Chapter -1

INTRODUCTION AND THEORETICAL

BACKGROUND

1

1.1 INTRODUCTION

HDFC Life, one of India's leading private life insurance companies, offers a range

of individual and group insurance solutions. It is a joint venture between Housing

Development Finance Corporation Limited (HDFC), India's leading housing

finance institution and Standard Life plc (public listed company), the leading

provider of financial services in the United Kingdom.

HDFC Ltd. holds 72.37% and Standard Life (Mauritius Holding) Ltd. holds

26.00% of equity in the joint venture, while the rest is held by others.

The topic for research, ‘A study on Buying behaviour and consumer satisfaction

regarding products and services of HDFC Life,’ mainly aims to find out the factors

that respondents give importance to while going for insurance and also to find out

the satisfaction levels of consumer towards the products and services. Based on the

analysis done my project aims to provide suggestions for increasing the market

share of HDFC Life and also it helps to improve the customer satisfaction levels

towards HDFC Life products and services.

1.2 MARKET OVERVIEW:

The Indian life insurance industry is rapidly evolving. It has emerged as one of the

fastest developing emerging markets for life insurance in the world. The industry

has become fiercely competitive with the entry of private sector companies

including major multinational insurers after sector deregulation.

India’s share of the world life insurance business has doubled within 5 years since

liberalization raising India’s global ranking to 17 in 2006 from 20 in 2000. From

0.5% of the world’s life insurance business in 2000 India today accounts for

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1.02% of the world’s premium reflecting that the insurance business in India has

more than just doubled within just 5 years.

Nonetheless insurance as a business is growing faster than India’s GDP. Life

insurance premium which accounted for 1.77 % of the country’s GDP in 2000

contributed 2.53% to the GDP for the 2005- 2006 fiscal year. An expert group of

Confederation of Indian Industry (CII) has projected that in 2016 the size of Indian

insurance market will grow to Rs.145000 Crores. This translates into an average

annual growth of 19.6%.

CII expects an annual growth in the pension business which is projected to rise at

29% per annum, effectively translating to an expansion of over 12 times over a

period of a few years by 2016. The premium business from pension schemes is

projected to grow by 22.5% within the same period.

There is a large scope for Indian insurance sector to grow; only 20 lakh advisors

are available for 1.22 Billion Indians. 70% of the population is below the age of

35years. Over 100 crore people in India do not have insurance.

1.3 CUSTOMER SATISFACTION:

Customer satisfaction, a term frequently used in marketing, is a measure of how

products and services supplied by a company meet or surpass customer

expectation. Customer satisfaction is defined as "the number of customers or

percentage of total customers, whose reported experience with a firm, its products,

or its services (ratings) exceeds specified satisfaction goals.

3

1.3.1 Customer satisfaction in 7 steps:

1. Encourage face-to-face dealings:

It is important to meet your customers face to face at least once

or even twice during the course of a project.

2. Respond to messages promptly & keep your clients informed

We all know how annoying it is to wait days for a response to

an email or phone call. It might not always be practical to deal with all

customers’ queries within the space of a few hours, but at least email or call

them back and let them know you’ve received their message and you’ll

contact them about it as soon as possible. Even if you’re not able to solve a

problem right away, let the customer know you’re working on it.

3. Be friendly and approachable:  It’s very important to be friendly,

courteous and to make your clients feel like you’re their friend and you’re

there to help them out. There will be times when you want to beat your

clients over the head repeatedly with a blunt object – it happens to all of us.

It’s vital that you keep a clear head, respond to your clients’ wishes as best

you can, and at all times remain polite and courteous.

4. Have a clearly defined customer service policy: a clearly defined

customer service policy is going to save you a lot of time and effort in the

long run. If a customer has a problem, what should they do? If the first

option doesn’t work, then what? Should they contact different people for

billing and technical enquiries? If they’re not satisfied with any aspect of

your customer service, who should they tell?

5. Attention to detail ( also known as The Little Niceties):

4

Have you ever received a Happy Birthday email or card from a company

you were a client of? Have you ever had a personalised sign-up

confirmation email for a service that you could tell was typed from scratch?

These little niceties can be time consuming and aren’t always cost effective,

but remember to do them. Even if it’s as small as sending a Happy Holidays

email to all your customers, it’s something. It shows you care; it shows

there are real people on the other end of that screen or telephone; and most

importantly, it makes the customer feel welcomed, wanted and valued.

6. Anticipate your clients need and go out of your way to help them out:

Sometimes this is easier said than done! However, achieving this supreme

level of understanding with your clients will do wonders for your working

relationship.

7. Honour your promises: The simple message: when you promise

something, deliver it. Never break your promises that will disturb your

relationship with your customers.

1.4 CONSUMER BEHAVIOUR:

Consumer behaviour is the study of when, why, how, and where people

do or do not buy a product. It blends elements from psychology, sociology, social

anthropology and economics. It attempts to understand the buyer decision making

process, both individually and in groups. It studies characteristics of individual

consumers such as demographics and behavioral 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.

1.4.1 COGNITIVE VIEW:

5

It portrays the consumer as a thinking problem solver. Within this

framework, consumers frequently are pictured as either receptive to or actively

searching for products and services that fulfill their needs and enrich their lives.

The cognitive model focuses on the processes by which consumers seek and

evaluate information about selected brands and retail outlets. Within the context of

the cognitive model, consumers are viewed as information processors. Information

processing leads to formation of preferences and ultimately to purchase intention.

1.4.2 INPUT-PROCESS-OUTPUT MODEL

INPUT (external influences)

1. Socio-cultural inputs: Friends, family, informal sources, social classes.

2. Marketing inputs: These inputs to the consumer’s decision making process take

the form of specific marketing mix strategies that consists of:

Product (Brand name, quality )

Promotion (festival offers, discount, bundling)

Price (pricing policy of company)

Channels of distribution (direct company delivery, distributor).

PROCESS

The process component of the model is concerned with how consumers

make decisions. The psychological field represents the internal influences-

motivation, perception, learning, personality and attitudes that affect consumer’s

decision making processes. It consists of the following:

Need recognition

6

The buying process starts when the buyer recognizes a problem or need

trigged by internal or external stimuli. With an internal stimulus, one of the

persons normal needs- hunger, thirst, sex-rises to a level and become a driver; or a

need can be aroused by an external stimulus.

Pre-purchase search

Consumers often search for limited amounts of information. Major

information sources to which consumers fall are:

Personal: family, friends, neighbors, acquaintances.

Commercial: Advertising, web sites, sales persons, dealers, displays.

Public: Mass media, consumer rating organizations.

Experiential: Previous usage.

Evaluation of alternatives:

When evaluating potential alternatives, consumers tend to use two types of

information.

(1) Evoked set: Within the context of consumer decision making, the evoked set

refers to the specific brands a consumer considers in making a purchase within

a particular product category.

(2) The criteria they will use to evaluate each brand. This is where the customer

evaluates products based on chosen criteria such as quality,

durability, warranty, price, after sale services and quality on competitive basis.

This will help to make the brand and product choice.

Expectancy value model:

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The consumer arrives at attitudes toward various brands through an attribute

evaluation procedure. This model of attitude formation posits that consumer

evaluates products and services by combining their brand beliefs – the positive and

negative attributes according to their importance.

Purchase Decision:

This is where the customer makes the final choice and ends up effectively

purchasing the product. Once the purchase decision is made it cannot be changed.

Here customers may follow non-compensatory model of consumer choice

like conjunctive heuristic, where the customer sets minimum acceptable cut off

level for each attribute and chooses the first alternative that meets the minimum

standard for all attributes. Lexicographic heuristic, where customer chooses the

best brand on the basis of its perceived most important attribute. Elimination –by

aspect heuristic, where the customer compares the brands on an attribute and select

probabilistically.

OUTPUT:

This is the behaviour of the consumer upon consuming the good. Post

purchase behaviour could be of two forms:

Positive post purchase behaviour

This is where the consumer holds a positive feedback about the product and

happy with the product quality. When there is positive post purchase behaviour he

will engage in repeat purchases and spread positive word of mouth about the

product encouraging others people to buy the product.

Negative post purchase behaviour

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This is where the customer is dissatisfied with the product and holds a

negative feedback about the product. This will result in bad word of mouth about

the product. Organizations should always try to avoid negative post purchase

behaviors.

An important part of post purchase evaluation is the reduction of

uncertainty or doubts that the consumer might have about the selection. As part of

this post purchase analysis, consumers try to reassure themselves that their choice

was a wise one; that is they attempt to reduce post purchase cognitive dissonance.

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Chapter -2

RESEARCH METHODOLOGY

2.1 Rationale of the project

10

This study intends to help in analyzing the buying behavior and satisfaction

levels of the customers towards HDFC LIFE products and this may also

help the company to come up with better marketing strategies to cater to the

needs of the customers by creating better products and services.

2.2 OBJECTIVES OF THE STUDY:-

2.2.1 Primary objective:

To determine the factors that influence respondents buying behavior

towards HDFC Life products

To determine the factors that influence the satisfaction levels of consumers

towards HDFC Life products and services

2.2.2 Secondary objective:

To find out the post purchase experience of consumers about the HDFC

Life products

2.3 RESEARCH METHODOLOGY:

2.3.1 Type of research

Exploratory research has been done to determine the variables and the impact of

the variables on customer satisfaction and buying behavior. The research was

based on Primary data.

2.3.2 Sampling plan

11

The sampling plan used is Convenient sampling. The population for the sample is

the existing customers and the prospective customers of HDFC Life. The sample

size is limited to 150. The samples are collected from different areas of Bangalore.

2.3.3 Data collection

Structured questionnaire was used to collect data from sources such as HDFC Life

existing customers and non customers of HDFC Life. Separate questionnaire was

used for both the segments of customers.

2.3.4 Data Analysis

The data analysis was done with the help of data collected through questionnaire.

Tool like Mean square, Average, Percentages are used to analyze and software

such as MS – EXCEL was used to interpret the data.

2.3.5 Limitation of Study:

The study was limited to the urban areas of Bangalore

The time taken for the research was sixty working days

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Chapter -3

INDUSTRY, COMPANY

AND

PRODUCT PROFILE

3.1 INDUSTRY PROFILE

13

The advent of life insurance business in India started in 1818 with the

establishment of the Oriental Life Insurance Company in Calcutta. This Company

however failed in 1834. In 1870 saw the enactment of the British Insurance Act

and in the last three decades of the nineteenth century, the Bombay Mutual (1871),

Oriental (1874) and Empire of India (1897) were started in the Bombay

Residency. This era, however, was dominated by foreign insurance offices,

namely Albert Life Assurance, Royal Insurance, Liverpool and London Globe

Insurance and the Indian offices were up for hard competition from the foreign

companies.

In 1914, the Government of India started publishing returns of Insurance

Companies in India. The Indian Life Assurance Companies Act, 1912 was the first

statutory measure to regulate life business. In 1928, the Indian Insurance

Companies Act was enacted to enable the Government to collect statistical

information about both life and non-life business transacted in India by Indian and

foreign insurers including provident insurance societies. Insurance Act, 1938

amended with comprehensive provisions for effective control over the activities of

insurers.

The Insurance Amendment Act of 1950 abolished Principal Agencies.

However, there were a large number of insurance companies and the level of

competition was high. There were also allegations of unfair trade practices. The

Government of India, therefore, decided to nationalize insurance business. 

An Ordinance was issued on 19th January, 1956 nationalizing the Life

Insurance sector and Life Insurance Corporation came into existence in the same

year. The LIC absorbed 154 Indian, 16 non-Indian insurers as also 75 provident

societies—245 Indian and foreign insurers in all. The LIC had monopoly till the

late 90s when the Insurance sector was reopened to the private sector

In 1993, the Government set up a committee under the chairmanship of RN

Malhotra, former Governor of RBI, to propose recommendations for reforms in

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the insurance sector. The committee submitted its report in 1994 wherein, among

other things, it recommended that the private sector be permitted to enter the

insurance industry. They stated that foreign companies are allowed to enter by

floating Indian companies, preferably a joint venture with Indian partners.

In 1999, the Insurance Regulatory and Development Authority (IRDA)

were constituted as an autonomous body to regulate and develop the insurance

industry. The IRDA was incorporated as a statutory body in April, 2000.

The IRDA opened up the market in August 2000 with the invitation for

application for registrations. Foreign companies were allowed ownership of up to

26%. The Authority has the power to frame regulations under Section 114A of the

Insurance Act, 1938 and has from 2000 onwards framed various regulations

ranging from registration of companies for carrying on insurance business to

protection of policyholders’ interests. 

Today there are 24 general insurance companies including the ECGC and

Agriculture Insurance Corporation of India and 23 life insurance companies

operating in the country. 

The insurance sector is a colossal one and is growing at a speedy rate of 15-

20%. Together with banking services, insurance services add about 7% to the

country’s GDP.

3.2 COMPANY PROFILE

HDFC Life is one of India's leading private life insurance companies, offers a

range of individual and group insurance solutions. It is a joint venture between

Housing Development Finance Corporation Limited (HDFC), India's leading

housing finance institution and Standard Life plc, the leading provider of financial

services in the United Kingdom.

HDFC Ltd. holds 72.43% and Standard Life (Mauritius Holding) Ltd. holds

26.00% of equity in the joint venture, while the rest is held by others.

15

HDFC Life's product portfolio comprises solutions, which meet various customer

needs such as Protection, Pension, Savings, Investment and Health. Customers

have the added advantage of customizing the plans, by adding optional benefits

called riders, at a nominal price. The company currently has 29 retail and 5 group

products in its portfolio, along with five optional rider benefits catering to the

savings, investment, protection and retirement needs of customers.

HDFC Life continues to have one of the widest reaches among new insurance

companies with more than 500branches servicing customer needs in over 700

cities and towns. The company has a strong base of Financial Consultants.

To ensure long-term sustainable growth HDFC LIFE concentrated their focus on

expansion of branch network, organizing an efficient and well trained sales force,

and setting up appropriate systems and processes with optimum use of technology.

As all these areas form the basic infrastructure for establishing the highest possible

customer service standards. HDFC LIFE is the first private player to be registered

with the IRDA and the first to issue a policy on December 12, 2000.

HDFC LIFE is the first private life insurer to break the ice using the idea of self-

respect instead of 'death' to convey their brand proposition (Sar Utha Ke Jiyo).

Today, they are one of the few brands that customers recognize, like and prefer to

do business. Moreover, the brand thought, Sar Utha Ke Jiyo, is the most recalled

campaign in its category.

HDFC Life investment focus is based on the primary objective of protecting and

generating good, consistent, and stable investment returns to match the investor's

long-term objective and return expectations, irrespective of the market condition.

Despite the criticality of life insurance, sales in the industry have been

characterized by over reliance on tax benefits and limited advice-based selling.

Their eight-step structured sales process 'Disha' however, helps customers

understand their latent needs at the first instance itself without focusing on product

features or tax benefits. Need-based selling process, 'Disha', the first of its kinds in

16

the industry, looks at the whole financial picture. Customers see a plan not

piecemeal product selling.

HDFC Life has initiated and implemented many new processes, some of which

were found useful by the IRDA and later made mandatory for the entire industry.

The agents who successfully completed this training only, were authorized by the

company to sell ULIPs. This has now been made compulsory by IRDA for all

insurance companies under the new Unit Linked Guidelines

VISION: 'The most successful and admired life insurance company, which

means that we are the most trusted company, the easiest to deal with, offer the

best value for money, and set the standards in the industry'.

3.3 HDFC LIFE PRODUCTS

3.3.1 Protection plans:-

To safeguard family’s financial independence

Security against uncertainties

Financial cushion in case of an eventuality

Types of protection plans:-

1. HDFC TERM Assurance plan

2. HDFC Premium Guarantee Plan

3. HDFC Loan Cover Term Assurance Plan

3.3.2 Children’s Plans:-

To Fulfill Children’s dreams

Economic support when child needs it most

Types

17

Conventional plans Unit linked insurance plans

HDFC Children’s plan HDFC SL Young Star Super II

HDFC SL Young Star Super Premium

3.3.3 RETIREMENT PLANS:-

Monetary Security

Financial independence even after retirement

To live carefree in golden years.

Types

Type Conventional Plans Unit Linked Insurance

plans

Regular

Premium

HDFC Personal Pension

plan

HDFC Life classic

Pension Insurance Plan

3.3.4 Saving & Investment Plans:

Dual benefit of protection and long term savings

Provide an assured sum for future needs

Inculcate a habit of regular savings.

Type Conventional Plans Unit Linked Insurance Plans

Regular

Premium

1.HDFC SL New Money Back

Plan

2.HDFC Endowment Assurance

1.HDFC SL Pro Growth

Super II

2.HDFC SL Pro Growth

18

Plan

3.HDFC Life Sampoorn Samridhi

Insurance Plan

Flexi

Single

Premium

1.HDFC Single Premium Whole of

Life Insurance Plan

HDFC SL Pro Growth

Maximiser

3.3.5 Health Plans

To secure health costs

Financial independence despite illnesses

Meeting medical expenses effortlessly

Types

HDFC Critical Care Plan

HDFC Surgicare Plan

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Chapter -4

DATA ANALYSIS AND INTERPRETATION

For Non customers of HDFC Life

The following table shows the Age group of the respondents

TABLE - 4.1: Age group of the respondents:

20

CATEGORY FREQUENCY

BELOW 25 21

25 – 40 43

ABOVE 40 11

28%

57%

15%

below 25 25 - 40

above 40

Figure 4.1 – Age group of respondents

Out of 75 respondents 28% are below 25, majority of the respondents that is 57%

are between 25 and 40 and only 15% are above 40.

The following table shows the gender of the respondents

TABLE - 4.2: Gender of the respondents

21

CATEGORY FREQUENCY

Male 51

Female 24

68%

32%

male female

Figure 4.2: Gender of the respondents

Out of 75 respondents majority of them that is 68% are male and 32% of them are

female.

The following table shows the occupation of the respondents.

TABLE - 4.3: Occupation of the respondents:

22

OCCUPATION FREQUENCY

Professional 36

Business person 18

Govt. Employee 21

48%

24%

28%

professional

business person

govt. employee

Figure 4.3: Occupation of the respondents.

Out of 75 respondent’s majority of them that is 48% are professionals, 24% of

them are business person and 28% of them are govt. Employees.

The following table shows the annual income of the respondents

TABLE - 4.4: Annual Income of the respondents:

23

INCOME LEVEL

(yearly)

FREQUENCY

1.5 lakh – 5 lakh 51

5 lakh – 10 lakh 19

Above 10 lakh 5

68%

25%

7%

1.5 lakh - 5 lakh5 lakh - 10 lakh above 10 lakh

Figure 4.4: Annual income of the respondents

Out of 75 respondents 68% of their annual income is in between 1.5lakh – 5 lakh,

25% of them are in between 5 lakh – 10 lakh, and only 7% of them are above 10

lakh

The following table shows the investment schemes that respondents give much

preference

TABLE - 4.5: Preference towards Investment schemes

24

Various schemes Rating (mean square value)

Life Insurance 3.37

Fixed Deposits 3.64

Properties 4.02

Mutual funds 3.25

24%

25%28%

23%

life insurancefixed depositspropertiesmutual funds

Figure 4.5: Preference towards investment schemes

Out of 75 respondents majority of them that is 28% prefer for properties, 25% of

them prefer fixed deposits, 24 % of them prefer Life Insurance and only 23% of

the respondents prefer mutual funds.

The following table shows that the respondents opinion about Life insurance

TABLE - 4.6: Importance of having Life Insurance

25

Attitude Frequency

Most important 18

Important 27

Neutral 23

Least important 4

Not important 3

Most Important important neutral least important not important0%

5%

10%

15%

20%

25%

30%

35%

40%

24%

36%31%

5% 4%

Figure 4.6: Importance of having Life Insurance

24% of the respondents think its most important to have Life insurance, 36% of

them think it is important, 31% of them are in neutral, 5% of them think it is least

important and only 4% of them think it is not important.

The following table shows that the number of respondents having insurance from

any company

TABLE - 4.7: Number of respondents having Life insurance

26

Insurance holder Frequency

Yes 39

No 36

52%48% Yes

No

Figure 4.7: Number of respondents having Life Insurance

Out of 75 respondents 52% of them have taken Insurance from other companies

and 48% of them haven’t taken Insurance from any company.

The following table shows that the important factors that the respondents rated in a

Life Insurance Company

TABLE - 4.8: Important factors in a Life insurance company

27

Factors Rating (mean square value)

Brand name 3.50

Better services 3.90

Innovative Plans 3.17

Accessibility 3.98

Brand name better services innovative plan accessibility0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

70%78%

63%

80%

Figure 4.8: Important factors in a Life Insurance company

Out of 75 respondents 70% of them give importance to brand name, 78% of them

give importance to better services, 63% of the give importance to innovative plans

and majority of them that is 80% of them give importance to accessibility.

The following table shows the important factors that are considered by the

respondents while purchasing a Life Insurance policy

TABLE - 4.9: Important factors when purchasing Life insurance policy

28

Factors Rating (mean square value)

Tax benefit 2.56

Saving 3.4

Protection 3.89

Pension 3.38

Investment 2.57

tax benefit

saving

protection

pension

investment

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

51%

68%

78%

68%

51%

Figure 4.9: Important factor when purchasing a Life insurance policy

Out of 75 respondents 51% of them look for tax benefit, 68% for saving, and

majority of the respondents that is 78% for protection, 68% for pension and 51%

of them for investment. From this we can say that most of them are taking

insurance for protection purpose.

The following table shows that the respondents prefer a policy with premium

spread over

TABLE - 4.10: Preference for premium spread over

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Premium spread over Frequency

Less than 5 years 13

5 – 10 years 24

10 – 15 years 27

More than 15 years 11

Less than 5 years

5 - 10 years

10 - 15 years

more than 15 years

0% 5% 10% 15% 20% 25% 30% 35% 40%

17%

32%

36%

15%

Figure 4.10: Preference for premium spread over

17% of the respondents prefer a policy with premium spread over less than 5

years, 32% of them prefer for 5-10years, majority of the respondents that is 36%

prefer with a premium spread over for 10-15years, and only 15% of them prefer

more than 15 years.

The following table shows the rating given by the respondents for the services that

they expect from Life insurance providers.

TABLE - 4.11: Rating for services expected by respondents

30

Features Rating (mean square value) Rank

Bonus 4.33 1

Provision in case of dues 4.21 2

Easy access ability to

deposit centre

4.01 3

Time to time premium

collection

3.61 4

easy access ability to deposit centre

time to time premium collection

provision in case of dues bonus 65%

70%

75%

80%

85%

90%

80%

72%

84%

87%

Figure 4.11: Rating for services expected by respondents

From the graph it is seen that 80% of the respondents are expecting easy access

ability to deposit centre, 72% for time to time premium collection, 84% for

provision in case of dues, and a majority of the respondents that is 87% for bonus.

The following table shows that the respondent’s opinion in which areas should

Life Insurance companies should work on

TABLE - 4.12: Rating for the areas where company should work

31

Features Rating (mean square value) Rank

Less complicated procedures 3.97 3

Fewer premiums 3.42 4

More returns 4.46 1

Transparency 4.26 2

Less complicated pro-cedures

fewer premiums more returns transparency0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

3.973.42

4.46 4.26

Figure 4.12: Rating for the areas where company should work

From the table we can conclude that respondents are giving first importance to

more returns, 2nd to Transparency, 3rd to less complicated procedures, and last

preference to fewer premiums.

The following table shows that the numbers of respondents are aware of HDFC

Life products

TABLE - 4.13: Respondent’s awareness towards HDFC Life products

32

Awareness Frequency

Yes 15

No 60

19%

81%

yesno

Figure 4.13: Awareness towards HDFC Life products

Out of 75 respondents only 19% of them are aware of HDFC Life products and

81% of them are not aware of the products.

The following table shows how respondents come to know about the HDFC Life

products.

TABLE - 4.14: Source of awareness towards HDFC Life products

Source Frequency

33

Newspaper 0

Television 0

Internet 7

Reference Group 4

Financial Journals 0

Agents 4

News papers television internet reference group financial journals

agents0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0% 0%

47%

27%

0%

27%

Figure 4.14: Source of awareness towards HDFC Life products

Out of 15 respondents 47% of them are come to know about the products through

internet, 27% of them come to know through reference group and 27% through

agents.

The following table shows that the numbers of respondents are interested to make

an investment with HDFC Life

TABLE - 4.15: Investment with HDFC Life

Investment with HDFC Life Frequency

34

Yes 11

No 09

Not yet decided 50

15%

12%

73%

yesnoNot decided

Figure 4.15: Investment with HDFC Life

Out of 75 respondents only 15% of them are ready to make an investment with

HDFC Life, and 12% of them are not willing to do investment with HDFC Life.

And a majority of the respondents that is 73% are not yet decided whether to go

for HDFC Life or not.

The following table shows the rating that the respondents gave for HDFC Life

plans

TABLE - 4.16: Respondents preference towards HDFC Life plans

35

Plans Rating (mean square value) Rank

Retirement plans 4.18 2

Health Plans 3.54 4

Savings and investment

plans

3.72 3

Children’s plan 3.27 5

Protection plans 4.45 1

retire

ment p

lans

health

plans

savin

gs an

d inve

stmen

t plan

s

child

ren plan

s

protec

tion plans

00.5

11.5

22.5

33.5

44.5

5

4.183.54 3.72

3.27

4.45

Figure 4.16: Respondents preference towards HDFC Life plans

From the table we can conclude that out of 11 respondents, 1st importance is given

for Protection plans, 2nd for Retirement plans, 3rd for savings and investment plans,

4th for health plans and 5th for children’s plan.

For existing customers of HDFC Life

The following table shows the age group of the respondents.

36

TABLE - 4.17: The age group of respondents

CATEGORY FREQUENCY PERCENT

BELOW 25 7 9%

25 – 40 59 79%

ABOVE 40 9 12%

9%

79%

12%

below 2525 - 40above 40

Figure 4.17: Age group of the respondents

Out of the 75 respondents, only 9% of respondents are of the age group of below

25 years and majority of the respondents, that is 79% are in the age group of 25 –

40 years and 12% of the respondents are of the age group of above 40 years.

The following table shows the Gender of the respondents.

TABLE - 4.18: Gender of the respondents

CATEGORY FREQUENCY PERCENT

37

Male 61 81%

Female 14 19%

81%

19%

male female

Figure 4.18: Gender of the respondents

81% of the respondents are males and 19% of the respondents are females. So we

can say that male population is more exposed to the insurance products.

The following table shows the Occupation of the respondents

TABLE - 4.19: Occupation of the respondents

38

OCCUPATION FREQUENCY PERCENTAGE

Professional 48 64%

Business person 12 16%

Govt. Employee 15 20%

64%

16%

20%

professionalbusiness persongovt.Employee

Figure 4.19: Occupation of the respondents.

Out of 75 respondents majority of the respondents, that is 64% are professionals,

16% are business person and 20% are government employee.

The following table shows the annual Income of the respondents.

TABLE - 4.20: Annual income of the respondents:

39

INCOME LEVEL

(yearly)

FREQUENCY PERCENT

1.5 lakh – 5 lakh 45 60%

5 lakh – 10 lakh 23 31%

Above 10 lakh 7 9%

60%

31%

9%

1.5 lakh - 5 lakh5 lakh - 10 lakhabove 10 lakh

Figure 4.20: Annual Income of the respondents

From the graph we can find that 60% of the respondents are of the income group

of 1.5 lakh – 5 lakh, 31% are of the income group 5 lakh- 10 lakh and only 9% are

of the income group of above 10 lakh.

The following table shows the various sources from which the respondents are

aware about HDFC Life are shown in the table

40

TABLE: 4.21: Source to know about HDFC Life

SOURCE FREQUENCY

News Paper 09

Television 11

Friends and Relatives 21

Direct selling agents 19

Internet 15

Other 0

12%

15%

28%

25%

20%

News paperTelevisionfriends & relativesdirect selling agentsinternet

Figure 4.21: Source of awareness

The various sources by which HDFC Life customers are aware about the products

are 12% by News paper, 15% through television, major part 28% of awareness by

friends and relatives, 25% by direct selling agents and 20% by internet.

The following table shows the various products that the respondents bought from

HDFC Life.

41

TABLE - 4.22: Products those respondents bought from HDFC Life

PRODUCTS FREQUENCY

Retirement Plans 18

Health plans 08

Savings and Investment plans 09

Children plans 11

Protection plans 29

retirement plans health plans savings & investment planschildren plans protection plans0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

24%

11% 12%15%

39%

Figure 4.22: Products that respondents bought from HDFC Life

Out of 75 respondents 24% took retirement plans, 11% of the respondents took

Health plans, 12% of the respondents took Savings and Investment plans, 15% of

the respondents took children’s plan and majority of the respondents that is 39%

took protection plans. From this graph we can say that protection and retirement

plans are fast moving products in HDFC Life.

The following table shows the number of policies that the respondent took from

HDFC Life

TABLE - 4.23: Number of policies

42

NUMBER OF POLICIES FREQUENCY

One 52

Two 16

Three 7

More than three 0

1 policy 2 policies 3 policies >3 policies0%

10%

20%

30%

40%

50%

60%

70%

80%

69%

21%

9%0%

Figure 4.23: Number of Polices

From this graph we can say that majority of the respondents that is 69% had

bought 1 policy, 21% bought 2 policies, 9% bought 3 policies and no one had

taken more than 3policies.

The following table shows that number of years being customers of HDFC Life.

TABLE - 4.24: Number of years being the customers of HDFC Life

43

NUMBER OF YEARS FREQUENCY

Less than 1 year 11

1 – 2 years 24

2 – 5 years 31

More than 5 years 9

< 1 year

1 - 2 years

2 - 5 years

more than 5 years

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

15%

32%

41%

12%

Figure 4.24: Number of years being the customers of HDFC Life

The majority of the respondents that is 41% are between 2-5years, 32% are

between 1-2years, 15% are less than 1year and only 12% are more than 5years.

The following table shows the premium amount that respondents are paying

annually.

TABLE - 4.25: Annual premium payment by respondents

44

PREMIUM FREQUENCY

Less than 10,000 0

10,000 – 20,000 13

20,000-30,000 26

More than 30,000 36

less than 10000

10000-20000

20000-30000

more than 30000

0% 10% 20% 30% 40% 50% 60%

0%

17%

35%

48%

Figure 4.25: Annual premium payment by respondents

From this graph we can say that majority of the respondents that is 48% are paying

more than 30000, 35% of respondents are paying in between 20000-30000, 17%

are paying between 10000-20000 and no one is paying below 10,000.

The following table shows the satisfaction levels of respondents towards their

products.

TABLE - 4.26: Satisfaction levels of the respondents

45

SATISFACTION LEVEL FREQUENCY

Extremely satisfied 12

Slightly satisfied 38

Neutral 21

Dissatisfied 4

Extremely Dissatisfied 0

extremely satisfied slightly satisfied neutral dissatisfied extremely dissatisfied0%

10%

20%

30%

40%

50%

60%

16%

51%

28%

5%0%

Figure 4.26: Satisfaction levels of the respondents

From this graph we can infer that only 16% of the respondents are extremely

satisfied, and a majority that is 51% of the respondents are slightly satisfied, 28%

are in neutral and few respondents are dissatisfied with their product. Finally we

can say about 67% of the respondents are satisfied with the product they own.

The following table shows that whether the respondents got the information about

various polices available at that time when they purchased the policy.

TABLE - 4.27: Information about other policies

46

INFORMATION FREQUENCY

Yes 68

No 7

91%

9%

yesNo

Figure 4.27 Information about other policies

From the above pie chat we can infer that a majority of respondents that is 91%

got information about other policies at the time of their purchase, only a few like

9% didn’t get information about other policies.

The following table shows that the number of the respondents felt that benefits

received by their policy are attractive and preferable.

TABLE - 4.28: Benefits of the policy

47

NUMBER OF RESPONDENTS

YES 53

NO 22

71%

29%

YesNo

Figure 4.28: Benefits of the policy

From the pie chart it is infer that 71% of the respondents said the benefits received

by their policy is attractive and preferable and 29% of respondents says that they

are attractive and preferable.

The following table shows that whether the respondents received any

compensation and reward was it given in time as specified at the time of

purchasing the policy.

48

TABLE - 4.29: Compensation and rewards

IN TIME FREQUENCY

Yes 41

No 34

41

34

yesNo

Figure 4.29: compensation and rewards

41% of the respondents said that they received compensation and reward in time

and rest that is 34% said they didn’t received.

The following table shows the company ability to satisfy customer needs

TABLE - 4.30: Ability to satisfy customer need

Ability to satisfy the need Frequency

49

Strongly Agree 9

Agree 33

Neutral 25

Disagree 8

Strongly Disagree 0

strongly agree

agree

neutral

disagree

strongly disagree

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

12%

44%

33%

11%

0%

Figure 4.30: Ability to satisfy customer need

From the graph it is infer that 12% of the respondents strongly agree that the

customer need is properly judged by the company, majority of respondents that is

44% agree, 33% of the respondents are in neutral, and only 11% of the

respondents disagree. Over all we can say that the company is able to satisfy the

customer need properly.

The following table shows the ability of employees to solve customer queries

TABLE - 4.31: Ability of employees to solve customers’ queries

50

Ability to solve queries Frequency

Excellent 11

Good 31

Average 21

Fair 7

Poor 5

excellent good average fair poor0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

15%

41%

28%

9%7%

Figure 4.31 Ability of employees to solve customers’ queries

Out of 75 respondents 15% of them felt the ability employees is excellent in

solving their queries, 41% felt good, 28% felt average, 9% felt fair, and only 7%

said they are poor to solve their queries.

The following table shows how frequently customers are been contacted by the

company.

TABLE - 4.32: Company contact with customers

51

Frequency Number of respondents

Monthly 15

Quarterly 17

Half-yearly 20

Yearly 23

20%

23%

27%

31%

monthlyquaterlyhalf-yearlyyearly

Figure 4.32: Company contact with customers

20% of respondents are been contacted by the company monthly, 23% are been

contacted quarterly, 27% are contacted half-yearly and majority of the respondents

that is 31% are been contacted yearly.

The following table shows the rating that the customers gave for the type of

service system they prefer.

TABLE - 4.33: Preference of service system

52

Type of system Rating (mean square value)

Personal 4.05

Telephone 2.30

Online Internet 3.73

40%

23%

37%

personal telephone online internet

Figure 4.33: Preference of service system

Majority of respondent that is 40% prefer personal, 37% of the respondents prefer

Online Internet, and 23% of them prefer Telephone.

The following table shows the overall rating given by respondents for the services

of HDFC Life.

TABLE - 4.34: Overall rating for services.

53

Rating Frequency

Poor 7

Average 21

Good 43

Excellent 4

poor average good excellent0%

10%

20%

30%

40%

50%

60%

70%

9%

28%

57%

5%

Figure 4.34: Overall rating for services

Out of 75 respondents 9% of them rate the service system of HDFC Life as poor,

28% of them rate as average, majority of them that is 57% rate it as good and only

5% of them rate it as excellent.

The following table shows that whether the respondents will recommend others to

take the products of HDFC Life

TABLE - 4.35: Recommendation of HDFC Life products to others

54

Recommendation Frequency

Strongly recommend 4

To some extent 53

Not recommend 18

5%

71%

24%

strongly recommendto some extentnot recommend

Figure 4.35 Recommendation of HDFC Life products to others.

Only 5% of the respondents strongly recommend HDFC Life products to other,

majority of 71% recommend to some extent and 18% of them will not

recommend.

55

Chapter- 5

FINDINGS AND CONCLUSION

From the analysis done a number of findings have been made and they are

divided in to two categories.

5.1 Finding from non customers of HDFC Life

56

a) Accessibility and better services are the important factors that 80 % of the

respondents are giving importance to Life insurance companies.

b) Protection and Pension plans are the main consideration that respondents

are looking for while purchasing Life Insurance policy.

c) 87% of the respondents are looking for bonus and 84% of them are

expecting provision in case of dues from Insurance companies.

d) 89% and 85% of the respondents suggesting the company needs to work

upon more returns and transparency.

e) 81% respondents are unaware about HDFC Life products, 13% who are

aware have their main source of awareness from Agents, Internet, and

reference group.

f) 73% of respondents have not yet decided to make investment with HDFC

Life, because they are not aware of the products and benefits that they get

out of them. 15% of respondents who are interested to invest with HDFC

Life prefer protection and retirement plans.

5.2 Finding from existing customers of HDFC Life

g) 39% of the respondent’s bought protection plans and 24% bought

retirement plans.

h) 67% of the respondents who bought products from HDFC Life are satisfied

with their policies, 28% are in neutral and only 5% of the respondents are

dissatisfied that because of lack of knowledge of product on the part of

agents and their ability to explain the same to the customers.

i) Respondents are unhappy with the communication of information on due

dates for paying premiums. Company is informing them 15 days before the

grace period of payment is over.

j) 71% of the respondents agree that the benefits of their policy are attractive

and preferable.

57

k) 40% of the customers prefer personal service system and 37% of them are

for Online internet system.

l) 63% the respondents are happy with the service system provided by the

HDFC Life.

m) 70% of the respondents are willing to recommend the products of HDFC

Life to other. Only 30% are not willing to recommend.

5.3 CONCLUSION:

A customer gives more preference to certain factors before making an investment

in an insurance company. So HDFC Life should focus on these aspects to gain

competitive advantage. Primarily, the firm must identify such factors that are

creating dissatisfaction to the customers and must endeavor to remove these to

compete with other leading firms. Also suggestions from the customers are very

much vital in bringing necessary changes.

58

Chapter- 6

SUGGESTIONS AND RECOMMENDATION

6.1 Recommendations:

Some of the recommendations to the company are:

59

a) HDFC Life should provide better services and accessibility, it may be better

if they recruit a team to monitor and take care of these aspects.

b) It is recommended that the company should come up with new products

that provide better returns and transparency.

c) To improve awareness about the products there should be increase in

advertisements on TV channels and newspapers focusing on the products

and their benefits.

d) The company should go for sponsorship events like reality shows, stage

shows etc., so that people get familiar with the brand.

e) Proper training should be provided to the agents for improving their product

knowledge. This will improve their effectiveness in explaining complete

details about the products, regarding the change of policies and benefits of

the policies.

f) Maintaining relationship between the company and the customers should be

a continuous effort, not only during the payment of premiums but

throughout the years.

g) At least 45 days prior intimation should be given for annual premium

payments.

Bibliography

BOOKS:

Kotler, Philip. Marketing Management. 12th Edition. India: Pearson

Education, Dorling Kindersley Pvt. Ltd, 2007.

60

LG. Schiffman, Leslie Lazar Kanuk. Consumer Behavior. 8th Edition. India:

Asoke K. Ghosh, Prentice-Hall Private Limited, 2006.

Malhotra, Naresh. Marketing Research-:An applied orientation.4th Edition.

New Delhi: Prentice- Hall, 2006.

Nargundkar, Rajendra Marketing Research, 2nded, New Delhi: Tata

McGraw-hill, 2003.

D.C., Shrivastava and S. Shrivastava. Indian Insurance Industry: Transition

and Prospects. New Delhi: New Century Publications, 2001.

Mishra, M.N. Principles and Practices of Insurance. New Delhi: Sultan and

Chand Limited, 2002.

Web Sites

4 jul 2011. http://www.hdfclife.com/AboutUs/AboutUsIntroduction.aspx

5 jul 2011http://www.irda.gov.in/ADMINCMS/cms/NormalData_Layout.aspx?

page=PageNo4&mid=2

10 jul 2011. http://www.irda.gov.in/ADMINCMS/cms/frmGeneral_NoYearList.

aspx?DF=RL&mid=4.2

12 jul 2011. http://www.insuranceinstituteofindia.com/InsuranceInst/Home/ASPX/

Index.aspx

28 jul 2011. http://en.wikipedia.org/wiki/Customer_satisfaction

18 aug 2011. http://www.learnmarketing.net/consumer.htm

Appendix 1

Questionnaire for Non – customers of HDFC Life

61

Which Age group you belongs to?

Below 25

25 – 40

Above 40

Gender: Male Female

Occupation: Professional Business Person Govt. Employee

Any other (please specify)…………………

Annual Income (Rs): 1.5 lakh – 5lakh 5 lakh – 10 lakh

Above 10 lakh

1. Which Investment schemes you prefer (Rate them, 1 being least and 5being

highest)?

Features Rating

1 2 3 4 5

Life Insurance

62

Fixed Deposits

Properties

Mutual funds

Other(specify)

2. Do you think is it essential to have Life Insurance?

Most important

Important

Neutral

Least Important

Not Important

3. Have you taken any Life Insurance from any company?

Yes

No

If yes please specify the

Name of the Company……………….

Plan …………………..

Premium ………………….

4. Rate the factors that you give importance in a Life Insurance company?

Features Rating

1 2 3 4 5

Brand Name

63

Better Services

Innovative Plans

Accessibility

5. Main consideration that you look at while purchasing a Life Insurance policy.

Most

importantImportant Neutral

Least

important

Not

important

Tax benefit

Saving

Protection

Pension

Investment

6. You will prefer a policy with premium spread over.

Less than 5 years

5 – 10 years

10 -15 years

More than 15 years

7. Prioritize the Services you expect from Life Insurance providers (1 being the

lowest and 5 being the highest)?

Features Rating

1 2 3 4 5

64

Easy access ability to

deposit centre

Time to time premium

collection

Provision in case of dues

Bonus and other schemes

8. According to you, in what areas should the Life Insurance companies work upon?(

1 being the lowest and 5 being the highest)

Features Rating

1 2 3 4 5

Less complicated

procedures

Fewer premiums

More returns

Transparency

9. Are you aware of HDFC Life Products?

Yes

No

10. How do you come to know about HDFC Life products?

News Papers

Television

Internet

65

Reference Group

Financial Journals

Any other (specify):

11. Are you willing to make an investment with HDFC Life?

Yes

No

Not yet decided

If No Specify reasons:

12. If yes which of the following plans you prefer to buy from HDFC Life. (1 being

the lowest and 5 being the highest)?

Features Rating

1 2 3 4 5

Retirement Plans

Health Plans

Savings and Investment Plans

Children Plans

Protection Plans

Appendix: 2

Questionnaire for customer satisfaction towards HDFC Life Products and

Services

66

Which Age group you belongs to?

Below 25

25 – 40

Above 40

Gender: Male Female

Occupation: Professional Business Person Govt. Employee

Any other (please specify)…………………

Annual Income (Rs): 1.5 lakh – 5lakh 5 lakh – 10 lakh

Above 10 lakh

1. How do you come to know about HDFC Life?

News Paper

Television

Friends and relatives

Direct selling agents

Internet

Other (please specify) ………………

2. Which of the following products you bought from HDFC Life?

Retirement plans

Health Plans

Savings and Investment Plans

67

Children Plans

Protection Plans

3. How many policies do you have in HDFC Life?

1

2

3

>3

4. For how many years have you been the customers of HDFC Life?

Less than 1 Year

1 – 2 Years

2 – 5 Years

More than 5 Years

5. What is the Premium amount you are paying annually?

Less than 10,000

10,000 – 20,000

20,000 – 30,000

More than 30,000

6. Are you satisfied with the policy you own?

Extremely satisfied

Slightly satisfied

Neutral

Dissatisfied

68

Extremely dissatisfied

7. Were you given information about all the different policies available at the time

you purchased the policy

Yes

No

8. Are the benefits received by your policy attractive and preferable?

Yes

No.

9. If you received any compensation and reward was it given to you in time as

specified at the time of purchasing policy?

Yes

No

10. Do you agree that the customer need is properly judged by the company?

Strongly agree

Agree

Neutral

Disagree

Strongly disagree

11. How do you feel about the ability of the employees to solve your queries?

Excellent

Good

Average

Fair

Poor

69

12. How frequently are you contacted by company?

Monthly

Quarterly

Half-yearly

Yearly

13. What type of service system do you prefer? (Rank them)

Features Rating

1 2 3 4 5

Personal

Telephone

Online internet

14. Are you satisfied with the HDFC Life Products that you own?

Extremely satisfied

Slightly satisfied

Neutral

Dissatisfied

Extremely dissatisfied

70

15. How would you rate the overall services given by HDFC Life?

Poor

Average

Good

Excellent

16. Your opinion about the HDFC Life?

Very good

Good

Average

Bad

Very bad

17. Would you like to recommend HDFC Life products to others?

Strongly recommend

To some extent

Not recommend

18. Suggestions for HDFC Life?

……………………………………………………………………

……………………………………………………………………

71