7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 1/92
A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
A dissertation submitted to Department of Management
In partial fulfillment of the requirement for the award of degree of
BACHELOR OF BUSINESS ADMINISTRATION (HONS.)
Submitted by:Gurwinder Singh
Regd. No.7020070004
Supervisor:Dr. Anjanay Pandey
Prof. Management
LOVELY PROFESSIONAL UNIVERSITYPHAGWARA
(2010)
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 2/92
LOVELY PROFESSIONAL UNIVERSITYDEPARTMENT OF MANAGEMENT
Format of Certificate of Completion by the Faculty Advisor
TO WHOMSOEVER IT MAY CONCERN
This is to certify that the project report titled “A Study on Consumer perception Regarding Insurance
Companies in rural areas of Ludhiana Distt. ” carried out by Mr.Gurwinder Singh, S/o Mr. Bhajan Singh has
been accomplished under my guidance & supervision as a duly registered BBA (Hons) student of the Lovely
Professional University, Phagwara. This project is being submitted by him in the partial fulfillment of the
requirements for the award of the Bachelor of Business Administration (Hons) from Lovely Professional
University.
His dissertation represents his original work and is worthy of consideration for the award of the degree of
Bachelor of Business Administration (Hons).
Dr.Anjanay Pandey
Faculty Advisor.
Date: ______________________________
LOVELY PROFESSIONAL UNIVERSITYDEPARTMENT OF MANAGEMENT
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 3/92
DECLARATION
I, "Gurwinder Singh", hereby declare that the work presented herein is genuine work done originally by me
and has not been published or submitted elsewhere for the requirement of a degree programme. Any
literature, data or works done by others and cited within this dissertation has been given due
acknowledgement and listed in the reference section.
Gurwinder Singh
Regd. No. 7020070004
Date: __________________
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 4/92
ACKNOWLEDGEMENT
With profound veneration, first of all we recline ourselves before ALMIGHTY without whose blessings
ourselves is cipher.
It is my pleasure to be indebted to various people, who directly or indirectly contributed in the development
of this work and who influenced my thinking, behavior, and acts during the course of study.
As a student specializing in Marketing, I came to know about the ground realities in topics like “A Study on
Consumer Perception Regarding Insurance Companies in rural areas of Ludhiana Distt.”. For this I am
indebted to Dr.Anjanay Pandey, Faculty, LSB who took personal interest in my project and bore the
associated headaches.
I am thankful to him for his support, cooperation, and motivation provided to me during the study.
It would be unfair if I do not mention the name of Ms. Mega Mehta, Faculty, LHSB who gave me valuable
tips to complete this project and Mrs. Dr. Rajesh Verma, HoD, LHSB for her inspiring presence and
blessings.
Lastly, I would like to thank the almighty and my parents for their moral support and my colleagues with
whom I shared my day-to-day experience and received lots off suggestions that improved my work quality.
Gurwinder Singh
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 5/92
1.1 Theoretical Foundation 1
Table of Contents
Title PageAuthentication Certificate iiDeclaration iiiAcknowledgement ivExecutive Summary vii
ChaptersChapter-1 ITRODUCTION TO THE SUBJ ECT 1-13
1.1.1 Meaning of Insurance 21.1.2 Need for Insurance 31.1.3 Types of insurance 41.1.41.1.5 Meaning of Consumer perception 7
Need for Life Insurance 6
1.2 Need of the Study 8
1.3 Objectives 81.4 Research Methodology 9
Chapter-2 INTRODUCTION TO THE INSURANCE INDUSTRY 14-40
2.1 Overview of Insurance Industry 152.1.1 Life Insurance in India 152.1.2 History of the Insurance Industry 162.1.3 Major Policy Changes 182.1.4 Insurance Companies 192.1.5 Growth of the Insurance Industry in India 20
2.1.6 Landmarks 282.1.7 Major Players 292.1.8 Market Share 312.1.9 Product Range of the Insurance Industry 322.1.10 Future Possibilities 37Chapter-3SURVEY OF LITATURE 41-50
3.1 Review of Literature 42
Chapter-4DATA ANAL YSIS, INPRETATION AND FINDINGS 51-87 4.1 Data Analysis And Interpretation 52
4.2 Observations and Findings 87
Chapter-5CONCCLUSIONS, RECOMMENDATIONAND LIMITATION 88-91
5.1 Conclusions 895.2 Recommendations 905.3 Limitations 92
BibliographyAnnexure
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 6/92
Executive Summary
The subject consumer behavior regarding insurance companies is a very wider. In this study touches some
important aspects of the consumer behavior regarding public and private insurance companies like
preference between both insurance companies, factors that people keep in mind during the time of taking any
policy, prefer regarding mode of premium payment etc. The study also deals with background and current
scenario of insurance industry in India. This study also puts light on the History, current market position,
product range, financial status, future plans of Insurance industry.
A thriving insurance company is of vital importance to every modern economy. First because it encourages
the savings habit, second because it provides a safety net to rural and urban enterprises and productive
individuals. And perhaps most importantly it generates long-term investible funds for infrastructure building.
The nature of the insurance business is such that the cash inflow of insurance companies is constant while
the payout is deferred and contingency related.
This characteristic of their business makes insurance companies the biggest investors in long-gestation
infrastructure development projects in all developed and aspiring nations. This is the most compelling reason
why private insurance (and foreign) companies which will spread the insurance habit in the societal and
consumer interest are urgently required in this vital sector of the economy.
With the nation’s infrastructure in a state of imminent collapse, India couldn’t have afforded to be lumbered
with sub-optimally performing monopoly insurance companies and therefore the passage of the Insurance
Regulatory & Development Authority Bill on December 2, 1999 heralds an era of cautious optimism where
stakes are high for all parties concerned. For the Govt. of India, Foreign Direct Investment (FDI) must pour
in as anticipated; for foreign insurers, investments must start yielding returns and for the domestic insurance
industry - their market penetration should remain intact. On the fringe, the customer is pondering whether all
the hype created on liberalization will actually benefit him.
The IRDA Bill provides for the establishment of an authority to protect the interests of the holders of
insurance policies, to regulate, promote and insure orderly growth of the insurance industry and amend the
Insurance Act, 1938, the Life Insurance Act, 1956 and the General Insurance Business (Nationalization) Act,
1972. The bill allows foreign equity stake in domestic private insurance companies to a maximum of 26 per
cent of the total paid-up capital and seeks to provide statutory status to the insurance regulator. The
insurance business in India is pegged at $ 6.6 Billion whereas industry leaders feel privatization will
increase it to $ 40 Billion within next 3-5 years.
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 7/92
OBJ ECTIVES OF STUDY:
1. To study the awareness level of people about insurance companies in rural areas.
2. To identify the factors people consider at the time of buying any insurance policy.
3. To find out the customer preference between public and private Insurance companies in rural
areas.
NEED AND SCOPE OF THE STUDY
SCOPE OF THE STUDY
The study was mainly limited to the six villages of The Ludhiana Distt.(Punjab). The study also covers the
analysis of different products offered by the Insurance Companies and market position of different players
of public and private Insurance companies (i.e. market share of different players).
NEED OF THE STUDY
To study the awareness among rural people about the insurance.
This study is helped insurance companies to know about the perception of rural people about the insurance.
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 8/92
RESEARCH METHODOLOGY
Meaning of research
Research is the search for knowledge. It’s an art of science investigation discover the hidden trust. It’s
the movement from the known to the unknown to discover real fact. Systematized efforts to gain new
knowledge.
Research Design
The study was conducted as an exploratory sampling survey method to collect primary and
secondary data.
Population of the study
Those entire people whose age was more than 18 years and living in rural areas (Ludhiana Distt.).
Sample Size
90 people.
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 9/92
Sampling Frame (area)
People whose age was more than 18 will be asked to fill questionnaire, in order to know responses
and priorities. Research was done around six villages of Ludhiana distt. (Punjab) The geographical
distribution of sample is given below.
Sr No. Villages of
Ludhiana
Distt.
No. of People
1 Chhourian 20
2 Hedon Bet 20
3 Katala 10
4 Sherpur 20
5 Raipur 10
6 Gari Bet 10
Total 90
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 10/92
SOURCE OF DATA
Primary Source of Data
Primary data are those collected by the investigator himself for the first time and thus they are
original in character, they are collected for a particular purpose. A well-structured questionnaire was
personally administrated to the selected sample to collect the primary data.
Secondary Source of Data
Secondary data are those, which have already been collected by some other persons for their purpose
and published. Secondary data are usually in the shape of finished products.
External Data was generated from magazines, research books and internet (websites).
Sampling Technique
Simple random sampling technique was used in sampling but keeping in view to those whose age
is more than 18 and living in rural areas of Ludhiana Distt.
(a) METHOD 0F DATA COLLECTION
Questionnaires were asked to fill in order to collect the data from the respondents. The method was
chosen mainly because of the speed, accuracy and other benefits added to this particular method.
(b) TOOLS OF DATA COLLECTION
A structure questionnaire was used as an aid to collect data. The questionnaire was included close
ended, multiple choice and ranking questions, which was very well bring out the responses from the
respondents.
(c) DATA ANALYSIS
The collected data was statistically analyze using various analysis techniques such as Hypothesis
Test, percentage analysis, ratio analysis, cross tabulation and ranking etc.
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 11/92
LIMITATIONS OF THE STUDY
• Due to the time and financial constraints, the research is limited to the six villages of Ludhiana Distt.
(Punjab) only.
• Some of the respondents were less co-operative. They did not show any interest in filling the
questionnaire. They had taken this work just as wastage of time.
• Some respondents did not know the English language very well, it also leads to inaccurate responses.
Personal biasness is also one of the major limitations of the study because some people who are
related to public companies they give more importance to public sector and those who are engaged in
private companies. They give more weight age to private companies without considering the
advantages and disadvantages of both companies
Findings
• Still near about 45% people of six village’s of Ludhiana Distt.(Punjab) give the more preference to
LIC to get insured.
• There is lot of potential in the Punjab for insurance companies mainly in the villages of Ludhiana
Distt.
• Near about the 33% people have no need of life insurance during the time of research. So, Most of
people still are not aware about the importance and necessity of the insurance in their life. They are
not aware how useful life insurance can be for their family members if something happens to them.
• Near about 40% People still consider insurance just as a tax saving device. So today also there is
always a rush to buy an insurance policy only at the end of financial year like in January, February
and March making the other 9 months dry for this business.
• In this study I have also found that now people have started to take interest in private insurance
companies. They have started to think beyond the issue of public and private companies because now
they want better returns and better services. Now which company gives them to these things they go
for that?
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 12/92
RECOMMENDATIONS AND SUGGESTIONS
• The private and public insurance companies should reposition their products in a better way by
adding few attributes to their products.
• Office in every major city/town and big villages will help companies as it will the confidence of
people and they invest in these companies without having the feel of risk.
• Mostly insurance buyers are service conscious, so service of these private insurance companies
should be the better..
• Insurance business depends a lot on the insurance agents/consultants/life advisors. So, companies
should select these candidates according to its best recruiting policy.
• Advertising through electronic media i.e T.V. must be helpful. Also wall advertisement may be very
fruitful.
• Printed media of advertisement is also proved very helpful where electronic media does not reach.
Like Banners, Posters etc. in every village, town must help to grab the attention of people.
• Gifts or incentives scheme should be there for life advisors/agents. Who show to job, so as to
motivate them to do the best in future.
• After every month, there should be meeting by the companies, as it helps to solve any problem faced
by them.
• Private and public insurance companies should offer sponsorship to various helpful events from time
to time. This would certainly enhance the brand image plus an impetus to the sale.
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 13/92
CHAPTER-1
INTRODUCTION TO THE
SUBJ ECT
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 14/92
1.1THEORETICAL FOUNDATON
INSURANCE
Man is a social animal. He contributes to society’s well being and gets livelihood protection from the
society in which he lives. Man has always sought protection from risks which in fact compelled him to live
in groups. He remained exposed to various kind of risks like death, accidents, loss of wealth, poverty etc.
1.1.1 Meaning of Insurance
Insuranceis the most important aspect a novice to insurance marketshould be conversant with. Insurance
is a hedging instrument used as a precautionary measure against future contingent losses. This instrument is
used for managing the possible risks of the future.
Insurances are bought in order to hedge the possible risks of the future which might/might not take place.
This is a mode of financially insuring that if such a incident happens then the loss does not affect the present
well-being of the person. Thus, through insurance, a person buys the future happiness and smooth living.
DEFINITION OF INSURANCE
Insurance can be defined in two ways;
1. Functional Definition
2. Legal Definition
FUNCTIONAL DEFINITION: According to MAC GILL, “insurance is a process in which
uncertainties are made certain”
J HON MEGI , “Insurance is a plan wherein persons collectively share the losses of the risks.”
Prof. R.S. SHARMA,” Insurance is a cooperative device to spread loss caused due to a particular risk
over a number of persons exposed to it, who agree to insurance themselves against the risk.
LEGEL DEFINITION: Like other forms of the business, the business of insurance is also based on
Law of Contract.
According to Chief justice Tindal, “Insurance is a contract in which sum of money is paid by the
insured in consideration of the insurer’s incurring the risk of paying a large sum upon a given
contingencies. Acc. To Britannica encyclopedia, “Insurance may be described as a social device
whereby a large group of individuals through a system of equitable contribution to reduce or eliminate
certain measurable risks of economic loss common to all members of the group.”
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 15/92
As such all contracts of insurance, except for life insurance contract are contract of indemnity. To
conclude insurance is a contract in which a person whose risk is shifted is called ‘INSURED’ and the
party to whom it is shifted is called ‘INSURER’. Price consideration which is paid by insured to insurer
is called ‘PREMIUM’.
INSURANCE CONTRACT in which terms and conditions of insurance are mentioned is called
‘INSURANCE POLICY’.
1.1.2 Need for Insurance
Insurance is desired to safeguard oneself and one's family against possible losses on account of risks and
perils. It provides financial compensation for the losses suffered due to the happening of any unforeseen
events.
By taking life insurance a person can have peace of mind and need not worry about the financial
consequences in case of any untimely death.
Certain Insurance contracts are also made compulsory by legislation. For example, Motor Vehicles Act
1988, stipulates that a person driving a vehicle in a public place should hold a valid insurance policy
covering “Act" risks. Another example of compulsory insurance pertains to the Environmental Protection
Act, wherein a person using or carrying hazardous substances (as defined in the Act) must hold a valid
public liability (Act) policy.
1.1.3 Basically there are two types of insurance
1. Life Insurance
2. General Insurance
Insurance - L ife
Your family counts on you every day for financial support: food, shelter, transportation, education, and
much more. Insurance provides you with that unique sense of security that no other form of investment
provides. It gives you a sense of financial support especially during that time of crisis irrespective of the
fluctuations in the stock market. Insurance provides for your career goals right from your childhood years.
Life insurance is all about making sure your family has adequate financial resources to make those plans and
dreams come true. It provides financial protection to help your family or business to manage after your
death.
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 16/92
Few of the Life insurance policies are:
Whole life policies - Cover the insured for life. The insured does not receive money while he is alive; the
nominee receives the sum assured plus bonus upon death of the insured..
Endowment policies - Cover the insured for a specific period. The insured receives money on survival of
the term and is not covered thereafter.
Money back policies- The nominee receives money immediately on death of the insured. On survival the
insured receives money at regular intervals during the term. These policies cost more than endowment with
profit policies.
Annuities / Children's policies - The nominee receives a guaranteed amount of money at a pre-determined
time and not immediately on death of the insured. On survival the insured receives money at the same pre-
determined time. These policies are best suited for planning children's future education and marriage costs.
Pension schemes - are policies that provide benefits to the insured only upon retirement. If the insured dies
during the term of the policy, his nominee would receive the benefits either as a lump sum or as a pension
every month.
Since a single policy cannot meet all the insurance objectives, one should have a portfolio of policies
covering all the needs.
Insurance - General
Every asset has a value and the business of general insurance is related to the protection of economic value
of assets. Assets would have been created through the efforts of owner, which can be in the form of building,
vehicles, machinery and other tangible properties. Since tangible property has a physical shape and
consistency, it is subject to many risks ranging from fire, allied perils to theft and robbery.
Concepts of insurance have been extended beyond the coverage of tangible asset. Now the risk of losses due
to sudden changes in currency exchange rates, political disturbance, negligence and liability for the damages
can also be covered.
But if a person judiciously invests in insurance for his property prior to any unexpected contingency then he
will be suitably compensated for his loss as soon as the extent of damage is ascertained.
Few of the General Insurance policies are:
Property Insurance: The home is most valued possession. The policy is designed to cover the various risks
under a single policy. It provides protection for property and interest of the insured and family.
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 17/92
Health I nsurance: It provides cover, which takes care of medical expenses following hospitalization from
sudden illness or accident.
Personal Accident Insurance: This insurance policy provides compensation for loss of life or injury
(partial or permanent) caused by an accident. This includes reimbursement of cost of treatment and the use
of hospital facilities for the treatment.
Travel Insurance: The policy covers the insured against various eventualities while traveling abroad. It
covers the insured against personal accident, medical expenses and repatriation, loss of checked baggage,
passport etc.
Liability Insurance: This policy indemnifies the Directors or Officers or other professionals against loss
arising from claims made against them by reason of any wrongful Act in their Official capacity.
Motor Insurance: Motor Vehicles Act states that every motor vehicle plying on the road has to be insured,
with at least Liability only policy. There are two types of policy one covering the act of liability, while other
covers insurers all liability and damage caused to one's vehicles.
Since a single policy cannot meet all the insurance objectives, one should have a portfolio of policies
covering all the needs.
1.1.4 Need for Life Insurance
Today, there is no shortage of investment options for a person to choose from. Modern day investments
include gold, property, fixed income instruments, mutual funds and of course, life insurance. Given the
plethora of choices, it becomes imperative to make the right choice when investing your hard-earned money.
Life insurance is a unique investment that helps you to meet your dual needs - saving for life’s important
goals, and protecting your assets.
Let us look at these unique benefits of life insurance in detail.
The core benefit of life insurance is that the financial interests of one’s family remain protected from
circumstances such as loss of income due to critical illness or death of the policyholder. Simultaneously,
Asset Protection
From an investor’s point of view, an investment can play two roles - asset appreciation or asset protection.
While most financial instruments have the underlying benefit of asset appreciation, life insurance is unique
in that it gives the customer the reassurance of asset protection, along with a strong element of asset
appreciation.
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 18/92
insurance products also have a strong inbuilt wealth creation proposition. The customer therefore benefits on
two counts and life insurance occupies a unique space in the landscape of investment options available to a
customer.
Goal based savings
Each of us has some goals in life for which we need to save. For a young, newly married couple, it could be
buying a house. Once, they decide to start a family, the goal changes to planning for the education or
marriage of their children. As one grows older, planning for one’s retirement will begin to take
precedence.Clearly, as your life stage and therefore your financial goals change, the instrument in which you
invest should offer corresponding benefits pertinent to the new life stage.
Life insurance is the only investment option that offers specific products tailor-made for different life stages.
It thus ensures that the benefits offered to the customer reflect the needs of the customer at that particular life
stage, and hence ensures that the financial goals of that life stage are met. The table below gives a general guide to the plans that are appropriate for different life stages
Table 1 source RIDA
Life Stage Primary Need Life Insurance Product
Young & Single Asset creation Wealth creation plans
Young & Just married Asset creation & protection Wealth creation and
mortgage protection plans
Married with kids Children’s education, Asset
creation and protection
Education insurance,
mortgage protection &
wealth creation plans
Married with kids Planning for retirement &
asset protection
Retirement solutions &
mortgage protection
Across all life-stages Health plans Health Insurance
1.1.5 Meaning of Consumer perception
Consumer behavior is the study of how people buy, what they buy, when they buy and why they buy. It
blends elements from psychology, sociology, sociopsychology, anthropology and economics. It attempts to
understand the buyer decision processes|buyer decision making process. It studies characteristics of
individual consumers such as demographics, psychographics, and behavioural variables in an attempt to
understand people’s wants. It also tries to assess influences on the consumer from groups such as family,
friends, reference groups, and society in general.
Belch and Belch define consumer behavior as ‘the process and activities people engage in when searching
for, selecting, purchasing, using, evaluating, and disposing of products and services so as to satisfy their
needs and desires’.
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 19/92
1.3 NEED AND SCOPE OF THE STUDY
Consumer perception and Insurance Companies
The subject consumer behavior regarding insurance companies is a very wider. In this study touches some
important aspects of the consumer behavior regarding insurance sector like why people make demand of
insurance, preference between public insurance companies and private insurance companies, factors that
people keep in mind during the time of taking any policy, prefer regarding mode of premium payment etc.
1.2OBJ ECTIVES OF STUDY
To study the awareness level of people about insurance companies in rural areas.
To identify the factors people consider at the time of buying any insurance policy.
To find out the customer preference between public and private Insurance companies in rural areas.
SCOPE OF THE STUDY
The study was mainly limited to the six villages of The Ludhiana Distt.(Punjab). The study also covers the
analysis of different products offered by the Insurance Companies and market position of different players
of public and private Insurance companies (i.e. market share of different players).
NEED OF THE STUDY
To study the awareness among rural people about the insurance.
This study is helped insurance companies to know about the perception of rural people about the insurance.
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 20/92
1.4RESEARCH METHODOLOGY
Meaning of research
Research is the search for knowledge. It’s an art of science investigation discover the hidden trust. It’s
the movement from the known to the unknown to discover real fact. Systematized efforts to gain new
knowledge.
Research Design
The study was conducted as an exploratory sampling survey method to collect primary and
secondary data.
Population of the study
Those entire people whose age was more than 18 years and living in rural areas (Ludhiana Distt.).
Sample Size
90 people.
Sampling Frame (area)
People whose age was more than 18 will be asked to fill questionnaire, in order to know responses
and priorities. Research was done around six villages of Ludhiana distt. (Punjab) The geographical
distribution of sample is given below.
Table-2
Sr No. Villages of
Ludhiana Distt.
No. of People
1 Chhourian 20
2 Hedon Bet 20
3 Katala 10
4 Sherpur 20
5 Raipur 10
6 Gari Bet 10
Total 90
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 21/92
SOURCE OF DATA
Primary Source of Data
Primary data are those collected by the investigator himself for the first time and thus they are
original in character, they are collected for a particular purpose. A well-structured questionnaire was
personally administrated to the selected sample to collect the primary data.
Secondary Source of Data
Secondary data are those, which have already been collected by some other persons for their purpose
and published. Secondary data are usually in the shape of finished products.
External Data was generated from magazines, research books and internet (websites).
Sampling Technique
Simple random sampling technique was used in sampling but keeping in view to those whose age
is more than 18 and living in rural areas of Ludhiana Distt.
(a) METHOD 0F DATA COLLECTION
Questionnaires were asked to fill in order to collect the data from the respondents. The method was
chosen mainly because of the speed, accuracy and other benefits added to this particular method.
(b) TOOLS OF DATA COLLECTION
A structure questionnaire was used as an aid to collect data. The questionnaire was include close
ended, multiple choice and ranking questions, which was very well bring out the responses from the
respondents.
(c) DATA ANALYSIS
The collected data was statistically analyze using various analysis techniques such as
Hypothesis Test, percentage analysis, ratio analysis, cross tabulation and ranking etc.
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 22/92
LIMITATIONS OF THE STUDY
Due to the time and financial constraints, the research is limited to the few villages of Ludhiana Distt.
(Punjab) only.
Some of the respondents were less co-operative. They did not show any interest in filling the
questionnaire. They had taken this work just as wastage of time.
• Some respondents did not know the English language very well, it also leads to inaccurate responses.
Personal biasness is also one of the major limitations of the study because some people who are
related to public companies they give more importance to public sector and those who are engaged in
private companies. They give more weight age to private companies without considering the
advantages and disadvantages of both companies
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 23/92
CHAPTER-2
INTRODUCTION
TO
THE INSURANCE
INDUSTRY
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 24/92
2.1 Overview of Insurance Industry
With a large population and untapped market, insurance happens to be a big opportunity in India. The
insurance business (measured in the context of first year premium) grew at 47.93 per cent in 2005-06,
surpassing the growth rate of 32.49 percent achieved in 2004-05. However, insurance penetration in the
country continues to be low. Insurance penetration or premium volume as a share of a country’s GDP, for
the year 2005 stood at 2.53 per cent for life insurance and 0.62 per cent for non-life insurance. The level of
penetration tends to rise as income increases, particularly in life insurance. India, with its huge middle class
households, has exhibited potential for the insurance industry. Saturation of markets in many developed
economies has made the Indian market even more attractive for global insurance majors. The insurance
market has witnessed dynamic changes which includes presence of a fair number of insurers in both life and
non-life segment.
2.1.1 Life Insurance in IndiaLife insurance industry recorded a premium income of Rs.105875.76 crore during 2005-06 as against
Rs.82854.80 crore in the previous financial year, recording a growth of 27.78 per cent. The contribution of
first year premium, single premium and renewal premium to the total premium was Rs.21275.75 crore
(20.09 per cent); Rs.17509.78 crore (16.54 per cent); and Rs.67090.21 crore (63.37 per cent), respectively.
In the year 2000-01, when the industry was opened up to the private players, the life insurance premium was
Rs.34,898.48 crore which constituted of Rs.6996.95 crore of first year premium, Rs.25191.07 crore of
renewal premium and Rs.2740.45 crore of single premium. Post opening up, single premium had declined
from Rs.9, 194.07 crore in the year 2001-02 to Rs.5674.14 crore in 2002-03 with the withdrawal of the
guaranteed return policies. Though it went up marginally in 2003-04 to Rs.5936.50 crore (4.62 per cent
growth) the year 2004-05 witnessed a significant shift with the single premium
Income rising to Rs.10336.30 crore showing 74.11 per cent growth over 2003-04, accounting for 12.74 per
cent of the total premium underwritten in that year.
As against 34.62 percent in 2005-06.While the number of single premium individual policies underwritten
by the private insurance companies grew by 103 percent, the non-single premium individual policies grew
by 64 percent. The new insurers have improved their market share from 9.33 per cent in 2005-06 to 14.25
percent in 2006-07.
It reflects increase in their persistency ratio and enables insurers to bring down overall cost of doing
business. The renewal premium underwritten by the life insurance industry, during 2006-07 recorded a
growth of 18.46 per cent as against 20.85 per cent in 2005-06.
The private insurers and LIC reported growths of 122.56 per cent and 14.32 per cent respectively during the
year. Segregation of the first year premium reflects a definite consolidation towards linked products with
premium underwritten at Rs.16060.67 crore in 2006-07 as against Rs.8247.74 crore in 2005-06, i.e., a
growth of 95 per cent. The non-linked premium was Rs.19804.33 crore as against Rs.17069.37 crore in
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 25/92
2004-05, i.e., a growth of 16 per cent. The linked and non-linked business accounted for 44.78 and 55.22 per
cent as against 32.54 and 67.46 per cent respectively in the year 2005-06.
2.1.2 History of the Insurance Industry
The business of life insurance in India in its existing form started in India in the year 1818 with the
establishment of the Oriental Life Insurance Company in Calcutta.
Insurance sector reforms:
In 1993, Malhotra Committee headed by former Finance Secretary and RBI Governor R.N. Malhotra was
formed to evaluate the Indian insurance industry and recommend its future direction.
The Malhotra committee was set up with the objective of complementing the reforms initiated in the
financial sector. The reforms were aimed at “creating a more efficient and competitive financial system
suitable for the requirements of the economy keeping in mind the structural changes currently underway and
recognizing that insurance is an important part of the overall financial system where it was necessary to
address the need for similar reforms…”
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 26/92
In 1994, the committee submitted the report and some of the key recommendations included:
1) Structure
Government stake in the insurance Companies to be brought down to 50%.
Government should take over the holdings of GIC and its subsidiaries so that these subsidiaries can act
as independent corporations.
All the insurance companies should be given greater freedom to operate.
2) Competition
Private Companies with a minimum paid up capital of Rs.1bn should be allowed to enter the industry.
No Company should deal in both Life and General Insurance through a single entity.
Foreign companies may be allowed to enter the industry in collaboration with the domestic companies.
Postal Life Insurance should be allowed to operate in the rural market.
Only One State Level Life Insurance Company should be allowed to operate in each state.
3) Regulatory Body
The Insurance Act should be changed.
An Insurance Regulatory body should be set up.
Controller of Insurance (Currently a part from the Finance Ministry) should be made independent.
4) Investments
Mandatory Investments of LIC Life Fund in government securities to be reduced from 75% to 50%.
GIC and its subsidiaries are not to hold more than 5% in any company (There current holdings to be
brought down to this level over a period of time).
5) Customer Service
LIC should pay interest on delays in payments beyond 30 days.
Insurance companies must be encouraged to set up unit linked pension plans.
Computerization of operations and updating of technology to be carried out in the insurance industry The
committee emphasized that in order to improve the customer services and increase the coverage of
the insurance industry should be opened up to competition.
But at the same time, the committee felt the need to exercise caution as any failure on the part of new players
could ruin the public confidence in the industry. Hence, it was decided to allow competition in a limited way
by stipulating the minimum capital requirement of Rs.100 crores. The committee felt the need to provide
greater autonomy to insurance companies in order to improve their performance and enable them to act as
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 27/92
independent companies with economic motives. For this purpose, it had proposed setting up an independent
regulatory body.
2.1.3 MAJ OR POLICY CHANGES
Insurance sector has been opened up for competition from Indian private insurance companies with the
enactment of Insurance Regulatory and Development Authority Act, 1999 (IRDA Act). As per theprovisions of IRDA Act, 1999, Insurance Regulatory and Development Authority (IRDA) was established
on 19th April 2000 to protect the interests of holder of insurance policy and to regulate, promote and ensure
orderly growth of the insurance industry. IRDA Act 1999 paved the way for the entry of private players into
the insurance market which was hitherto the exclusive privilege of public sector insurance companies/
corporations. Under the new dispensation Indian insurance companies in private sector were permitted to
operate in India with the following conditions:
Company is formed and registered under the Companies Act, 1956;
The aggregate holdings of equity shares by a foreign company, either by itself or through its subsidiary
companies or its nominees, do not exceed 26%, paid up equity capital of such Indian insurance
company;
The company’s sole purpose is to carry on life insurance business or general insurance business or
reinsurance business.
The minimum paid up equity capital for life or general insurance business is Rs.100 crores.
The minimum paid up equity capital for carrying on reinsurance business has been prescribed as Rs.200
crores.
The Authority has notified 27 Regulations on various issues which include Registration of Insurers,
Regulation on insurance agents, Solvency Margin, Re-insurance, Obligation of Insurers to Rural and Social
sector, Investment and Accounting Procedure, Protection of policy holders’ interest etc. Applications were
invited by the Authority with effect from 15th
IRDA has so far granted registration to 12 private life insurance companies and 9 general insurance
companies. If the existing public sector insurance companies are included, there are currently 13 insurance
companies in the life side and 13 companies operating in general insurance business. General Insurance
Corporation has been approved as the “Indian reinsurer” for underwriting only reinsurance business.
Particulars of the life insurance companies and general insurance companies including their web address is
given below
August, 2000 for issue of the Certificate of Registration to
both life and non-life insurers. The Authority has its Head Quarter at Hyderabad.
2.1.4 Insurance companies
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 28/92
LIFE INSURERS Websites
Public Sector
Life Insurance Corporation of India www.licindia.com
Private Sector
Allianz Bajaj Life Insurance Company Limited www.allianzbajaj.co.in
Birla Sun-Life Insurance Company Limited www.birlasunlife.com
HDFC Standard Life Insurance Co. Limited www.hdfcinsurance.com
ICICI Prudential Life Insurance Co. Limited www.iciciprulife.com
ING Vysya Life Insurance Company Limited www.ingvysayalife.com
Max New York Life Insurance Co. Limited www.maxnewyorklife.com
MetLife Insurance Company Limited www.metlife.com
Kotak Mahindra Life Insurance Co. Ltd. www.kotakmahnidra.com
SBI Life Insurance Company Limited www.sbilife.co.in
TATA AIG Life Insurance Company Limited www.tata-aig.com
AMP Sanmar Assurance Company Limited www.ampsanmar.com
Dabur CGU Life Insurance Co. Pvt. Limited www.avivaindia.com
GENERAL INSURERS
Public Sector
National Insurance Company Limited www.nationalinsuranceindia.co
New India Assurance Company Limited www.niacl.com
Oriental Insurance Company Limited www.orientalinsurance.nic.in
United India Insurance Company Limited www.uiic.co.in
Private Sector
Bajaj Allianz General Insurance Co. Limited www.bajajallianz.co.in
ICICI Lombard General Insurance Co. Ltd. www.icicilombard.com
IFFCO-Tokio General Insurance Co. Ltd. www.itgi.co.inReliance General Insurance Co. Limited www.ril.com
Royal Sundaram Alliance Insurance Co. Ltd. www.royalsun.com
TATA AIG General Insurance Co. Limited www.tata-aig.com
Cholamandalam General Insurance Co. Ltd. www.cholainsurance.com
Export Credit Guarantee Corporation www.ecgcindia.com
HDFC Chubb General Insurance Co. Ltd.
REINSURER
General Insurance Corporation of India www.gicindia.com
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 29/92
2.1.5 Growth of Insurance Industry in India
A thriving insurance sector is of vital importance to every modern economy. First because it encourages the
savings habit, second because it provides a safety net to rural and urban enterprises and productive
individuals. And perhaps most importantly it generates long-term investible funds for infrastructure building.
The nature of the insurance business is such that the cash inflow of insurance companies is constant while
the payout is deferred and contingency related.
This characteristic of their business makes insurance companies the biggest investors in long-gestation
infrastructure development projects in all developed and aspiring nations. This is the most compelling reason
why private sector (and foreign) companies which will spread the insurance habit in the societal and
consumer interest are urgently required in this vital sector of the economy.
With the nation’s infrastructure in a state of imminent collapse, India couldn’t have afforded to be lumbered
with sub-optimally performing monopoly insurance companies and therefore the passage of the Insurance
Regulatory & Development Authority Bill on December 2, 1999 heralds an era of cautious optimism where
stakes are high for all parties concerned. For the Govt. of India, Foreign Direct Investment (FDI) must pour
in as anticipated; for foreign insurers, investments must start yielding returns and for the domestic insurance
industry - their market penetration should remain intact. On the fringe, the customer is pondering whether all
the hype created on liberalization will actually benefit him.
Recent economic liberalization started few years ago have started bringing in new investments from global
giants and the government was hard pressed to facilitate global integration by lowering trade barriers for the
free flow of technology, intellectual and financial capital. Additionally, reforms are essential if the Indian
economy is to achieve and sustain a growth rate of 7 to 8 per cent per annum. Reaching a faster growth path
also implies attracting foreign direct investment inflows of $ 10 Billion every year, up from the current level
of $ 3 to $ 3.5 Billion. Thus liberalization of insurance creates an environment for the generation of longterm contractual funds for infrastructural investments.
Multinationals’ interest
Multinational insurers are indeed keenly interested in emerging insurance because their home markets are
saturated while emerging countries have low insurance penetrations and high growth rates. International
insurers often derive a significant part of their business from multinational operations. As early as 1994,
many of the UK’s largest life and general insurers derived 40 per cent to 60 per cent of their total premiumfrom outside their home markets. The figure at Commercial Union was 76 per cent in that year.
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 30/92
While the impact of global operations on their business may be large, typically foreign insurers take only a
small share of an individual country’s market. In Taiwan for example, foreign companies took only a 3 per
cent share even seven years after opening up. In Korea, their share was 1 per cent after 20 years. In China, a
large and complex market like India, private insurers have not made much headway.
Yet, new entrants find insurance attractive because even a small share of a large and growing market can be
profitable. The Korean insurance market for example, was only the 30th largest market in the world by
premium volume in 1971. It moved up to 6th
According to the Sigma report on global insurance brought out by the world’s second largest reinsurer SwissRe - the international market is completely saturated. In the developed world, the growth in life insurance
premium has been a meager 1.5%. As compared to this, LIC despite all its handicaps has been growing at a
healthy clip of around 20%.
largest in 1996. In any case, in India multinational insurers will
be restricted to a minority shareholding in new companies. The new entrants will therefore be private Indian
companies.
The other reason why these large MNCs are interested in India is the economies of the insurance market.
Insurance companies survive on the principle of spreading of risk. No matter what the size of each player, an
insurer cannot afford to operate in a niche market. Operating in a particular region would expose them to theeconomic downtrends in the region and derail their profits.
Insurance companies, being long-term players, also have to avoid sudden dips in earnings to inspire
confidence among investors to invest long-term funds. This can be achieved by spreading their operations
over a wide geographical area. Moreover, for them, big is not just beautiful, but essential for survival. Which
brings us to the avenues for growth.
Nationalized Sector: A Performance Review
In 1995-96, LIC had a total income from premium and investments of $ 5 Billion while GIC recorded a net
premium of $ 1.3 Billion. During the last 15 years, LIC’s income grew at a healthy average of 10 per cent asagainst the industry’s 6.7 per cent growth in the rest of Asia (3.4 per cent in Europe, 1.4 per cent in the US).
LIC has even provided insurance cover to five million people living below the poverty line, with 50 per cent
subsidy in the premium rates. LIC’s claims settlement ratio at 95 per cent and GIC’s at 74 per cent are higher
than that of global average of 40 per cent. Compounded annual growth rate for Life insurance business has
been 19.22 per cent per annum and for General insurance business it has been 17 per cent per annum.
However, there is other side of the coin too. Their large scale of operations, public sector bureaucracies and
cumbersome procedures hampers nationalized insurers. The field staff and the agents of the GIC and its four
wholly owned subsidiary companies have seldom bothered to venture out into the rural hinterland to sell
crop or any other personal line insurance. Given the woeful lack of penetration of the rural market by the
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 31/92
GIC subsidiaries, it is hardly surprising that a growing number of farmers across the country are resorting to
the extreme remedy of suicide when their usually uninsured crops fail
The highest paid employees of the public sector, the estimated half-a-million employees of the nationalized
insurance companies, are characterized by abysmal productivity, utter ignorance of the basic principles of
the insurance business, endemic corruption, gross indiscipline and sheer laziness.
Dominating the inevitably weak management of the nationalized insurance companies, the militant and
strongly unionized employees of the nationalized monopoly insurance companies have transformed Indian
insurance from volume-driven into class-based business.
The domestic insurance companies, despite meeting their social objectives of going into the deepest interiors
of the country, have lagged behind in meeting customer expectations in products and services.
Privatization: Start Up Strategy
Potential private entrants therefore expect to score in the areas of customer service, speed and flexibility.
They point out that their entry will mean better products and choice for the consumer. Critics counter that the
benefit will be slim, because new players will concentrate on affluent, urban customers as foreign banks did
until recently.
This might seem a logical strategy from the point of view of new players. Start-up costs-such as those of
setting up a conventional distribution network-are large and high-end niches offer better returns. However,
in the long run ‘middle-market’ offers the greatest potential as in terms of it is the second largest market in
the world. This may still be an urban market but goes beyond the affluent segment.
Insurance, even more than banking, is a volume game. A very exclusive approach is unlikely to provide
meaningful numbers. Therefore, private insurers would be best served by a middle-market approach,
targeting customer segments that are currently untapped.
Regulatory Issues
The IRDA Bill lays down that the Indian promoter must dilute the stake in the private insurance firms from
74 per cent to 26 per cent in ten years. The bill stipulates tough solvency margins—Rs 500 million for life
insurance firms, Rs 500 million or a sum equivalent to 20 per cent of net premium income for general
insurance and Rs 1 billion for reinsurance business.
The insurer has to maintain separate accounts relating to fund of shareholders and policyholders. The funds
of policyholders should be retained within the country but does not cover repatriation of profits and
dividends. Insurance companies under the new regime will have to have exposure to rural and social sectors.
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 32/92
Foreign investment in insurance, the bill states, is crucial to financing infrastructure and better insurance
cover.
The key to success in opening up the insurance sector in India is regulation. An example of how poor
regulation can destroy a market is the mutual fund industry. A combination of improper marketing practice
and unfullfilable promises has resulted in a loss of investor faith in that industry. Incidentally, the insurance
industry in India itself has gone through the same phase.
One of the reasons for nationalization of the insurance industry (LIC in 1956 and GIC in 1973) was the
mismanagement and malpractice of erstwhile private players. But if the statements of IRA officials are
anything to go by, the new regulations are expected to be on the right track. N I Rangachary, chairman, IRA,
has already provided the time table for the changes once the Bill is passed. The IRA has already indicated
that it will have tough norms for new participants.
Repositioning by Nationalized Sector
Floodgates of competition opened up by the privatization of insurance industry did throw a challenge to the
well-protected nationalized sector and it seems they have picked up the gauntlet. LIC and GIC, both are
trying to reposition themselves by having re-engineering done on the structure and operations of their
respective organizations.
Life Insurance Corporation is at present going through presentations from top management consultants.
These consultants have been asked to narrate their experiences in countries where the insurance sector has
been opened up for private competition so that the public sector player can draw lessons. Based on these,
LIC will appoint a consultant which can provide them broad terms of reference on what changes are required
to tackle the impending competition.
GIC has already identified the areas that need to be activated and given a shape through the four subsidiary
companies. Foremost is the area of providing health insurance services. A change in the GIC Act will enable
the corporation to float a joint venture company for health insurance. Other areas that the GIC is looking at
are savings-linked insurance products and use of alternate distribution channels including banc assurance.
Also in progress is the co-ordination of all foreign operations of the group.
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 33/92
Even state-owned entities, SBI and UTI have serious plans for insurance sector as the banks have
unsurpassed advantages over any other player. The intermediaries are also getting more organized with a
little nudging from the IRA. The Reinsurance Consultants Association is planning to convert itself into the
Insurance Brokers Association of India in anticipation of the laws being amended to allow insurance
broking.
Cross Border Experience
A cross-country experience show that nowhere in the world has the entry of foreign firms threatened the
position of domestic companies. Whether it is Malaysia, where the insurance sector has been open for more
than 50 years and foreign companies account for about 10 per cent of market penetration or it is Indonesia,
Thailand, China or the Philippines, where the market has been opened more recently, the total market share
of foreign companies is less than 10 per cent except in Indonesia where it is about 20 per cent. Closer home,
we have the experience of the banking sector where despite the presence of 42 foreign banks, their share in
total banking assets is less than 10 per cent.
Today hardly 20 per cent of the population in India is insured and insurance premium (life as well as non-
life) account for just 2 per cent of GDP as against the G-7 average of 9.2 per cent. Consequently, the fear
that new companies will displace public companies is misplaced. There is room for more for not only the
existing companies but also for any number of competitors.
In China, insurance premium accounted for just over 1 per cent of China’s GDP in 1995 but in the four yearssince the market has been liberalized (albeit partially), spending on insurance has grown at a compound
annual rate of 33 per cent. It is not just foreign companies alone that have grown but also the national PICC
as well. The story is no different in S Korea. There, the opening of the sector saw the Big Six domestic
players, who initially controlled the entire market, increase their business from 7 to 37 trillion won by 1997.
Meanwhile foreign companies were not able to capture more than a miniscule 0.7 per cent of the market.
Structure of insurance industry: Snapshot
Historical Perspective: Snapshot
(1) Prior to 1956, 242 companies operating
(2) 1956-2001 Nationalization – LIC Monopoly
Player – Government control
(3) 2001 –Opened up Sector
Market Share
Table -3
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 34/92
Sector 2001-02 2002-03 2003-04 2006-07 2007-08
Public(LIC) 98% 94% 87% 77% 74%
Private 2% 6% 13% 23% 26%
Source IRDA
Potential of life Insurance in India
Table -4 Total population 1.9 billion
Total population of
insurable class
253 million
Total population insured 88.5 million
Source: Financial Expert Delhi (2008)
Contribution to Indian Economy
(1) Life Insurance is only companies which garner long term savings.
(2) Spread of financial services in rural areas and among socially less privileged.
(3) Long term fund for the infrastructure.
(4) Strong positive correlation between development of capital market and insurance companies.
(5) Employment generation.
Aggregation of long term savings
(a) Total assets of life insurance companies
Table-5
2005-06 2006-07 2007-08
4,23,000 cr. 5,42,000 cr. 6,53,780 cr.
Source IRDA (2008)
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 35/92
(b) Total premium generated
Table-6
2005-06 2006-07 2007-08
94,000 cr. 1,12,000 cr. 1,33,000 cr.
Source IRDA (2008)
(c) The insurance industry is growing at 19% p.a.
Spread of financial services in rural areas and amongst socially underprivileged
(1) IRDA regulations provide certain minimum business to be done
(a) In rural areas
(b) In the socially weaker sector
(2) Life insurance offices are spread over nearly 1400 centers. (3) Presence of representatives in every tensile for deeper penetration in rural areas.
(4) Insurance agents numbering over 7.24 lakhs in rural areas.
2.1.6 Landmarks
.Some of the important milestones in the life insurance business in India are:
1870 Bombay mutual life insurance society is the first Indian owned life insurer
1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance
business.
1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical
information about both life and non-life insurance businesses.
1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of
protecting the interests of the insuring public.
1956: 245 Indian and foreign insurers and provident societies taken over by the central government and
nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of
Rs. 5 crore from the Government of India.
• The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance
Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the
British.
Some of the important milestones in the general insurance business in India are:
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 36/92
1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of general
insurance business.
1957: General Insurance Council, a wing of the Insurance Association of India, frames a code of conduct
for ensuring fair conduct and sound business practices.
1968: The Insurance Act amended to regulate investments and set minimum solvency margins and the
Tariff Advisory Committee set up.
1972: The General Insurance Business (Nationalization) Act, 1972 nationalized the general insurance
business in India with effect from 1st
2.1.7 MAJ OR PLAYES
January 1973.
107 insurers amalgamated and grouped into four companies viz. the National Insurance Company Ltd.,
the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India
Insurance Company Ltd. GIC incorporated as a company.
Public Player: L IC
Life Insurance Corporation of India (LIC),facing a major challenge from 15 new players including
international majors, has clawed its way back slightly, raising its share from 71 per cent to 77.51 per cent
during the first four months of the current fiscal.
T S Vijayan, recently appointed chairman of LIC, told a news conference that the government-controlled
company has seen premium income rise by 182.26 per cent, as against an industry average of 177.44 per
cent. New premium income has soared by 191 per cent.
“The life insurance industry in India has grown largely because of LIC’s growth in the current fiscal,” said a
confident Vijayan. For financial year 2006-07, LIC expects premium income to rise to Rs24,000 crore, about
40 per cent higher than in the previous year. The corporation, which turns 50, will be launching a new
product, Bima Gold-2, to mark the occasion on September 4. This follows the success of the first version of
Bima Gold.
According to Vijayan, LIC has set a world record by settling 11.8 million claims worth Rs28,512 crore in
2005-06. Every day, the corporation settles nearly 45,000 claims, and 97 per cent of the claims are settled on
or before the due date. And in the case of death claims, 93 per cent are paid within 20 days of intimation of
death, he added.
LIC is also toying with the idea of entering the credit card business, following a report by KPMG, which
suggested it could be a viable business. “We are currently looking for partners,” said Vijayan.
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 37/92
The corporation has invested nearly Rs300,000 crore in central and state government bonds, about Rs60,000
crore in the infrastructure sector, and just around Rs3,000 crore in the equity markets. A bulk of its bond
investments (about Rs240,000 crore) was in central government bonds, representing over 50 per cent of its
total assets.
According to the Insurance Regulatory and Development Authority (“IRDA”), new business premium
income from April 2006 to February 2007 amounted to INR579.38 billion (US$13.18 billion), registering an
impressive 120% growth over the same period last year. The Life Insurance Corporation (“LIC”) represented
75.2% of the market share in new business.
Private Players: A large number of players are working in Indian insurance sector very successfully. Name
of some major players of this sector are as below:
ICICI Prudential
Bajaj Allianz
SBI Life
HDFC Standard Life
HDFC Standard Life
Birla Sunlife
Max New York Life
Reliance Life
Aviva
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 38/92
2.1.8 MARKET SHARE (in %)
Table-7
Companies Market Share (in %)
2005-2006 2006-2007
LIC 71 73
ICICI Prudential 7 7
Bajaj Allianz 8 6
SBI Life 2 3
HDFC Standard Life 3 2
Birla Sunlife 2 1
Max New York Life 1 1
Reliance Life 1 1
Aviva 1 1
Kotak Life Insurance 1 2
Tata AIG 1 1
Others 1 2
Source: Irda
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 39/92
Fig 1 show the market share of insurance companies
2.1.9 PRODUCT RANGE OF THE INSURANCE INDUSTRY
Product means offering capable of satisfying a need or a want, which is offered to a target market for
attention, acquisition, use, or consumption. A product can be an object, service, activity, person, place,
organization, or idea.
Life Insurance Products
Life insurance products are usually referred to as ‘plans’ of insurance or insurance policies. These plans have
two basic elements. One of the ‘Death cover’ providing for the being paid on the death of the insured person
within specified period. The other is the ‘survival Benefit’ providing for the benefit being paid on survival of
a specified period.
Product mix of L ife insurance companies:
Table-8
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 40/92
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 41/92
policyholder has the option to pay premium up to a certain age (referred to as the ‘maturity age’ which is
generally 80-100 years) or for a specified period. On reaching maturity age, the insurer gives you the option
to either continue with the cover through the lifetime (for which no further premiums will have to be paid) or
encase the maturity benefits (sum assured plus bonuses). Some insurers do give the option to encase the
bonus during the term per it self, which can serve as a useful income stream during your later years, if you so
desire.
5. Unit-linked insurance plans
In insurance-cum investment plans of the kind listed above, you have little say in where your money is
invested. Your insurer too is governed by certain investment restrictions: it can invest just 10 per cent of the
premium paid by you in equities; the greater chunk of 90 percent has to be invested in debt paper. While
such restrictions are intended to insure safety of your investment, they also lead to rigidity in investment are
rein in your returns to low single digits. Unit-linked insurance plans get around such restrictions, by giving
you greater control over where your premium is invested.
Think of them as insurance plans that double as mutual funds. The annual premium you pay on unit-linked
plans is linked to the sum assured and the policy tenure. You can switch from one plan to another free of
cost once a year (a nominal amount is charged for additional switches). So, if you think stocks are going
cheap, you can move to the growth plan; or, if you think stocks are overvalued, you can move your money to
the income plan. You can switch from one plan to another free of cost once a year (a nominal amount is
charged for additional switches). So, if you think stocks are going cheap, you can move to the growth plan;
or, if you think stocks are overvalued, you can move your money to the income plan.
1. Flexibility
Unit L inked Insurance Product
ULIPs have gained high acceptance due to attractive features they offer. These include:
1. Flexibility to choose Sum Assured.
2. Flexibility to choose premium amount.
3. Option to change level of Premium /Sum Assured even after the plan has started.
4. Flexibility to change asset allocation by switching between funds.
2. Transparency
1. Charges in the plan & net amount invested are known to the customer.
2. Convenience of tracking one’s investment performance on a daily basis.
3. Liquidity
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 42/92
1. Option to withdraw money after few years (comfort required in case of exigency).
2. Low minimum tenure.
3. Partial / Systematic withdrawal allowed
4. Fund Options
1. A choice of funds (ranging from equity, debt, cash or a combination).
2. Option to choose your fund mix based on desired asset allocation.
1. Steady Investment
6. Traditional Plans
These are the oldest types of plans available. These plans cater to customers with a low risk appetite. Some
of the common features of traditional plans are:
1. Major chunk of investible funds are in debt instruments.
2. Steady and almost assured returns over the long term.2. Features
1. Death benefit is Sum Assured +guaranteed & vested bonus.
2. Helps in asset creation as they are for a long tenure.
3. Premium to Sum Assured ratios are fixed for each plan and age.
General insurance products
Property Insurance : The home is most valued possession. The policy is designed to cover the various
risks under a single policy. It provides protection for property and interest of the insured and family.
Health Insurance : It provides cover, which takes care of medical expenses following hospitalization from
sudden illness or accident.
Personal Accident Insurance : This insurance policy provides compensation for loss of life or injury
(partial or permanent) caused by an accident. This includes reimbursement of cost of treatment and the use
of hospital facilities for the treatment.
Travel Insurance: The policy covers the insured against various eventualities while traveling abroad. It
covers the insured against personal accident, medical expenses and repatriation, loss of checked baggage,passport etc.
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 43/92
Liability Insurance: This policy indemnifies the Directors or Officers or other professionals against loss
arising from claims made against them by reason of any wrongful Act in their Official capacity.
Motor Insurance: Motor Vehicles Act states that every motor vehicle plying on the road has to be insured,
with at least Liability only policy. There are two types of policy one covering the act of liability, while other
covers insurers all liability and damage caused to one's vehicles.
Since a single policy cannot meet all the insurance objectives, one should have a portfolio of policies
covering all the needs.
2.1.10 Future Possibilities (Next 5-10 Years)
Job opportunities are likely to increase manifold. The number of people working in the insurance sector in
India is roughly the same as in the UK with a population that is 1/7 India’s; the US with a population ¼ the
size of India has nearly 4 times the number. In the emerging markets, the picture is no less encouraging. In S
Korea, the no of full time employees more than doubled over a ten year period. Thailand added 50 per cent
more jobs in four years.
The liberalization of the insurance sector promises several new jobs opportunities for those employed in the
finance sector who are equipped with degrees in finance. Finance professionals who had witnessed a slump
in the job market would be a much-relieved lot to hear about the privatization of the insurance sector.
Let us look into the type of jobs that will be created once the private players come on the scene. Certainly, it
won’t be far different from the traditional streams in any other industry. There will be demand for marketing
specialists, finance experts, human resource professionals, engineers from diverse streams like the
petrochemical and power sectors, systems professionals, statisticians and even medical professionals. Apart
from this, there will be high demand for professionals in the streams like Underwriting and claims
management and actuarial sciences.
There could be a huge inflow of funds into the country. Given the industry’s huge requirement of start-up
capital, the initial years after opening up are bound to see a strong inflow of foreign capital. Moreover, given
that the break-even, typically, comes much later than in the case of other sectors, odds are that the first
remittance of dividend will not happen before a good 10-15 years.
In the areas of reinsurance, huge capacity is likely to be created with players like Swiss Re and Munich Re
keenly observing the unfolding saga of liberalization of insurance industry in India. Not only the outwardreinsurance will reduce, it is bound to attract inward reinsurance from the neighboring countries and regions.
If the regulator is forward looking and legislature is supportive, this trend may well lead to the creation of a
Lloyds like market for the direct as well as reinsurance businesses.
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 44/92
However, increased competition is very likely to result in rate reductions in certain classes of business, but in
those areas that have so far been cross subsidized, an increase in rates may be possible. Overall, the rate
reductions may outweigh the increases, thus bringing down the re-insurance premium volume available.
Apart from pure re-insurance activities, which is providing insurance protection, a revolution will come in
service related fields like training, seminars, workshops, know-how transfer regarding risk assessment and
rating, risk inspections, risk management and devising new policy covers, etc. Also, with more players in the
market, there will be significant increase in advertising, brand building, and keen pricing not ridiculous
pricing and this will benefit whole lot of ancillary industries.
Another effect of de-regulation will be that, projects, especially mega-projects where one needs the
capacities of the international re-insurance market, will get exposed to international trends to an even greater
extent than is the case today. This will affect rates too. Areas like the personal lines segment, where we also
expect to see substantial growth as also new types of covers, would usually not be affected by internationaltrends in the same way as, there is much less need for global re-insurance support.
Substantial shift in the distribution of insurance in India is likely to take place. Many of these changes will
echo international trends. Worldwide, insurance products move along a continuum from pure service
products to pure commodity products. Initially, insurance is seen as a complex product with a high advice
and service component. Buyers prefer a face-to-face interaction and place a high premium on brand names
and reliability.
As products become simpler and awareness increases, they become off-the-shelf, commodity products.
Sellers move to remote channels such as the telephone or direct mail. Various intermediaries, not necessarily
insurance companies, sell insurance. In the UK for example, retailer Marks & Spencer now sells insurance
products. In some countries like Netherlands and Japan, insurance is marketed using post office’s
distribution channels. At this point, buyers look for low price. Brand loyalty could shift from the insurer to
the seller.
In other markets, notably Europe, this has resulted in bancassurance: banks entering the insurance business.
The Netherlands led with financial services firms providing an entire range of products including bank
accounts, motor, home and life insurance, and pensions. Other European markets have followed suit. In
France over half of all life insurance sales are made through banks. In the UK, almost 95% of banks and
building societies are distributing insurance products today.
In India too, banks hope to maximize expensive existing networks by selling a range of products. Various
seminars and conferences on bancassurance are taking place and many bankers have clearly shown theirinclination to enter insurance market by leveraging their strengths in the areas of brand image, distribution
network, face to face contact with the clients and telemarketing coupled with advanced information
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 45/92
technology systems. The mergers of Citibank with Travellers in USA and of Winterthur, the largest Swiss
Co. with Credit Suisse are recent examples of the phenomenon likely to sweep India too.
Insurers in India should also explore distribution through non-financial organizations. For example,
insurance for consumer items such as refrigerators can be offered at the point of sale. This piggybacks on an
existing distribution channel and increases the likelihood of insurance sales. Alliances with manufacturers or
retailers of consumer goods will be possible. With increasing competition, they are wooing customers with
various incentives, of which insurance can be one.
Another potential channel that reduces the need for an owned distribution network is worksite marketing.
Insurers will be able to market pensions, health insurance and even other general covers through employers
to their employees. These products may be purchased by the employer or simply marketed at the workplace
with the employer’s co-operation.
Worldwide interest in E-commerce and India’s predominant position in information technology and software
development is also likely to be a major factor in the marketing of insurance products in the immediate
future. The internet account is increasing in arithmetic progression and the trend has already been set by
some of the leading insurers and insurance brokers worldwide.
Finally, some potential Indian entrants into insurance hope to ride their existing distribution networks and
customer bases. For example, financial organizations like ICICI, HDFC or Kotak Mahindra intend to tap the
thousands of customers who already buy their deposits, consumer loans or housing finance. Other hopefulentrants anticipate specific alliances such as with hospitals to provide health cover.
Over the past three years, around 40 companies have expressed interest in entering the sector and many
foreign and Indian companies have arranged anticipatory alliances. The threat of new players taking over the
market has been overplayed. As is witnessed in other countries where liberalization took place in recent
years we can safely conclude that nationalized players will continue to hold strong market share positions,
but there will be enough business for new entrants to be profitable.
Opening up the sector will certainly mean new products, better packaging and improved customer service.
Both new and existing players will have to explore new distribution and marketing channels. Potential
buyers for most of this insurance lie in the middle class. New insurers must segment the market carefully to
arrive at appropriate products and pricing. Recognizing the potential, in the past three years, the nationalized
insurers have already begun to target niches like pensions, women or children.
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 46/92
CHAPTER-3
SURVEY
OF
LITERATURE
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 47/92
3.1 REVIEW OF LITERATURE
Heubner (1942) who postulated that human life value has certain qualitative aspects that gives rise to its
economic value. But his idea was normative in nature as it suggested ‘how much’ life insurance to be
purchased and not ‘what’ will be purchased. There were no guidelines regarding the kind of life policies to
be selected depending upon the consumers capacity and the amount of risk to be carried in the product. The
ongoing discussion also reveals that individuals’ current income and future anticipated consumption
expenditure plays a crucial role in determining the amount of insurance purchased (we are, for a while
ignoring the form in which insurance is purchased). The importance of rate of interest or the impatience
factor is also worth considering. Preferences over different consumption pattern vary from person to person
and there are ‘qualitative’ factors which affects such preferences.
Yaari (1965) studied the problem of uncertain lifetime and life insurance . Including the risk of dying in
life cycle model, he showed conceptually that an individual increases expected lifetime utility by purchasingfair annuities. Simple models of insurance demand were proposed by Pratt
Mossin et al. (1968) considering a risk averse decision maker with an initial wealth.. The results indicate
that demand for life insurance varies inversely with the wealth of the individuals.
Headen et al. (1974) studied the effects of short run financial market behavior and consumer expectations
on purchase of ordinar life insurance and developed structural determinants of life insurance demand. They
considered three different sets of variables: first, variables stimulating demand as a result of insurer efforts
(e.g. industry advertising expenditure, size of the sales force, new products and policies, etc.); second,
variables affecting household saving decision (e.g. disposable, permanent and transitory income, expenditure
expectation, number of births, marriages, etc.) and lastly, variables determining ability to pay and size of
potential markets (e.g. net savings by households, financial assets, and consumer expectation regarding
future economic condition). They concluded that life insurance demand is inelastic and positively affected
by change in consumer sentiments; interest rates playing a role in the short run as well as in the long run.
Björn Ekman (1989) Health policy makers are faced with competing alternatives, and for systemsof health
care financing. The choice of financing method should mobilize resources for health care and provide
financial protection. This review systematically assesses theevidence of the extent to which community-
based health insuranceis a viable option for low-income countries in mobilizing resources and providing
financial protection. The review contributes to the literature on health financing by extending and qualifying
exiting knowledge. Overall, the evidence base is limited in scope and questionable in quality. There is strong
evidence that community-based health insurance provides some financial
protection by reducing out-of-pocket spending. There is evidence of moderate strength that such schemes improve cost-recovery. There is
weak or no evidence that schemes have an effect on the quality of care or the efficiency with which care is
produced. In absolute terms, the effects are small and schemes serve only a limited section of the population.
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 48/92
The main policy implication of the is review that these types of community financing arrangements are, at
best, complementary to other more effective systems of health financing. To improve reliability and validity
of the evidence base, analysts should agree on a more coherent set of outcome indicators and a more
consistent assessment of these indicators. Policy makers need to be better informed as to both the costs and
the benefits of implementing various financing options. The current evidence base on community-based
health insurance is mute on this point.
CC Griffin
Cleeton, D. L . et al. (1993) expanded the discussion on life insurance demand by adding newer variables
namely, average life expectancy and enrollment ratio of third level education. The study based on 45
countries for two separate time periods (1980 and 1987) concluded that income and social security
(1989) adverse selection, moral hazard, and sometimes high administrative costs necessitate
government intervention in health care to achieve universal insurance coverage. Private health insurance
addresses the risk problem. Government should provide personal health services, including curative care, in
rural areas in developing countries. Movements to enhance private health providers should begin in urban
areas, thereby relieving governments of a considerable burden, since most of their health budgets now are
targeted to cities. In developing countries, the greatest potential for private sector involvement lies in
hospital care. Third party payment mechanisms would need to be developed to pay for such care, however.
They would also relieve the government of its regulatory burden and result in more efficient and equitable
health systems in developing countries. A reevaluation of government's role in areas where the governments
are most heavily involved is also needed. The private sector should supply government health facilities,
which should almost exclusively be in rural areas, with drugs, medical supplies, lab tests, and X-rays,
resulting in more diversified private markets and supply lines. Chile has restructured its health care delivery
system to increase incentives for greater internal efficiency and to use a less expensive mix of providers. In
the late 1970s and early 1980s the government reduced subsidies to people who can afford to pay for theirown care. China has transformed its public curative system in rural areas into an almost completely private
system. Health financing in China encompasses user fees, state funds, health insurance, cooperative health
insurance, and brigade subsidies to rural and barefoot doctors. Zimbabwe has attempted to reduce the private
sector and to reallocate health budgets to rural areas, yet private care still exists with the government
providing it large subsidies.
Truett et al. (1990) discussed the growth pattern of life insurance consumption in Mexico and United States
in a comparative framework, during the period 1964 to 1984. They assumed that at an abstract level demand
depends upon the price of insurance, income level of individual, availability of substitute and other
individual and environment specific characteristics. Further, they experimented with demographic variables
like age of individual insured(s) and population within the age group 25 to 64 and also considered education
level to have some bearing on insurance consumption decision. They concluded the existence of higher
income inelasticity of demand for life insurance in Mexico with low income levels. Age, education and
income were significant factors affecting demand for life insurance in both countries.
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 49/92
expenditures are significant determinants of insurance demand, however, inflation has a negative correlation.
Dependency ratio, education and life expectancy were not significant but incorporation of religion, a dummy
variable, indicates that Muslim countries have negative affinity towards life insurance.
Currie (1995) look at the effects that having public or private insurance has on health care utilization. They
find that there are racial differences in how whites respond to having insurance versus how blacks respond.
They find that white children covered by either form of insurance are more likely to visit a doctor when sick.
White children covered by Medicaid are more likely to receive preventive care than white children with
private insurance or no insurance. The authors find that for blacks Medicaid coverage has less effect on
increasing preventive care and no increase in health care utilization. They also find that private insurance
coverage for blacks has no increased effect of health care utilization over no coverage.
Gruber (1996) previous work on the effects of public insurance on health outcomes includes. They looked
at how two different Medicaid expansion covering low-income pregnant women affected the rates of low
birth weight and infant mortality rates. They find that the more narrowly targeted expansion had an effect on
reducing infant mortality by about 8.5%. They estimate that this reduction in infant mortality came at a cost
of $840,000 per life saved. One innovation they developed was to create an instrumental variable to correct
the problem that the number of women eligible for the expansion depended on not just state eligibility limits,
but state demographic and economic conditions. They simulate eligibility in each state using a national
sample of 3000 women. This simulated fraction eligible was used as an instrument for the number of women
eligible in each state. This IV only depends on the legislative environment that created the guidelines.
F Ellis (1998) this
Atmanand (2003) Key elements of disaster management are prevention, mitigation, preparedness, response
and relief, rehabilitation. The various stakeholders in the process of disaster mitigation are policy makers,
decision makers, administration, professionals, professional institutions, R&D institutions, financial
institutions, insurance sector, community, NGOs and the common man. Insurance has played a very
important role. The advanced countries have developed the insurance system and made it effective and
mandatory – as a result the loss of lives and property is comparatively less. In India, most of the losses
suffered in natural disasters are not insured, for reasons such as lack of purchasing power, lack of interest in
article reviews the recent literature on diversification as a livelihood strategy of rural
households in developing countries, with particular reference to sub-Saharan Africa. Livelihood
diversification is defined as the process by which rural families construct a diverse portfolio of activities and
social support capabilities in order to survive and to improve their standards of living. The determinants and
effects of diversification in the areas of poverty, income distribution, farm output and gender are examined.
Some policy inferences are summarised. The conclusion is reached that removal of constraints to, and
expansion of opportunities for, diversification are desirable policy objectives because they give individuals
and households more capabilities to improve livelihood security and to raise livingstandards.
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 50/92
insurance, theory of karma attitude and ignorance of availability of such covers. Quite large numbers of
agencies provide the insurance cover and foreign insurance companies have already ventured in such areas.
This implies that the commercial and private sector can also play an essential role in disaster mitigation. The
present study attempts to fill the gap in studies on the role of the insurance sector in disaster management.
Saliba AJ . Charles (2003) Rurality is associated with a number of direct and indirect causes of eye disease.
The direct causes are best described as lifestyle factors, such as exposure to UV light and occupational risks.
Indirect factors are those where the occurrence of a predisposition is magnified due to rural population
distributions, for example gender and age. ISSUE: Research into rurality and optical health is limited, so
definitive increases in the prevalence of vision disease are difficult to ascertain. Furthermore, establishing
the need for additional optometrists in rural areas has been mixed in the literature. The current review
addresses the relationship between rurality and optical health and suggests an increase in available
optometrists in rural areas. LESSONS LEARNED: Age is the single largest correlate of vision disease, with
an increase in age over 40 years correlating significantly with a range of vision diseases. Rural New South
Wales (NSW) Australian areas contain a higher proportion of 'older' residents than urban equivalents.
Gender is also a correlate of vision disease, although the phenomenon is more complex than for age. Rural
NSW populations contain a higher ratio of men to women than do urban areas, which is significant. Rural
residents are exposed to higher levels of UV radiation than their urban counterparts, increasing the
prevalence of pterygium. Rural residents experience higher levels of occupational eye injury and may have
less stringent eye safety standards. The interaction between vision and hearing loss can accentuate
occupational safety vulnerability and general living difficulties. Rural communities experience higher levelsof noise-induced hearing loss. Rural communities experience higher levels of certain eye disease and may be
exposed to an increased risk from indirect factors such as age, gender and private health insurance
ownership. Rural communities may have lower access to optometrists and this review suggests increasing
the number of optometrists in rural Australia. The amount of research conducted on factors associated with
rurality and optical health should be increased.
HansP.Binswanger (2004) It has long been recognized that rural credit markets are incomplete. This is
because many classes of borrowers have little or no access to credit from formal institutions, and they often
borrow small amounts informally at what appear to be excessive interest rates. It has now also become clear
that the market for comprehensive crop yield insurance has, in nearly all cases, failed. While some specific
yield Insurance (hail, flooding) is provided by private companies in developed Countries on a profit-making
basis, general yield insurance come sintoexistence or survives only because of government subsidies. The
failure of crop yield insurance markets does not arise from lack of demand for the stabilization of
consumption and income. Recent experimental studies indicate that farmers in developing countries are poor
and typically risk-averse. Furthermore, capital markets are also poorly developed, which in principle should
increase the demand for insurance on the Part of risk adverse farmers. Finally, yield risks are primarily
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 51/92
weather related and probability information on weather is not exceptionally difficult to find. This chapter
attempts a systematic exploration of the causes of the serious difficulties of both rural credit and yield
insurance markets. I trace these difficulties to an identical set of information, incentive, and management
problems that arise in spatially dispersed agricultural production systems.
It is a common observation that people do not freely provide their transaction partners with information.
Indeed, people normally attempt to take advantage of lenders' and insurers' information difficulties unless
the contracts and information-gathering procedures are structured to preclude such opportunistic behaviour.
In the insurance literature, these problems are known as moral hazard and adverse selection.
Mikhail Frolov (2004) this paper reviews the main results of the economic literature explaining the
existence of deposit insurance in its modern form. It is shown that deposit insurance is not the only means to
cope with the problem of bank runs. Yet it is a prevailing solution for the banks dominate the credit channels
in most economies the world over, and the modern payment systems are based on the convertibility of the
bank deposits into cash. Being a part of the general public policy of financial sector stability, deposit
insurance is structured in accordance with a core objective adopted for the entire policy, and this explains
why many world schemes, besides the intrinsic DIS objective of bank run prevention, also
Choose to follow the objective of small (unsophisticated) depositor protection. In practice, atrade-off
between the ability of a DIS to prevent bank runs and the soundness of incentives it induces forces
policymakers to choose between the twoobjectives. The review of the related literature helps to distinguish
four basic approaches regarding the balance of the run-prevention capacity and sound incentives in deposit
insurance design. Further analysis also shows that three of the basic structuring options (the limited, partial,
and selective guarantees) are likely to be employed in the ordinary (non-crisis) circumstances and the choice
among them needs to be based on the country-specific factors.
T Ensor (2005)
In general indirect methods that help families to pool the costs of maternal health services are preferable to
direct methods of payment. It is also clear, however, that user charges may sometimes help to mitigate
deficiencies in systems of pooled funding. Available literature suggests that financing mechanisms for
maternal health services could be improved by systems that increase transparency help to mitigate demand-
side costs of services and provide funding for that promotes transparent charging for services. While the
limited experience of demand-side mechanisms for improving access to maternal health services more
evaluation is required.
Health care can be funded in a number of ways ranging from direct user charges (out of
pocket) payments to indirect methods that pool across time (prepayment) and across different risk and
wealth groups (insurance and general taxation). All these methods can be used to finance maternal health
services. When assessing the impact of financing mechanisms it is important to be aware of the different
ways they effect service delivery patterns and utilisation. Specifically most systems have both equity and
efficiency aspects that combine to impact on health service utilisation and health status.
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 52/92
Hussels et al. (2005) has reviewed the efforts of researchers to explain consumer behaviour concerning the
purchase of life insurance for almost 50 years. The review of earlier studies concludes that bulk of the
empirical studies undertaken finds a positive association between increase in savings behaviour, financial
services industry and demand for life insurance. Taking this forward, our first issue is to see whether or not
per capita gross domestic savings and financial depth influences life insurance consumption. GDP and Per-
capita GDP are often highly correlated with the proxy variables measuring insurance demand- density and
penetration. We therefore ignore these two variables and assume that as income grows, it will add to
insurance demand via rise in the savings component i.e., GDS.
Guptahima (2007) Health insurance in India has shown little development. It has not been able to evoke
enthusiasm among Indian insurers. Consequently, several reports on Indian health care insurance have been
produced. The purpose of this paper is to offer a review of this matter. Almost 79 per cent of health
expenditure is borne by private bodies and the rest by the public. Authors argue that to stimulate private
health insurance growth, the Indian government should recognize health insurance as a separate line of
business and distinguish it from other non-life insurance. Particular emphasis is placed on the present health
care scenario in India and international field generally. A global comparison of selected Asian countries,
regarding their national incomes and health expenditure in public and private sectors, generates insights.
Third party administrators (TPAs) facilitate a cashless health services for their customers and offer back-up
services to the insurance companies. Desired strategies and ways of furthering the role of the Insurance
Regulatory and Development Authority in acting as a regulator for the purpose of ensuring the industry's
smooth functioning is an issue for India's health services.
J oyce et al. (2008). They look at the effect that the mandatory coverage of vaccinations had on the
likelihood of children being up to date on vaccinations, and if coverage changed the number receiving all
shots from a single private provider. Using the National Immunization Survey (NIS), they find that SCHIP
only increased the use of the new vermicelli vaccine, and that instead of seeing more vaccines done bya
single private provider, the percentage actually decreased.
J oglekar rama (2008) In India, the out-of-pocket health expenditure by households accounts for around 70
percent of the total expenditure on health. Large out-of-pocket payments may reduce consumption
expenditure on other goods and services and push households into poverty. Recently, health insurance has
been considered as one of the possible instruments to reduce impoverishing effects of large out-of-pocket
health expenditure. In India, health has insurance limited coverage and the present paper studies whether it
has been effective so far. Litecture defines out-of-pocket health expenditure as catastrophic if its share in the
household budget is more than some arbitrary threshold level. In the present paper, we argue that for
households below poverty line any expenditure on health is catastrophic as they are unable to attain the
subsistence level of consumption. Thus, we take zero percent as a threshold level to define catastrophic
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 53/92
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 54/92
DATA ANALYSIS,
INTERPRETATION AND
FINDINGS
Q1. What is your monthly income? Table 9 showing the monthly income of the respondents
PARTICULARS FREQUENCY PERCENTAGELess than 10000 11 12%10000-20000 22 24%20000-30000 24 27%30000-40000 18 20%
More than 40000 15 17%
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 55/92
Total 90 100%
From the above table it can be inferred that: 12% of the 90 respondents have a monthly income of less than 10000
24% of the respondents have a monthly income of 10000 – 20000
27% of the respondents have a monthly income of 20000 – 30000
20% of the respondents have a monthly income of 30000 – 40000
17% of the respondents have a monthly income of more than 40000
Fig 2
0
5
10
15
20
25
1112
24
18
15
n
o
o f r e s p o n d e n t s
Monthly income of the respondents
less than 10000 10000 - 2000020000 - 30000 30000 - 40000
more than 40000
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 56/92
INTERPRETATION: It can be interpreted from above results that 12% income of the respondents less than
10000, 24% of respondents 10000-20000, 27% of 20000-30000, 20% of 30000-40000 and 17% more than
40000 in villages of Ludhiana Distt.(Punjab).
Q2. What is your monthly saving?
Table 11 showing the monthly savings of respondents
PARTICULARS FREQUENCY PRECENTAGELessthan2000 15 17%
2000-4000 22 24%4000-6000 21 23%6000-8000 19 21%
More than 8000 13 15% TOTAL 90 100%
From the above table it can be inferred that: 17% of the 90 respondents have a monthly savings of less than 2000
24% of the respondents have a monthly savings of 2000 – 4000
23% of the respondents have a monthly savings of 4000 – 6000
21% of the respondents have a monthly savings of 6000 – 8000
15% of the respondents have a monthly savings of more than 8000
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 57/92
Fig 3
INTERPRETATION: It can be interpreted from above results that 17% monthly saving of the respondents
less than 2000, 24% of respondents monthly saving is 2000-4000, 23% of 4000-6000, 21% of 6000-8000
and 15% of more than 8000 in village’s of Ludhiana Distt.(Punjab).
Q3. Are you aware about the Insurance?
Table 12showing the awareness of people about insurance
AWARE ABOUTINSURANCE
NO.OF RESPONDENTS PERCENTAGE
Yes 60 67%
0
5
10
15
20
25
15
2221
19
13
n o
o f r e s p o n d e n t s
monthly savings of the respondents
less than 2000 2000 - 4000
4000 - 6000 6000 - 8000
more than 8000
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 58/92
No 30 33%
Total 90 100%
From the above table it can be inferred that:
Out of 90 only 60 feel the need of insurance. It means 67% of respondents aware about insurance
&33% do not aware about insurance.
Fig 4
INTERPRETATION: It can be interpreted from above results that there is still a very big segment of the
population of the villages of Ludhiana Distt.(Punjab) is not aware about the importance of the life insurance.
So, if insurance companies adopt right approach in Punjab they can grab this portion of the population.
67%
33%
Awareness about insurance
Yes
No
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 59/92
Q4. If yes, then from which medium you came to know about the Insurance companies (i.e. source of
advertisement)?
This question is put forward in order to know, which is strongest medium of advertisement that provide theinformation about the private insurance companies to the people.
Table 13 show the source of advertisement
SOURCE OFADVERTISEMENT
NO. OF RESPONDENTS PERCENTAGE
Electronic Media 54 60%
Printed Media 18 20%
Through Others 18 20%
Total 90 100%
From the above table it can be inferred that:60% of the respondents came to know through the electronic media.
20% of the respondents came to know through the print media.
20% of the respondents came to know through the other medium.
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 60/92
Fig 5
INTERPRETATION: It can be interpreted from above results that people give most preference to T.V. as a
source of information. So, insurance companies should make attractive T.V ads to promote their products.
Q5. in your opinion to whom the customer give more preference Insurance?
The question was put forward in order to know the preference of people about the companies through which
they want to be get insured.
Table 14 show the consumers insurance preference
INSURANCEPREFERENCE
NO.OF RESPONDENTS PERCENTAGE
Public Co. 59 65%
Private Co. 31 35%
Total 90 100%
ELECTRONIC MEDIUM
PRINT MEDIUM
OTHERS
60%
20%
20%
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 61/92
From the above table it can be inferred that:
o Out of 90, 65% of respondents like the public companies i.e. LIC and remaining 35% respondents
like the private insurance companies.
Fig 6
INTERPRETATION: It can be interpreted from above results that public insurance companies (i.e LIC)has a very strong position in the market of Punjab as comparative to private insurance companies.
Q 6. Do you have any Insurance policy?
The question was put forward in order to know how many people have any insurance policy.
Table 15 show how many people have insurance policy
INSURANCE POLICY NO.OF RESPONDENTS PERCENTAGE
Yes 60 66%
No 40 44%
Total 90 100%
From the above table it can be inferred that:
66% of the respondents have insurance policy.
44% of the respondents do not have any insurance policy.
65%
35%
INSURANCE PREFERENCEPublic Co. Private Co.
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 62/92
Fig 7
INTERPRETATION: It can be interpreted from above results that most of the people have insurance
policy.
Q7. Which Insurance policy do you have? Table 16 showing various insurance policies taken by respondents
INSURANCE POLICY NO. OF RESPONDENTS PERCENTAGE
Life Insurance 15 17%
General Insurance 2 0 22%
Both 55 61%
Total 90 100%
From the above table it can be inferred that: 17% respondents have life insurance
22 % respondents have General insurance policy
61% respondents have both insurance policy
60%
40%
INSURANCE POLICY
Yes
No
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 63/92
Fig 8
INTERPRETATION: It can be interpreted from above results that most of the people bought both
insurance policies. Because no. of people having vehicles and General insurance is compulsory by
Government and 17% respondents have life insurance poliies.
Q8. Which Co’s Insurance policy you prefer the most?
Table 17 showing the company’s preferred for taking life insurance policies by the respondents
PARTICULARS FREQUENCY PRECENTAGE
LIC 40 45%ICICI 30 33%
ING-VYSYA 07 08%Birla Sun life 10 11%
Others 03 03% TOTAL 90 100%
From the above table it can be inferred that:
45% of the 90 respondents are the holders of life insurance policies of LIC
33% of the respondents are the holders of life insurance policies of ICICI
08% of the respondents are the holders of life insurance policies of ING – VYSYA
11% of the respondents are the holders of life insurance policies of Birla sunlife
3% of the respondents hold the life insurance policies of other companies, which include Max New
York, Metlife etc.
Life insurance General insurance both
17 22 61
insurance policies taken by respondents
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 64/92
Fig 9
INTERPRETATION: It can be interpreted from above results that in public insurance company LIC hasmost strong position in Ludhiana Distt.(Punjab) and in private sector insurance companies ICICI Prudentialhas most strong position in Ludhiana Distt.(Punjab).
Q9. Form how many years do you have Insurance policy? Table 18 showing the years of insurance policies of respondents
YEARS OF INSURANCEPOLICY
NO. OF RESPONDENTS PERCENTAGE
<-5 years 24 27%
5-10 years 36 40%
10-15years 18 20%
45%
33%
8% 11%
3%
Companies preferred for lifeinsurance policies
LIC ICICI ING - VYSYA Birla sunlife others
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 65/92
Any others 12 13%
From the above table it can be inferred that:27% respondents have <-5 years insurance policy.40% respondents have 5-10 years insurance policy20% respondents have 10-15 years insurance policy.13% respondents have any others insurance policy.
Fig 10
INTERPRETATION: It can be interpreted from above results that most of the people have from 5-10years insurance policies.
Q10. What do think are the benefits of Insurance cover?
Table 19 showing to know about which factor leads them to get insured.
BENEFITS OFINSURANCE
NO. OF RESPONDENTS PERCENTAGE
Cover Future Uncertainty50 55%
Future Investment20 22%
Tax Deductions 12 13%
Any other 8 10%
Total 90 100%
From the above table it can be inferred that:
27%
40%
20%
13%
Years of insurance policy
<-5years 5-10years 10-15years Any other
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 66/92
55% of the respondents get insured for the sake of risk coverage.
22% respondents get insured for the sake of investment.
13% respondents get insured for saving the tax.
Remaining 10%respondents buy insured for other purposes.
Fig 11
INTERPRETATION: It can be interpreted from above results that most of the people get insured for risk
coverage and investment purposes.
Q11. Which feature of your policy attracted you to pay it? Table 20 showing the attractive feature of insurance policies
ATTRACTED POLICY No. OF RESOPNDENTS PERCENTAGE
Low Premium 15 17
0
10
20
30
40
50
60
Future Uncertainty Future Investment Tax Deductions Any other
Benefits of insurance
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 67/92
Larger Risk Conversance 43 48
Money Back Guarantee 14 15
Easy Access to Agents 12 13
Any Other 6 7
From the above table it can be inferred that: 17% respondents attracted insurance policy for low premium.
48% respondents attracted insurance policy for larger risk covers.
15% respondents attracted insurance policy for money back guarantee.
13% respondents attracted for easy access to agents.
7% respondents attracted for any other feature.
Fig 12INTERPRETATION: It can be interpreted from above results that most of the people prefer larger risk
covers and low premium buying any insurance policies.
0
5
10
15
20
25
30
35
40
45
50
Low premium LARGER risk
COVERS
Money Back
guarantee
Easy access to
agents
Any other
Attracted policy
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 68/92
Q12. What is your perception about insurance? Table 21 showing the perception of respondents about insurance
PERCEPTION ABOUTINSURANCE
NO. OF RESPONDENTS PERCENTAGE
Protect future 42 47%
Tax saving device 36 40%
Saving tool 12 13%
Total 90 100
From the above table it can be inferred that:
o 47% respondents’ perception about insurance are protected future.
o 40% respondents’ perception about insurance is tax saving device.
o 12% respondents’ perception about insurance are saving tool.
Fig 13
INTERPRETATION: It can be interpreted from above results that most of the people perception about
insurance is that insurance is a tax saving device and good for future portect.
Protect future
47%
Tax saving device40%
Saving tool
13%
perception about insurance
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 69/92
Q13. What type of insurance plan would you like to prefer?
Table 22 showing that the liking of people regarding different insurance plans.
PREFER OF INSURANCE
PLANS
NO.OF RESPONDENTS PERCENTAGE
Child plans 18 20
Money back plans 23 25
Pension plans 18 20
Term insurance plans 9 10
Employment plans 13 15
Others plans 9 10
Total 90 100
From the above table it can be inferred that:
• 20% people like to buy child insurance plans.
• 25% people like to get money back insurance plans.
• 20% people like to buy pension plans.
• 10% people like to buy term insurance plans.
• 15% people like Employment plans.
• 10% people like to get insured in other insurance plans.
•
Fig 14
05
1015202530
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 70/92
INTERPRETATION: It can be interpreted from above results that Money back insurance plans, child
insurance plans and pension plans are more popular in Ludhiana Distt. of Punjab than other plans.
TESTING OF HYPOTHESIS
The test of hypothesis begins with an assumption about the population from which the sample is
drawn. According to Prof.Morris Ham bury, “A hypothesis is simply a quantitative statement about a
population”. Hypothesis testing deals with a procedure, which accepts or rejects the hypothesis.
Hypotheses are of two types:
1. Null Hypothesis
2. Alternate Hypothesis
Null Hypothesis
The null hypothesis is a very useful tool in testing the significance of difference. It states that there is
no real difference in the sample value and population value in the particular value under consideration. This
means that the observed difference is due to the random fluctuations. The null hypothesis is denoted by Ho.
Alternate Hypothesis
As against the null hypothesis the alternative hypothesis specify those values that the researcher
believes to hold true, and he hopes that the sample data lead to acceptance of this hypothesis as true.
Types of Errors
When a statistical hypothesis is tested there are four possibilities:
1. The hypothesis is true but the test reject it (Type 1 error)
2. The hypothesis is false but the test accepts it (Type 11 error).
Level of Significance
Confidence with which the null hypothesis is accepted or rejected depends on what is called
significant level. The probability, with which we may reject a null hypothesis, when it is true, is called the
level of significance. Therefore the level of significance is the risk, statisticians running in his decision. The
level of significance is denoted by ‘a’. It is better to keep level of significance at a low percentage. It means
that we should not reject a true hypothesis.
Acceptance Region
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 71/92
This represents the region with which the calculated value of the statistics must lie to accept the null
hypothesis. If calculated value lies in this region then the null hypothesis will be rejected.
Procedure for Testing Hypothesis
1. Set up a null hypothesis (Ho) and alternative hypothesis (H1) appropriate to the test to be conducted.
2. Specify the suitable level of significance.
3. Decide the test criterion suitable to the test statistics
4. Calculate the value of the test statistics using the appropriate formula
5. Make decisions about accepting or rejecting the null hypothesis. If calculated value is less than
tabulated value, Ho is accepted, else, HA is accepted by rejecting Ho.
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 72/92
Tools used for testing of hypothesis
Chi- square Test:
It is a non- parametric test. It describes the magnitude of discrepancy between observed value and
expected value. Higher the value of Chi-square ψ2
Degree of Freedom (DOF)
, greater the discrepancy between the observed values
from sample to sample. It is a statistic whose value is always positive and varies from zero to infinity. It is
the sum of difference between the expected value and observed value.
This distribution is a limiting approximation of multinomial distribution with γ as the mean and 2γ
(nu) as the variance of the distribution. The test depends on the set of observed and expected values and the
degree of freedomγ(nu). It is a continuous distribution, which can be applied to discrete random variables.
It is the number of classes to which the values can assigned arbitrarily without violating therestrictions or limitations placed. It is calculated using the following formulae.
DOF =(r- 1)* (c – 1) where r is the no: of rows
C is the no: of columns
DOF =(n-1), where n is the no: pairs of observed and expected values.
Condition for Applying Chi-square Test:
The total sample size must be reasonably large.
No theoretical cell frequency should be less than 5. Incase, the cell frequency is less than 5, then ‘Yates’
correction factor will be applied.
The constraints on the cell frequency, if varies, should be linear.
Uses of Chi-square Test:
It is used as a test of independence of attributes. This test brings association, if any, between the
attributes.
It is used as a test of goodness of fit. In other words, it tests whether the given set of observation will
fit in to the distribution (normal, binomial etc…)
It is used as a test of homogeneity. In other words, it tests whether a set of readings are more uniform or non-
uniform. So with this test we can determine whether two or more independent random samples are drawn
from the same population or not.
Q14. How much you are satisfied with the Insurance products and investment plans provide by your
company?
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 73/92
TEST OF HYPOTHESIS
. Whether the consumers are satisfied with insurance products and investment plans of insurance companies.
Table 23Customer
SatisfactionInsuranceproducts
Investment plans TOTAL
Satisfied 25 20 45
Dissatisfied 5 10 15 TOTAL 30 30 60
Hypothesis:Ho: Consumers are satisfied.
Ha: Consumers are not satisfied.
Level of Significance: 5%
Degree of Freedom (DOF)=(R-1)(C-1) =(2-1)(2-1) =1tab = 7.88
Test of Statistics:
(O-E)2
ObservedValue (O)
/ E
Table 24Expected Value
(E)(O-E) 2 (O-E) 2/E
25 22.5 5 0.2777785 7.5 5 0.83333320 22.5 5 0.27777810 7.5 5 0.833333
TOTAL 2.222222
cal =2.22
tab =7.88
ITERPRETATION:Since, the calculated value (cal) is lesser than tabulated value (
tab), null hypothesis (Ho) is
accepted, i.e. alternate hypothesis (Ha) is rejected. it means consumers are satisfied Insurance products and
Investment plans of your company.
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 74/92
Q15. How much you are satisfied with the service provide by your Insurance agent?
Table 25 showing whether the respondents are satisfied with the service of the insurance agents.
PARTICULARS FREQUENCY PRECENTAGE
Satisfied 45 83%Not Satisfied 15 17%
TOTAL 60 100%
From the above table it can be inferred that:
83% out of the 90 respondents are satisfied with the service of insurance companies.
17% of the respondents are not satisfied with its service
Fig 15
83%
17%
service provide by insurance agents
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 75/92
INTERPRETATION: It can be interpreted from above results that 83% respondents are satisfied by the
insurance service provider and 17% respondents do not satisfied in village’s of Ludhiana Distt(Punjab).
Q16. Do you pay income tax?
Table 26 showing the income tax
PAY INCOME TAX FREQUENCY PRECENTAGE
Yes 30 33%No 60 67%
TOTAL 90 100%
From the above table it can be inferred that:
o
33% respondents pay income taxo 67% respondents do not pay income tax.
Fig 16
33%
67%
pay income tax
Yes No
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 76/92
INTERPRETATION: It can be interpreted from above results that mostly respondents of six village’s of
Ludhiana Distt. Do not pay income tax and only some people pay income tax.
Q17. In your opinion what is the preferred form of investments?
Table 27 showing the investment preference of the respondents
PARTICULARS FREQUENCY PRECENTAGE
Bank deposit 22 24%Insurance 18 20%Shares 13 14%
Debentures 09 10%Real estate 12 13%
Gold 04 05%Mutual funds 07 08%Chit funds 05 06%
Others 00 00% TOTAL 90 100%
From the above table it can be inferred that: 24% of the 90 respondents preferred to make investments in bank deposits
20% of the respondents preferred to make investments in insurance
14% of the respondents preferred to make investments in shares
10% of the respondents preferred to make investments in debentures
13% of the respondents preferred to make investments in real estate
05% of the respondents preferred to make investments in gold
08% of the respondents preferred to make investments in mutual funds
06% of the respondents preferred to make investments in chit funds
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 77/92
Fig 17
INTERPRETATION: It can be interpreted from above results that mostly people of Ludhiana village’s are
invested in bank deposit and 05% people in gold.
Q18. Which mode of Premium do you prefer?
Table 28 showing that which mode of payment people like most.
MODE OF PREMIUM
PREFER
NO. OF RESPONDENTS PERCENTAGE
Cash 58 65%
0
5
10
15
20
2522
18
13
9
12
4
7
5
n o
o f r e s p o n d e n t s
Investment preferences
bank deposit insurance shares
debenture real estate goldmutual funds chit funds
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 78/92
Cheque 18 20%
Draft 14 15%
Total 90 100%
From the above table it can be inferred that:
• 65% people like cash as mode of payment of mode.
• 20% people like cheque as mode of payment
• 15% people like draft as mode of payment.
Fig 18
INTERPRETATION: It can be interpreted from above results that cash payment is the most convenient
mode of payment for the people. This tendency of six village’s people of Ludhiana Distt. Can help to
insurance companies in time savings and quick payments of claims and mature funds.
Q19. What would you look for in Insurance Co’s?
Table 29 showing that before buying any insurance policy look for in insurance co.
LOOK FOR IN
INSURANCE CO’S
NO. OF RESPONDENTS PERCENTAGE
A trust name 30 33%
Friendly service &
Responsiveness
10 11%
Good plans 35 39
Accessibility 15 17
0
10
20
30
40
50
60
70
CASH CHEQUE DRAFT
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 79/92
Total 90 100
From the above table it can be inferred that:
33% respondents before buying any insurance policy see a trust name of insurance co.
11% respondents before buying any insurance policy see Friendly service & Responsiveness of
insurance co. 39% respondents before buying any insurance policy see a Good plan of insurance co.
17% respondents before buying any insurance policy see a accessibility of insurance co.
Fig 19
INTERPRETATION: It can be interpreted from above results that mostly respondents before buying any
insurance policies look for good plans, accessibility, a trust name of any insurance company.
0
5
10
15
20
25
30
3540
A trust name Friendly service &
Responsiveness
Good plans Accessibility
before buying any insurance policy look for
insurance co.
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 80/92
4.2 Findings
Still near about 45% people of six village’s of Ludhiana Distt.(Punjab) give the more preference to LIC
to get insured.
There is lot of potential in the Punjab for insurance companies mainly in the villages of Ludhiana Distt.
Near about the 33% people have no need of life insurance during the time of research. So, Most of
people still are not aware about the importance and necessity of the insurance in their life. They are
not aware how useful life insurance can be for their family members if something happens to them.
Near about 40% People still consider insurance just as a tax saving device. So today also there is always
a rush to buy an insurance policy only at the end of financial year like in January, February and
March making the other 9 months dry for this business.
In this study I have also found that now people have started to take interest in private insurance
companies. They have started to think beyond the issue of public and private companies because now
they want better returns and better services. Now which company gives them to these things they go
for that?
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 81/92
CHAPTER-5
SUMMARY, CONCLUSION
AND RECOMENDATION
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 82/92
5.1 CONCLUSION
Over the past three years, around 40 companies have expressed interest in entering the insurance industry
and many foreign and Indian companies have arranged anticipatory alliances. The threat of new players
taking over the market has been overplayed. As is witnessed in other countries where liberalization took
place in recent years we can safely conclude that nationalized players will continue to hold strong market
share positions, but there will be enough business for new entrants to be profitable.
Opening up the sector will certainly mean new products, better packaging and improved customer service.
Both new and existing players will have to explore new distribution and marketing channels. Potential
buyers for most of this insurance lie in the middle class. New insurers must segment the market carefully to
arrive at appropriate products and pricing. Recognizing the potential, in the past three years, the nationalized
insurers have already begun to target niches like pensions, women or children
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 83/92
5.2 RECOMMENDATIONS AND SUGGESTIONS
The private and public insurance companies should reposition their products in a better way by adding
few attributes to their products.
Office in every major city/town and big villages will help companies as it will the confidence of people
and they invest in these companies without having the feel of risk.
Mostly insurance buyers are service conscious, so service of these private insurance companies should be
the better..
Insurance business depends a lot on the insurance agents/consultants/life advisors. So, companies should
select these candidates according to its best recruiting policy.
Advertising through electronic media i.e T.V. must be helpful. Also wall advertisement may be very
fruitful.
Printed media of advertisement is also proved very helpful where electronic media does not reach. Like
Banners, Posters etc. in every village, town must help to grab the attention of people.
Gifts or incentives scheme should be there for life advisors/agents. Who show to job, so as to motivate
them to do the best in future.
After every month, there should be meeting by the companies, as it helps to solve any problem faced by
them.
Private and public insurance companies should offer sponsorship to various helpful events from time to
time. This would certainly enhance the brand image plus an impetus to the sale.
.
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 84/92
5.3 LIMITATIONS OF INSURANCE COMPANIES
After doing the research and making the analysis of the getting results the following limitations of insurance
sector are come out:
Lack of awareness among people: This is the biggest limitation in this insurance industry. Most of people
are not aware about the importance and necessity of the insurance in their life. They are not aware
how useful life insurance can be for their family members if something happens to them.
Perception of people towards insurance companies: People still consider insurance just as a tax saving
device. So today also there is always a rush to buy an insurance policy only at the end of financial
year like in January, February and march making the other 9 months dry for this business.
Insurance does not give good returns: Still people today think that insurance does not give good returns.
They are not aware about the modern Unit Linked Insurance Plans which are offered by the most of
the Private players. They are still under the perception of the 5-6% return on the policies. They do
not know that no one can get return up to 32% in ULIPs. Lack of awareness about the earning opportunities in the insurance companies: People still today are not
aware about e earning opportunities that the insurance companies gives. After the Privatization of the
insurance sector many private giants have entered in the insurance sector and providing very high
commissions to its advisors.
Increased competition: Today 16 life insurance companies working in the market including LIC that has
made the competition very stiff. Today each and every company is trying to increase their insurance
Advisors so that they can increase their reach in the market.
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 85/92
REFERENCES & BIBLIOGRAPHY
Reference to book
Insurance Institute of India (2008) , IC-33 Life Insurance, Universal Publishers Ltd, Mumbai.
Reference to web pages
http://business.mapsofindia.com/insurance/brief-history-of-insurance-sector.html
http://business.mapsofindia.com/insurance/general-insurance-india.html
http://books.google.co.in/books?id=_ZBCuBPD_6cC&printsec=frontcover&dq=histry+of+insurance+indust
ry#PPP9,M1
http://www.indianmba.com/Occasional_Papers/OP85/op85.html
http://www.theloanbazaar.com/insurance/types-of-insurance.html
http://www.theloanbazaar.com/insurance/what-is-an-insurance-policy.html
http://www.medical-billing-coding.org/Content260.htm
http://www.medical-billing-coding.org/Content261.htm
http://www.domainb.com/finance/insurance/2005/20050916_types_insurance.html
http://www.allbankingsolutions.com/insuresub2.htm
www.domain-b.com/finance/insurance/kotak_mahindra/20040914_growth.htm
indiainsured.blogspot.com/2007/12/kotak-life-insurance.htm
www.managementparadise.com/forums/financial-management-fm/41825-kotak-life-insurance.html
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 86/92
J ournal and Research papers
1) Heubner (1942) “Aspects of Rational Insurance Purchasing,” Journal of Political Economy, Vol. 79;
pp 553-568.
2) Yarri, M.E (1965), "Uncertain lifetime, life insurance, and the theory of the consumer", The Review
of Economic Studies, Vol. 22 No.90, pp.137-49.
3) Headen, R. S. and J. F. Lee (1974) “Life Insurance Demand and Household Portfolio Behaviour”, Journal of Risk and Insurance, Vol. 41; pp 685-698.
4) Mossin, J . (1969) Smith (1968) “Aspects of Rational Insurance Purchasing,” Journal of Political
Economy, Vol. 79; pp 553-568.
5) Björn Ekman (1989) “Community-based health insurance in low-in
6)
come countries;” The Journalof
Human Resources, Vol. 30; pp 104-107.
CC Griffin (1989) “Strengthening health services in developing countries through the private sector;”
International Finance Corporation,7) Truett, D. B. and L. J . Truett (1990) “The Demand for Life Insurance in Mexico and the United
States: A Comparative Study”, Journal of Risk and InsuranceVol. 57; pp 321-328.
J ournal of Financial Economicsvol. 17, pp.211-19.
8) Cleeton, D. L. and B. B. Zellner (1993) “Insurance Risk Aversion and the Demand for insurance,”
Southern Economic Journal, vol 60; pp 146-156.
9) Currie and Janet (1995) “Medical Care for Children: Public Insurance, Private Insurance, and.” The
Journal of Human Resources, Vol. 30; pp 135-162.
10) Jonathan Gruber (1996) “Health Insurance Eligibility, Utilization of Medical Care, and Child
Health.” The Quarterly Journal of Economics, Vol. 111; pp 431-466.
11) F Ellis (1998) “Household strategies and rural livelihood diversification,” Journal of Development
Studies,
12) Atmanand (2003) “Insurance and disaster management,”
vol. 15, pp.145-61.
Journal of Development Studies,
13) Saliba AJ
vol.16;
pp.154-62
. Charles (2003) “Impact of rurility on optical, “The Journal of Human Resources, Vol. 32;
pp 103-108.
14) HansP.Binswanger (2004) “Collateral Requirements, and the Markets for Credit and insurance in
rural Areas,” J ournal of Financial Economicsvol. 30, pp.102-105.
15) Mikhail Frolov (2 004) “the existence of deposit insurance in its modern form” J ournal of Financial
Economicsvol.17; pp.503-508.
16) T Ensor (2005)
17) Hussels, S., D. Ward and R. Zurbruegg (2005) “Stimulating the Demand for Insurance”, Risk
Management and Insurance Review, Vol. 8; pp 257-278.
“Effective financing of maternal health services,” J ournal of Financial Economics
vol. 18, pp.213-18.
18) Guptahima (2007) “The role of insurance in health care management in India,” The Journalof
Human Resources, Vol. 30; pp 135-165.
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 87/92
19) Joyce, Ted, and Andrew Racine.(2008) “Chip Shots: Association between the State Children’s
Health Insurance Programs and Immunization Coverage and Delivery.” The Quarterly Journal of
Economics, Vol.111; pp431-466.
20) Joglekar rama (2008) “insurance reduce catastrophic out-of-pocket health expenditure,” Journal of
Development Studies, vol. 16, pp.145-61.
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 88/92
ANNEXURES
Questionnaire
Dear Sir/Madam
I am a student of BBA (Hons) 4th
a) Farmer ◊ b) Teacher c) Shopkeeper d) worker
semester (L.P.U). I am doing my this semester Research
Project title: A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana
Distt. Sir/Madam I need to get a questionnaire filled by you .All the data and information you provide will
be kept confidential and will be use only for the academics purpose
Name -
Age –
1) Below 18□ 2)18-40□ 3)41-70□ 4)70 above □
Gender –
1) Male□ 2) Female□
Education-
1) Under graduate□ 2) Graduate □ 3)
Post graduate□ 4) Other □
Address-
1) Rural □ 2) Urban□
Q1. What is your occupation?
e) Business f) Any other_______ Q2. What is your monthly income?a) Less than 10000 b) 10000 to 20000c) 20000 to 30000 d) 30000 to 40000e) More than 40000
Q3. What is your monthly saving?a) Less than 20000 b) 2000-4000 c) 4000-6000d) 6000-8000 e) More than 8000Q4. Are you aware about the Insurance?a) Yes b) No
Q5. If yes, then from which medium you came to know about the Insurance companies (i.e. source of
advertisement)?
a) Electronic Media b) Printed media c) Through others
Q6. In your opinion to whom the customer give more preference Insurance?a) Public Co. b) Private Co.Q7. Do you have any Insurance policy?a) Yes b) No
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 89/92
Q8. Which Insurance policy do you have?a) Life Insurance b) General Insurance c) Both
Q9. Which Co’s Insurance policy you prefer the most?a) L I C b) ICICI Prudential c) ING-VYSYAd) Birla Sun Life e) Any other _________ Q10. For how many years do you have Insurance policy?
a) <-5 year b) 5-10 yearc) 10-15 year d) any other__________
Q11. What do think are the benefits of Insurance cover?a) Cover Future Uncertainty b) Future Investmentc) Tax Deductions d) d) Any other_________ Q12. Which feature of your policy attracted you to pay it?a) Low Premium b) Larger Risk Conversance c) Money Back Guaranteed) Easy Access to Agents e) Any other_________ Q13. What is your perception about insurance?a) A Tool to protect future b) A Tax saving device c) A saving tool
Q14. What type of insurance plan would you like to prefer?
a) Child Plan b) Money Back Plan c) Pension Plan
d) Term Plan (e) Endowment Plan f ) Any other___________.
Q15. How much you are satisfied with the investment plans and insurance products provide by your
company?
a) Satisfied b) Dissatisfied
Q16. How much you are satisfied with the service provide by your Insurance agent?
a) Satisfied b) Not satisfied
Q17. Do you pay income tax?
a) Yes b) No
Q18. In your opinion what is the preferred form of investments?
a) Bank deposits b) Insurance c) Shares
d) Debentures e) Real estate f) Mutual funds
g) Chit funds h) Others__________.
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 90/92
Q19. What would you look for in Insurance Co’s?
a) A trusted name b) friendly service & Responsiveness
c) Good plans d) Accessibility
Q20. Any suggestion
_______________________________________________________________________________________
_____________________________________________________.
Address __________________________________________
__________________________________________
__________________________________________
Phone no. _________________________________
“ Thanks for your valuable time and co-operation”
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 91/92
Glossary:
1. ABANDONMENT: Giving up the proprietary rights in insured property to the Underwriter in
exchange for payment of a constructive total loss.
2. ACCIDENTAL DEATH: Coverage in the event of death due to an accident, usually in combination
with dismemberment insurance.
3. BENEFIT OF INSURANCE CLAUSE: A clause by which the bailee of goods claims the benefit of
any insurance policy effected by the cargo owner on the goods in care of the bailee. Such a clause in
a contract of carriage, issued in accordance with the Carriage of Goods by Sea Act, is void at law.
4. BLANKET INSURANCE: (1) Property-liability insurance that covers more than one type of
property in one location in one policy or form instead of under separate items, or one or more types
of property at more than one location; (2) A contract of health insurance that covers all of a class of
persons not individually identified.
5. CLAIM: (1) A formal request for payment of a loss under an insurance contract or bond; (2) The
actual amount of the final settlement.
6. EARNED PREMIUM: That portion of a premium for which the policy protection has already been
given during the now-expired portion of the policy term.
7. HEALTH INSURANCE: Protection against the costs of hospital and medical care or lost income
arising from an illness or injury (sometimes called Accident & Sickness Insurance).
8. INSURANCE: A system to protect persons, groups, or businesses against the risks of financial loss
by transferring the risks to a large group who agree to share the financial losses in exchange for
premium payments.
9. INSURED: The person whose risk is transferred and shared; the party to an insurance agreement
whom the insurer agrees to indemnify for losses, provide benefits for, or render services to.
10. INSURER: The company or group offering protection through the sale of an insurance policy to an
insured; the party to an insurance agreement who undertakes to indemnify for losses, provide
pecuniary benefits, or render services.
11. KEY MAN (KEY EMPLOYEE) INSURANCE POLICY: An insurance policy on the life of a key
employee whose death would cause the employer financial loss, owned by and payable to the
employer.
12. LIFE INSURANCE: Protection against the death of the Insured in the form of payment to a
designated beneficiary, typically a family member or business.
13. POLICY : The written statement of a contract effecting insurance, or certificates thereof, by
whatever name called and including all causes, riders, endorsements and papers attached thereto and
made part thereof.14. REINSURANCE: (1) A contract of indemnity against liability by which the insurance company
procures another insurance to insure against loss or liability by reason of the original insurance; (2)
7/28/2019 A Study on Consumer Perception Regarding Insurance Companies In rural areas of Ludhiana Distt.
http://slidepdf.com/reader/full/a-study-on-consumer-perception-regarding-insurance-companies-in-rural-areas 92/92
Insurance by one insurance company of all or part of a risk accepted by it with another insurance
company which agrees to reimburse the insurance company for the portion of the claim insured.
15. UNDER-INSURANCE: A condition in which not enough insurance is carried to cover the
insurable value, and, especially, to satisfy a coinsurance clause.