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A
Training ReportOn
Customer buying behavior
Of
Submitted By
Narendra Singh Thakur
MBA Full Time CourseII Semester
Bansal MBA College
Barkatullah University
Bhopal ( M.P.)
1
SESSION - 2008-10
Preface
o The success story of good market share of different market
organizations depends upon the availability of the product and services
near to the customer, which can be distributed through a distribution
channel. In Insurance sector, distribution channel includes only agents
or agency holders of the company. The customer satisfaction is the key
factor of any successful organization and it is essential to know the
customers taste for those organizations which want to survive in the
cut throat competition in the market.
o The primary objective of the research is SWOT analysis of the
customers or taste of the customer. This is the study of customer’s
behavior because in today’s competitive world the customer fascinates
by the ads and the customers carried away by the ads change their
choice and tastes that’s by the organizations need to know the
behavior of the customers.
o The research made on customer behavior buying with a focus on
market segmentation of HDFC Standard Life Insurance Company
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because in today’s context the insurance sector is a boom sector in
which a lot of companies are surviving in cut throat competition and
every company wants to capture the market for which the behavior of
the customer always plays a key role.
Acknowledgement
I would like to pay my words of thanks to Dr. R S Tiwari director of Bansal MBA College Bhopal, who has given me this golden opportunity to take 45 days training at HDFC Standard Life Insurance Company & Mr.Vipin Tiwari Business Development Manager HDFC Standard Life Insurance Company Branch Bhopal Cinema, Bhopal Who was my Field guide & trainer.
I am very grateful to my esteemed faculties especially for Mr. Vinod sharma who provided me a right direction to utilize the time, during the training, & proper guidence.
In the last but not least, I would like to express my hearty thanks to my family who has given me financial support & encouraged me to do the best. Besides my family I also thank to my friends who inspired me to put the best effort for the report & I thank to all those people who co operated me to the completion the training.
3
Narendra Singh Thakur
MBA 2ND
Semester
Certificate
This to certify that Mr. Narendra Singh Thakur, is a regular student of MBA II Semester of Bansal MBA College Bhopal, has successfully completed minor research project entitled.
Marketing research has been made on …….
“Customer Buying Behavior with a focus on market segments”.
We have examine the training report & found it satisfactory for the fulfillment of the project requirement for the subject Summer training report of MBA (FT) II sem. Bansal MBA College Bhopal examination 2009.
This report is completed under my supervision .It is only for academic purpose and is a bona fide work done by researcher.
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Project guide: Mr. Vinod Sharma
Director: Dr. R S Tiwari
Bansal MBA College Bhopal
Date:
Place:
Declaration
I, undersigned Narendra Singh Thakur, hereby declare that the training report entitled Customer- buying behavior is based on my original work of my dedication to the work.
This is a genuine work done by me & the information has been collected, is authentic to the best of my knowledge & belief.
The training report was undertaken as a part of MBA curriculum at Bansal MBA College, Barkatullah University Bhopal (MP)
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Narendra Singh Thakur
MBA 2nd Semester
Contents Chapter 1 Introduction
Chapter 2 Company profile Board members Company’s products Corporate objective
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Chapter 3 Research methodology Objective & Significance Research Design Data Collection
Chapter4 Facts & Findings Data
Collection & Interpretation
Chapter 5 Conclusion Suggestion Limitations
Chapter 6 Appendix
7
Chapter 1
Introduction
8
IntroductionThe history of Indian insurance industry:
o Life insurance
In 1818 the British established the first insurance company in India in
Calcutta, the Oriental Life Insurance Company. First attempts at regulation of
the industry were made with the introduction of the Indian Life Assurance
Companies Act in 1912. A number of amendments to this Act were made
until the Insurance Act was drawn up in 1938. Noteworthy features in the Act
were the power given to the Government to collect statistical information
about the insured and the high level of protection the Act gave to the public
through regulation and control. When the Act was changed in 1950, this
meant far reaching changes in the industry. The extra requirements included
a statutory requirement of a certain level of equity capital, a ceiling on share
holdings in such companies to prevent dominant control (to protect the
public from any adversarial policies from one single party), stricter control on
investments and, generally, much tighter control. In 1956, the market
contained 154 Indian and 16 foreign life insurance companies. Business was
heavily concentrated in urban areas and targeted the higher echelons of
society. “Unethical practices adopted by some of the players against the
interests of the consumers” then led the Indian government to nationalize
the industry. In September 1956, nationalization was completed, merging all
these companies into the Life Insurance Corporation (LIC)
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Some of the important milestones in the life insurance business in
India are:
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: The market contained 154 Indian and 16 foreign life insurance
companies.
o General Insurance
The General Insurance industry in India dates back to the
Industrial Revolution and the subsequent increase in trade across
the oceans in the 17th century. As for Life Insurance, the British
brought General Insurance to India, and a similar path was
followed in the development of this industry. A number of private
companies were in existence for years and years until, in 1971,
the Indian Government decided that the public interest would be
served by nationalizing the industry, merging all the 107
companies into four companies, depending on the sort of
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business transacted (Marine, Fire, Miscellaneous). These were
the National Insurance Company Ltd., the Oriental Insurance
Company Ltd., the New India Assurance Company Ltd., and the
United India Insurance Company Ltd. located in Calcutta, New
Delhi, Bombay and Madras respectively. The General Insurance
Corporation (GIC) was set up in 1972 as a ‘holding’ company,
having these four companies as its subsidiaries.
Some of the important milestones in the general insurance business
in India are:
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
nationalize the general insurance business in India with effect from 1st
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.
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MAJOR PLAYERS OF INSURANCE
INDUSTRY IN INDIA
o Life Insurance Corporation of India (LIC)
Life Insurance Corporation of India (LIC) was established on 1 September
1956 to spread the message of life insurance in the country and mobilise
people’s savings for nation-building activities. LIC with its central office in
Mumbai and seven zonal offices at Mumbai, Calcutta, Delhi, Chennai,
Hyderabad, Kanpur and Bhopal, operates through 100 divisional offices in
important cities and 2,048 branch offices. LIC has 5.59 lakh active agents
spread over the country.
The Corporation also transacts business abroad and has offices in Fiji,
Mauritius and United Kingdom. LIC is associated with joint ventures abroad in
the field of insurance, namely, Ken-India Assurance Company Limited,
Nairobi; United Oriental Assurance Company Limited, Kuala Lumpur; and Life
Insurance Corporation (International), E.C. Bahrain. It has also entered into
an agreement with the Sun Life (UK) for marketing unit linked life insurance
and pension policies in U.K..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 as against 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
12
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
o General Insurance Corporation of India (GIC)
The general insurance industry in India was nationalized and a government
company known as General Insurance Corporation of India (GIC) was formed
by the Central Government in November 1972. With effect from 1 January
1973 the erstwhile 107 Indian and foreign insurers which were operating in
the country prior to nationalization, were grouped into four operating
companies, namely, (i) National Insurance Company Limited; (ii) New India
Assurance Company Limited; (iii) Oriental Insurance Company Limited; and
(iv) United India Insurance Company Limited. (However, with effect from
Dec'2000, these subsidiaries have been de-linked from the parent company
and made as independent insurance companies).
Besides the domestic market, the industry is presently operating in 17
countries directly through branches or agencies and in 14 countries through
subsidiary and associate companies.
o In addition to state insurers the following have been
permitted to enter into insurance business :-
The introduction of private players in the industry has added to the colors in
the dull industry. The initiatives taken by the private players are very
13
competitive and have given immense competition to the on time monopoly
of the market LIC. Since the advent of the private players in the market the
industry has seen new and innovative steps taken by the players in this
sector. The new players have improved the service quality of the insurance.
As a result LIC down the years have seen the declining phase in its career.
The market share was distributed among the private players. Though LIC still
holds the 75% of the insurance sector but the upcoming natures of these
private players are enough to give more competition to LIC in the near
future. LIC market share has decreased from 95% (2002-03) to 82 %( 2004-
05).
1. HDFC Standard Life Insurance Company Ltd.
HDFC Standard Life Insurance Company Ltd. is one of India’s leading private
life insurance companies, which offers a range of individual and group
insurance solutions. It is a joint venture between Housing Development
Finance Corporation Limited (HDFC Ltd.), India’s leading housing finance
institution and The Standard Life Assurance Company, a leading provider of
financial services from the United Kingdom. Their cumulative premium
income, including the first year premiums and renewal premiums is Rs.
672.3 for the financial year, Apr-Nov 2005. They have managed to cover
over 11,00,000 individuals out of which over 3,40,000 lives have been
covered through our group business tie-ups.
2. HDFC Standard Life Insurance Company Ltd.
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Max New York Life Insurance Company Limited is a joint venture that brings
together two large forces - Max India Limited, a multi-business corporate,
together with New York Life International, a global expert in life insurance.
With their various Products and Riders, there are more than 400 product
combinations to choose from. They have a national presence with a network
of 57 offices in 37 cities across India.
3. HDFC Standard Life Insurance Company Ltd.
ICICI Prudential Life Insurance Company is a joint venture between ICICI
Bank, a premier financial powerhouse and prudential plc, a leading
international financial services group headquartered in the United Kingdom.
ICICI Prudential was amongst the first private sector insurance companies to
begin operations in December 2000 after receiving approval from
Insurance Regulatory Development Authority (IRDA). The company has a
network of about 56,000 advisors; as well as 7 banc assurance and 150
corporate agent tie-ups.
4.Kotak Mahindra Old Mutual Life Insurance Ltd.
Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture between
Kotak Mahindra Bank Ltd. (KMBL), and Old Mutual plc.
5. Birla Sun Life Insurance Company
Birla Sun Life Insurance Company is a joint venture between Aditya
Birla Group and Sun Life financial Services of Canada.
o Tata AIG Life Insurance Company Ltd.
o SBI Life Insurance Company Limited
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o ING Vysya Life Insurance Company Private Limited
o Allianz Bajaj Life Insurance Company Ltd.
o Metlife India Insurance Company Pvt. Ltd.
o AMP SANMAR Assurance Company Ltd.
o Dabur CGU Life Insurance Company Pvt. Ltd.
1. Royal Sunderam alliance Insurance Company Ltd.
The joint venture bringing together Royal & Sun Alliance Insurance and
Sundaram Finance Limited started its operations from March 2001. The
company is Head Quartered at Chennai, and has two Regional Offices, one at
Mumbai and another one at New Delhi.
2. Bajaj Allianz General Insurance Company Limited
Bajaj Allianz General Insurance Company Limited is a joint venture between
Bajaj Auto Limited and Allianz AG of Germany. Both enjoy a reputation of
expertise, stability and strength.
Bajaj Allianz General Insurance received the Insurance Regulatory and
Development Authority (IRDA) certificate of Registration (R3) on May 2nd,
2001 to conduct General Insurance business (including Health Insurance
business) in India. The Company has an authorized and paid up capital of Rs
110 crores. Bajaj Auto holds 74% and the remaining 26% is held by Allianz,
AG, Germany.
3. ICICI Lombard General Insurance Company Limited
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ICICI Lombard General Insurance Company Limited is a joint venture
between ICICI Bank Limited and the US-based $ 26 billion Fairfax Financial
Holdings Limited. ICICI Bank is India's second largest bank, while Fairfax
Financial Holdings is a diversified financial corporate engaged in general
insurance, reinsurance, insurance claims management and investment
management.
Lombard Canada Ltd, a group company of Fairfax Financial Holdings Limited,
is one of Canada's oldest property and casualty insurers. ICICI Lombard
General Insurance Company received regulatory approvals to commence
general insurance business in August 2001.
4. Cholamandalam General Insurance Company Limited
Cholamandalam MS General Insurance Company Limited (Chola-MS) is a joint
venture of the Murugappa Group & Mitsui Sumitomo.
Chola-MS commenced operations in October 2002 and has issued more than
1.4 lakh policies in its first calendar year of operations. The company has a
pan-Indian presence with offices in Chennai, Hyderabad, Bangalore, Kochi,
Coimbatore, Mumbai, Pune, Indore, Ahmedabad, Delhi, Chandigarh, Kolkata
and Vizag.
5. Tata AIG General Insurance Company Ltd.
Tata AIG General Insurance Company Ltd. is a joint venture company,
formed from the Tata Group and American International Group, Inc. (AIG).
Tata AIG combines the strength and integrity of the Tata Group with AIG's
international expertise and financial strength. The Tata Group holds 74 per
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cent stake in the two insurance ventures while AIG holds the balance 26 per
cent stake.Tata AIG General Insurance Company, which started its
operations in India on January 22, 2001, offers the complete range of
insurance for automobile, home, personal accident, travel, energy, marine,
property and casualty, as well as several specialized financial lines.
6. Reliance General Insurance Company Limited.
7. IFFCO Tokio General Insurance Co. Ltd
8. Export Credit Guarantee Corporation Ltd.
9. HDFC-Chubb General Insurance Co. Ltd.
Marketing of Insurance In India
Insurance is in a manner of speaking the last frontier in the financial sector
to open. It is also a sector, which leads to benefits across the full spectrum,
from the individual who now have wider choices, to the economy, which see
increased savings, to the infrastructure sector, which can look forward to
long term funding being available. In an under-insured economy, newer
channels of distribution have to be utilized to intensify the reach of insurance
both in urban and rural markets. This will create huge employment
opportunities not only within insurance companies but also as agents and
consultants of insurance companies.
Market mix policies
Different companies can choose to position themselves differently and hence
the Marketing Mix is different. However, there are certain common
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characteristics that one can cull out from the possible strategies that
companies adopt.
o Product
The development of flexible products to suit individual requirements is what
will differentiate the winners from the also-rans. The key to success is in
providing insurance solutions, not standardized insurance products. The
concept of riders/optional benefits has already been a huge innovation
brought about by the new players, which has led to customization of
products for individual needs. However, companies may differentiate
themselves on the basis of product segments that they choose to focus on
and excel in.
o Place
Different companies may however choose different channels and different
geographies to focus on. The channel options are - tied agency force,
corporate agents and brokers and this is an area where different companies
will make different choices. Many companies like HDFC Standard Life are
focusing on all channels whereas companies like Max New York Life are
focusing on the tied agency force only. Customer interface will be a key
challenge for life insurance companies and includes every that interaction
that the customer has with the company, such as sales, new business
underwriting, policy servicing, premium payments, claim processing and so
on. Technology can play a crucial role in delivering the highest standards of
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service set by the company and it will be imperative for any serious player to
excel in all of these.
o Price
Price is a relevant differentiator only in two segments - pure term insurance
and in pure annuities. Here too, service delivery and financial strength will
need to be present at a minimum acceptable level for price to be a relevant
differentiator. In case of savings oriented products, long-term returns
generated are more relevant than just the price of the product. A focus on
generating good investment performance and keeping a tight control on
costs help in generating good long-term maturity value for customers. Norms
have been laid down on all of these by IRDA and adhering to these while
delivering good returns will be a challenge.
o Promotion and Advertising
The level of demand is latent and will have to be activated considerably. The
market needs to be developed. Greater awareness of insurance and the need
to have it as a protection tool rather than as a tax planning measure needs
to be appreciated by the Indian people. Various communication tools
including advertising, direct marketing and road shows contribute to all this
and different companies take different approaches on these.
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Chapter 2Company profileBoard membersCompany’s productsCorporate objective
Company profile
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HDFC Standard Life Insurance Company Ltd. is one of India's leading private insurance companies, which offers a range of individual and group insurance solutions. It is a joint venture between Housing Development Finance Corporation Limited (HDFC Ltd.), India's leading housing finance institution and a Group Company of the Standard Life, UK. HDFC as on December 31, 2007 holds 72.38 per cent of equity in the joint venture.
HDFC Standard Life Insurance Company Parentage
HDFC Limited.
o HDFC is India leading housing finance institution and has helped build more than 23, 00,000 houses since its incorporation in 1977.
o In Financial Year 2003-04 its assets under management crossed Rs. 36,000 Cr.
o As at March 31, 2004, outstanding deposits stood at Rs. 7,840 crores. The depositor base now stands at around 1 million depositors.
o Rated AAA by CRISIL and ICRA for the 10th consecutive year
o Stable and experienced management
o High service standards
o Awarded The Economic Times Corporate Citizen of the year Award for its long-standing commitment to community development.
o Presented the Dream Homeâ award for the best housing finance provider in 2004 at the third Annual Outlook Money Awards.
Standard Life Group
o Standard Life Group (Standard Life plc and its subsidiaries)
o The Standard Life group has been looking after the financial needs of customers for over 180 years
o It currently has a customer base of around 7 million people who rely on the company for their insurance, pension, investment, banking and health-care needs
o Its investment manager currently administers £125 billion in assets
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o t is a leading pensions provider in the UK, and is rated by Standard & Poor's as 'strong' with a rating of A+ and as 'good' with a rating of A1 by Moody's
o Standard Life was awarded the 'Best Pension Provider' in 2004, 2005 and 2006 at the Money Marketing Awards, and it was voted a 5 star life and pension’s provider at the Financial Adviser Service Awards for the last 10 years running. The '5 Star' accolade has also been awarded to Standard Life Investments for the last 10 years, and to Standard Life Bank since its inception in 1998. Standard Life Bank was awarded the 'Best Flexible Mortgage Lender' at the Mortgage Magazine Awards in 2006.
HDFC Key Strengths
o Financial expertise
As a joint venture of leading financial services groups, HDFC Standard Life Insurance has the financial expertise required to manage your long term investments safely and effectively.
o Range of solutions
The group has a range individual and group solutions, which can be easily customized to specific needs. The group solutions have been designed to offer the customer the complete flexibility combined with a low charging structure.
o Track record so far
The group gross premium income for the year end march 31, 2008 stood at Rs. 4,859 crores and new business premium income stood at 2,685 crores.
The company has covered over 9,59,000 lives year ending march 31, 2008.
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Board members
Brief Profile of the Board of Directors
Mr. Deepak S. Parekh is the Chairman of the Company. He is also the Executive Chairman of Housing Development Finance Corporation Limited (HDFC Limited). He joined HDFC Limited in a senior management position in 1978. He was inducted as a whole-time director of HDFC Limited in 1985 and was appointed as its Executive Chairman in 1993. He is the Chief Executive Officer of HDFC Limited. Mr. Parekh is a Fellow of the Institute of Chartered Accountants (England & Wales).
Sir Alexander M. Crombie joined the Board of Directors of the Company in April, 2002. He has been with the Standard Life Group for 34 years holding various senior management positions. He was appointed as the Group Chief Executive of the Standard Life Group in March 2004. Sir Crombie is a fellow of the Faculty of Actuaries in Scotland.
Mr. Keki M. Mistry joined the Board of Directors of the Company in December, 2000. He is currently the Managing Director of HDFC Limited. He joined HDFC Limited in 1981 and became an Executive Director in 1993. He was appointed as its Managing Director in November, 2000. Mr. Mistry is a Fellow of the Institute of Chartered Accountants of India and a member of the Michigan Association of Certified Public Accountants.
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Ms. Marcia D. Campbell is currently the Group Operations Director in the Standard Life group and is responsible for Group Operations, Asia Pacific Development, Strategy & Planning, Corporate Responsibility and Shared Services Centre. Ms. Campbell joined the Board of Directors in November 2005.
Ms. Renu S. Karnad is the Executive director of HDFC Limited, is a graduate in law and holds a Master's degree in economics from Delhi University. She has been employed with HDFC Limited since 1978 and was appointed as the Executive Director in 2000. She is responsible for overseeing all aspects of lending operations of HDFC Limited.
Mr. Norman K. Skeoch is currently the Chief Executive in Standard Life Investments Limited and is responsible for overseeing Investment Process & Chief Executive Officer Function. Prior to this, Mr. Skeoch was working with M/s. James Capel & Co. holding the positions of UK Economist, Chief Economist, Executive Director, Director of Controls and Strategy HSBS Securities and Managing Director International Equities. He was also responsible for Economic and Investment Strategy research produced on a worldwide basis. Mr. Skeoch joined the Board of Directors in November 2005.
Mr. Gautam R. Divan is a practising Chartered Accountant and is a Fellow of the Institute of Chartered Accountants of India. Mr. Divan was the Former Chairman and Managing Committee Member of Midsnell Group International, an International Association of Independent Accounting Firms and has authored several papers of professional interest. Mr. Divan has wide experience in auditing accounts of large public limited companies and nationalised banks, financial and taxation planning of individuals and limited companies and also has substantial experience in structuring overseas investments to and from India.
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Mr. Ranjan Pant is a global Management Consultant advising CEO/Boards on Strategy and Change Management. Mr. Pant, until 2002 was a Partner & Vice-President at Bain & Company, Inc., Boston, where he led the worldwide Utility Practice. He was also Director, Corporate Business Development at General Electric headquarters in Fairfield, USA. Mr. Pant has an MBA from The Wharton School and BE (Honours) from Birla Institute of Technology and Sciences.
Mr. Ravi Narain is the Managing Director & CEO of National Stock Exchange of India Limited. Mr. Ravi Narain was a member of the core team to set-up the Securities & Exchange Board of India (SEBI) and is also associated with various committees of SEBI and the Reserve Bank of India (RBI).
Mr. Gerald E. Grimstone was appointed Chairman in May 2007, having been Deputy Chairman since March 2006. He became a director of The Standard Life Assurance Company in July 2003. He is also Chairman of Candover Investments plc and was appointed as one of the UK’s Business Ambassadors by the Prime Minister in January 2009. Gerry held senior positions within the Department of Health and Social Security and HM Treasury until 1986. He then spent 13 years with Schroders in London, Hong Kong and New York, and was Vice Chairman of Schroders’ worldwide investment banking activities from 1998 to 1999. He is the Alternate Director to Sir Alexander Crombie.
Mr. Paresh Parasnis is the Principal Officer and Executive Director of the company since November 14, 2008. A fellow of the Institute of Chartered Accountants of India, he has been associated with the HDFC Group since 1984. During his 16-year tenure at HDFC Limited, he was responsible for driving and spearheading several key initiatives. As one of the founding members of HDFC Standard life, Mr. Parasnis has been responsible for setting up branches, driving sales and servicing strategy, leading
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recruitment, contributing to product launches and performance management system, overseeing new business and claims settlement, customer interactions etc.
Company Products
Individual Products
We at HDFC Standard Life realize that not everyone has the same kind of
needs. Keeping this in mind, we have a varied range of Products that you can
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choose from to suit all your needs. These will help secure your future as well
as the future of your family.
Protection Planso HDFC Term Assurance Plano HDFC Loan Cover Term Assurance Plano HDFC Home Loan Protection Plan
You can protect your family against the loss of your income or the burden of a loan in the event of your unfortunate demise, disability or sickness. These plans offer valuable peace of mind at a small price.Our Protection range includes our Term Assurance Plan & Loan Cover Term Assurance Plan
Savings & Investment Plans
o HDFC Unit Linked Endowment Plus IIo HDFC SimpliLifeo HDFC Unit Linked Endowment IIo HDFC Unit Linked Enhanced Life Protection IIo HDFC Unit Linked Wealth Maximiser Pluso HDFC Unit Linked Endowment Winnero HDFC Endowment Assurance Plano HDFC Money Back Plano HDFC Single Premium Whole of Life Insurance Plano HDFC Assurance Plano HDFC Savings Assurance Plan
Our Savings Plans offer you flexible options to build savings for your future needs such as buying a dream home or fulfilling your children immediate and future needs.
Our Savings range includes Endowment Assurance Plan, Unit Linked Endowment, Unit Linked Endowment Plus, Unit Linked Endowment Plus II, Money Back, Unit Linked Enhanced Life Protection II, Children's Plan, Unit Linked Young Star, Unit Linked Young Star Plus, Unit Linked Young Star Plus II.
Children's Plans
o HDFC Children's Plano HDFC Unit Linked Young Star II
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o HDFC Unit Linked Young Star Plus IIo HDFC Unit Linked YoungStar Champion
Retirement Plans
o HDFC Personal Pension Plano HDFC Unit Linked Pension IIo HDFC Unit Linked Pension Maximiser IIo HDFC Immediate Annuity
Health Plans
o HDFC Critical Care Plano HDFC SurgiCare Plan
Group Plans
o Group Term Insurance Plano Group Variable Term Insurance Plano Group Unit Linked Plan - Gratuityo Group Unit Linked Plan - Superannuationo Group Unit Linked Plan - Leave Encashment
Development Insurance Plan
Development Insurance plan is an insurance plan which provides life cover to members of a Development Agency for a term of one year. On the death of any member of the group insured during the year of cover, a lump sum is paid to those member beneficiaries to help meet some of the immediate financial needs following their loss.
Eligibility
Members of the development agency and their spouses with :
- Minimum age at the start of the policy 18 years last birthday
- Maximum age at the start of policy 50 years last birthday
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Employees of the Development Agency are not eligible to join the group. The group to be covered is only eligible if it contains more than 500 members.
Premium Payments
The premium to be paid will be quoted per member in the group and will be the same for all members of the group. The premium can only be paid by the Development Agency as a single lump sum that includes all premiums for the group to be covered. Cover will not start until the premium and all the member information in our specified format has been received.
The premium rate is Rs. 25 per Rs. 10,000 of lump sum, per member.
Benefits
On the death of each member covered by the policy during the year of cover a lump sum equal to the sum assured will be paid to their beneficiaries or legal heirs. Where the death is as a result of an accident, an additional lump sum will be paid equal to half the sum assured. There are no benefits paid at the end of the year of cover and there is no surrender value available at any time.
The role of the Development Agency
Due to the nature of the groups covered, HDFC Standard Life will be passing certain administrative tasks onto the Development Agency. By passing on these tasks the premium charged can be lower. These tasks would include:
Submission of member data in a specified computer format
Collection of premiums from group members
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Recording changes in the details of group members
Disbursement of claim payments and the mortality rebate (if any) to group members
These tasks would be in addition to the usual duties of a policyholder such as:
Payment of premiums
Reporting of claims
Keeping policy holder information up to date
Training and support will be available to give guidance on how to complete the tasks appropriately. Since these additional tasks will impose a burden on the Development Agency, the Development Agency may charge a Rs. 10 administration fee to their members.
Prohibition of rebates
Section 41 of the Insurance Act, 1938 states
No person shall allow or offer to allow, either directly or indirectly, as an inducement to any person to take out or renew or continue an insurance in respect of any kind of risk relating to lives or property in India, any rebate of the whole or part of the commission payable or any rebate of the premium shown on the policy, nor shall any person taking out or renewing or continuing a policy accept any rebate, except such rebate as may be allowed in accordance with the published prospectus or tables of the insurerIf any person fails to comply with sub regulation (previous point) above, he shall be liable to payment of a fine which may extend to rupees five hundred
Tax Benefits
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INCOME TAX SECTION GROSS ANNUAL
SALARY
HOW MUCH TAX CAN YOU SAVE? HDFC STANDARD LIFE
PLANS
Sec. 80C Across All income Slabs Upto Rs. 33,990 saved on investment of
Rs. 1,00,000.
All the life insurance plans.
Sec. 80 CCC Across all income
slabs.
Upto Rs. 33,990 saved on
Investment of Rs.1,00,000.
All the pension plans.
Sec. 80 D* Across all income
slabs
Upto Rs. 3,399 saved on
Investment of
Rs. 10,000.
All the health insurance
riders available with the
conventional plans.
TOTAL SAVINGS
POSSIBLE ** Rs37,389
Rs. 33,990 under Sec. 80C and under Sec. 80 CCC , Rs.3,399 under Sec. 80 D, calculated for a male with gross annual income
exceeding Rs. 10,00,000.
Sec. 10 (10)D Under Sec. 10(10D), the benefits you receive are completely tax-free, subject to
the conditions laid down therein.
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CORPORATE
OBJECTIVE
Our Vision
'The most successful and admired life insurance company, which means that we are the most trusted company, the easiest to deal with, offer the best value for money, and set the standards in the industry'.'The most obvious choice for all'.
Our Values
Values that we observe while we work:
.Integrity
.Innovation
.Customer centric
.People Care One for all and all for ones€ �
.Teamwork
.Joy and Simplicity
Accolades and Recognition
Rated by 'Business world' as 'India's Most Respected Private Life Insurance Company in 2004.
33
Chapter 3 Research methodology
Objective & Significance Research Design Data Collection
34
Research methodology
Research studies the behavior of human beings as members of society and
their feelings responses, attitudes under different circumstances. The
study is to
determine customer-buying behavior with a focus on market
segmentation
for HDFC Standard Life Insurance.
Title Justification
The above title is self explanatory. The study deals mainly with studying the
buying pattern in the insurance industry with a special focus on HDFC
Standard Life Insurance. The various segments of the markets divided in
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terms of Insurance Needs, Age groups, Satisfaction levels etc will also
studied.
Area of research
The area of research was Bhopal Madhya Pradesh. The samples of the
respondents of have been taken from the different locations of the city. The
data analysis has been done on the basis of the responses of the
respondents.
RESEARCH DESIGN
o NON-PROBABILITY
oEXPLORATORY & DISCRIPTIVE EXPERIMENTAL RESEARCH
The research is primarily both exploratory as well as descriptive in nature.
The sources of information are both primary & secondary.
A well-structured questionnaire was prepared and personal interviews were
conducted to collect the customer’s perception and buying behavior,
through this questionnaire.
Sampling Methodology
Area of sampling
The area of sampling was the different regions of the Bhopal.
36
Sampling Technique
Initially, a rough draft was prepared keeping in mind the objective of the
research. A pilot study was done in order to know the accuracy of the
Questionnaire. The final Questionnaire was arrived only after certain
important changes were done. Thus my sampling came out to be
judgmental and continent
Sampling Unit
The respondents who were asked to fill out questionnaires are the sampling
units. These comprise of employees of MNCs, Govt. Employees and
Self-employed etc.
Sample size
The sample size was restricted to about 100, which comprised of mainly
peoples from different regions of Bhopal due to time constraints.
Objectives
o To determine reasons behind opting for an insurance.
o To provide the company with information of customer's Insurance policy if
they have any and reasons for opting for that particular policies.
o To know the most preferred policy.
o To determine customers perception towards private insurance companies
and their expectation form private insurance companies.
37
o To determine the feedback on services provided by any other insurance
agent.
o To study the types of benefits provided by insurance services.
o To determine the use of Internet for valuable information and decision-
making process.
DATA COLLECTION
Primary data:
The data has been collected through the observation method &
direct communication with the respondents during this descriptive
research. The other methods have also been used to obtain the
primary data such as:
1. Interview method
2. Questioners method
3. Schedules method
The schedules methods were very useful to collect the data
through questioners. The role of enumerator was very important
who were appointed for the purpose . The enumerators went to the
respondents along with the profarma (profarma contains a set of
38
questions) & these profarma’s has been filled by the sampled
respondents to obtain the require data.
Secondary data
There are a lot of sources of secondary data collation. The source
of internet has been used in a large scale to collect the data about
the company’s profit & loss statements, balance sheets, sales
fingers, sales call records etc.
Other data has been collected by the theatrical expose which is
given by the trainer during the training.
Chapter 4
Facts & Findings
39
Data analysis & Interpretation
Facts & Findings
1. As the people think that insurance is a tool to protect their family & a
tax saving device. They are aware of the fact & realizing its,
importance. The company should try to expand & build up its
infrastructure because there is a large potential for insurance in India.
2. Company should come up with its branch in Bhopal. With the objective
and goals to meet the demands & expectations of the public. Because the
40
entrance of private players will increase the competition and it would be a
tough task to secure a good position in market.
3.Since HDFC STANDARD LIFE INSURANCE LTD is leading with several
companies’ policies it should be easy for them to penetrate into the
market and secure a good position if they pay greater attention to the
service part provided to their customer and thereby forming a long and
trusted relationship.
4. As seen from the survey that at present 70% of the customer are
having insurance policy out of which 87.5% of the customer are planning
for new investments. So it can be a good potential for the company and
they should make an attempt to trap these customers.
5. Above 43% of the customer is even ready to go for insurance if a service provider away from their home is providing it. But intend they should provide good products and services. The company should try to convince these customers and get them in its favor.
Data analysis & Interpretation
o DATA GIVES PREFERENCE OF RESPONDENTS OF INSURANCE COMPANIES
41
COMPANY’S NAME NO.OF RESPONDENT SHARE (%)
L.I.C. 78 78
HDFC 2 2
ICICI PRUDENTIAL 10 10
SBI LIFE 7 7
RELIANCE LIFE INSURANCE 3 3
TOTAL 100 100
Interpretation
o 78% of the people contacted prefer LIC policy to any other and therefore
it is ranked no.1 by that percent of respondents.
o DATA GIVES BENEFITS OF INSURANCE PERCEIVED BY
RESPONDENTS
42
BENEFITSNO.OF
RESPONDENTS
SHARE (%)
Cover Future Uncertainty
55 55
Tax Deductions 20 20
Future Investment 25 25
TOTAL 100 100
Interpretation
o 55% of the respondents believe that covering future uncertainty is
the biggest benefit of an insurance policy.
o Whereas, 20% and 25% of them believe that the other benefits
are Tax deduction and future investments respectively
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o DATA PROVIDES FEATURES OF INSURANCE
POLICY THAT ATTRACTED RESPONDENTS
FEATURE NO.OF RESPONDENT
S
SHARE (%)
Money Back Guarantee 15 15
Larger Risk Coverance 37 37
Easy Access to Agents 7 7
Low Premium 30 30
Company’s Reputation 11 11
TOTAL 100 100
Interpretation
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o Majority of the respondent (37%) found Larger risk coverance as the
most attracted feature of the all.
o DATA PROVIDES NUMBER OF INSURANCE POLICY
TYPE RESPONDENTS
POLICY TYPE NO. OF RESPONDENT
S
SHARE (%)
LIFE POLICY 75 75
NON LIFE POLICY 25 25
BOTH 45 45
Interpretation
45
o 75% of the respondents have Life Insurance Policy while 45% have
both. (The % is calculated out of 280 positive response)
o DATA GIVES PEOPLE PERCEPTION ABOUT INSURANCE
RESPONSE NO. OF RESPONDENTS
SHARE (%)
A saving tool 81 81%
A tax saving device 74 74%
A tool to protect your family 100 100%
Interpretation
o 81% of the respondents have perception of Insurance being a saving tool.
46
o And 74% of the respondents have perception of Insurance being a tax saving
device.
o But 100% of the respondents are with the view that Insurance is a tool to
protect your family.
o DATA SHOWS PEOPLE HAVING INSURANCE
RESPONSE NO. OF RESPONDENTS
SHARE (%)
Yes 70 70%
No 30 30%
Interpretation
o Of the sample size of 400 surveyed respondents 70% of the respondents are
having Insurance policy.
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o 30% of the respondents are either not having any Insurance policy at present or their
policy is already matured.
o And at present 100% of the respondents are with the view that Insurance is a tool to
protect your family.
o DATA SHOWS BUYING PROCESS OF THE
PEOPLE
BUYING PROCESS NO. OF RESPONDEN
TS
SHARE (%)
Customer approached Insurance company/Agent
45 45%
Company/agent approached customer
55 555
Total 100 100%
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Interpretation
o 44.5% of the respondents approached the Insurance Company / Agent.
o Whereas, 55.5% of the respondents were approached by the
Company /Agent.
o DATA SHOWS REASONS BEHIND FOR
INSURANCE
RESPONSE NO. OF RESPONDENT
S
SHARE (%)
Tax saving 80 80%
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Saving / Investment 80 80.%
Family protection 100 100%
Interpretation
o 80.71% of the Respondents opted for Insurance for tax saving benefits.
o 80.71% of the Respondents opted for saving / Investments.
o But all of them, i.e. 100% of the respondents have opted for insurance
for their family protection.
o DATA SHOWS SATISFACTION OF RESPONDENTS WITH RESPECT TO POLICY
RESPONSE NO. OF SHARE (%)
50
RESPONDENTS
Satisfied 60 60%
Not satisfied 40 40%
Not Responded 0 0.0%
Total 100 100%
Interpretation
o 60% of the respondents are more or less satisfied with their existing policy.
o 40% of the respondents are not satisfied with their existing policy.
o In this case all of those who have taken a policy have responded.
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o DATA SHOWS SATISFACTION OF +RESPONDENTS WITH RESPECT TO
SERVICE AGENT
RESPONSE NO. OF RESPONDENTS
SHARE (%)
Satisfied 45 45%
Not satisfied 55 55%
Not Responded 0 0.0%
Total 100 100%
Interpretation
o 45% of the respondents are satisfied with their existing service agent.
o 55% of the respondents are not satisfied with their existing insurance
agent.
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o All of those who have taken a policy have responded.
o DATA SHOWS NUMBER OF RESPONDENTS
PAYING TAX
RESPONSE NO. OF RESPONDENTS
SHARE (%)
Paying tax 100 100%
Not paying tax - 0%
Total 100 100%
Interpretation
o Of the sample size of 100 respondents, all the respondents are paying tax
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o DATA SHOWS RESPONDENT’S INVESTMENTS FOR TAX SAVING
INVESTMENTS NO. OF RESPONDENTS
SHARE (%)
LIC 51 51%
NSC 33 33%
Bonds 32 32%
PPF 25 25%
PF 21 21%
EPF 11 11%
Interpretation
54
o 51% of the respondents save their tax by investing in LIC, which is the
highest among all Investment. This shows that most people for getting
taxes benefits invest in LIC.
o 33.25% of the respondents do their tax saving by investing in NSC.
o 32.25% of the respondents to their tax saving by investing in bonds.
o DATA SHOWS RESPONDENTS PERCEPTION ABOUT BEST FORM
OF INVESTMENT FOR SECURING THEIR FUTURE
NO. OF RESPONDENTS
SHARE (%)
Fixed Assets 75 75%
Bank deposits 11 11%
Jewellery 25 25%
Securities i.e. bonds, MFs 40. 40%
Shares 10 10%
Insurance 70 70%
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Interpretation
o 75.25% of the respondents as with the view that Fixed Assets is the best
form of investment for securing their future.
o 70.5% of the respondents are with the perception that Insurance is the
best form of investment for securing their future, which is one of the
highest and this shows that insurance is an important key for securing
your future.
o DATA SHOWS WHAT PEOPLE INTENT TO GAIN FROM
THEIR INVESTMENT
RESPONSE NO. OF RESPONDEN
TS
SHARE (%)
Saving & Returns 100 100%
Security 90 90%
Tax benefits 71. 71.%
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Interpretation
o 100% of the respondents intent to gain saving and returns from their
investment.
o 90% of the respondent’s intent to gain security from their
investments.
o Whereas, 71.75% of the respondent’s intent to gain tax benefits from
their investments.
o DATA GIVES PEOPLE’S PERCEPTION ON APPROPRIATE
AGE FOR BUYING INSURANCE
RESPONSE NO. OF RESPONDENTS SHARE (%)
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After 25 years 29 29%
After 35 years 10 10%
After 45 years 0 0%
Anytime 60 60%
Interpretation
o 29% of the respondents are with the view that insurance should be bought after the
age of 25 years.
o 10.5% of the respondents are with the view that insurance should be buyed after
the age of 35 years.
oWhereas, 60.5% of the respondents are with the view that buying of insurance do
not have any thing to do with age i.e. there is no age limitations. It can be
purchased any time according to the need.
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o DATA SHOWS PEOPLE OPINION ABOUT INDIAN INSURANCE COMPANIES
RESPONSE NO. OF RESPONDENTS SHARE (%)
Rigid plans 67 67%
Non user friendly 29 29%
Unsatisfactory services 26 26%
Non Aggressive 35 35%
Satisfactory 24 24%
Good 10 10%
Very good 0 0%
Interpretation
o 67% of the respondents have the opinion that Indian Insurance
Companies have Rigid plans.
o 29.5% feel that Indian Insurance companies are Non-user friendly.
o 26.5% feel that services of Indian Insurance companies are
Unsatisfactory.
o 35.75% of the respondents are with the view that Indian Insurance
companies are Non-aggressive.
o 24% of the respondents feel that products and services of Indian
Insurance companies is Satisfactory.
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o Whereas only 10.25% feel that it is Good enough.
o And according to the data, no single person has felt that it is very good.
o DATA SHOWS WHAT PEOPLE WOULD LOOK FOR IN AN INSURANCE
COMPANY
RESPONSE NO. OF RESPONDEN
TS
SHARE (%)
A trusted name 82 82%
Friendly service & responsiveness
71 71%
Good plans 81 81%
Accessibility 49 49%
Interpretation
o 82% customers look for a Trusted name in a company for insurance.
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o 81.5% customers look for a good plan in a company for insurance.
o Friendly service & responsiveness and Accessibility are also important
factors looked by customers in a company.
o DATA SHOWS PEOPLE PLANNING FOR NEW
INVESTMENTS
RESPONSE NO. OF RESPONDENTS
SHARE (%)
Planning 87 87%
Not planning 13 13%
Total 100 100%
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Interpretation
o Only 12.5% of the customers contacted are not planning for new
investments presently.
o Whereas, 87.5% of the customers are still planning for new investments this can be a great potential for Reliance Life Insurance to take them on their favor
o DATA SHOWS PEOPLE INTERESTED IN GOING FOR
INSURANCE IF A SERVICE PROVIDER AWAY FROM THE
CITY OFFERS BETTER SERVICE & PRODUCTS
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RESPONSE NO. OF RESPONDEN
TS
SHARE (%)
Yes 43 43%
No 44 44%
Uncertain 13 13%
Total 100 100%
Interpretation
o The interested customers i.e. 43% are ready to go for insurance even
away from a city if services and products are worthwhile, which again
is a good prospect (potential) for Reliance Life Insurance to take them
on their favor.
Chapter 5
Conclusion
Limitation
Suggestion
63
Conclusion
Our exhaustive research in the field of Life Insurance threw up some
interesting trends which can be seen in the above analysis. A general
impression that we gathered during Data collection was the immense
awareness and knowledge among people about various companies and
their insurance products. People are beginning to look beyond LIC for their
insurance needs and are willing to trust private players with their hard
earned money.
People in general have been impressed by the marketing and advertising
campaigns of insurance companies. A high penetration of print, radio and
Television ad campaigns over the years is beginning to have its impact
now.
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Another heartening trend was in terms of people viewing insurance as a tax
saving and investment instrument as much as a protective one. A very high
number of respondents have opted for insurance for such purposes and it
shows how insurance companies have been successful to attract public
money in recent times.
The general satisfaction levels among public with regards to policy and
agents still requires improvement. But therein lies the opportunity for a
relative new comer like HDFC Standard Life Insurance Company Ltd . LIC
has never been known for prompt service or customer oriented methods
and HDFC Standard Life can build on these factors.
Limitations
o Some respondents were reluctant to divulge personal information which
can affect the validity of all responses.
O In a rapidly changing industry, analysis on one day or in one segment can
change very quickly. The environmental changes are vital to be
considered in order to assimilate the findings.
65
O This study is confined to Bhopal city therefore the result should not be
generalized.
o Sample size is very small it might not covering whole population.
o The primary & secondary data are limited and are consstrained by the
availability and approachability.
Recommendations
o The company should expand its branches in small cities or suburban areas because a big part of india’s population lives in small places.
o As the people think that insurance is a tool to protect their family & a tax
saving device. They are aware of the fact & realizing its, importance. The
66
company should try to expand & build up its infrastructure because there is
a large potential for insurance in India.
o Company should come up with its branch in Bhopal. With the objective and
goals to meet the demands & expectations of the public. Because the
entrance of private players will increase the competition and it would be a
tough task to secure a good position in market.
o Since HDFC Standard Life Insurance Company Ltd is leading with several
companies’ policies it should be easy for them to penetrate into the market
and secure a good position if they pay greater attention to the service part
provided to their customer and thereby forming a long and trusted
relationship.
o As seen from the survey that at present 70% of the customer are having
insurance policy out of which 87.5% of the customer are planning for new
investments. So it can be a good potential for the company and they should
make an attempt to trap these customers.
o 43% of the customer is even ready to go for insurance if a service provider
away from their home is providing it. But intend they should provide good
products and services. The company should try to convince these
customers and get them in its favor.
67
Chapter 6
Appendix
68
Bibliography
1. Books/Magazines referred
o Books published by insurance institute of India
o Insurance watch.
o Money outlook.
2. Websites referred
o WWW .Cifainsurance .com
o WWW .Moneyoutlook.com
o WWW .Iinsurance.Ind.com
o WWW.HDFCinsurance.com
3.Reports/Articles referred
o Report: Issues and challenges facing the insurance.
o Brief profile of LIC India…Dec 2006.
69
Questionares1.Are you employed?
Yes No
If yes, only then proceed
2.Do you have any Insurance Policy? Yes No
3.Which insurance policy do you have?
Life Non-life Both
4.Which co’s insurance policy you prefer the most? (rank them)
a) LIC b) ICICIPRUDENTIAL c) SBI LIFE INSURANCE d) ING VYSYA LIFE e) RELIANCE LIFE INSURANCE
f) TATA AIG LIFE g) ANY OTHER ________( Specify) 5. For how many years do you have insurance policy? (Please Tick)
a) <5Yrs b) 5-10 Yrs c) 10-15 Yrs d) Any Other______(Specify)
6. What do you think are the benefits of insurance cover?(rank them)
a) Cover future uncertainty b) Tax deductions
c) Future investment
d) Any other _________ (Specify)
7. Which feature of your policy attracts you to buy it ? (Rank them) a) Low premium
70
b) Larger risk coverage c) Money back guarantee d) Reputation of company e) Easy access to agent f) Any other _________ (Specify)
8. Your monthly income?
a)<4k b)4k-8k c)8k-12k d)12k-16k e)Other_____(Specify) 9. Do you really think insurance policy cove in today’s scenario is not essential?
a) yes b) No c) No responce
10. What’s your perception about insurance? (Rank them)
a) A saving tool
b) A tax saving device c) A tool of protect future
11. How has/would you bought/buy insurance?
a) Customer approach insurance co’s
b) Insurance co’s approach customer 12. Are you satisfied with the policies?
a) Satisfied saving tool
b) Not satisfied c) Not responding
13. Are you satisfied with the service agent?
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a) Satisfied saving tool
b) Not satisfied c) Not responding
14 Do you pay tax?
Yes No
15. Where have you invested for tax saving? (Rank them)
a) LIC
b) NSC
c) Bonds
d) PPF
e) PF
f) EPF
16. Which is the best form of investment? (Rank them)
a) Fixed assets
b) Bank deposits
c) Jewellery
d) Securities, i.e. Bonds, MFs
e) Shares
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f) Insurance
17. What do you intend to gain from investment?
a) Savings & returns
b) Security c) Tax benefits
18. What’s the right age to buy the insurance?
a) After 25 yrs
b) After 35 yrs c) After 45 yrs
d) Any time
19. How would you rate Indian insurance co’s?
a) Rigid plans
b) Non-user friendly
c) Unsatisfactory services
d) Non-aggressive
e) Satisfactory f) Good
g) Very good
20. What would you look for in an insurance company?
(Rank them)
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a) A trusted name
b) Friendly service & responsiveness c) Good plans
d) Accessibility
21. Are you planning for new investment?
Planning Not planning
22. Would you go for insurance if a service provider away from the city offers better service & products?
a) Yes
b) No
c) Uncertain
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Thank you
Name:_________________________
Address:______________________
______________________________
Occupation:___________________
Contract no.:___________________
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