones home a large accident liability judgment or death of primary
family breadwinner However it has long been recognized that this sensible product is difficult to
sellv
Kahneman amp Tversky (1984) stated indeed repeated demonstrations have shown most people lack
an adequate understanding of probability and risk concepts Dhar (1997) Greenleaf and Lehmann
(1995) Tversky and Shafir (1992) have shown that offering more options can generate decision
conflict and preference uncertainty leading to decision deferral
Kotler (1973) considers insurance to be in the category of unsought goods along with products
such as preventive dental services and burial plotsHe notes that unsought goods pose special
challenges to the marketer
Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) found that subjects were more likely
to buy insurance against small high-probability losses than insurance against large low- probability
losses Hershey and Schoemaker (1980) reported the opposite result
Kunreuther (1979) ldquoIt is not the magnitude of a potential loss that inspires people to buy insurance
voluntarily ndash it is the frequency with which a loss is likely to occurrdquo
Michael L Smith (1982) said that a typical life insurance contract provides a package of options or
rights to the policy owner that is not precisely duplicated by any other combination of commonly
available contracts Viewed from this perspective life insurance enjoys a unique position in the
field of investments and should be judged in this light The paper shows that an options viewpoint
provides a more complete explanation of policy owner behavior towards life insurance than the
conventional savings-and-protection view
13
Michael L Walden (1985) told that the options package view of the whole a
whole life policy is a package of options each of which has value and is expected to influence the
price of the policy This viewpoint implies the general hypothesis that price differences between
whole life policies can be explained by differences in policy contract provisions and differences in
selected company characteristics
OBJECTIVE
o To evaluate the factors underlying consumer perception towards investment in life insurance
policies
o To compare the differences in consumer perception of male and
female consumers
RESEARCH METHODOLOGY
The Study The study was exploratory in nature with survey method being used to complete the
study
Sampling Design
Population
Population included investors in NCR region
Sample frame
Since the data was collected through personal contacts the sample frames were the individuals who
are investing in life insurance policies
Sampling elements
Individual respondents were the sampling elements
14
Sampling Techniques
Random sampling technique was used to select the samples
Sample Size
Sample size was 150 respondents
Tools Used for Data Collection
Self designed questionnaire was used for the evaluation of factors affecting consumerrsquos perception
towards insurance Data was collected on Likertrsquos type scale where 1 stood for minimum
agreement and 7 stood for maximum agreement
Tools Used for Data Analysis
Item to total correlation was applied to check the internal consistency of the questionnaire The
measures were standardized through computation of reliability and validity
Factor analysis was applied to identify the underlying factors
Z-test was applied to find out the significant differences between male and
female investors
Results and Discussions
Consistency Measure
Firstly consistency of all the items in the questionnaire is checked through item to total correlation
Under this correlation of every item with total is measured and the computed value is compared
with standard value (ie 01590) If the computed value is found less than standard value then
whole factorstatement is dropped and will be termed as inconsistent
15
SNO ITEMS COMPUTED
CORRELATIO
N VALUE
CONSISTE
NT
ACCEPTED
DROPPED
1 Awareness about terms and conditions of
policy
0671575 Consistent Accepted
2 Provide services on time 0651847 Consistent Accepted
3 Provide satisfactory services 0573518 Consistent Accepted
4 Goodwill of the company 0607722 Consistent Accepted
5 Agent is well informed about policies 0640696 Consistent Accepted
6 Co-operative and friendly agent 0598089 Consistent Accepted
7 Agent respond promptly 0696914 Consistent Accepted
8 Proper reminder of installments by
agents
0531124 Consistent Accepted
9 Employees responsible towards
customers
0685817 Consistent Accepted
10 Benefits are met by policy 0510702 Consistent Accepted
11 Selection of highly reputed company 0634614 Consistent Accepted
12 Reputation of the insurance company 0582977 Consistent Accepted
13 Hassle free settlements 0594282 Consistent Accepted
14 Personal attention on every costumer 0640192 Consistent Accepted
15 Understand Customerrsquos financial needs 0603133 Consistent Accepted
16 Fulfill its promise towards policy 0613243 Consistent Accepted
17 Provides the claims on time 0474994 Consistent Accepted
18 Settlement of claims easy and timely 0569959 Consistent Accepted
19 Satisfy with relationship to company 0621496 Consistent Accepted
20 Company able to fulfill expectation 0594265 Consistent Accepted
21 Only company I want to associate
myself
0519161 Consistent Accepted
22 Purchase more policies from the same
company
0502876 Consistent Accepted
16
23 Suggest friends and family to purchase
policy from the same company
0540626 Consistent Accepted
24 Policy benefits benchmarks 062874 Consistent Accepted
25 Investment in life insurance is more
secure than stock market
0376874 Consistent Accepted
26 Purchase further policies from other
companies
0091102 Inonsistent Dropped
Reliability
Reliability test was carried out using SPSS software and the reliability of the items was measured
The result is as follows
Cronbachrsquos Alpha 0919
It can be seen that the reliability value is more than 07 So the questionnaire is
highly reliable
Description of factors
1 Company Loyalty
This factor includes that this is the only company the consumer wants to associate himself with in
future (0814) himself would purchase more policies from the same company (0799) suggest
friends and family to purchase policy from the same company (0790) company able to fulfill
expectation (0599) Policy benefits benchmarks (0545) The highest Eigen value lies in this factor
35213 So it is been considered as the highly contributing factor towards study Therefore it is
clear that company loyalty plays an important role in investment decisions of investors
17
2 Services Quality
This factor includes hassle free settlements (0693) employees responsible towards customers
(0631) agents respond promptly (0611) investment in life insurance is more secure than stock
market (0563) satisfy with relationship to company (0537) As we can see that the Eigen value for
factor service quality is 9753 which is also a contributing factor towards the study so it can also be considered as an the study
3 Ease of Procedures
This factor includes the company provides claims on time (0852) co- operative and friendly agent
(0662) settlement of claims easy and timely (0651) agent is well informed about policies (0486) As
we can see that the Eigen value for factor ease of procedures is 5830 which is also a contributing
factor towards the study so it can also be considered as an important factor inconsumerrsquos financial
needs (0404) As we can see that the Eigen value for factor company client relationship is 4051
which is also a contributing factor towards the study so it can also be considered as an important factor
in the study
4 Satisfaction Level
This factor includes that the suggested benefits of Insurance Policy should be met to the investors
( 0774) Company provides them satisfactory services (0631) fulfill its promise about life
insurance policy (0575) Services should be provided on time(0515) and awareness of terms and
conditions of policies As we can see that the Eigen value for factor satisfaction level is 5008
which is also a contributing factor towards the study so it can also be considered as an important
factor in the study
5 Company Image
This factor includes that the insurance company should be well known in the industry (0777)
insurance provider should have goodwill in market (0758) and company of high repute (0428)As
we can see that the Eigen value for factor company image is 4878 which is also a contributing
factor towards the study so it can also be considered as an important factor in the study
18
6 Company-Client Relationship
This factor includes that the agent remind about premium installments (0778) pay personal
attention on every consumer (0505) and understand consumerrsquos financial needs (0404) As
we can see that the Eigen value for factor company client relationship is 4051 which is also a
contributing factor towards the study so it can also be considered as an important factor in the
study
Z-Test
Z-test was applied to find out significant difference between male and female investorrsquos perception
towards investment in life insurance policies
For applying Z-test mean and standard deviation was calculated then values were put in formula to
calculate standard error
Null Hypothesis Ho It states that there is no significant difference between the perception of male
and female investors towards investment in life insurance policies
GENDER MEAN SD SAMPLE
SIZE
SQUARE
OF
SD
MALE 14104 20078 75 403146
FEMALE 14594 17701 75 313348
Z = 15877
Since the value of Z is less than the standard value 196 at 5 level of significance so the null
hypothesis is accepted Therefore there is no significant difference between the perception of male
and female investors towards investment in life insurance policies
19
CONCLUSION
In present Indian market the investment habits of Indian consumers are changing very frequently
The individuals have their own perception towards various types of investment plans The study of
this research work was focused over consumerrsquos perception on investment towards Life Insurance
Services The objectives of the study were to evaluate the factors underlying consumer perception
towards investment in life insurance policies and to compare the differences in consumer
perception of male and female consumers The tests that were used for our research activities were-
Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25
items being accepted Next was Reliability Test to check the reliability of the items The
result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis
Test and the six factors that came out were Consumer Loyalty Service Quality Ease of
Procedures Satisfaction Level Company Image and Company-Client Relationship
The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind
sets for their investment pattern in insurance policies Still some actions are needed for
developing insurance market The major factors playing the role in developing
consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality
Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship
Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in
developing the market share loyalty and further development in insurance sector
20
References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)
21
Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in
Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)
22
invested premiums and ensures that the customer receives only the benefits of fund
appreciation without any of the risks of depreciation
1113090 Invest Shield Cash back is a unit linked plan that provides premium guarantee
on the invested premiums along with flexible liquidity options
Protection Solutions
1113090 LifeGuard is a protection plan which offers life cover at low cost It is available in
3 options - level term assurance level term assurance with return of premium amp
single premium
1113090 HomeAssure is a mortgage reducing term assurance plan designed specifically to
help customers cover their home loans in a simple and cost-effective manner
Child Plans
1113090 Education insurance under the Smart Kid brand provides guaranteed educational
benefits to a child along with life insurance cover for the parent who purchases the
policy The policy is designed to provide money at important milestones in the
childs life Smart Kid plans are also available in unit-linked form - both single
premium and regular premium
Retirement Solutions
1113090 ForeverLife is a traditional retirement product that offers guaranteed returns for the
first 4 years and then declares bonuses annually
1113090 LifeTime Super Pension is a regular premium unit linked pension plan that helps
one accumulate over the long term and offers an annuity option (guaranteed income
for life) at the time of retirement
1113090 LifeLink Super Pension is a single premium unit linked pension plan
1113090 Immediate Annuity is a single premium annuity product that guarantees income for
life at the time of retirement It offers the benefit of 5 payout options
Health Solutions
1113090 Health Assure and Health Assure Plus Health Assure is a regular premium plan
which provides long term cover against 6 critical illnesses by providing policyholder
8
with financial assistance irrespective of the actual medical expenses Health Assure
Plus offers the added advantage of an equivalent life insurance cover
1113090 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
1113090 Diabetes Care Diabetes Care is the first ever critical illness product especially for
individuals with Type 2 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
1113090 Hospital Care Hospital Care is structured to ensure customers receive a pre-
determined insurance amount for each procedure or hospitalization even if they
spend less Further its long-term design of a term between 10-20 years assures
policyholders the guaranteed cushion of insurance cover even if they make a claim
during the term Available for individuals between the ages of 1-60 years this is one
of the first products that will cover people up to the age of 80 years
GROUP INSURANCE SOLUTIONS
ICICI Prudential also offers Group Insurance Solutions for companies seeking to enhance
benefits to their employees
1113090 Group Gratuity Plan ICICI Prudentials group gratuity plan helps employers fund
their statutory gratuity obligation in a scientific manner The plan can also be
customized to structure schemes that can provide benefits beyond the statutory
obligations
1113090 Group Superannuation Plan ICICI Prudential offers both defined contribution
(DC) and defined benefit (DB) superannuation schemes to optimize returns for the
members of the trust and rationalize the cost Members have the option of choosing
from various annuity options or opting for a partial commutation of the annuity at
the time of retirement
1113090 Group Immediate Annuities In addition to the annuities offered to existing
superannuation customers they offer immediate annuities to superannuation funds
not managed by them
1113090 Group Term Plan ICICI Prudentials flexible group term solution helps provide
affordable cover to members of a group The cover could be uniform or based on
designationrank or a multiple of salary The benefit under the policy is paid to the
9
beneficiary nominated by the member on hisher death
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
1113090 Accident amp disability benefit If death occurs as the result of an accident during the
term of the policy the beneficiary receives an additional amount equal to the rider sum assured
under the policy If the death occurs while traveling in an authorized
mass transport vehicle the beneficiary will be entitled to twice the sum assured as
additional benefit
1113090 Critical Illness Benefit protects the insured against financial loss in the event of 9
specified critical illnesses Benefits are payable to the insured for medical expenses
prior to death
1113090 Income Benefit This rider pays the 10 of the sum assured to the nominee every
year till maturity in the event of the death of the life assured It is available on
SmarKid and CashPlus
1113090 Waiver of Premium In case of total and permanent disability due to an accident
the future premiums continue to be paid by the company till the time of maturity
This rider is available with LifeTime Super LifeTime Super Pension and CashPlus
HISTORY OF ICICI PRUDENTIAL
As mentioned earlier ICICI Prudential Life Insurance Company is a joint venture
between ICICI Bank - one of Indias foremost financial services company - and
Prudential plc - a leading international financial services group headquartered in the
United Kingdom
HISTORY OF ICICI PRUDENTIAL
As mentioned earlier icici prudential life insurance company is a joint venture between icici bank
one of India foremost financial services company and prudential plc a leading international
financial services group headquarterd in tha united kingdom
10
ICICI Bank
ICICI Bank (1113090YSEIB1113090) is Indias second largest bank and largest private sector bank
with over 50 years presence in financial services and with assets of over Rs 344658 bn
(USD 79 billion) as on March 31 2007 The 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 specialized subsidiaries in the areas of investment
banking life and non-life insurance private equity and asset management ICICI Bank is
a leading player in the retail banking market and services its large customer base through
a network of over 950 branches and extension counters 3300 ATMs call centers and
internet banking to ensure that customers have access to its services at all times
Prudential Plc
Established in London in 1848 Prudential plc through its businesses in the UK and
Europe the US and Asia provides retail financial services products and services to more
than 20 million customers policyholder and unit holders and manages over pound251 billion
of funds worldwide (as of 31 December 2006) In Asia Prudential is the leading
European life insurance company with life operations in China Hong Kong India
Indonesia Japan Korea Malaysia the Philippines Singapore Taiwan Thailand and
Vietnam Prudential is the second largest retail fund manager for Asian sourced assets ex-
Japan as at June 2006 Its fund management business has expanded into a total of ten markets
China Hong Kong India Japan Korea Malaysia Singapore Taiwan Vietnam
and United Arab Emirates
ICICI Prudential has been the market leader in the private life insurance sector
contributing to 30 of the growth share followed by the SBI Life Insurance with 18
share Members like Ms Shikha Sharma CEO amp MD Ms Anita Pai EVP ndash
Customer Service amp Technology Mr Puneet Nanda CIO Mr Binayak Dutta Chief ndash
Sales amp Distribution have been with the company since its inception in 2000 and are
instrumental in developing ICIC Prudential to this level
The first policy was sold on 12th December 2000 Within 1 year ICICI Prudential
achieved 25000 policies and thereby growing at a faster rate achieved 1 million policies
by October 2004 By 2010 ICICI Prudential has a target to achieve 20 million customers
AWARDS amp RECOGNITION
AWARDS
11
1113090 Indias Most Customer Responsive Insurance Company
Avaya GlobalConnect - Economic Times
Customer Responsiveness Awards
1113090 Most Trusted Private Life Insurer
The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003
2004 and 2005
1113090 Prudence Customer Centricity Award 2004 amp 2005
Prudential Corporation Asia
1113090 Best Life Insurer 2003
Outlook Money Awards 2003 amp 2004
1113090 Superbrand 2003-04
1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising
campaign
Effies 2003
RECOGNITIONS
1113090 IMM Award for Excellence
Institute of Marketing amp Management
1113090 Organisation with Innovative HR Practices
Indira Group of Institutes
1113090 Most Trusted Private Life Insurer
The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003
2004 and 2005
1113090 Prudence Customer Centricity Award 2004 amp 2005
Prudential Corporation Asia
1113090 Best Life Insurer 2003
Outlook Money Awards 2003 amp 2004
1113090 Superbrand 2003-04
1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising
campaign
Effies 2003
12
Review of Literature
Mehr and Cammack (1976) agrees that insurance is usually thought of as a product that spreads the
risk of serious but low-probability losses among a group of individuals thus providing some
financial protection to each individual Kunreuther (1979) said that his product makes good sense
particularly when the protection is purchased against potential losses so large as to be catastrophic
such as total destruction of ones home a large accident liability judgment or death of primary
family breadwinner However it has long been recognized that this sensible product is difficult to
sellv
Kahneman amp Tversky (1984) stated indeed repeated demonstrations have shown most people lack
an adequate understanding of probability and risk concepts Dhar (1997) Greenleaf and Lehmann
(1995) Tversky and Shafir (1992) have shown that offering more options can generate decision
conflict and preference uncertainty leading to decision deferral
Kotler (1973) considers insurance to be in the category of unsought goods along with products
such as preventive dental services and burial plotsHe notes that unsought goods pose special
challenges to the marketer
Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) found that subjects were more likely
to buy insurance against small high-probability losses than insurance against large low- probability
losses Hershey and Schoemaker (1980) reported the opposite result
Kunreuther (1979) ldquoIt is not the magnitude of a potential loss that inspires people to buy insurance
voluntarily ndash it is the frequency with which a loss is likely to occurrdquo
Michael L Smith (1982) said that a typical life insurance contract provides a package of options or
rights to the policy owner that is not precisely duplicated by any other combination of commonly
available contracts Viewed from this perspective life insurance enjoys a unique position in the
field of investments and should be judged in this light The paper shows that an options viewpoint
provides a more complete explanation of policy owner behavior towards life insurance than the
conventional savings-and-protection view
13
Michael L Walden (1985) told that the options package view of the whole a
whole life policy is a package of options each of which has value and is expected to influence the
price of the policy This viewpoint implies the general hypothesis that price differences between
whole life policies can be explained by differences in policy contract provisions and differences in
selected company characteristics
OBJECTIVE
o To evaluate the factors underlying consumer perception towards investment in life insurance
policies
o To compare the differences in consumer perception of male and
female consumers
RESEARCH METHODOLOGY
The Study The study was exploratory in nature with survey method being used to complete the
study
Sampling Design
Population
Population included investors in NCR region
Sample frame
Since the data was collected through personal contacts the sample frames were the individuals who
are investing in life insurance policies
Sampling elements
Individual respondents were the sampling elements
14
Sampling Techniques
Random sampling technique was used to select the samples
Sample Size
Sample size was 150 respondents
Tools Used for Data Collection
Self designed questionnaire was used for the evaluation of factors affecting consumerrsquos perception
towards insurance Data was collected on Likertrsquos type scale where 1 stood for minimum
agreement and 7 stood for maximum agreement
Tools Used for Data Analysis
Item to total correlation was applied to check the internal consistency of the questionnaire The
measures were standardized through computation of reliability and validity
Factor analysis was applied to identify the underlying factors
Z-test was applied to find out the significant differences between male and
female investors
Results and Discussions
Consistency Measure
Firstly consistency of all the items in the questionnaire is checked through item to total correlation
Under this correlation of every item with total is measured and the computed value is compared
with standard value (ie 01590) If the computed value is found less than standard value then
whole factorstatement is dropped and will be termed as inconsistent
15
SNO ITEMS COMPUTED
CORRELATIO
N VALUE
CONSISTE
NT
ACCEPTED
DROPPED
1 Awareness about terms and conditions of
policy
0671575 Consistent Accepted
2 Provide services on time 0651847 Consistent Accepted
3 Provide satisfactory services 0573518 Consistent Accepted
4 Goodwill of the company 0607722 Consistent Accepted
5 Agent is well informed about policies 0640696 Consistent Accepted
6 Co-operative and friendly agent 0598089 Consistent Accepted
7 Agent respond promptly 0696914 Consistent Accepted
8 Proper reminder of installments by
agents
0531124 Consistent Accepted
9 Employees responsible towards
customers
0685817 Consistent Accepted
10 Benefits are met by policy 0510702 Consistent Accepted
11 Selection of highly reputed company 0634614 Consistent Accepted
12 Reputation of the insurance company 0582977 Consistent Accepted
13 Hassle free settlements 0594282 Consistent Accepted
14 Personal attention on every costumer 0640192 Consistent Accepted
15 Understand Customerrsquos financial needs 0603133 Consistent Accepted
16 Fulfill its promise towards policy 0613243 Consistent Accepted
17 Provides the claims on time 0474994 Consistent Accepted
18 Settlement of claims easy and timely 0569959 Consistent Accepted
19 Satisfy with relationship to company 0621496 Consistent Accepted
20 Company able to fulfill expectation 0594265 Consistent Accepted
21 Only company I want to associate
myself
0519161 Consistent Accepted
22 Purchase more policies from the same
company
0502876 Consistent Accepted
16
23 Suggest friends and family to purchase
policy from the same company
0540626 Consistent Accepted
24 Policy benefits benchmarks 062874 Consistent Accepted
25 Investment in life insurance is more
secure than stock market
0376874 Consistent Accepted
26 Purchase further policies from other
companies
0091102 Inonsistent Dropped
Reliability
Reliability test was carried out using SPSS software and the reliability of the items was measured
The result is as follows
Cronbachrsquos Alpha 0919
It can be seen that the reliability value is more than 07 So the questionnaire is
highly reliable
Description of factors
1 Company Loyalty
This factor includes that this is the only company the consumer wants to associate himself with in
future (0814) himself would purchase more policies from the same company (0799) suggest
friends and family to purchase policy from the same company (0790) company able to fulfill
expectation (0599) Policy benefits benchmarks (0545) The highest Eigen value lies in this factor
35213 So it is been considered as the highly contributing factor towards study Therefore it is
clear that company loyalty plays an important role in investment decisions of investors
17
2 Services Quality
This factor includes hassle free settlements (0693) employees responsible towards customers
(0631) agents respond promptly (0611) investment in life insurance is more secure than stock
market (0563) satisfy with relationship to company (0537) As we can see that the Eigen value for
factor service quality is 9753 which is also a contributing factor towards the study so it can also be considered as an the study
3 Ease of Procedures
This factor includes the company provides claims on time (0852) co- operative and friendly agent
(0662) settlement of claims easy and timely (0651) agent is well informed about policies (0486) As
we can see that the Eigen value for factor ease of procedures is 5830 which is also a contributing
factor towards the study so it can also be considered as an important factor inconsumerrsquos financial
needs (0404) As we can see that the Eigen value for factor company client relationship is 4051
which is also a contributing factor towards the study so it can also be considered as an important factor
in the study
4 Satisfaction Level
This factor includes that the suggested benefits of Insurance Policy should be met to the investors
( 0774) Company provides them satisfactory services (0631) fulfill its promise about life
insurance policy (0575) Services should be provided on time(0515) and awareness of terms and
conditions of policies As we can see that the Eigen value for factor satisfaction level is 5008
which is also a contributing factor towards the study so it can also be considered as an important
factor in the study
5 Company Image
This factor includes that the insurance company should be well known in the industry (0777)
insurance provider should have goodwill in market (0758) and company of high repute (0428)As
we can see that the Eigen value for factor company image is 4878 which is also a contributing
factor towards the study so it can also be considered as an important factor in the study
18
6 Company-Client Relationship
This factor includes that the agent remind about premium installments (0778) pay personal
attention on every consumer (0505) and understand consumerrsquos financial needs (0404) As
we can see that the Eigen value for factor company client relationship is 4051 which is also a
contributing factor towards the study so it can also be considered as an important factor in the
study
Z-Test
Z-test was applied to find out significant difference between male and female investorrsquos perception
towards investment in life insurance policies
For applying Z-test mean and standard deviation was calculated then values were put in formula to
calculate standard error
Null Hypothesis Ho It states that there is no significant difference between the perception of male
and female investors towards investment in life insurance policies
GENDER MEAN SD SAMPLE
SIZE
SQUARE
OF
SD
MALE 14104 20078 75 403146
FEMALE 14594 17701 75 313348
Z = 15877
Since the value of Z is less than the standard value 196 at 5 level of significance so the null
hypothesis is accepted Therefore there is no significant difference between the perception of male
and female investors towards investment in life insurance policies
19
CONCLUSION
In present Indian market the investment habits of Indian consumers are changing very frequently
The individuals have their own perception towards various types of investment plans The study of
this research work was focused over consumerrsquos perception on investment towards Life Insurance
Services The objectives of the study were to evaluate the factors underlying consumer perception
towards investment in life insurance policies and to compare the differences in consumer
perception of male and female consumers The tests that were used for our research activities were-
Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25
items being accepted Next was Reliability Test to check the reliability of the items The
result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis
Test and the six factors that came out were Consumer Loyalty Service Quality Ease of
Procedures Satisfaction Level Company Image and Company-Client Relationship
The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind
sets for their investment pattern in insurance policies Still some actions are needed for
developing insurance market The major factors playing the role in developing
consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality
Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship
Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in
developing the market share loyalty and further development in insurance sector
20
References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)
21
Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in
Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)
22
with financial assistance irrespective of the actual medical expenses Health Assure
Plus offers the added advantage of an equivalent life insurance cover
1113090 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
1113090 Diabetes Care Diabetes Care is the first ever critical illness product especially for
individuals with Type 2 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
1113090 Hospital Care Hospital Care is structured to ensure customers receive a pre-
determined insurance amount for each procedure or hospitalization even if they
spend less Further its long-term design of a term between 10-20 years assures
policyholders the guaranteed cushion of insurance cover even if they make a claim
during the term Available for individuals between the ages of 1-60 years this is one
of the first products that will cover people up to the age of 80 years
GROUP INSURANCE SOLUTIONS
ICICI Prudential also offers Group Insurance Solutions for companies seeking to enhance
benefits to their employees
1113090 Group Gratuity Plan ICICI Prudentials group gratuity plan helps employers fund
their statutory gratuity obligation in a scientific manner The plan can also be
customized to structure schemes that can provide benefits beyond the statutory
obligations
1113090 Group Superannuation Plan ICICI Prudential offers both defined contribution
(DC) and defined benefit (DB) superannuation schemes to optimize returns for the
members of the trust and rationalize the cost Members have the option of choosing
from various annuity options or opting for a partial commutation of the annuity at
the time of retirement
1113090 Group Immediate Annuities In addition to the annuities offered to existing
superannuation customers they offer immediate annuities to superannuation funds
not managed by them
1113090 Group Term Plan ICICI Prudentials flexible group term solution helps provide
affordable cover to members of a group The cover could be uniform or based on
designationrank or a multiple of salary The benefit under the policy is paid to the
9
beneficiary nominated by the member on hisher death
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
1113090 Accident amp disability benefit If death occurs as the result of an accident during the
term of the policy the beneficiary receives an additional amount equal to the rider sum assured
under the policy If the death occurs while traveling in an authorized
mass transport vehicle the beneficiary will be entitled to twice the sum assured as
additional benefit
1113090 Critical Illness Benefit protects the insured against financial loss in the event of 9
specified critical illnesses Benefits are payable to the insured for medical expenses
prior to death
1113090 Income Benefit This rider pays the 10 of the sum assured to the nominee every
year till maturity in the event of the death of the life assured It is available on
SmarKid and CashPlus
1113090 Waiver of Premium In case of total and permanent disability due to an accident
the future premiums continue to be paid by the company till the time of maturity
This rider is available with LifeTime Super LifeTime Super Pension and CashPlus
HISTORY OF ICICI PRUDENTIAL
As mentioned earlier ICICI Prudential Life Insurance Company is a joint venture
between ICICI Bank - one of Indias foremost financial services company - and
Prudential plc - a leading international financial services group headquartered in the
United Kingdom
HISTORY OF ICICI PRUDENTIAL
As mentioned earlier icici prudential life insurance company is a joint venture between icici bank
one of India foremost financial services company and prudential plc a leading international
financial services group headquarterd in tha united kingdom
10
ICICI Bank
ICICI Bank (1113090YSEIB1113090) is Indias second largest bank and largest private sector bank
with over 50 years presence in financial services and with assets of over Rs 344658 bn
(USD 79 billion) as on March 31 2007 The 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 specialized subsidiaries in the areas of investment
banking life and non-life insurance private equity and asset management ICICI Bank is
a leading player in the retail banking market and services its large customer base through
a network of over 950 branches and extension counters 3300 ATMs call centers and
internet banking to ensure that customers have access to its services at all times
Prudential Plc
Established in London in 1848 Prudential plc through its businesses in the UK and
Europe the US and Asia provides retail financial services products and services to more
than 20 million customers policyholder and unit holders and manages over pound251 billion
of funds worldwide (as of 31 December 2006) In Asia Prudential is the leading
European life insurance company with life operations in China Hong Kong India
Indonesia Japan Korea Malaysia the Philippines Singapore Taiwan Thailand and
Vietnam Prudential is the second largest retail fund manager for Asian sourced assets ex-
Japan as at June 2006 Its fund management business has expanded into a total of ten markets
China Hong Kong India Japan Korea Malaysia Singapore Taiwan Vietnam
and United Arab Emirates
ICICI Prudential has been the market leader in the private life insurance sector
contributing to 30 of the growth share followed by the SBI Life Insurance with 18
share Members like Ms Shikha Sharma CEO amp MD Ms Anita Pai EVP ndash
Customer Service amp Technology Mr Puneet Nanda CIO Mr Binayak Dutta Chief ndash
Sales amp Distribution have been with the company since its inception in 2000 and are
instrumental in developing ICIC Prudential to this level
The first policy was sold on 12th December 2000 Within 1 year ICICI Prudential
achieved 25000 policies and thereby growing at a faster rate achieved 1 million policies
by October 2004 By 2010 ICICI Prudential has a target to achieve 20 million customers
AWARDS amp RECOGNITION
AWARDS
11
1113090 Indias Most Customer Responsive Insurance Company
Avaya GlobalConnect - Economic Times
Customer Responsiveness Awards
1113090 Most Trusted Private Life Insurer
The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003
2004 and 2005
1113090 Prudence Customer Centricity Award 2004 amp 2005
Prudential Corporation Asia
1113090 Best Life Insurer 2003
Outlook Money Awards 2003 amp 2004
1113090 Superbrand 2003-04
1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising
campaign
Effies 2003
RECOGNITIONS
1113090 IMM Award for Excellence
Institute of Marketing amp Management
1113090 Organisation with Innovative HR Practices
Indira Group of Institutes
1113090 Most Trusted Private Life Insurer
The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003
2004 and 2005
1113090 Prudence Customer Centricity Award 2004 amp 2005
Prudential Corporation Asia
1113090 Best Life Insurer 2003
Outlook Money Awards 2003 amp 2004
1113090 Superbrand 2003-04
1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising
campaign
Effies 2003
12
Review of Literature
Mehr and Cammack (1976) agrees that insurance is usually thought of as a product that spreads the
risk of serious but low-probability losses among a group of individuals thus providing some
financial protection to each individual Kunreuther (1979) said that his product makes good sense
particularly when the protection is purchased against potential losses so large as to be catastrophic
such as total destruction of ones home a large accident liability judgment or death of primary
family breadwinner However it has long been recognized that this sensible product is difficult to
sellv
Kahneman amp Tversky (1984) stated indeed repeated demonstrations have shown most people lack
an adequate understanding of probability and risk concepts Dhar (1997) Greenleaf and Lehmann
(1995) Tversky and Shafir (1992) have shown that offering more options can generate decision
conflict and preference uncertainty leading to decision deferral
Kotler (1973) considers insurance to be in the category of unsought goods along with products
such as preventive dental services and burial plotsHe notes that unsought goods pose special
challenges to the marketer
Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) found that subjects were more likely
to buy insurance against small high-probability losses than insurance against large low- probability
losses Hershey and Schoemaker (1980) reported the opposite result
Kunreuther (1979) ldquoIt is not the magnitude of a potential loss that inspires people to buy insurance
voluntarily ndash it is the frequency with which a loss is likely to occurrdquo
Michael L Smith (1982) said that a typical life insurance contract provides a package of options or
rights to the policy owner that is not precisely duplicated by any other combination of commonly
available contracts Viewed from this perspective life insurance enjoys a unique position in the
field of investments and should be judged in this light The paper shows that an options viewpoint
provides a more complete explanation of policy owner behavior towards life insurance than the
conventional savings-and-protection view
13
Michael L Walden (1985) told that the options package view of the whole a
whole life policy is a package of options each of which has value and is expected to influence the
price of the policy This viewpoint implies the general hypothesis that price differences between
whole life policies can be explained by differences in policy contract provisions and differences in
selected company characteristics
OBJECTIVE
o To evaluate the factors underlying consumer perception towards investment in life insurance
policies
o To compare the differences in consumer perception of male and
female consumers
RESEARCH METHODOLOGY
The Study The study was exploratory in nature with survey method being used to complete the
study
Sampling Design
Population
Population included investors in NCR region
Sample frame
Since the data was collected through personal contacts the sample frames were the individuals who
are investing in life insurance policies
Sampling elements
Individual respondents were the sampling elements
14
Sampling Techniques
Random sampling technique was used to select the samples
Sample Size
Sample size was 150 respondents
Tools Used for Data Collection
Self designed questionnaire was used for the evaluation of factors affecting consumerrsquos perception
towards insurance Data was collected on Likertrsquos type scale where 1 stood for minimum
agreement and 7 stood for maximum agreement
Tools Used for Data Analysis
Item to total correlation was applied to check the internal consistency of the questionnaire The
measures were standardized through computation of reliability and validity
Factor analysis was applied to identify the underlying factors
Z-test was applied to find out the significant differences between male and
female investors
Results and Discussions
Consistency Measure
Firstly consistency of all the items in the questionnaire is checked through item to total correlation
Under this correlation of every item with total is measured and the computed value is compared
with standard value (ie 01590) If the computed value is found less than standard value then
whole factorstatement is dropped and will be termed as inconsistent
15
SNO ITEMS COMPUTED
CORRELATIO
N VALUE
CONSISTE
NT
ACCEPTED
DROPPED
1 Awareness about terms and conditions of
policy
0671575 Consistent Accepted
2 Provide services on time 0651847 Consistent Accepted
3 Provide satisfactory services 0573518 Consistent Accepted
4 Goodwill of the company 0607722 Consistent Accepted
5 Agent is well informed about policies 0640696 Consistent Accepted
6 Co-operative and friendly agent 0598089 Consistent Accepted
7 Agent respond promptly 0696914 Consistent Accepted
8 Proper reminder of installments by
agents
0531124 Consistent Accepted
9 Employees responsible towards
customers
0685817 Consistent Accepted
10 Benefits are met by policy 0510702 Consistent Accepted
11 Selection of highly reputed company 0634614 Consistent Accepted
12 Reputation of the insurance company 0582977 Consistent Accepted
13 Hassle free settlements 0594282 Consistent Accepted
14 Personal attention on every costumer 0640192 Consistent Accepted
15 Understand Customerrsquos financial needs 0603133 Consistent Accepted
16 Fulfill its promise towards policy 0613243 Consistent Accepted
17 Provides the claims on time 0474994 Consistent Accepted
18 Settlement of claims easy and timely 0569959 Consistent Accepted
19 Satisfy with relationship to company 0621496 Consistent Accepted
20 Company able to fulfill expectation 0594265 Consistent Accepted
21 Only company I want to associate
myself
0519161 Consistent Accepted
22 Purchase more policies from the same
company
0502876 Consistent Accepted
16
23 Suggest friends and family to purchase
policy from the same company
0540626 Consistent Accepted
24 Policy benefits benchmarks 062874 Consistent Accepted
25 Investment in life insurance is more
secure than stock market
0376874 Consistent Accepted
26 Purchase further policies from other
companies
0091102 Inonsistent Dropped
Reliability
Reliability test was carried out using SPSS software and the reliability of the items was measured
The result is as follows
Cronbachrsquos Alpha 0919
It can be seen that the reliability value is more than 07 So the questionnaire is
highly reliable
Description of factors
1 Company Loyalty
This factor includes that this is the only company the consumer wants to associate himself with in
future (0814) himself would purchase more policies from the same company (0799) suggest
friends and family to purchase policy from the same company (0790) company able to fulfill
expectation (0599) Policy benefits benchmarks (0545) The highest Eigen value lies in this factor
35213 So it is been considered as the highly contributing factor towards study Therefore it is
clear that company loyalty plays an important role in investment decisions of investors
17
2 Services Quality
This factor includes hassle free settlements (0693) employees responsible towards customers
(0631) agents respond promptly (0611) investment in life insurance is more secure than stock
market (0563) satisfy with relationship to company (0537) As we can see that the Eigen value for
factor service quality is 9753 which is also a contributing factor towards the study so it can also be considered as an the study
3 Ease of Procedures
This factor includes the company provides claims on time (0852) co- operative and friendly agent
(0662) settlement of claims easy and timely (0651) agent is well informed about policies (0486) As
we can see that the Eigen value for factor ease of procedures is 5830 which is also a contributing
factor towards the study so it can also be considered as an important factor inconsumerrsquos financial
needs (0404) As we can see that the Eigen value for factor company client relationship is 4051
which is also a contributing factor towards the study so it can also be considered as an important factor
in the study
4 Satisfaction Level
This factor includes that the suggested benefits of Insurance Policy should be met to the investors
( 0774) Company provides them satisfactory services (0631) fulfill its promise about life
insurance policy (0575) Services should be provided on time(0515) and awareness of terms and
conditions of policies As we can see that the Eigen value for factor satisfaction level is 5008
which is also a contributing factor towards the study so it can also be considered as an important
factor in the study
5 Company Image
This factor includes that the insurance company should be well known in the industry (0777)
insurance provider should have goodwill in market (0758) and company of high repute (0428)As
we can see that the Eigen value for factor company image is 4878 which is also a contributing
factor towards the study so it can also be considered as an important factor in the study
18
6 Company-Client Relationship
This factor includes that the agent remind about premium installments (0778) pay personal
attention on every consumer (0505) and understand consumerrsquos financial needs (0404) As
we can see that the Eigen value for factor company client relationship is 4051 which is also a
contributing factor towards the study so it can also be considered as an important factor in the
study
Z-Test
Z-test was applied to find out significant difference between male and female investorrsquos perception
towards investment in life insurance policies
For applying Z-test mean and standard deviation was calculated then values were put in formula to
calculate standard error
Null Hypothesis Ho It states that there is no significant difference between the perception of male
and female investors towards investment in life insurance policies
GENDER MEAN SD SAMPLE
SIZE
SQUARE
OF
SD
MALE 14104 20078 75 403146
FEMALE 14594 17701 75 313348
Z = 15877
Since the value of Z is less than the standard value 196 at 5 level of significance so the null
hypothesis is accepted Therefore there is no significant difference between the perception of male
and female investors towards investment in life insurance policies
19
CONCLUSION
In present Indian market the investment habits of Indian consumers are changing very frequently
The individuals have their own perception towards various types of investment plans The study of
this research work was focused over consumerrsquos perception on investment towards Life Insurance
Services The objectives of the study were to evaluate the factors underlying consumer perception
towards investment in life insurance policies and to compare the differences in consumer
perception of male and female consumers The tests that were used for our research activities were-
Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25
items being accepted Next was Reliability Test to check the reliability of the items The
result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis
Test and the six factors that came out were Consumer Loyalty Service Quality Ease of
Procedures Satisfaction Level Company Image and Company-Client Relationship
The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind
sets for their investment pattern in insurance policies Still some actions are needed for
developing insurance market The major factors playing the role in developing
consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality
Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship
Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in
developing the market share loyalty and further development in insurance sector
20
References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)
21
Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in
Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)
22
beneficiary nominated by the member on hisher death
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
1113090 Accident amp disability benefit If death occurs as the result of an accident during the
term of the policy the beneficiary receives an additional amount equal to the rider sum assured
under the policy If the death occurs while traveling in an authorized
mass transport vehicle the beneficiary will be entitled to twice the sum assured as
additional benefit
1113090 Critical Illness Benefit protects the insured against financial loss in the event of 9
specified critical illnesses Benefits are payable to the insured for medical expenses
prior to death
1113090 Income Benefit This rider pays the 10 of the sum assured to the nominee every
year till maturity in the event of the death of the life assured It is available on
SmarKid and CashPlus
1113090 Waiver of Premium In case of total and permanent disability due to an accident
the future premiums continue to be paid by the company till the time of maturity
This rider is available with LifeTime Super LifeTime Super Pension and CashPlus
HISTORY OF ICICI PRUDENTIAL
As mentioned earlier ICICI Prudential Life Insurance Company is a joint venture
between ICICI Bank - one of Indias foremost financial services company - and
Prudential plc - a leading international financial services group headquartered in the
United Kingdom
HISTORY OF ICICI PRUDENTIAL
As mentioned earlier icici prudential life insurance company is a joint venture between icici bank
one of India foremost financial services company and prudential plc a leading international
financial services group headquarterd in tha united kingdom
10
ICICI Bank
ICICI Bank (1113090YSEIB1113090) is Indias second largest bank and largest private sector bank
with over 50 years presence in financial services and with assets of over Rs 344658 bn
(USD 79 billion) as on March 31 2007 The 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 specialized subsidiaries in the areas of investment
banking life and non-life insurance private equity and asset management ICICI Bank is
a leading player in the retail banking market and services its large customer base through
a network of over 950 branches and extension counters 3300 ATMs call centers and
internet banking to ensure that customers have access to its services at all times
Prudential Plc
Established in London in 1848 Prudential plc through its businesses in the UK and
Europe the US and Asia provides retail financial services products and services to more
than 20 million customers policyholder and unit holders and manages over pound251 billion
of funds worldwide (as of 31 December 2006) In Asia Prudential is the leading
European life insurance company with life operations in China Hong Kong India
Indonesia Japan Korea Malaysia the Philippines Singapore Taiwan Thailand and
Vietnam Prudential is the second largest retail fund manager for Asian sourced assets ex-
Japan as at June 2006 Its fund management business has expanded into a total of ten markets
China Hong Kong India Japan Korea Malaysia Singapore Taiwan Vietnam
and United Arab Emirates
ICICI Prudential has been the market leader in the private life insurance sector
contributing to 30 of the growth share followed by the SBI Life Insurance with 18
share Members like Ms Shikha Sharma CEO amp MD Ms Anita Pai EVP ndash
Customer Service amp Technology Mr Puneet Nanda CIO Mr Binayak Dutta Chief ndash
Sales amp Distribution have been with the company since its inception in 2000 and are
instrumental in developing ICIC Prudential to this level
The first policy was sold on 12th December 2000 Within 1 year ICICI Prudential
achieved 25000 policies and thereby growing at a faster rate achieved 1 million policies
by October 2004 By 2010 ICICI Prudential has a target to achieve 20 million customers
AWARDS amp RECOGNITION
AWARDS
11
1113090 Indias Most Customer Responsive Insurance Company
Avaya GlobalConnect - Economic Times
Customer Responsiveness Awards
1113090 Most Trusted Private Life Insurer
The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003
2004 and 2005
1113090 Prudence Customer Centricity Award 2004 amp 2005
Prudential Corporation Asia
1113090 Best Life Insurer 2003
Outlook Money Awards 2003 amp 2004
1113090 Superbrand 2003-04
1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising
campaign
Effies 2003
RECOGNITIONS
1113090 IMM Award for Excellence
Institute of Marketing amp Management
1113090 Organisation with Innovative HR Practices
Indira Group of Institutes
1113090 Most Trusted Private Life Insurer
The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003
2004 and 2005
1113090 Prudence Customer Centricity Award 2004 amp 2005
Prudential Corporation Asia
1113090 Best Life Insurer 2003
Outlook Money Awards 2003 amp 2004
1113090 Superbrand 2003-04
1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising
campaign
Effies 2003
12
Review of Literature
Mehr and Cammack (1976) agrees that insurance is usually thought of as a product that spreads the
risk of serious but low-probability losses among a group of individuals thus providing some
financial protection to each individual Kunreuther (1979) said that his product makes good sense
particularly when the protection is purchased against potential losses so large as to be catastrophic
such as total destruction of ones home a large accident liability judgment or death of primary
family breadwinner However it has long been recognized that this sensible product is difficult to
sellv
Kahneman amp Tversky (1984) stated indeed repeated demonstrations have shown most people lack
an adequate understanding of probability and risk concepts Dhar (1997) Greenleaf and Lehmann
(1995) Tversky and Shafir (1992) have shown that offering more options can generate decision
conflict and preference uncertainty leading to decision deferral
Kotler (1973) considers insurance to be in the category of unsought goods along with products
such as preventive dental services and burial plotsHe notes that unsought goods pose special
challenges to the marketer
Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) found that subjects were more likely
to buy insurance against small high-probability losses than insurance against large low- probability
losses Hershey and Schoemaker (1980) reported the opposite result
Kunreuther (1979) ldquoIt is not the magnitude of a potential loss that inspires people to buy insurance
voluntarily ndash it is the frequency with which a loss is likely to occurrdquo
Michael L Smith (1982) said that a typical life insurance contract provides a package of options or
rights to the policy owner that is not precisely duplicated by any other combination of commonly
available contracts Viewed from this perspective life insurance enjoys a unique position in the
field of investments and should be judged in this light The paper shows that an options viewpoint
provides a more complete explanation of policy owner behavior towards life insurance than the
conventional savings-and-protection view
13
Michael L Walden (1985) told that the options package view of the whole a
whole life policy is a package of options each of which has value and is expected to influence the
price of the policy This viewpoint implies the general hypothesis that price differences between
whole life policies can be explained by differences in policy contract provisions and differences in
selected company characteristics
OBJECTIVE
o To evaluate the factors underlying consumer perception towards investment in life insurance
policies
o To compare the differences in consumer perception of male and
female consumers
RESEARCH METHODOLOGY
The Study The study was exploratory in nature with survey method being used to complete the
study
Sampling Design
Population
Population included investors in NCR region
Sample frame
Since the data was collected through personal contacts the sample frames were the individuals who
are investing in life insurance policies
Sampling elements
Individual respondents were the sampling elements
14
Sampling Techniques
Random sampling technique was used to select the samples
Sample Size
Sample size was 150 respondents
Tools Used for Data Collection
Self designed questionnaire was used for the evaluation of factors affecting consumerrsquos perception
towards insurance Data was collected on Likertrsquos type scale where 1 stood for minimum
agreement and 7 stood for maximum agreement
Tools Used for Data Analysis
Item to total correlation was applied to check the internal consistency of the questionnaire The
measures were standardized through computation of reliability and validity
Factor analysis was applied to identify the underlying factors
Z-test was applied to find out the significant differences between male and
female investors
Results and Discussions
Consistency Measure
Firstly consistency of all the items in the questionnaire is checked through item to total correlation
Under this correlation of every item with total is measured and the computed value is compared
with standard value (ie 01590) If the computed value is found less than standard value then
whole factorstatement is dropped and will be termed as inconsistent
15
SNO ITEMS COMPUTED
CORRELATIO
N VALUE
CONSISTE
NT
ACCEPTED
DROPPED
1 Awareness about terms and conditions of
policy
0671575 Consistent Accepted
2 Provide services on time 0651847 Consistent Accepted
3 Provide satisfactory services 0573518 Consistent Accepted
4 Goodwill of the company 0607722 Consistent Accepted
5 Agent is well informed about policies 0640696 Consistent Accepted
6 Co-operative and friendly agent 0598089 Consistent Accepted
7 Agent respond promptly 0696914 Consistent Accepted
8 Proper reminder of installments by
agents
0531124 Consistent Accepted
9 Employees responsible towards
customers
0685817 Consistent Accepted
10 Benefits are met by policy 0510702 Consistent Accepted
11 Selection of highly reputed company 0634614 Consistent Accepted
12 Reputation of the insurance company 0582977 Consistent Accepted
13 Hassle free settlements 0594282 Consistent Accepted
14 Personal attention on every costumer 0640192 Consistent Accepted
15 Understand Customerrsquos financial needs 0603133 Consistent Accepted
16 Fulfill its promise towards policy 0613243 Consistent Accepted
17 Provides the claims on time 0474994 Consistent Accepted
18 Settlement of claims easy and timely 0569959 Consistent Accepted
19 Satisfy with relationship to company 0621496 Consistent Accepted
20 Company able to fulfill expectation 0594265 Consistent Accepted
21 Only company I want to associate
myself
0519161 Consistent Accepted
22 Purchase more policies from the same
company
0502876 Consistent Accepted
16
23 Suggest friends and family to purchase
policy from the same company
0540626 Consistent Accepted
24 Policy benefits benchmarks 062874 Consistent Accepted
25 Investment in life insurance is more
secure than stock market
0376874 Consistent Accepted
26 Purchase further policies from other
companies
0091102 Inonsistent Dropped
Reliability
Reliability test was carried out using SPSS software and the reliability of the items was measured
The result is as follows
Cronbachrsquos Alpha 0919
It can be seen that the reliability value is more than 07 So the questionnaire is
highly reliable
Description of factors
1 Company Loyalty
This factor includes that this is the only company the consumer wants to associate himself with in
future (0814) himself would purchase more policies from the same company (0799) suggest
friends and family to purchase policy from the same company (0790) company able to fulfill
expectation (0599) Policy benefits benchmarks (0545) The highest Eigen value lies in this factor
35213 So it is been considered as the highly contributing factor towards study Therefore it is
clear that company loyalty plays an important role in investment decisions of investors
17
2 Services Quality
This factor includes hassle free settlements (0693) employees responsible towards customers
(0631) agents respond promptly (0611) investment in life insurance is more secure than stock
market (0563) satisfy with relationship to company (0537) As we can see that the Eigen value for
factor service quality is 9753 which is also a contributing factor towards the study so it can also be considered as an the study
3 Ease of Procedures
This factor includes the company provides claims on time (0852) co- operative and friendly agent
(0662) settlement of claims easy and timely (0651) agent is well informed about policies (0486) As
we can see that the Eigen value for factor ease of procedures is 5830 which is also a contributing
factor towards the study so it can also be considered as an important factor inconsumerrsquos financial
needs (0404) As we can see that the Eigen value for factor company client relationship is 4051
which is also a contributing factor towards the study so it can also be considered as an important factor
in the study
4 Satisfaction Level
This factor includes that the suggested benefits of Insurance Policy should be met to the investors
( 0774) Company provides them satisfactory services (0631) fulfill its promise about life
insurance policy (0575) Services should be provided on time(0515) and awareness of terms and
conditions of policies As we can see that the Eigen value for factor satisfaction level is 5008
which is also a contributing factor towards the study so it can also be considered as an important
factor in the study
5 Company Image
This factor includes that the insurance company should be well known in the industry (0777)
insurance provider should have goodwill in market (0758) and company of high repute (0428)As
we can see that the Eigen value for factor company image is 4878 which is also a contributing
factor towards the study so it can also be considered as an important factor in the study
18
6 Company-Client Relationship
This factor includes that the agent remind about premium installments (0778) pay personal
attention on every consumer (0505) and understand consumerrsquos financial needs (0404) As
we can see that the Eigen value for factor company client relationship is 4051 which is also a
contributing factor towards the study so it can also be considered as an important factor in the
study
Z-Test
Z-test was applied to find out significant difference between male and female investorrsquos perception
towards investment in life insurance policies
For applying Z-test mean and standard deviation was calculated then values were put in formula to
calculate standard error
Null Hypothesis Ho It states that there is no significant difference between the perception of male
and female investors towards investment in life insurance policies
GENDER MEAN SD SAMPLE
SIZE
SQUARE
OF
SD
MALE 14104 20078 75 403146
FEMALE 14594 17701 75 313348
Z = 15877
Since the value of Z is less than the standard value 196 at 5 level of significance so the null
hypothesis is accepted Therefore there is no significant difference between the perception of male
and female investors towards investment in life insurance policies
19
CONCLUSION
In present Indian market the investment habits of Indian consumers are changing very frequently
The individuals have their own perception towards various types of investment plans The study of
this research work was focused over consumerrsquos perception on investment towards Life Insurance
Services The objectives of the study were to evaluate the factors underlying consumer perception
towards investment in life insurance policies and to compare the differences in consumer
perception of male and female consumers The tests that were used for our research activities were-
Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25
items being accepted Next was Reliability Test to check the reliability of the items The
result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis
Test and the six factors that came out were Consumer Loyalty Service Quality Ease of
Procedures Satisfaction Level Company Image and Company-Client Relationship
The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind
sets for their investment pattern in insurance policies Still some actions are needed for
developing insurance market The major factors playing the role in developing
consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality
Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship
Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in
developing the market share loyalty and further development in insurance sector
20
References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)
21
Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in
Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)
22
ICICI Bank
ICICI Bank (1113090YSEIB1113090) is Indias second largest bank and largest private sector bank
with over 50 years presence in financial services and with assets of over Rs 344658 bn
(USD 79 billion) as on March 31 2007 The 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 specialized subsidiaries in the areas of investment
banking life and non-life insurance private equity and asset management ICICI Bank is
a leading player in the retail banking market and services its large customer base through
a network of over 950 branches and extension counters 3300 ATMs call centers and
internet banking to ensure that customers have access to its services at all times
Prudential Plc
Established in London in 1848 Prudential plc through its businesses in the UK and
Europe the US and Asia provides retail financial services products and services to more
than 20 million customers policyholder and unit holders and manages over pound251 billion
of funds worldwide (as of 31 December 2006) In Asia Prudential is the leading
European life insurance company with life operations in China Hong Kong India
Indonesia Japan Korea Malaysia the Philippines Singapore Taiwan Thailand and
Vietnam Prudential is the second largest retail fund manager for Asian sourced assets ex-
Japan as at June 2006 Its fund management business has expanded into a total of ten markets
China Hong Kong India Japan Korea Malaysia Singapore Taiwan Vietnam
and United Arab Emirates
ICICI Prudential has been the market leader in the private life insurance sector
contributing to 30 of the growth share followed by the SBI Life Insurance with 18
share Members like Ms Shikha Sharma CEO amp MD Ms Anita Pai EVP ndash
Customer Service amp Technology Mr Puneet Nanda CIO Mr Binayak Dutta Chief ndash
Sales amp Distribution have been with the company since its inception in 2000 and are
instrumental in developing ICIC Prudential to this level
The first policy was sold on 12th December 2000 Within 1 year ICICI Prudential
achieved 25000 policies and thereby growing at a faster rate achieved 1 million policies
by October 2004 By 2010 ICICI Prudential has a target to achieve 20 million customers
AWARDS amp RECOGNITION
AWARDS
11
1113090 Indias Most Customer Responsive Insurance Company
Avaya GlobalConnect - Economic Times
Customer Responsiveness Awards
1113090 Most Trusted Private Life Insurer
The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003
2004 and 2005
1113090 Prudence Customer Centricity Award 2004 amp 2005
Prudential Corporation Asia
1113090 Best Life Insurer 2003
Outlook Money Awards 2003 amp 2004
1113090 Superbrand 2003-04
1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising
campaign
Effies 2003
RECOGNITIONS
1113090 IMM Award for Excellence
Institute of Marketing amp Management
1113090 Organisation with Innovative HR Practices
Indira Group of Institutes
1113090 Most Trusted Private Life Insurer
The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003
2004 and 2005
1113090 Prudence Customer Centricity Award 2004 amp 2005
Prudential Corporation Asia
1113090 Best Life Insurer 2003
Outlook Money Awards 2003 amp 2004
1113090 Superbrand 2003-04
1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising
campaign
Effies 2003
12
Review of Literature
Mehr and Cammack (1976) agrees that insurance is usually thought of as a product that spreads the
risk of serious but low-probability losses among a group of individuals thus providing some
financial protection to each individual Kunreuther (1979) said that his product makes good sense
particularly when the protection is purchased against potential losses so large as to be catastrophic
such as total destruction of ones home a large accident liability judgment or death of primary
family breadwinner However it has long been recognized that this sensible product is difficult to
sellv
Kahneman amp Tversky (1984) stated indeed repeated demonstrations have shown most people lack
an adequate understanding of probability and risk concepts Dhar (1997) Greenleaf and Lehmann
(1995) Tversky and Shafir (1992) have shown that offering more options can generate decision
conflict and preference uncertainty leading to decision deferral
Kotler (1973) considers insurance to be in the category of unsought goods along with products
such as preventive dental services and burial plotsHe notes that unsought goods pose special
challenges to the marketer
Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) found that subjects were more likely
to buy insurance against small high-probability losses than insurance against large low- probability
losses Hershey and Schoemaker (1980) reported the opposite result
Kunreuther (1979) ldquoIt is not the magnitude of a potential loss that inspires people to buy insurance
voluntarily ndash it is the frequency with which a loss is likely to occurrdquo
Michael L Smith (1982) said that a typical life insurance contract provides a package of options or
rights to the policy owner that is not precisely duplicated by any other combination of commonly
available contracts Viewed from this perspective life insurance enjoys a unique position in the
field of investments and should be judged in this light The paper shows that an options viewpoint
provides a more complete explanation of policy owner behavior towards life insurance than the
conventional savings-and-protection view
13
Michael L Walden (1985) told that the options package view of the whole a
whole life policy is a package of options each of which has value and is expected to influence the
price of the policy This viewpoint implies the general hypothesis that price differences between
whole life policies can be explained by differences in policy contract provisions and differences in
selected company characteristics
OBJECTIVE
o To evaluate the factors underlying consumer perception towards investment in life insurance
policies
o To compare the differences in consumer perception of male and
female consumers
RESEARCH METHODOLOGY
The Study The study was exploratory in nature with survey method being used to complete the
study
Sampling Design
Population
Population included investors in NCR region
Sample frame
Since the data was collected through personal contacts the sample frames were the individuals who
are investing in life insurance policies
Sampling elements
Individual respondents were the sampling elements
14
Sampling Techniques
Random sampling technique was used to select the samples
Sample Size
Sample size was 150 respondents
Tools Used for Data Collection
Self designed questionnaire was used for the evaluation of factors affecting consumerrsquos perception
towards insurance Data was collected on Likertrsquos type scale where 1 stood for minimum
agreement and 7 stood for maximum agreement
Tools Used for Data Analysis
Item to total correlation was applied to check the internal consistency of the questionnaire The
measures were standardized through computation of reliability and validity
Factor analysis was applied to identify the underlying factors
Z-test was applied to find out the significant differences between male and
female investors
Results and Discussions
Consistency Measure
Firstly consistency of all the items in the questionnaire is checked through item to total correlation
Under this correlation of every item with total is measured and the computed value is compared
with standard value (ie 01590) If the computed value is found less than standard value then
whole factorstatement is dropped and will be termed as inconsistent
15
SNO ITEMS COMPUTED
CORRELATIO
N VALUE
CONSISTE
NT
ACCEPTED
DROPPED
1 Awareness about terms and conditions of
policy
0671575 Consistent Accepted
2 Provide services on time 0651847 Consistent Accepted
3 Provide satisfactory services 0573518 Consistent Accepted
4 Goodwill of the company 0607722 Consistent Accepted
5 Agent is well informed about policies 0640696 Consistent Accepted
6 Co-operative and friendly agent 0598089 Consistent Accepted
7 Agent respond promptly 0696914 Consistent Accepted
8 Proper reminder of installments by
agents
0531124 Consistent Accepted
9 Employees responsible towards
customers
0685817 Consistent Accepted
10 Benefits are met by policy 0510702 Consistent Accepted
11 Selection of highly reputed company 0634614 Consistent Accepted
12 Reputation of the insurance company 0582977 Consistent Accepted
13 Hassle free settlements 0594282 Consistent Accepted
14 Personal attention on every costumer 0640192 Consistent Accepted
15 Understand Customerrsquos financial needs 0603133 Consistent Accepted
16 Fulfill its promise towards policy 0613243 Consistent Accepted
17 Provides the claims on time 0474994 Consistent Accepted
18 Settlement of claims easy and timely 0569959 Consistent Accepted
19 Satisfy with relationship to company 0621496 Consistent Accepted
20 Company able to fulfill expectation 0594265 Consistent Accepted
21 Only company I want to associate
myself
0519161 Consistent Accepted
22 Purchase more policies from the same
company
0502876 Consistent Accepted
16
23 Suggest friends and family to purchase
policy from the same company
0540626 Consistent Accepted
24 Policy benefits benchmarks 062874 Consistent Accepted
25 Investment in life insurance is more
secure than stock market
0376874 Consistent Accepted
26 Purchase further policies from other
companies
0091102 Inonsistent Dropped
Reliability
Reliability test was carried out using SPSS software and the reliability of the items was measured
The result is as follows
Cronbachrsquos Alpha 0919
It can be seen that the reliability value is more than 07 So the questionnaire is
highly reliable
Description of factors
1 Company Loyalty
This factor includes that this is the only company the consumer wants to associate himself with in
future (0814) himself would purchase more policies from the same company (0799) suggest
friends and family to purchase policy from the same company (0790) company able to fulfill
expectation (0599) Policy benefits benchmarks (0545) The highest Eigen value lies in this factor
35213 So it is been considered as the highly contributing factor towards study Therefore it is
clear that company loyalty plays an important role in investment decisions of investors
17
2 Services Quality
This factor includes hassle free settlements (0693) employees responsible towards customers
(0631) agents respond promptly (0611) investment in life insurance is more secure than stock
market (0563) satisfy with relationship to company (0537) As we can see that the Eigen value for
factor service quality is 9753 which is also a contributing factor towards the study so it can also be considered as an the study
3 Ease of Procedures
This factor includes the company provides claims on time (0852) co- operative and friendly agent
(0662) settlement of claims easy and timely (0651) agent is well informed about policies (0486) As
we can see that the Eigen value for factor ease of procedures is 5830 which is also a contributing
factor towards the study so it can also be considered as an important factor inconsumerrsquos financial
needs (0404) As we can see that the Eigen value for factor company client relationship is 4051
which is also a contributing factor towards the study so it can also be considered as an important factor
in the study
4 Satisfaction Level
This factor includes that the suggested benefits of Insurance Policy should be met to the investors
( 0774) Company provides them satisfactory services (0631) fulfill its promise about life
insurance policy (0575) Services should be provided on time(0515) and awareness of terms and
conditions of policies As we can see that the Eigen value for factor satisfaction level is 5008
which is also a contributing factor towards the study so it can also be considered as an important
factor in the study
5 Company Image
This factor includes that the insurance company should be well known in the industry (0777)
insurance provider should have goodwill in market (0758) and company of high repute (0428)As
we can see that the Eigen value for factor company image is 4878 which is also a contributing
factor towards the study so it can also be considered as an important factor in the study
18
6 Company-Client Relationship
This factor includes that the agent remind about premium installments (0778) pay personal
attention on every consumer (0505) and understand consumerrsquos financial needs (0404) As
we can see that the Eigen value for factor company client relationship is 4051 which is also a
contributing factor towards the study so it can also be considered as an important factor in the
study
Z-Test
Z-test was applied to find out significant difference between male and female investorrsquos perception
towards investment in life insurance policies
For applying Z-test mean and standard deviation was calculated then values were put in formula to
calculate standard error
Null Hypothesis Ho It states that there is no significant difference between the perception of male
and female investors towards investment in life insurance policies
GENDER MEAN SD SAMPLE
SIZE
SQUARE
OF
SD
MALE 14104 20078 75 403146
FEMALE 14594 17701 75 313348
Z = 15877
Since the value of Z is less than the standard value 196 at 5 level of significance so the null
hypothesis is accepted Therefore there is no significant difference between the perception of male
and female investors towards investment in life insurance policies
19
CONCLUSION
In present Indian market the investment habits of Indian consumers are changing very frequently
The individuals have their own perception towards various types of investment plans The study of
this research work was focused over consumerrsquos perception on investment towards Life Insurance
Services The objectives of the study were to evaluate the factors underlying consumer perception
towards investment in life insurance policies and to compare the differences in consumer
perception of male and female consumers The tests that were used for our research activities were-
Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25
items being accepted Next was Reliability Test to check the reliability of the items The
result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis
Test and the six factors that came out were Consumer Loyalty Service Quality Ease of
Procedures Satisfaction Level Company Image and Company-Client Relationship
The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind
sets for their investment pattern in insurance policies Still some actions are needed for
developing insurance market The major factors playing the role in developing
consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality
Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship
Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in
developing the market share loyalty and further development in insurance sector
20
References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)
21
Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in
Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)
22
1113090 Indias Most Customer Responsive Insurance Company
Avaya GlobalConnect - Economic Times
Customer Responsiveness Awards
1113090 Most Trusted Private Life Insurer
The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003
2004 and 2005
1113090 Prudence Customer Centricity Award 2004 amp 2005
Prudential Corporation Asia
1113090 Best Life Insurer 2003
Outlook Money Awards 2003 amp 2004
1113090 Superbrand 2003-04
1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising
campaign
Effies 2003
RECOGNITIONS
1113090 IMM Award for Excellence
Institute of Marketing amp Management
1113090 Organisation with Innovative HR Practices
Indira Group of Institutes
1113090 Most Trusted Private Life Insurer
The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003
2004 and 2005
1113090 Prudence Customer Centricity Award 2004 amp 2005
Prudential Corporation Asia
1113090 Best Life Insurer 2003
Outlook Money Awards 2003 amp 2004
1113090 Superbrand 2003-04
1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising
campaign
Effies 2003
12
Review of Literature
Mehr and Cammack (1976) agrees that insurance is usually thought of as a product that spreads the
risk of serious but low-probability losses among a group of individuals thus providing some
financial protection to each individual Kunreuther (1979) said that his product makes good sense
particularly when the protection is purchased against potential losses so large as to be catastrophic
such as total destruction of ones home a large accident liability judgment or death of primary
family breadwinner However it has long been recognized that this sensible product is difficult to
sellv
Kahneman amp Tversky (1984) stated indeed repeated demonstrations have shown most people lack
an adequate understanding of probability and risk concepts Dhar (1997) Greenleaf and Lehmann
(1995) Tversky and Shafir (1992) have shown that offering more options can generate decision
conflict and preference uncertainty leading to decision deferral
Kotler (1973) considers insurance to be in the category of unsought goods along with products
such as preventive dental services and burial plotsHe notes that unsought goods pose special
challenges to the marketer
Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) found that subjects were more likely
to buy insurance against small high-probability losses than insurance against large low- probability
losses Hershey and Schoemaker (1980) reported the opposite result
Kunreuther (1979) ldquoIt is not the magnitude of a potential loss that inspires people to buy insurance
voluntarily ndash it is the frequency with which a loss is likely to occurrdquo
Michael L Smith (1982) said that a typical life insurance contract provides a package of options or
rights to the policy owner that is not precisely duplicated by any other combination of commonly
available contracts Viewed from this perspective life insurance enjoys a unique position in the
field of investments and should be judged in this light The paper shows that an options viewpoint
provides a more complete explanation of policy owner behavior towards life insurance than the
conventional savings-and-protection view
13
Michael L Walden (1985) told that the options package view of the whole a
whole life policy is a package of options each of which has value and is expected to influence the
price of the policy This viewpoint implies the general hypothesis that price differences between
whole life policies can be explained by differences in policy contract provisions and differences in
selected company characteristics
OBJECTIVE
o To evaluate the factors underlying consumer perception towards investment in life insurance
policies
o To compare the differences in consumer perception of male and
female consumers
RESEARCH METHODOLOGY
The Study The study was exploratory in nature with survey method being used to complete the
study
Sampling Design
Population
Population included investors in NCR region
Sample frame
Since the data was collected through personal contacts the sample frames were the individuals who
are investing in life insurance policies
Sampling elements
Individual respondents were the sampling elements
14
Sampling Techniques
Random sampling technique was used to select the samples
Sample Size
Sample size was 150 respondents
Tools Used for Data Collection
Self designed questionnaire was used for the evaluation of factors affecting consumerrsquos perception
towards insurance Data was collected on Likertrsquos type scale where 1 stood for minimum
agreement and 7 stood for maximum agreement
Tools Used for Data Analysis
Item to total correlation was applied to check the internal consistency of the questionnaire The
measures were standardized through computation of reliability and validity
Factor analysis was applied to identify the underlying factors
Z-test was applied to find out the significant differences between male and
female investors
Results and Discussions
Consistency Measure
Firstly consistency of all the items in the questionnaire is checked through item to total correlation
Under this correlation of every item with total is measured and the computed value is compared
with standard value (ie 01590) If the computed value is found less than standard value then
whole factorstatement is dropped and will be termed as inconsistent
15
SNO ITEMS COMPUTED
CORRELATIO
N VALUE
CONSISTE
NT
ACCEPTED
DROPPED
1 Awareness about terms and conditions of
policy
0671575 Consistent Accepted
2 Provide services on time 0651847 Consistent Accepted
3 Provide satisfactory services 0573518 Consistent Accepted
4 Goodwill of the company 0607722 Consistent Accepted
5 Agent is well informed about policies 0640696 Consistent Accepted
6 Co-operative and friendly agent 0598089 Consistent Accepted
7 Agent respond promptly 0696914 Consistent Accepted
8 Proper reminder of installments by
agents
0531124 Consistent Accepted
9 Employees responsible towards
customers
0685817 Consistent Accepted
10 Benefits are met by policy 0510702 Consistent Accepted
11 Selection of highly reputed company 0634614 Consistent Accepted
12 Reputation of the insurance company 0582977 Consistent Accepted
13 Hassle free settlements 0594282 Consistent Accepted
14 Personal attention on every costumer 0640192 Consistent Accepted
15 Understand Customerrsquos financial needs 0603133 Consistent Accepted
16 Fulfill its promise towards policy 0613243 Consistent Accepted
17 Provides the claims on time 0474994 Consistent Accepted
18 Settlement of claims easy and timely 0569959 Consistent Accepted
19 Satisfy with relationship to company 0621496 Consistent Accepted
20 Company able to fulfill expectation 0594265 Consistent Accepted
21 Only company I want to associate
myself
0519161 Consistent Accepted
22 Purchase more policies from the same
company
0502876 Consistent Accepted
16
23 Suggest friends and family to purchase
policy from the same company
0540626 Consistent Accepted
24 Policy benefits benchmarks 062874 Consistent Accepted
25 Investment in life insurance is more
secure than stock market
0376874 Consistent Accepted
26 Purchase further policies from other
companies
0091102 Inonsistent Dropped
Reliability
Reliability test was carried out using SPSS software and the reliability of the items was measured
The result is as follows
Cronbachrsquos Alpha 0919
It can be seen that the reliability value is more than 07 So the questionnaire is
highly reliable
Description of factors
1 Company Loyalty
This factor includes that this is the only company the consumer wants to associate himself with in
future (0814) himself would purchase more policies from the same company (0799) suggest
friends and family to purchase policy from the same company (0790) company able to fulfill
expectation (0599) Policy benefits benchmarks (0545) The highest Eigen value lies in this factor
35213 So it is been considered as the highly contributing factor towards study Therefore it is
clear that company loyalty plays an important role in investment decisions of investors
17
2 Services Quality
This factor includes hassle free settlements (0693) employees responsible towards customers
(0631) agents respond promptly (0611) investment in life insurance is more secure than stock
market (0563) satisfy with relationship to company (0537) As we can see that the Eigen value for
factor service quality is 9753 which is also a contributing factor towards the study so it can also be considered as an the study
3 Ease of Procedures
This factor includes the company provides claims on time (0852) co- operative and friendly agent
(0662) settlement of claims easy and timely (0651) agent is well informed about policies (0486) As
we can see that the Eigen value for factor ease of procedures is 5830 which is also a contributing
factor towards the study so it can also be considered as an important factor inconsumerrsquos financial
needs (0404) As we can see that the Eigen value for factor company client relationship is 4051
which is also a contributing factor towards the study so it can also be considered as an important factor
in the study
4 Satisfaction Level
This factor includes that the suggested benefits of Insurance Policy should be met to the investors
( 0774) Company provides them satisfactory services (0631) fulfill its promise about life
insurance policy (0575) Services should be provided on time(0515) and awareness of terms and
conditions of policies As we can see that the Eigen value for factor satisfaction level is 5008
which is also a contributing factor towards the study so it can also be considered as an important
factor in the study
5 Company Image
This factor includes that the insurance company should be well known in the industry (0777)
insurance provider should have goodwill in market (0758) and company of high repute (0428)As
we can see that the Eigen value for factor company image is 4878 which is also a contributing
factor towards the study so it can also be considered as an important factor in the study
18
6 Company-Client Relationship
This factor includes that the agent remind about premium installments (0778) pay personal
attention on every consumer (0505) and understand consumerrsquos financial needs (0404) As
we can see that the Eigen value for factor company client relationship is 4051 which is also a
contributing factor towards the study so it can also be considered as an important factor in the
study
Z-Test
Z-test was applied to find out significant difference between male and female investorrsquos perception
towards investment in life insurance policies
For applying Z-test mean and standard deviation was calculated then values were put in formula to
calculate standard error
Null Hypothesis Ho It states that there is no significant difference between the perception of male
and female investors towards investment in life insurance policies
GENDER MEAN SD SAMPLE
SIZE
SQUARE
OF
SD
MALE 14104 20078 75 403146
FEMALE 14594 17701 75 313348
Z = 15877
Since the value of Z is less than the standard value 196 at 5 level of significance so the null
hypothesis is accepted Therefore there is no significant difference between the perception of male
and female investors towards investment in life insurance policies
19
CONCLUSION
In present Indian market the investment habits of Indian consumers are changing very frequently
The individuals have their own perception towards various types of investment plans The study of
this research work was focused over consumerrsquos perception on investment towards Life Insurance
Services The objectives of the study were to evaluate the factors underlying consumer perception
towards investment in life insurance policies and to compare the differences in consumer
perception of male and female consumers The tests that were used for our research activities were-
Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25
items being accepted Next was Reliability Test to check the reliability of the items The
result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis
Test and the six factors that came out were Consumer Loyalty Service Quality Ease of
Procedures Satisfaction Level Company Image and Company-Client Relationship
The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind
sets for their investment pattern in insurance policies Still some actions are needed for
developing insurance market The major factors playing the role in developing
consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality
Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship
Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in
developing the market share loyalty and further development in insurance sector
20
References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)
21
Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in
Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)
22
Review of Literature
Mehr and Cammack (1976) agrees that insurance is usually thought of as a product that spreads the
risk of serious but low-probability losses among a group of individuals thus providing some
financial protection to each individual Kunreuther (1979) said that his product makes good sense
particularly when the protection is purchased against potential losses so large as to be catastrophic
such as total destruction of ones home a large accident liability judgment or death of primary
family breadwinner However it has long been recognized that this sensible product is difficult to
sellv
Kahneman amp Tversky (1984) stated indeed repeated demonstrations have shown most people lack
an adequate understanding of probability and risk concepts Dhar (1997) Greenleaf and Lehmann
(1995) Tversky and Shafir (1992) have shown that offering more options can generate decision
conflict and preference uncertainty leading to decision deferral
Kotler (1973) considers insurance to be in the category of unsought goods along with products
such as preventive dental services and burial plotsHe notes that unsought goods pose special
challenges to the marketer
Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) found that subjects were more likely
to buy insurance against small high-probability losses than insurance against large low- probability
losses Hershey and Schoemaker (1980) reported the opposite result
Kunreuther (1979) ldquoIt is not the magnitude of a potential loss that inspires people to buy insurance
voluntarily ndash it is the frequency with which a loss is likely to occurrdquo
Michael L Smith (1982) said that a typical life insurance contract provides a package of options or
rights to the policy owner that is not precisely duplicated by any other combination of commonly
available contracts Viewed from this perspective life insurance enjoys a unique position in the
field of investments and should be judged in this light The paper shows that an options viewpoint
provides a more complete explanation of policy owner behavior towards life insurance than the
conventional savings-and-protection view
13
Michael L Walden (1985) told that the options package view of the whole a
whole life policy is a package of options each of which has value and is expected to influence the
price of the policy This viewpoint implies the general hypothesis that price differences between
whole life policies can be explained by differences in policy contract provisions and differences in
selected company characteristics
OBJECTIVE
o To evaluate the factors underlying consumer perception towards investment in life insurance
policies
o To compare the differences in consumer perception of male and
female consumers
RESEARCH METHODOLOGY
The Study The study was exploratory in nature with survey method being used to complete the
study
Sampling Design
Population
Population included investors in NCR region
Sample frame
Since the data was collected through personal contacts the sample frames were the individuals who
are investing in life insurance policies
Sampling elements
Individual respondents were the sampling elements
14
Sampling Techniques
Random sampling technique was used to select the samples
Sample Size
Sample size was 150 respondents
Tools Used for Data Collection
Self designed questionnaire was used for the evaluation of factors affecting consumerrsquos perception
towards insurance Data was collected on Likertrsquos type scale where 1 stood for minimum
agreement and 7 stood for maximum agreement
Tools Used for Data Analysis
Item to total correlation was applied to check the internal consistency of the questionnaire The
measures were standardized through computation of reliability and validity
Factor analysis was applied to identify the underlying factors
Z-test was applied to find out the significant differences between male and
female investors
Results and Discussions
Consistency Measure
Firstly consistency of all the items in the questionnaire is checked through item to total correlation
Under this correlation of every item with total is measured and the computed value is compared
with standard value (ie 01590) If the computed value is found less than standard value then
whole factorstatement is dropped and will be termed as inconsistent
15
SNO ITEMS COMPUTED
CORRELATIO
N VALUE
CONSISTE
NT
ACCEPTED
DROPPED
1 Awareness about terms and conditions of
policy
0671575 Consistent Accepted
2 Provide services on time 0651847 Consistent Accepted
3 Provide satisfactory services 0573518 Consistent Accepted
4 Goodwill of the company 0607722 Consistent Accepted
5 Agent is well informed about policies 0640696 Consistent Accepted
6 Co-operative and friendly agent 0598089 Consistent Accepted
7 Agent respond promptly 0696914 Consistent Accepted
8 Proper reminder of installments by
agents
0531124 Consistent Accepted
9 Employees responsible towards
customers
0685817 Consistent Accepted
10 Benefits are met by policy 0510702 Consistent Accepted
11 Selection of highly reputed company 0634614 Consistent Accepted
12 Reputation of the insurance company 0582977 Consistent Accepted
13 Hassle free settlements 0594282 Consistent Accepted
14 Personal attention on every costumer 0640192 Consistent Accepted
15 Understand Customerrsquos financial needs 0603133 Consistent Accepted
16 Fulfill its promise towards policy 0613243 Consistent Accepted
17 Provides the claims on time 0474994 Consistent Accepted
18 Settlement of claims easy and timely 0569959 Consistent Accepted
19 Satisfy with relationship to company 0621496 Consistent Accepted
20 Company able to fulfill expectation 0594265 Consistent Accepted
21 Only company I want to associate
myself
0519161 Consistent Accepted
22 Purchase more policies from the same
company
0502876 Consistent Accepted
16
23 Suggest friends and family to purchase
policy from the same company
0540626 Consistent Accepted
24 Policy benefits benchmarks 062874 Consistent Accepted
25 Investment in life insurance is more
secure than stock market
0376874 Consistent Accepted
26 Purchase further policies from other
companies
0091102 Inonsistent Dropped
Reliability
Reliability test was carried out using SPSS software and the reliability of the items was measured
The result is as follows
Cronbachrsquos Alpha 0919
It can be seen that the reliability value is more than 07 So the questionnaire is
highly reliable
Description of factors
1 Company Loyalty
This factor includes that this is the only company the consumer wants to associate himself with in
future (0814) himself would purchase more policies from the same company (0799) suggest
friends and family to purchase policy from the same company (0790) company able to fulfill
expectation (0599) Policy benefits benchmarks (0545) The highest Eigen value lies in this factor
35213 So it is been considered as the highly contributing factor towards study Therefore it is
clear that company loyalty plays an important role in investment decisions of investors
17
2 Services Quality
This factor includes hassle free settlements (0693) employees responsible towards customers
(0631) agents respond promptly (0611) investment in life insurance is more secure than stock
market (0563) satisfy with relationship to company (0537) As we can see that the Eigen value for
factor service quality is 9753 which is also a contributing factor towards the study so it can also be considered as an the study
3 Ease of Procedures
This factor includes the company provides claims on time (0852) co- operative and friendly agent
(0662) settlement of claims easy and timely (0651) agent is well informed about policies (0486) As
we can see that the Eigen value for factor ease of procedures is 5830 which is also a contributing
factor towards the study so it can also be considered as an important factor inconsumerrsquos financial
needs (0404) As we can see that the Eigen value for factor company client relationship is 4051
which is also a contributing factor towards the study so it can also be considered as an important factor
in the study
4 Satisfaction Level
This factor includes that the suggested benefits of Insurance Policy should be met to the investors
( 0774) Company provides them satisfactory services (0631) fulfill its promise about life
insurance policy (0575) Services should be provided on time(0515) and awareness of terms and
conditions of policies As we can see that the Eigen value for factor satisfaction level is 5008
which is also a contributing factor towards the study so it can also be considered as an important
factor in the study
5 Company Image
This factor includes that the insurance company should be well known in the industry (0777)
insurance provider should have goodwill in market (0758) and company of high repute (0428)As
we can see that the Eigen value for factor company image is 4878 which is also a contributing
factor towards the study so it can also be considered as an important factor in the study
18
6 Company-Client Relationship
This factor includes that the agent remind about premium installments (0778) pay personal
attention on every consumer (0505) and understand consumerrsquos financial needs (0404) As
we can see that the Eigen value for factor company client relationship is 4051 which is also a
contributing factor towards the study so it can also be considered as an important factor in the
study
Z-Test
Z-test was applied to find out significant difference between male and female investorrsquos perception
towards investment in life insurance policies
For applying Z-test mean and standard deviation was calculated then values were put in formula to
calculate standard error
Null Hypothesis Ho It states that there is no significant difference between the perception of male
and female investors towards investment in life insurance policies
GENDER MEAN SD SAMPLE
SIZE
SQUARE
OF
SD
MALE 14104 20078 75 403146
FEMALE 14594 17701 75 313348
Z = 15877
Since the value of Z is less than the standard value 196 at 5 level of significance so the null
hypothesis is accepted Therefore there is no significant difference between the perception of male
and female investors towards investment in life insurance policies
19
CONCLUSION
In present Indian market the investment habits of Indian consumers are changing very frequently
The individuals have their own perception towards various types of investment plans The study of
this research work was focused over consumerrsquos perception on investment towards Life Insurance
Services The objectives of the study were to evaluate the factors underlying consumer perception
towards investment in life insurance policies and to compare the differences in consumer
perception of male and female consumers The tests that were used for our research activities were-
Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25
items being accepted Next was Reliability Test to check the reliability of the items The
result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis
Test and the six factors that came out were Consumer Loyalty Service Quality Ease of
Procedures Satisfaction Level Company Image and Company-Client Relationship
The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind
sets for their investment pattern in insurance policies Still some actions are needed for
developing insurance market The major factors playing the role in developing
consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality
Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship
Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in
developing the market share loyalty and further development in insurance sector
20
References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)
21
Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in
Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)
22
Michael L Walden (1985) told that the options package view of the whole a
whole life policy is a package of options each of which has value and is expected to influence the
price of the policy This viewpoint implies the general hypothesis that price differences between
whole life policies can be explained by differences in policy contract provisions and differences in
selected company characteristics
OBJECTIVE
o To evaluate the factors underlying consumer perception towards investment in life insurance
policies
o To compare the differences in consumer perception of male and
female consumers
RESEARCH METHODOLOGY
The Study The study was exploratory in nature with survey method being used to complete the
study
Sampling Design
Population
Population included investors in NCR region
Sample frame
Since the data was collected through personal contacts the sample frames were the individuals who
are investing in life insurance policies
Sampling elements
Individual respondents were the sampling elements
14
Sampling Techniques
Random sampling technique was used to select the samples
Sample Size
Sample size was 150 respondents
Tools Used for Data Collection
Self designed questionnaire was used for the evaluation of factors affecting consumerrsquos perception
towards insurance Data was collected on Likertrsquos type scale where 1 stood for minimum
agreement and 7 stood for maximum agreement
Tools Used for Data Analysis
Item to total correlation was applied to check the internal consistency of the questionnaire The
measures were standardized through computation of reliability and validity
Factor analysis was applied to identify the underlying factors
Z-test was applied to find out the significant differences between male and
female investors
Results and Discussions
Consistency Measure
Firstly consistency of all the items in the questionnaire is checked through item to total correlation
Under this correlation of every item with total is measured and the computed value is compared
with standard value (ie 01590) If the computed value is found less than standard value then
whole factorstatement is dropped and will be termed as inconsistent
15
SNO ITEMS COMPUTED
CORRELATIO
N VALUE
CONSISTE
NT
ACCEPTED
DROPPED
1 Awareness about terms and conditions of
policy
0671575 Consistent Accepted
2 Provide services on time 0651847 Consistent Accepted
3 Provide satisfactory services 0573518 Consistent Accepted
4 Goodwill of the company 0607722 Consistent Accepted
5 Agent is well informed about policies 0640696 Consistent Accepted
6 Co-operative and friendly agent 0598089 Consistent Accepted
7 Agent respond promptly 0696914 Consistent Accepted
8 Proper reminder of installments by
agents
0531124 Consistent Accepted
9 Employees responsible towards
customers
0685817 Consistent Accepted
10 Benefits are met by policy 0510702 Consistent Accepted
11 Selection of highly reputed company 0634614 Consistent Accepted
12 Reputation of the insurance company 0582977 Consistent Accepted
13 Hassle free settlements 0594282 Consistent Accepted
14 Personal attention on every costumer 0640192 Consistent Accepted
15 Understand Customerrsquos financial needs 0603133 Consistent Accepted
16 Fulfill its promise towards policy 0613243 Consistent Accepted
17 Provides the claims on time 0474994 Consistent Accepted
18 Settlement of claims easy and timely 0569959 Consistent Accepted
19 Satisfy with relationship to company 0621496 Consistent Accepted
20 Company able to fulfill expectation 0594265 Consistent Accepted
21 Only company I want to associate
myself
0519161 Consistent Accepted
22 Purchase more policies from the same
company
0502876 Consistent Accepted
16
23 Suggest friends and family to purchase
policy from the same company
0540626 Consistent Accepted
24 Policy benefits benchmarks 062874 Consistent Accepted
25 Investment in life insurance is more
secure than stock market
0376874 Consistent Accepted
26 Purchase further policies from other
companies
0091102 Inonsistent Dropped
Reliability
Reliability test was carried out using SPSS software and the reliability of the items was measured
The result is as follows
Cronbachrsquos Alpha 0919
It can be seen that the reliability value is more than 07 So the questionnaire is
highly reliable
Description of factors
1 Company Loyalty
This factor includes that this is the only company the consumer wants to associate himself with in
future (0814) himself would purchase more policies from the same company (0799) suggest
friends and family to purchase policy from the same company (0790) company able to fulfill
expectation (0599) Policy benefits benchmarks (0545) The highest Eigen value lies in this factor
35213 So it is been considered as the highly contributing factor towards study Therefore it is
clear that company loyalty plays an important role in investment decisions of investors
17
2 Services Quality
This factor includes hassle free settlements (0693) employees responsible towards customers
(0631) agents respond promptly (0611) investment in life insurance is more secure than stock
market (0563) satisfy with relationship to company (0537) As we can see that the Eigen value for
factor service quality is 9753 which is also a contributing factor towards the study so it can also be considered as an the study
3 Ease of Procedures
This factor includes the company provides claims on time (0852) co- operative and friendly agent
(0662) settlement of claims easy and timely (0651) agent is well informed about policies (0486) As
we can see that the Eigen value for factor ease of procedures is 5830 which is also a contributing
factor towards the study so it can also be considered as an important factor inconsumerrsquos financial
needs (0404) As we can see that the Eigen value for factor company client relationship is 4051
which is also a contributing factor towards the study so it can also be considered as an important factor
in the study
4 Satisfaction Level
This factor includes that the suggested benefits of Insurance Policy should be met to the investors
( 0774) Company provides them satisfactory services (0631) fulfill its promise about life
insurance policy (0575) Services should be provided on time(0515) and awareness of terms and
conditions of policies As we can see that the Eigen value for factor satisfaction level is 5008
which is also a contributing factor towards the study so it can also be considered as an important
factor in the study
5 Company Image
This factor includes that the insurance company should be well known in the industry (0777)
insurance provider should have goodwill in market (0758) and company of high repute (0428)As
we can see that the Eigen value for factor company image is 4878 which is also a contributing
factor towards the study so it can also be considered as an important factor in the study
18
6 Company-Client Relationship
This factor includes that the agent remind about premium installments (0778) pay personal
attention on every consumer (0505) and understand consumerrsquos financial needs (0404) As
we can see that the Eigen value for factor company client relationship is 4051 which is also a
contributing factor towards the study so it can also be considered as an important factor in the
study
Z-Test
Z-test was applied to find out significant difference between male and female investorrsquos perception
towards investment in life insurance policies
For applying Z-test mean and standard deviation was calculated then values were put in formula to
calculate standard error
Null Hypothesis Ho It states that there is no significant difference between the perception of male
and female investors towards investment in life insurance policies
GENDER MEAN SD SAMPLE
SIZE
SQUARE
OF
SD
MALE 14104 20078 75 403146
FEMALE 14594 17701 75 313348
Z = 15877
Since the value of Z is less than the standard value 196 at 5 level of significance so the null
hypothesis is accepted Therefore there is no significant difference between the perception of male
and female investors towards investment in life insurance policies
19
CONCLUSION
In present Indian market the investment habits of Indian consumers are changing very frequently
The individuals have their own perception towards various types of investment plans The study of
this research work was focused over consumerrsquos perception on investment towards Life Insurance
Services The objectives of the study were to evaluate the factors underlying consumer perception
towards investment in life insurance policies and to compare the differences in consumer
perception of male and female consumers The tests that were used for our research activities were-
Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25
items being accepted Next was Reliability Test to check the reliability of the items The
result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis
Test and the six factors that came out were Consumer Loyalty Service Quality Ease of
Procedures Satisfaction Level Company Image and Company-Client Relationship
The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind
sets for their investment pattern in insurance policies Still some actions are needed for
developing insurance market The major factors playing the role in developing
consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality
Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship
Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in
developing the market share loyalty and further development in insurance sector
20
References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)
21
Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in
Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)
22
Sampling Techniques
Random sampling technique was used to select the samples
Sample Size
Sample size was 150 respondents
Tools Used for Data Collection
Self designed questionnaire was used for the evaluation of factors affecting consumerrsquos perception
towards insurance Data was collected on Likertrsquos type scale where 1 stood for minimum
agreement and 7 stood for maximum agreement
Tools Used for Data Analysis
Item to total correlation was applied to check the internal consistency of the questionnaire The
measures were standardized through computation of reliability and validity
Factor analysis was applied to identify the underlying factors
Z-test was applied to find out the significant differences between male and
female investors
Results and Discussions
Consistency Measure
Firstly consistency of all the items in the questionnaire is checked through item to total correlation
Under this correlation of every item with total is measured and the computed value is compared
with standard value (ie 01590) If the computed value is found less than standard value then
whole factorstatement is dropped and will be termed as inconsistent
15
SNO ITEMS COMPUTED
CORRELATIO
N VALUE
CONSISTE
NT
ACCEPTED
DROPPED
1 Awareness about terms and conditions of
policy
0671575 Consistent Accepted
2 Provide services on time 0651847 Consistent Accepted
3 Provide satisfactory services 0573518 Consistent Accepted
4 Goodwill of the company 0607722 Consistent Accepted
5 Agent is well informed about policies 0640696 Consistent Accepted
6 Co-operative and friendly agent 0598089 Consistent Accepted
7 Agent respond promptly 0696914 Consistent Accepted
8 Proper reminder of installments by
agents
0531124 Consistent Accepted
9 Employees responsible towards
customers
0685817 Consistent Accepted
10 Benefits are met by policy 0510702 Consistent Accepted
11 Selection of highly reputed company 0634614 Consistent Accepted
12 Reputation of the insurance company 0582977 Consistent Accepted
13 Hassle free settlements 0594282 Consistent Accepted
14 Personal attention on every costumer 0640192 Consistent Accepted
15 Understand Customerrsquos financial needs 0603133 Consistent Accepted
16 Fulfill its promise towards policy 0613243 Consistent Accepted
17 Provides the claims on time 0474994 Consistent Accepted
18 Settlement of claims easy and timely 0569959 Consistent Accepted
19 Satisfy with relationship to company 0621496 Consistent Accepted
20 Company able to fulfill expectation 0594265 Consistent Accepted
21 Only company I want to associate
myself
0519161 Consistent Accepted
22 Purchase more policies from the same
company
0502876 Consistent Accepted
16
23 Suggest friends and family to purchase
policy from the same company
0540626 Consistent Accepted
24 Policy benefits benchmarks 062874 Consistent Accepted
25 Investment in life insurance is more
secure than stock market
0376874 Consistent Accepted
26 Purchase further policies from other
companies
0091102 Inonsistent Dropped
Reliability
Reliability test was carried out using SPSS software and the reliability of the items was measured
The result is as follows
Cronbachrsquos Alpha 0919
It can be seen that the reliability value is more than 07 So the questionnaire is
highly reliable
Description of factors
1 Company Loyalty
This factor includes that this is the only company the consumer wants to associate himself with in
future (0814) himself would purchase more policies from the same company (0799) suggest
friends and family to purchase policy from the same company (0790) company able to fulfill
expectation (0599) Policy benefits benchmarks (0545) The highest Eigen value lies in this factor
35213 So it is been considered as the highly contributing factor towards study Therefore it is
clear that company loyalty plays an important role in investment decisions of investors
17
2 Services Quality
This factor includes hassle free settlements (0693) employees responsible towards customers
(0631) agents respond promptly (0611) investment in life insurance is more secure than stock
market (0563) satisfy with relationship to company (0537) As we can see that the Eigen value for
factor service quality is 9753 which is also a contributing factor towards the study so it can also be considered as an the study
3 Ease of Procedures
This factor includes the company provides claims on time (0852) co- operative and friendly agent
(0662) settlement of claims easy and timely (0651) agent is well informed about policies (0486) As
we can see that the Eigen value for factor ease of procedures is 5830 which is also a contributing
factor towards the study so it can also be considered as an important factor inconsumerrsquos financial
needs (0404) As we can see that the Eigen value for factor company client relationship is 4051
which is also a contributing factor towards the study so it can also be considered as an important factor
in the study
4 Satisfaction Level
This factor includes that the suggested benefits of Insurance Policy should be met to the investors
( 0774) Company provides them satisfactory services (0631) fulfill its promise about life
insurance policy (0575) Services should be provided on time(0515) and awareness of terms and
conditions of policies As we can see that the Eigen value for factor satisfaction level is 5008
which is also a contributing factor towards the study so it can also be considered as an important
factor in the study
5 Company Image
This factor includes that the insurance company should be well known in the industry (0777)
insurance provider should have goodwill in market (0758) and company of high repute (0428)As
we can see that the Eigen value for factor company image is 4878 which is also a contributing
factor towards the study so it can also be considered as an important factor in the study
18
6 Company-Client Relationship
This factor includes that the agent remind about premium installments (0778) pay personal
attention on every consumer (0505) and understand consumerrsquos financial needs (0404) As
we can see that the Eigen value for factor company client relationship is 4051 which is also a
contributing factor towards the study so it can also be considered as an important factor in the
study
Z-Test
Z-test was applied to find out significant difference between male and female investorrsquos perception
towards investment in life insurance policies
For applying Z-test mean and standard deviation was calculated then values were put in formula to
calculate standard error
Null Hypothesis Ho It states that there is no significant difference between the perception of male
and female investors towards investment in life insurance policies
GENDER MEAN SD SAMPLE
SIZE
SQUARE
OF
SD
MALE 14104 20078 75 403146
FEMALE 14594 17701 75 313348
Z = 15877
Since the value of Z is less than the standard value 196 at 5 level of significance so the null
hypothesis is accepted Therefore there is no significant difference between the perception of male
and female investors towards investment in life insurance policies
19
CONCLUSION
In present Indian market the investment habits of Indian consumers are changing very frequently
The individuals have their own perception towards various types of investment plans The study of
this research work was focused over consumerrsquos perception on investment towards Life Insurance
Services The objectives of the study were to evaluate the factors underlying consumer perception
towards investment in life insurance policies and to compare the differences in consumer
perception of male and female consumers The tests that were used for our research activities were-
Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25
items being accepted Next was Reliability Test to check the reliability of the items The
result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis
Test and the six factors that came out were Consumer Loyalty Service Quality Ease of
Procedures Satisfaction Level Company Image and Company-Client Relationship
The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind
sets for their investment pattern in insurance policies Still some actions are needed for
developing insurance market The major factors playing the role in developing
consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality
Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship
Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in
developing the market share loyalty and further development in insurance sector
20
References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)
21
Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in
Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)
22
SNO ITEMS COMPUTED
CORRELATIO
N VALUE
CONSISTE
NT
ACCEPTED
DROPPED
1 Awareness about terms and conditions of
policy
0671575 Consistent Accepted
2 Provide services on time 0651847 Consistent Accepted
3 Provide satisfactory services 0573518 Consistent Accepted
4 Goodwill of the company 0607722 Consistent Accepted
5 Agent is well informed about policies 0640696 Consistent Accepted
6 Co-operative and friendly agent 0598089 Consistent Accepted
7 Agent respond promptly 0696914 Consistent Accepted
8 Proper reminder of installments by
agents
0531124 Consistent Accepted
9 Employees responsible towards
customers
0685817 Consistent Accepted
10 Benefits are met by policy 0510702 Consistent Accepted
11 Selection of highly reputed company 0634614 Consistent Accepted
12 Reputation of the insurance company 0582977 Consistent Accepted
13 Hassle free settlements 0594282 Consistent Accepted
14 Personal attention on every costumer 0640192 Consistent Accepted
15 Understand Customerrsquos financial needs 0603133 Consistent Accepted
16 Fulfill its promise towards policy 0613243 Consistent Accepted
17 Provides the claims on time 0474994 Consistent Accepted
18 Settlement of claims easy and timely 0569959 Consistent Accepted
19 Satisfy with relationship to company 0621496 Consistent Accepted
20 Company able to fulfill expectation 0594265 Consistent Accepted
21 Only company I want to associate
myself
0519161 Consistent Accepted
22 Purchase more policies from the same
company
0502876 Consistent Accepted
16
23 Suggest friends and family to purchase
policy from the same company
0540626 Consistent Accepted
24 Policy benefits benchmarks 062874 Consistent Accepted
25 Investment in life insurance is more
secure than stock market
0376874 Consistent Accepted
26 Purchase further policies from other
companies
0091102 Inonsistent Dropped
Reliability
Reliability test was carried out using SPSS software and the reliability of the items was measured
The result is as follows
Cronbachrsquos Alpha 0919
It can be seen that the reliability value is more than 07 So the questionnaire is
highly reliable
Description of factors
1 Company Loyalty
This factor includes that this is the only company the consumer wants to associate himself with in
future (0814) himself would purchase more policies from the same company (0799) suggest
friends and family to purchase policy from the same company (0790) company able to fulfill
expectation (0599) Policy benefits benchmarks (0545) The highest Eigen value lies in this factor
35213 So it is been considered as the highly contributing factor towards study Therefore it is
clear that company loyalty plays an important role in investment decisions of investors
17
2 Services Quality
This factor includes hassle free settlements (0693) employees responsible towards customers
(0631) agents respond promptly (0611) investment in life insurance is more secure than stock
market (0563) satisfy with relationship to company (0537) As we can see that the Eigen value for
factor service quality is 9753 which is also a contributing factor towards the study so it can also be considered as an the study
3 Ease of Procedures
This factor includes the company provides claims on time (0852) co- operative and friendly agent
(0662) settlement of claims easy and timely (0651) agent is well informed about policies (0486) As
we can see that the Eigen value for factor ease of procedures is 5830 which is also a contributing
factor towards the study so it can also be considered as an important factor inconsumerrsquos financial
needs (0404) As we can see that the Eigen value for factor company client relationship is 4051
which is also a contributing factor towards the study so it can also be considered as an important factor
in the study
4 Satisfaction Level
This factor includes that the suggested benefits of Insurance Policy should be met to the investors
( 0774) Company provides them satisfactory services (0631) fulfill its promise about life
insurance policy (0575) Services should be provided on time(0515) and awareness of terms and
conditions of policies As we can see that the Eigen value for factor satisfaction level is 5008
which is also a contributing factor towards the study so it can also be considered as an important
factor in the study
5 Company Image
This factor includes that the insurance company should be well known in the industry (0777)
insurance provider should have goodwill in market (0758) and company of high repute (0428)As
we can see that the Eigen value for factor company image is 4878 which is also a contributing
factor towards the study so it can also be considered as an important factor in the study
18
6 Company-Client Relationship
This factor includes that the agent remind about premium installments (0778) pay personal
attention on every consumer (0505) and understand consumerrsquos financial needs (0404) As
we can see that the Eigen value for factor company client relationship is 4051 which is also a
contributing factor towards the study so it can also be considered as an important factor in the
study
Z-Test
Z-test was applied to find out significant difference between male and female investorrsquos perception
towards investment in life insurance policies
For applying Z-test mean and standard deviation was calculated then values were put in formula to
calculate standard error
Null Hypothesis Ho It states that there is no significant difference between the perception of male
and female investors towards investment in life insurance policies
GENDER MEAN SD SAMPLE
SIZE
SQUARE
OF
SD
MALE 14104 20078 75 403146
FEMALE 14594 17701 75 313348
Z = 15877
Since the value of Z is less than the standard value 196 at 5 level of significance so the null
hypothesis is accepted Therefore there is no significant difference between the perception of male
and female investors towards investment in life insurance policies
19
CONCLUSION
In present Indian market the investment habits of Indian consumers are changing very frequently
The individuals have their own perception towards various types of investment plans The study of
this research work was focused over consumerrsquos perception on investment towards Life Insurance
Services The objectives of the study were to evaluate the factors underlying consumer perception
towards investment in life insurance policies and to compare the differences in consumer
perception of male and female consumers The tests that were used for our research activities were-
Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25
items being accepted Next was Reliability Test to check the reliability of the items The
result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis
Test and the six factors that came out were Consumer Loyalty Service Quality Ease of
Procedures Satisfaction Level Company Image and Company-Client Relationship
The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind
sets for their investment pattern in insurance policies Still some actions are needed for
developing insurance market The major factors playing the role in developing
consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality
Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship
Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in
developing the market share loyalty and further development in insurance sector
20
References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)
21
Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in
Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)
22
23 Suggest friends and family to purchase
policy from the same company
0540626 Consistent Accepted
24 Policy benefits benchmarks 062874 Consistent Accepted
25 Investment in life insurance is more
secure than stock market
0376874 Consistent Accepted
26 Purchase further policies from other
companies
0091102 Inonsistent Dropped
Reliability
Reliability test was carried out using SPSS software and the reliability of the items was measured
The result is as follows
Cronbachrsquos Alpha 0919
It can be seen that the reliability value is more than 07 So the questionnaire is
highly reliable
Description of factors
1 Company Loyalty
This factor includes that this is the only company the consumer wants to associate himself with in
future (0814) himself would purchase more policies from the same company (0799) suggest
friends and family to purchase policy from the same company (0790) company able to fulfill
expectation (0599) Policy benefits benchmarks (0545) The highest Eigen value lies in this factor
35213 So it is been considered as the highly contributing factor towards study Therefore it is
clear that company loyalty plays an important role in investment decisions of investors
17
2 Services Quality
This factor includes hassle free settlements (0693) employees responsible towards customers
(0631) agents respond promptly (0611) investment in life insurance is more secure than stock
market (0563) satisfy with relationship to company (0537) As we can see that the Eigen value for
factor service quality is 9753 which is also a contributing factor towards the study so it can also be considered as an the study
3 Ease of Procedures
This factor includes the company provides claims on time (0852) co- operative and friendly agent
(0662) settlement of claims easy and timely (0651) agent is well informed about policies (0486) As
we can see that the Eigen value for factor ease of procedures is 5830 which is also a contributing
factor towards the study so it can also be considered as an important factor inconsumerrsquos financial
needs (0404) As we can see that the Eigen value for factor company client relationship is 4051
which is also a contributing factor towards the study so it can also be considered as an important factor
in the study
4 Satisfaction Level
This factor includes that the suggested benefits of Insurance Policy should be met to the investors
( 0774) Company provides them satisfactory services (0631) fulfill its promise about life
insurance policy (0575) Services should be provided on time(0515) and awareness of terms and
conditions of policies As we can see that the Eigen value for factor satisfaction level is 5008
which is also a contributing factor towards the study so it can also be considered as an important
factor in the study
5 Company Image
This factor includes that the insurance company should be well known in the industry (0777)
insurance provider should have goodwill in market (0758) and company of high repute (0428)As
we can see that the Eigen value for factor company image is 4878 which is also a contributing
factor towards the study so it can also be considered as an important factor in the study
18
6 Company-Client Relationship
This factor includes that the agent remind about premium installments (0778) pay personal
attention on every consumer (0505) and understand consumerrsquos financial needs (0404) As
we can see that the Eigen value for factor company client relationship is 4051 which is also a
contributing factor towards the study so it can also be considered as an important factor in the
study
Z-Test
Z-test was applied to find out significant difference between male and female investorrsquos perception
towards investment in life insurance policies
For applying Z-test mean and standard deviation was calculated then values were put in formula to
calculate standard error
Null Hypothesis Ho It states that there is no significant difference between the perception of male
and female investors towards investment in life insurance policies
GENDER MEAN SD SAMPLE
SIZE
SQUARE
OF
SD
MALE 14104 20078 75 403146
FEMALE 14594 17701 75 313348
Z = 15877
Since the value of Z is less than the standard value 196 at 5 level of significance so the null
hypothesis is accepted Therefore there is no significant difference between the perception of male
and female investors towards investment in life insurance policies
19
CONCLUSION
In present Indian market the investment habits of Indian consumers are changing very frequently
The individuals have their own perception towards various types of investment plans The study of
this research work was focused over consumerrsquos perception on investment towards Life Insurance
Services The objectives of the study were to evaluate the factors underlying consumer perception
towards investment in life insurance policies and to compare the differences in consumer
perception of male and female consumers The tests that were used for our research activities were-
Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25
items being accepted Next was Reliability Test to check the reliability of the items The
result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis
Test and the six factors that came out were Consumer Loyalty Service Quality Ease of
Procedures Satisfaction Level Company Image and Company-Client Relationship
The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind
sets for their investment pattern in insurance policies Still some actions are needed for
developing insurance market The major factors playing the role in developing
consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality
Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship
Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in
developing the market share loyalty and further development in insurance sector
20
References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)
21
Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in
Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)
22
2 Services Quality
This factor includes hassle free settlements (0693) employees responsible towards customers
(0631) agents respond promptly (0611) investment in life insurance is more secure than stock
market (0563) satisfy with relationship to company (0537) As we can see that the Eigen value for
factor service quality is 9753 which is also a contributing factor towards the study so it can also be considered as an the study
3 Ease of Procedures
This factor includes the company provides claims on time (0852) co- operative and friendly agent
(0662) settlement of claims easy and timely (0651) agent is well informed about policies (0486) As
we can see that the Eigen value for factor ease of procedures is 5830 which is also a contributing
factor towards the study so it can also be considered as an important factor inconsumerrsquos financial
needs (0404) As we can see that the Eigen value for factor company client relationship is 4051
which is also a contributing factor towards the study so it can also be considered as an important factor
in the study
4 Satisfaction Level
This factor includes that the suggested benefits of Insurance Policy should be met to the investors
( 0774) Company provides them satisfactory services (0631) fulfill its promise about life
insurance policy (0575) Services should be provided on time(0515) and awareness of terms and
conditions of policies As we can see that the Eigen value for factor satisfaction level is 5008
which is also a contributing factor towards the study so it can also be considered as an important
factor in the study
5 Company Image
This factor includes that the insurance company should be well known in the industry (0777)
insurance provider should have goodwill in market (0758) and company of high repute (0428)As
we can see that the Eigen value for factor company image is 4878 which is also a contributing
factor towards the study so it can also be considered as an important factor in the study
18
6 Company-Client Relationship
This factor includes that the agent remind about premium installments (0778) pay personal
attention on every consumer (0505) and understand consumerrsquos financial needs (0404) As
we can see that the Eigen value for factor company client relationship is 4051 which is also a
contributing factor towards the study so it can also be considered as an important factor in the
study
Z-Test
Z-test was applied to find out significant difference between male and female investorrsquos perception
towards investment in life insurance policies
For applying Z-test mean and standard deviation was calculated then values were put in formula to
calculate standard error
Null Hypothesis Ho It states that there is no significant difference between the perception of male
and female investors towards investment in life insurance policies
GENDER MEAN SD SAMPLE
SIZE
SQUARE
OF
SD
MALE 14104 20078 75 403146
FEMALE 14594 17701 75 313348
Z = 15877
Since the value of Z is less than the standard value 196 at 5 level of significance so the null
hypothesis is accepted Therefore there is no significant difference between the perception of male
and female investors towards investment in life insurance policies
19
CONCLUSION
In present Indian market the investment habits of Indian consumers are changing very frequently
The individuals have their own perception towards various types of investment plans The study of
this research work was focused over consumerrsquos perception on investment towards Life Insurance
Services The objectives of the study were to evaluate the factors underlying consumer perception
towards investment in life insurance policies and to compare the differences in consumer
perception of male and female consumers The tests that were used for our research activities were-
Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25
items being accepted Next was Reliability Test to check the reliability of the items The
result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis
Test and the six factors that came out were Consumer Loyalty Service Quality Ease of
Procedures Satisfaction Level Company Image and Company-Client Relationship
The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind
sets for their investment pattern in insurance policies Still some actions are needed for
developing insurance market The major factors playing the role in developing
consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality
Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship
Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in
developing the market share loyalty and further development in insurance sector
20
References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)
21
Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in
Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)
22
6 Company-Client Relationship
This factor includes that the agent remind about premium installments (0778) pay personal
attention on every consumer (0505) and understand consumerrsquos financial needs (0404) As
we can see that the Eigen value for factor company client relationship is 4051 which is also a
contributing factor towards the study so it can also be considered as an important factor in the
study
Z-Test
Z-test was applied to find out significant difference between male and female investorrsquos perception
towards investment in life insurance policies
For applying Z-test mean and standard deviation was calculated then values were put in formula to
calculate standard error
Null Hypothesis Ho It states that there is no significant difference between the perception of male
and female investors towards investment in life insurance policies
GENDER MEAN SD SAMPLE
SIZE
SQUARE
OF
SD
MALE 14104 20078 75 403146
FEMALE 14594 17701 75 313348
Z = 15877
Since the value of Z is less than the standard value 196 at 5 level of significance so the null
hypothesis is accepted Therefore there is no significant difference between the perception of male
and female investors towards investment in life insurance policies
19
CONCLUSION
In present Indian market the investment habits of Indian consumers are changing very frequently
The individuals have their own perception towards various types of investment plans The study of
this research work was focused over consumerrsquos perception on investment towards Life Insurance
Services The objectives of the study were to evaluate the factors underlying consumer perception
towards investment in life insurance policies and to compare the differences in consumer
perception of male and female consumers The tests that were used for our research activities were-
Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25
items being accepted Next was Reliability Test to check the reliability of the items The
result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis
Test and the six factors that came out were Consumer Loyalty Service Quality Ease of
Procedures Satisfaction Level Company Image and Company-Client Relationship
The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind
sets for their investment pattern in insurance policies Still some actions are needed for
developing insurance market The major factors playing the role in developing
consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality
Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship
Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in
developing the market share loyalty and further development in insurance sector
20
References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)
21
Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in
Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)
22
CONCLUSION
In present Indian market the investment habits of Indian consumers are changing very frequently
The individuals have their own perception towards various types of investment plans The study of
this research work was focused over consumerrsquos perception on investment towards Life Insurance
Services The objectives of the study were to evaluate the factors underlying consumer perception
towards investment in life insurance policies and to compare the differences in consumer
perception of male and female consumers The tests that were used for our research activities were-
Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25
items being accepted Next was Reliability Test to check the reliability of the items The
result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis
Test and the six factors that came out were Consumer Loyalty Service Quality Ease of
Procedures Satisfaction Level Company Image and Company-Client Relationship
The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind
sets for their investment pattern in insurance policies Still some actions are needed for
developing insurance market The major factors playing the role in developing
consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality
Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship
Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in
developing the market share loyalty and further development in insurance sector
20
References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)
21
Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in
Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)
22
References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)
21
Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in
Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)
22
Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in
Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)
22