POST PURCHASE BEHAVIOUR OF CONSUMER OF LIC
CHAPTER 1
INTRODUCTION OF INSURANCE
INDUSTRY
BRIEF HISTORY OF INSURANCE
IMPORTANT MILESTONE IN THE LIFE INSURANCE
BUSINESS IN INDIA.
INDIAN INSURANCE IN GLOBAL SCENERIO
LIFE INSURANCE INDUSTRY GROWTH
ETOP ANALYSIS OF THE INSURANCE INDUSTRY
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CHAPTER 1
INTRODUCTION OF INSURANCE INDUSTRY
BRIEF HISTORY OF LIFE INSURANCE
The story of insurance is probably as old as the story of mankind. The same instinct that prompts
modern businessmen today to secure themselves against loss and disaster existed in primitive
men also. They too sought to avert the evil consequences of fire and flood and loss of life and
were willing to make some sort of sacrifice in order to achieve security. Though the concept of
insurance is largely a development of the recent past, particularly after the industrial era – past
few centuries – yet its beginnings date back almost 6000 years.
Life Insurance in its modern form came to India from England in the year 1818. Oriental Life
Insurance Company started by Europeans in Calcutta was the first life insurance company on
Indian Soil. All the insurance companies established during that period were brought up with the
purpose of looking after the needs of European community and Indian natives were not being
insured by these companies. However, later with the efforts of eminent people like Babu
Muttylal Seal, the foreign life insurance companies started insuring Indian lives. But Indian lives
were being treated as sub-standard lives and heavy extra premiums were being charged on them.
Bombay Mutual Life Assurance Society heralded the birth of first Indian life insurance company
in the year 1870, and covered Indian lives at normal rates. Starting as Indian enterprise with
highly patriotic motives, insurance companies came into existence to carry the message of
insurance and social security through insurance to various sectors of society. Bharat Insurance
Company (1896) was also one of such companies inspired by nationalism. The Swadeshi
movement of 1905-1907 gave rise to more insurance companies. The United India in Madras,
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National Indian and National Insurance in Calcutta and the Co-operative Assurance at Lahore
were established in 1906. In 1907, Hindustan Co-operative Insurance Company took its birth in
one of the rooms of the Jorasanko, house of the great poet Rabindranath Tagore, in Calcutta. The
Indian Mercantile, General Assurance and Swadeshi Life (later Bombay Life) were some of the
companies established during the same period. Prior to 1912 India had no legislation to regulate
insurance business. In the year 1912, the Life Insurance Companies Act, and the Provident Fund
Act were passed. The Life Insurance Companies Act, 1912 made it necessary that the premium
rate tables and periodical valuations of companies should be certified by an actuary. But the Act
discriminated between foreign and Indian companies on many accounts, putting the Indian
companies at a disadvantage.
The first two decades of the twentieth century saw lot of growth in insurance business. From 44
companies with total business-in-force as Rs.22.44 crore, it rose to 176 companies with total
business-in-force as Rs.298 crore in 1938. During the mushrooming of insurance companies
many financially unsound concerns were also floated which failed miserably. The Insurance Act
1938 was the first legislation governing not only life insurance but also non-life insurance to
provide strict state control over insurance business. The demand for nationalization of life
insurance industry was made repeatedly in the past but it gathered momentum in 1944 when a
bill to amend the Life Insurance Act 1938 was introduced in the Legislative Assembly. However,
it was much later on the 19th of January, 1956, that life insurance in India was nationalized.
About 154 Indian insurance companies, 16 non-Indian companies and 75 provident were
operating in India at the time of nationalization. Nationalization was accomplished in two stages;
initially the management of the companies was taken over by means of an Ordinance, and later,
the ownership too by means of a comprehensive bill. The Parliament of India passed the Life
Insurance Corporation Act on the 19th of June 1956, and the Life Insurance Corporation of India
was created on 1st September, 1956, with the objective of spreading life insurance much more
widely and in particular to the rural areas with a view to reach all insurable persons in the
country, providing them adequate financial cover at a reasonable cost.
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LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its corporate
office in the year 1956. Since life insurance contracts are long term contracts and during the
currency of the policy it requires a variety of services need was felt in the later years to expand
the operations and place a branch office at each district headquarter. re-organization of LIC took
place and large numbers of new branch offices were opened. As a result of re-organisation
servicing functions were transferred to the branches, and branches were made accounting units.
It worked wonders with the performance of the corporation. It may be seen that from about
200.00 crores of New Business in 1957 the corporation crossed 1000.00 crores only in the year
1969-70, and it took another 10 years for LIC to cross 2000.00 crore mark of new business. But
with re-organisation happening in the early eighties, by 1985-86 LIC had already crossed
7000.00 crore Sum Assured on new policies.
Today LIC functions with 2048 fully computerized branch offices, 100 divisional offices, 7
zonal offices and the Corporate office. LIC’s Wide Area Network covers 100 divisional offices
and connects all the branches through a Metro Area Network. LIC has tied up with some Banks
and Service providers to offer on-line premium collection facility in selected cities. LIC’s ECS
and ATM premium payment facility is an addition to customer convenience. Apart from on-line
Kiosks and IVRS, Info Centres have been commissioned at Mumbai, Ahmedabad, Bangalore,
Chennai, Hyderabad, Kolkata, New Delhi, Pune and many other cities. With a vision of
providing easy access to its policyholders, LIC has launched its SATELLITE SAMPARK
offices. The satellite offices are smaller, leaner and closer to the customer. The digitalized
records of the satellite offices will facilitate anywhere servicing and many other conveniences in
the future.
LIC continues to be the dominant life insurer even in the liberalized scenario of Indian insurance
and is moving fast on a new growth trajectory surpassing its own past records. LIC has issued
over one crore policies during the current year. It has crossed the milestone of issuing
1,01,32,955 new policies by 15th Oct, 2005, posting a healthy growth rate of 16.67% over the
corresponding period of the previous year.
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From then to now, LIC has crossed many milestones and has set unprecedented performance
records in various aspects of life insurance business. The same motives which inspired our
forefathers to bring insurance into existence in this country inspire us at LIC to take this message
of protection to light the lamps of security in as many homes as possible and to help the people
in providing security to their families.
SOME OF THE IMPORTANT MILESTONES IN THE LIFE INSURANCE
BUSINESS IN INDIA ARE:
1818: Oriental Life Insurance Company, the first life insurance company on Indian soil started
functioning.
1870: Bombay Mutual Life Assurance Society, the first Indian life insurance company started its
business.
1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life
insurance business.
1928: The Indian Insurance Companies Act enacted to enable the government to collect
statistical information about both life and non-life insurance businesses.
1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of
protecting the interests of the insuring public.
1956: 245 Indian and foreign insurers and provident societies are taken over by the central
government and nationalised. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a
capital contribution of Rs. 5 crore from the Government of India.
INDIAN INSURANCE IN GLOBAL SCENERIO
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In life insurance business, India ranked 9th among the 156 countries for which data were
published by Swiss Re. During 2009, the life insurance premium in India grew by 10.1 per cent
(inflation adjusted).
However, during the same period, the global life insurance premium had contracted by 2 per
cent. The share of Indian life insurance sector in global market was 2.45 per cent during 2009, as
against 1.98 per cent in 2008. The non-life insurance sector witnessed a marginal growth of 1.6
per cent during 2009. However, its performance was better when compared to global non-life
premium, which contracted by 0.1 per cent during the same period. The share of Indian non-life
insurance premium in global non-life insurance premium remained very low at 0.46 per cent and
India ranked 26th in global non-life insurance premium.
LIFE INSURANCE INDUSTRY GROWTH
The share of life insurance business was 57 percent in total premium collection. While life
insurance business collected USD 2331 billion as premium, the same for non-life business was
USD 1735 billion. During 2009, the premium in life insurance business fell by 2 per cent on
account of double digit decline in premium collection in USA and UK. However, compared to
2008, when life insurance premium fell by 5.8 per cent, this is an improvement on account of the
improved sentiment in the calendar year 2009. On a product basis, investment-linked insurance
products continued to perform worse than traditional products with guaranteed returns.
Meanwhile, premiums in most emerging market countries, particularly in Asia, continued to
grow, albeit at a slower pace. As major investors, life insurers profited from the recovery of
stock and credit markets. Profitability and risk capital also improved as capital markets
rebounded, but have not yet returned to their pre-financial crisis levels.
REAL GROWTH IN PREMIUM DURING 2009* (In per cent)
Regions/Countries Life Non-Life
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Industrialized Countries -2.8 -0.6
Emerging markets 4.2 2.9
Asia 1.8 5.6
India 10.1 1.6
World -2.0 -0.1
Source: Swiss Re, Sigma No. 3/2010. Note: Financial Year 2009-10
MARKET SHARE OF LIFE INSURANCE CORPORATION OF INDIA
On the basis of total premium income, the market share of LIC declined marginally from 70.92
per cent in 2008-09 to 70.10 per cent in 2009-10. Accordingly, the market share of private
insurers had gone up marginally from 29.08 per cent in 2008-09 to 29.90 per cent in 2009-10.
The market share of private insurers in first year premium was 34.92 per cent in 2009-10
(39.11per cent in 2008-09). The same for LIC was 65.08 per cent (60.89 per cent in 2008-09).
However, in renewal premium, LIC had a much higher share of 73.64 per cent (77.43 per cent in
2008-09) when compared to 26.36 per cent (22.57 per cent in 2008-09) share of private insurers
MARKET SHARE OF LIFE INSURERS (per cent)
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B.M. COLLEGE OF BUSINESS ADMINISTRATION Page 8
Insurer 2008-2009 2009-2010
Regular Premium
LIC 38.43 43.13
Private Sector 61.57 56.87
Single premium
LIC 90.70 92.19
Private sector 9.30 7.81
First Year Premium
LIC
60.89
65.08
Private sector 39.11 34.92
Renewal premium
LIC 77.43 73.64
Private sector
22.57 26.36
Total Premium
70.10
POST PURCHASE BEHAVIOUR OF CONSUMER OF LIC
ETOP ANALYSIS OF INSURANCE SECTOR
Environmental threat and opportunity profile also known as environmental impact matrix is a
summarized depiction of the environmental factors and their likely impact on organization.
ETOP is the most useful way of structuring the result of environmental analysis. It can be
prepared in the following way:
Environmental
Factors
Environmental Analysis Effect
Economic (+) The Insurance industry is growing at the rate of 40 per
cent per annum. (Average).
(-) The global downturn has affected the Insurance
Industry in a very bad manner.
Opportunity
Threats
Technological (+) With the passage of time the Insurance industry is
expanding through technological aspects like Online
Premium & Selling of Insurance Online.
(+) Insurance Industry score over the Other service
providers, in terms of technology implementation, giving
both cost and service advantages
Opportunity
Opportunity
Political & Legal (-) The political scenario of India is looking forward to
Foreign Direct Investment in Insurance sector but with
strict rules.
Threats
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Social (+) Change in life style pattern in terms of savings and
investments.
(+) Multinational Insurance Companies are now looking to
enter into India and trying to share their culture with us.
Opportunity
Opportunity
CHAPTER 2
INTRODUCTION OF COMPANY
HISTORY OF LIFE INSURANCE CORPORATION OF
INDIA
PROFILE
MISSION, VISION, OBJECTIVES AND
COMMITMENT
MARKET SHARE OF THE COMPANIES
TYPES OF INSURANCE
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TAXATION OF LIFE INSURANCE
SWOT ANALYSIS
AWARDS AND RECOGNITION
CHAPTER 2
INTRODUCTION OF COMPANY
HISTORY OF LIFE INSURANCE CORPORATION OF INDIA
The Parliament of India passed the Life Insurance Corporation Act on the 19th of June 1956, and
the Life Insurance Corporation of India was created on 1st September, 1956, with the objective
of spreading life insurance much more widely and in particular to the rural areas with a view to
reach all insurable persons in the country, providing them adequate financial cover at a
reasonable cost.
LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its corporate
office in the year 1956. Since life insurance contracts are long term contracts and during the
currency of the policy it requires a variety of services need was felt in the later years to expand
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the operations and place a branch office at each district headquarter. Re-organization of LIC took
place and large numbers of new branch offices were opened. As a result of re-organisation
servicing functions were transferred to the branches, and branches were made accounting units.
It worked wonders with the performance of the corporation. It may be seen that from about
200.00 crores of New Business in 1957 the corporation crossed 1000.00 crores only in the year
1969-70, and it took another 10 years for LIC to cross 2000.00 crore mark of new business. But
with re-organisation happening in the early eighties, by 1985-86 LIC had already crossed
7000.00 crore Sum Assured on new policies.
Today LIC functions with 2048 fully computerized branch offices, 100 divisional offices, 7
zonal offices and the Corporate office. LIC’s Wide Area Network covers 100 divisional offices
and connects all the branches through a Metro Area Network. LIC has tied up with some Banks
and Service providers to offer on-line premium collection facility in selected cities. LIC’s ECS
and ATM premium payment facility is an addition to customer convenience. Apart from on-line
Kiosks and IVRS, Info Centres have been commissioned at Mumbai, Ahemdabad, Bangalore,
Chennai, Hyderabad, Kolkata, New Delhi, Pune and many other cities. With a vision of
providing easy access to its policyholders, LIC has launched its SATELLITE SAMPARK
offices. The satellite offices are smaller, leaner and closer to the customer. The digitalized
records of the satellite offices will facilitate anywhere servicing and many other conveniences in
the future.
LIC continues to be the dominant life insurer even in the liberalized scenario of Indian insurance
and is moving fast on a new growth trajectory surpassing its own past records. LIC has issued
over one crore policies during the current year. It has crossed the milestone of issuing
1,01,32,955 new policies by 15th Oct, 2009, posting a healthy growth rate of 16.67% over the
corresponding period of the previous year.
From then to now, LIC has crossed many milestones and has set unprecedented performance
records in various aspects of life insurance business. The same motives which inspired our
forefathers to bring insurance into existence in this country inspire us at LIC to take this message
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of protection to light the lamps of security in as many homes as possible and to help the people
in providing security to their families.
PROFILE
Mission, Vision, Objectives And Commitment
Mission:
"Explore and enhance the quality of life of people through financial security by providing
products and services of aspired attributes with competitive returns, and by rendering resources
for economic development."
Vision:
"A trans-nationally competitive financial conglomerate of significance to societies and Pride of
India."
Objectives:
1. Spread Life Insurance widely and in particular to the rural areas and to the socially and
economically backward classes with a view to reaching all insurable persons in the
country and providing them adequate financial cover against death at a reasonable cost.
2. Maximize mobilization of people's savings by making insurance-linked savings
adequately attractive.
3. Bear in mind, in the investment of funds, the primary obligation to its policyholders,
whose money it holds in trust, without losing sight of the interest of the community as a
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whole; the funds to be deployed to the best advantage of the investors as well as the
community as a whole, keeping in view national priorities and obligations of attractive
return.
4. Conduct business with utmost economy and with the full realization that the moneys
belong to the policyholders.
5. Act as trustees of the insured public in their individual and collective capacities.
6. Meet the various life insurance needs of the community that would arise in the changing
social and economic environment.
7. Involve all people working in the Corporation to the best of their capability in furthering
the interests of the insured public by providing efficient service with courtesy.
8. Promote amongst all agents and employees of the Corporation a sense of participation,
pride and job satisfaction through discharge of their duties with dedication towards
achievement of Corporate Objective.
1. Commitment To Clients - Settlement Of Claims :
1. NO. 1 INSURANCE COMPANY IN THE WORLD in terms of settlement of claims.
PER SECOND LIC settles more than 2 claims!!!
2. LIC settled 149 lacs claims during the year 2008/2009.
3. Prompt settlement of claims - 97% maturity claims settled on or before Due date.93.22%
Non-early death claims settled within 20 days of intimation.
4. Lowest outstanding claim ratio in the world (Maturity+SB = 0.26%) (Death Claim =
2.21%).
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2. ADVANCED TECHNOLOGY - FOR BETTER CUSTOMER
SERVICES.
1. Computerized and networked 2048 Branch Offices and 810 Satellite Offices throughout
the country.
2. LIC is the SECOND largest PC user in the country.
3. Premium payment facility extended through network of 2048 Branches and 810 Satellite
Offices, 9500 Empowered Agents and 510 Senior Business Associates,ECS,ATM of
Corp. & Axis Banks, through internet, online portals, Collecting Bank (Axis Bank), AP
online, MP online, Through SMS.
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MARKET SHARE ANALYSIS (year 2008-2009)
Life Insurance Corporation of India
ICICI Prudential Life Insurance Co Ltd
Bajaj Allianz Life Insurance Co Ltd
SBI Life Insurance Co Ltd
Reliance Life Insurance Co Ltd
HDFC Standard Life Insurance Co Ltd
Birla Sun Life Insurance Co Ltd
Max New York Life Insurance Co Ltd
Kotak Mahindra Old Mutual Life Insurance Ltd
Aviva Life Insurance Company India Ltd
Tata AIG
others
MARKET SHARE OF THE COMPANIES
(In crocre)
Life Insurance Corporation of India 186077.3
ICICI Prudential Life Insurance Co Ltd 16531.88
Bajaj Allianz Life Insurance Co Ltd 11419.71
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SBI Life Insurance Co Ltd 10104.03
Reliance Life Insurance Co Ltd 6604.9
HDFC Standard Life Insurance Co Ltd 7005.1
Birla Sun Life Insurance Co Ltd 5505.66
Max New York Life Insurance Co Ltd 4860.54
Kotak Mahindra Old Mutual Life
Insurance Ltd 2869.05
Aviva Life Insurance Company India Ltd 2378.01
Tata AIG 3493.78
Others 4422.73
(year 2008-2009)
Types of life insurance
Term Insurance:
Term life insurance provides for life insurance coverage for a specified term of years for a
specified premium. The policy does not accumulate cash value. Term is generally considered
"pure" insurance, where the premium buys protection in the event of death and nothing else.
Term insurance premiums are typically low because both the insurer and the policy owner agree
that the death of the insured is unlikely during the term of coverage. The three key factors to be
considered in term insurance are: face amount (protection or death benefit), premium to be paid
(cost to the insured), and length of coverage (term).
Limited-pay:
It is Limited-pay life insurance, in which all the premiums are paid over a specified period after
which no additional premiums are due to keep the policy in force. Common limited pay periods
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include 10-year, 20-year, and paid-up at age 65.And at the time of maturity whole amount is
given back in LIC it is in the form of Money Back Policy
Endowments:
Endowments are policies in which the cash value built up inside the policy, equals the death
benefit (face amount) at a certain age. The age this commences is known as the endowment age.
Endowments are considerably more expensive (in terms of annual premiums) than either whole
life because the premium paying period is shortened and the endowment date is earlier.
Accidental death Insurance Policy:
Accidental death is a limited life insurance that is designed to cover the insured when they pass
away due to an accident. Accidents include anything from an injury, but do not typically cover
any deaths resulting from health problems or suicide. Because they only cover accidents, these
policies are much less expensive than other life insurances.
Joint life insurance is either a term or permanent policy insuring two or more lives with the
proceeds payable on the first death.
Survivorship life or second-to-die life is a whole life policy insuring two lives with the
proceeds payable on the second (later) death. This policy is not there in LIC
Single premium whole life is a policy with only one premium which is payable at the time the
policy is issued.
Modified whole life is a whole life policy that charges smaller premiums for a specified period
of time after which the premiums increase for the remainder of the policy.
Group Life Insurance:
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It is term insurance covering a group of people, usually employees of a company or members of
a union or association. Individual proof of insurability is not normally a consideration in the
underwriting. Rather, the underwriter considers the size and turnover of the group, and the
financial strength of the group. Contract provisions will attempt to exclude the possibility of
adverse selection. Group life insurance often has a provision that a member exiting the group has
the right to buy individual insurance coverage.
Investment policies With-profits policies:
Some policies allow the policyholder to participate in the profits of the insurance company these
are with-profits policies. Other policies have no rights to participate in the profits of the
company, these are non-profit policies. With-profits policies are used as a form of collective
investment to achieve capital growth. Other policies offer a guaranteed return not dependent on
the company's underlying investment performance; these are often referred to as without-profit
policies which may be construed as a misnomer.LIC is giving the profit participation to the
customer in the terms of Bonus issued on the date: 31/03 of every year.
Annuities:
An annuity is a contract with an insurance company whereby the purchaser pays an initial
premium or premiums into a tax-deferred account, which pays out a sum at pre-determined
intervals. There are two periods: the accumulation (when payments are paid into the account)
and the annuitization (when the insurance company pays out).
Pension Term Insurance:
Pension Term Insurance is generally a term insurance in which the prospect is given a choice of
paying premium one timely or the prospect can pay the premium in terms and at the time of the
selected term or the age the prospect is given the monthly pension through ECS or by cheque or
annual pension. Nowadays there exist a plan where in the prospect is investing in the unit link
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Insurance where at the maturity the fund is automatically transferred into pension policy and the
pension is availed till the Prospect is living after the death the policy contract gets over and a
certain amount is given to the nominee.
TAXATION OF LIFE INSURANCE:
In India the Insurance taken is exempted upto the limit of the premium amount 1, 00,000 .It is
exempted under the Income Tax Act 80C, and the maturity amount is exempted through the
Income Tax Act 10,10D.
SWOT ANALYSIS
STRENGHTS
1. The ONE & ONLY - Government owned Life Insurance Company in India.
2. The most trusted & oldest insurance company in India since 1956.
3. Largest insurance company in the world on Customer Base (25 Crore customers).
4. Only 4 countries in the World have more population than LIC's policy holders!!!
5. No. I Insurance Company in the world in terms of agency force (13 lacs agents).
And No. I Insurance Company in the world on selling of policies 3.59 crore policies.
6. 2nd Biggest Real Estate Owner next to Indian Railways.
7. LIC has highest number of Club Member Agents.
8. It is the pride taking fact that this PSU is working for 60 years and has not incur losses
for a single year
WEAKNESS
1. Due to heavy customer base the management of it is not up to the benchmark level
2. It is over employed and so expenses are high
3. The infrastructure is not as advanced as other rivals
4. It is under the influence of government and mobilize their fund accordingly
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OPPORTUNITY
1. It can make use of its hefty funds properly in profitable area rather than following the
traditional way
2. With the heavy team force and personnel can attain the new venture development
3. LIC has a good amount of funds which should be used for the development of the
country.
4. It can start its subsidiaries in other companies and can expand the scope of development
THREATS
1. New Private companies are emerging with a qualitative approach and customer oriented
so LIC cannot posses the monopoly.
2. Due to availableness of newer product the lapsation of policies can be a major problem
3. Private companies are attracting the LIC employees and get through the strategy.
AWARDS AND RECOGNITION
World Brand Congress Award
OUTLOOK MONEY -- NDTV
PROFIT AWARD 2009 in
" BEST LIFE INSURER
CATEGORY "
NDTV PROFIT BUSSINESS
LEADERSHIP, AWARDS 2009
CNBC AWAAZ CONSUMER
AWARD 2009 for
" Most preferred insurance
company "
ASIA PACIFIC HRM Congress, 2009 Brand Equity Most Trusted Brand
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POST PURCHASE BEHAVIOUR OF CONSUMER OF LIC
Award for INNOVATIVE HR
PRACTICES 2009 Top in Insurance Category
Golden Peacock Innovative Product /
Service Award – 2009
Loyalty Award - 2009
Reader's Digest Trusted Brand
Award, 2009 ( Platinum category )
CNBC Awaaz Consumer Awards
2008
NDTV Profit Business Leadership
Award 2008
INDY's Silver Award for Best
Corporate Film
INDY's Silver Award for Best
" In-house Magazine "
NASCOM IT USER Award 2008
Business Super brand India 2009 ASIA BRAND CONGRESS BRAND
LEADERSHIP AWARD, 2008
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POST PURCHASE BEHAVIOUR OF CONSUMER OF LIC
CHAPTER 3
THEORETICAL ASPECTS OF THE
STUDY OF POST PURCHASE
CONSUMER BEHAVIOUR
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THEORETICAL ASPECTS
POST-PURCHASE CONSUMER BEHAVIOUR:
After the purchase, the consumer might experience dissonance that stems from noticing certain
disquieting features or hearing favourable things about other brands, and will be alert to
information that supports his or her decision. Marketing communications should supply beliefs
and evaluations that reinforce the consumer's choice and help him feel good about the brand.
The marketer's job therefore does not end with the purchase. Marketers must monitor
postpurchase satisfaction, postpurchase actions, and postpurchase product uses.
POSTPURCHASE SATISFACTION:
What determines customer satisfaction with a purchase? Satisfaction is a function of the
closeness between expectations and the product's perceived performance. If performance falls
short of expectations, the consumer is disappointed, if it meets expectations, the consumer is
satisfied; if it exceeds expectations, and the consumer is delighted. These feelings make a
difference in whether the customer buys the product again and talks favourably or unfavourably
about it to others.
Consumers form their expectations on the basis of messages received from sellers, friends, and
other information sources. The larger the gap between expectations and performance, the greater
the dissatisfaction. Here the consumer's coping style comes into play. Some consumers magnify
the gap when the product is not perfect, and they are highly dissatisfied; others minimize the gap
and are less dissatisfied.
The importance of postpurchase satisfaction suggests that product claims must truth-fully
represent the product's likely performance.
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PRODUCTGet Rid Of It Temprorarily
Rent It
Lend it
Get Rid Of It PermanentlyGive It AwayTo Be Resold
To Be Used
Trade It
Sell ItDirectly To Consumer
Through Middleman
To Intermediary
Throw Away
Keep ItUse It To Serve Original Purpose
Convert It To Serve A New Purpose
Store It
POST PURCHASE BEHAVIOUR OF CONSUMER OF LIC
POSTPURCHASE ACTIONS:
Satisfaction or dissatisfaction with the product influences a consumer's subsequent behaviour. A
satisfied consumer is normally a repeat buyer. He/she also says good things about the product to
others. Marketers say: "Our best advertisement is a satisfied customer."
Dissatisfied consumers may abandon or return the product. They may seek information high that
confirms its high value; they may take public action by complaining to the company, or
complaining to other groups (such as business, private, or government). Private actions include
making a decision to stop buying the product.
POSTPURCHASE AND DISPOSAL:
Marketers should also monitor how buyers use product and dispose the product. A key driver of
sales frequency is product consumption rate- more quickly buyers consume a product, the sooner
they may be back in the market to repurchase it.
One opportunity to increase frequency of product use is when consumers' perception of their
usage differs from the reality. Consumers may fail to replace products with relatively short life
spans in a timely manner because of a tendency to underestimate product life. One strategy to
speed up replacement is to tie the act of replacing the product to a certain holiday, event, or time
of year.
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DISPOSAL ALTERNATIVES :
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Expectations, Performance & Satisfaction:
Perceived Performance Relative to
Expectation
Consumer Reaction
Better Satisfaction
Same Non-satisfaction (neutral)
Worse Dissatisfaction
• Satisfaction is a function of expectation – hence manage expectations; do not make false
promises
• Satisfaction is not to be confused with repurchase intention & customer loyalty. Satisfied
customers too switch brands in search of better alternatives
• Dissatisfied customers may make repeat purchases due to lack of better alternatives or
resistance to /cost of switching
• Therefore focus on total customer satisfaction and not on immediate repurchase intention
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Dissatisfaction Response – Customer Complaint Behavior:
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POST PURCHASE BEHAVIOUR OF CONSUMER OF LIC
CHAPTER 4
RESEARCH METHODOLOGY
3. OBJECTIVES OF THE STUDY
4. BENEFITS OF THE STUDY
5. LIMITATIONS OF THE STUDY
6. SCOPE OF THE STUDY
7. RESEARCH DESIGN
8. DATACOLLECTION METHOD
9. DEFINING POPULATION
10.SAMPLING DECISION
11.ANALYSIS OF THE INFORMATION
12.RESEARCH CHART
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CHAPTER 4
RESEARCH METHODOLOGY
OBJECTIVES OF THE STUDY
There are mainly two Objectives:
13. Primary objective
14. Secondary objective
Primary Objectives:
The primary objective of the study is to find out the post purchase behaviour of the customer and
their activity after purchasing the policy.
Secondary Objectives:
The secondary objective of the study was to get the practical reasons for the problems faced by
the customer after their acquisition of the policy. This will help to serve the customer well
LIMITATION OF THE STUDY
Some of the major limitations of study are mentioned below.
The survey work was conducted in Surat and nearby areas only so, it cannot cover
preference of other region.
The sample size taken for the survey work was 100 so the reliability of data is not
adequate.
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There is a chance of mistake in the answer because of the limited knowledge of the
respondent.
There is also possibility of giving wrong answer by respondents because of mood of
Customers and due to the familiarity they cannot express their views correctly.
SCOPE OF THE STUDY
The topic of the study “Post Purchase Behavior” resembles the customer’s behavior after the
product what is there attitude towards it and it is helpful to the Life Insurance Corporation of
India to get the exact reason for the lapsation of the policy and cases of surrendering the policy,
which is day by day increasing. So to identify the basic problem why the insured is closing and
ending the contracted policy. I have done the study of post purchase behavior of the customer of
LIC.
RESEARCH DESIGN
Research Design constitutes the blueprint for the collection, measurement, and analysis of data.
It also express both structure of research problem- the framework, organisation, or configuration
of the relationships among variables of the study- and plan of investigation used to obtain
empirical evidence on those relationships.
Research Design is classified into main 3 types, out of them Exploratory Study is used. The
purpose of choosing this method is to develop the hypothesis or question for further research and
use of the data which is first hand for appropriate use.
Exploratory research:
An exploratory research focuses on the discovery of new ideas and is generally based on the
secondary data. It is preliminary investigation which does not have a rigid design.
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Descriptive research:
In the second stage, descriptive research design has been used because it described the
phenomena under the study and recommendation / findings were specific under this study.
Descriptive studies are undertaken in many circumstances. When the researcher is interested in
knowing the characteristics of certain groups such as age, sex, educational level, occupation, a
descriptive study may be necessary.
Causal research:
Causal Design is used when researcher is interested in knowing cause and effect relationship
between the two or more variables.
DATA COLLECTION METHOD
Data collection is related to the sources of data and data collection technique. It is very much
important to select the appropriate source of data which is very much necessary while conducting
the survey. There are two types of sources are available from which one can select the data.
1. Primary Data
2. Secondary Data
Primary data are those data that are collected for the first time. This data is never used before by
any one. I have collected primary data through Personal and Telephone Survey.
Secondary data are those that are not collected for the first time. They are gathered and collected
through various sources such as newspaper, magazine, radio, etc. In my project I have collected
secondary data from the Internet to get the information about my topic.
The fifth step of the research process is about decision on data collection techniques. Data
Collection Techniques are the ways in which information is gathered. Also, there are various
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ways to collect the data. Some of them are “Observational Method”, “Survey Method”.
According to my topic, I have chosen to do survey through questionnaire and through personal
survey, as it the best method for my survey.
DEFINING POPULATION
For my survey, the population selected is LIC’s customer as the post purchase behaviour can be
surveyed by a person who has a LIC policy.
SAMPLING DECISION
ANALYSIS OF INFORMATION
There are many ways of processing and analyzing the information, they are as follows:
Tabulation
Central tendency
Measures of dispersion
Multivariate analysis
Graphical representation etc
I have analysis of the information through graphical representation as it is easy to be understood
by everyone who reads this report.
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Research Chart
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Formulating the research
problem
Choice of research design
Determing The Sources Of Data
Organising And Conducting The
Field Survey
Determing Sampling
Design And Size
Designing Data Collection Forms
Processing And Analyzing The Collected Data
Preparing The Research Report
POST PURCHASE BEHAVIOUR OF CONSUMER OF LIC
CHAPTER 5
DATA ANALYSIS &
FINDINGS
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CHAPTER 5 DATA ANALYSIS AND FINDINGS
Here the detailed analysis of the survey conducted and the detailed findings from the
questionnaire.
The following are the detailed analysis of the questionnaire in question wise analysis
1. Which factor influenced you to buy LIC product?
(a) Need (b) Advertisement
(c) LIC Agent (d) if others then specify……………………………
Statistical information
Factor influencing to buy LIC product Response
Need 18
Advertisement 19
LIC agent 63
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If others 0
Total 100
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18
19
63
NeedAdvertisementLIC agentIf others
Analysis:
By seeing the graph we can come to know that the major influencing factor is LIC agent. There
is also scope of advertise ment but it cannot surpass the reality. So the company should focus on
giving training to lic agent to sell more and more policy as they areinfluencing the most to the
customer.
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2. Which type of policies you have? (multiple answer are acceptable)
(a) Endowment (b) Term insurance
(c) ULIP
Staistical information
Type of Policy Response
Endowment 32
Term insurance 60
ULIP 49
Total 141
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Type of Policy
endowmentterm insuranceULIP
From this graph we can firstly know the LIC customers are interested in buying more than one
policy. There is a rush of buying term insurance from LIC. It does not mean that endowment and
ULIP”S are not preferred but customers first preference is term insurance
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3. If endowment the term of payment is.
(a) 10-15 years (b)15-20 years
(c) 20 years or more (d) if others then specify
Years Response
10-15 years 7
15-20 years 10
20 years or more 15
Total 32
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Premium paying years
15-2015-2020 years more
The customers prefer to pay the premium for more than 20 years. So company should take it into
consideration an should bring more competitive policies of endowment so that customers will be
attracted and buy more policies which will be beneficial in long run to customers and the
company.
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4. If term insurance then the term of payment is.
(a) 10-15 years (b) 15-20 years
(c) 20 years or more (d) if others then specify
Years Response
10-15 years 5
15-20 years 30
20 years or more 25
Total 60
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Premium paying years
15-2015-2020 years more
This question was to know the prospect selecting the term plan and its maturity, normally in term
plan the lower age group keeps higher maturity periods as to incur good amount with additional
bonuses, but the people in the age bracket of 35 and above selecting early maturity as in their
older age they become financially independent.
The above were the response of them.
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5. If ULIP then which plan you have?
(a) Endowment plus (b) Market plus-1
(c) Market plus-2 (d) if others then specify…………………………
Type of ULIP plan Response
Endowment plus 7
Market plus-1 16
Market plus-2 20
Others 06
Total 49
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Type of ULIP plan
Endowment plusmarket plus 1market plus 2others
The data obtained can be analyzed that as endowment plus is a new plan iits sale is still lacking. There is a high sale of market plus-2 and alco market plus-1. The other ULIP are still not favoured like these three policies.
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6. In case if the term insurance matures then are you satisfied with the time duration of the
payment of LIC?
(a) Satisfied (b) average
(c) Unsatisfied (d) not applicable
Level of satisfaction Response
Satisfied 24
Average 10
Unsatisfied 2
Not applicable 64
Total 100
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Level of satisfaction at the time of payment By LIC
satisfiedaverageunsatisfiednot applicable
Here it can be seen that most of the customers are satisfied with the payment procedure of LIC after the maturity of the term insurance.But the company’s goal should be the satisfaction of all the customers. So company should collect feedback on this so that the actual thing comes up.
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7. By what way do you prefer to pay the premium in LIC?
(a) Going personally (b) By agent
(c) Online payment (d) if others then specify…………………………..
Way to pay premium Response
Going personally 8
By agent 85
Online payment 3
if others then specify 4
Total 100
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Way of paying Premium
going personallyLIC Agentonline paymentother
Most of the customers are paying the premium through LIC agent..The customers are being benefitted due to agent’s service. But there are some customers who are going personally or paying through internet.
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8. If you go personally then how is the behaviour of employee to you?
(a) Satisfactory (b) Average
(c) Unsatisfactory
Satisfaction Level Response
Satisfactory 5
Average 3
Unsatisfactory 1
Total 8
Level of Satisfaction towards employee of LIC
satisfactoryaverageunsatisfactory
The customers who are going personally are mostly satisfied with the employees but LIC should take care that all are being satisfied
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9. IN case you claim, then how was the response of the company?
(a) Satisfactory (b) Average
(c) Unsatisfactory (d) not applicable
Satisfaction level Response
Satisfactory 12
Average 12
Unsatisfactory 2
Not applicable 74
Total 100
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Satisfaction level at the time of claim
satisfactoryaverageunsatisfactorynot applicable
There are many who have not claim as they have not face such circumstances and that is good for them and company. But those who have claimed there are equal customers who are satisfied and those arehaving an average experience. This is not very good sign for a company. Still customers are not fully satisfied with the clauiming process of the company. So process should be made fast and accurate so that each and every customer is satisfied.
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10. Is the premium notice properly received at time?
(a) yes (b) no (c) sometimes
Premium notice Response
Yes 55
No 7
Sometimes 38
Total 100
Premium notice delivery
yesnosometimes
As there is a large customer base of LIC there is a possibility that the premium notice may not be delivered every time.so the customers response shows that they receive the premium notice sometimes and some donot receive only so LIC should consider this and should inform the customers about the premium notice so the customers will be ready with finance at the time of the premium paying date.
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11. Do you have any insurance policies of any other company?
(a) yes (b) no
If yes, then specify the company name……………………………………………………
Customer Loyalty Response
YES 15
No 85
Total 100
Customer Loyalty
yesno
The main Question to the customer is about their loyalty. Most of the customers are loyal to the LIC, but in this competitive world and the aggressive advertisement and new innovative policies of private companies some of the customers are attracted towards the private customers .so, LIC should keep this in mind and try to maximum retain their customers.
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12. What do you feel that LIC’s return provide value for your money?
(a) Satisfied (b) average
(c) Unsatisfactory
Satisfaction Level Response
Satisfactory 79
Average 318
Unsatisfactory 13
Total 100
Satisfaction with return of LIC
satisfactoryaverageunsatisfactory
Most of the customers are satisfied with the return if LICand few of them are not satisfied so LIC should do a research about satisfaction with return and shuld find the reasons of the dissatisfaction of customers and overcome it.
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13. How do you feel being a LICian?
(a) Very good (b) average
(c) Very bad
Feeling Response
very good 47
average 49
very bad 4
Total 100
Feeling of being an LICian
very goodaveragevery bad4th Qtr
Many of the customers think that it is an average experience of being LICian. Many thinks that it is really a good feeling that the are LICian but they are than above one.LIC backs here for creating an excellent good image in customers mind, which is a bad sign for the company.
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FINDINGS:
1. Most of the respondent prefers to stick to the particular company due to its
performance and brand tag of “Government of India” Guarantee.
2. From the research it was found that the aged one wanted to stick to the one particular
brand as they are brand conscious and the young blood of age group 21-30 wanted to
be dynamic and performance oriented.
3. From the research I have found that most of the people are satisfied with the service
medium of agent as no negative score was given to the question asked about the
satisfaction of service medium.
4. It was found from the research that the young people of age group 21-30 prefer the
combination of endowment and term insurance plans, well the aged group prefer the
combination of endowment and ulips as for them the term insurance is very expensive
and not cost effective
5. It was clear from the research that the customer prefers to pay the premium in shorter
period in endowment insurance.
6. It was the positive point for the LIC that most of the respondents were on an average
satisfied with the post purchase service.
7. The customers preferences are tending towards the ULIP products rather than the
conventional business.
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CHAPTER 6
SUGGESTIONS AND CONCLUSIONS
Suggestions Conclusions Bibliography Annexure
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CHAPTER 6 SUGGESTIONS AND CONCLUSIONS
SUGGESTIONS
1. I would suggest the advisor to increase the transparency of the insurance and show
the facts of the plan selected.
2. The respondent is blindly taking the insurance by brand name LIC so the advisor
should deliberately ask their need and judge properly and deliver a plan.
3. A proper prospected plan to customer led to the eradication of the dissatisfaction.
4. I recommend the advisor to use the above datas and assess the customers.
5. The lapsation of policies are on increasing rate so the company has to take the step
where their customers are finding problems and stop continuing policy.
6. One more thing it represent that many of the people almost 47% are tending towards
accepting the other rival products and having their view performance oriented. So the
agent should not be in a notion that their customer will always be loyal to them.
CONCLUSIONS
From the survey conducted by me I have come across many conclusions. The first thing that I
would like to conclude is that LIC is having brand equity and so policies are selling But, People
must be explained the plan properly and then to be sold and many of the advisors force the
customers to take the insurance where they get high monetary benefits, this should be stopped.
And strong thing identified about the insurance is that from the study most of the respondent has
been on an average satisfied and many who were not satisfied have to stop paying the premium
or have to surrender the policy. And for the loan there was not so much of awareness and the
customer feel cheated as their feelings were that they get their money for interest. This is to be
considered and some steps should be taken for that.Many of the people I studied posses less
knowledge about the insurance most of them were not able even to trace out the product which
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they have consumed, they have taken the product simply for tax exemption or risk motive but
they are of aware of the features and terms and condition of product they have blindly taken the
policy on trusting the agent, they wait for the agent to come and collect the premium otherwise
not caring for paying premium ,this is the reason the customer not selecting the other medium to
pay the premium.So effective advertisement and customer should be educated about their
responsibility of paying premium and benefits of the product.
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BIBLIOGRAPHY
http://business.mapsofindia.com/india-insurance/life.html
http://blogs.siliconindia.com/Pinky/Top_10_Life_Insurance_Companies_in_India-bid-
4yPZ38gx22775513.html
http://www.licindia.in/index.asp
BOOKS USED
1. MARKETTING MANAGEMENT
– PHILLIP KOTTLER
2. ADVANCED RESEARCH METHOLOGY
_G.C.Beri.
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ANNEXURE
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A Survey on Post Purchase Behaviour of Customer of LICDear respondent, I am Patel Nikita, student of Bhagvan Mahavir College of Business Administration; I am conducting a survey on the “POST PURCHASE BEHAVIOUR OF CUSTOMER” of LIC Products. So kindly give your valuable response fairly. NAME:……………………………………………………AGE:…………ADDRESS:………………………………………………………………………………………
CONTACT NO:………………………………
1. Which factor influenced you to buy LIC product?
(a) Need (b) Advertisement
(c) LIC Agent (d) if others then specify……………………………
2. Which type of policies you have? (multiple answer are acceptable)
(a) Endowment (b) Term insurance
(c) ULIP
3. If endowment the term of payment is.
(a) 10-15 years (b)15-20 years
(c) 20 years or more (d) if others then specify
4. If term insurance then the term of payment is.
(a) 10-15 years (b) 15-20 years
(c) 20 years or more (d) if others then specify
5. If ULIP then which plan you have?
(a) Endowment plus (b) Market plus-1
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(c) Market plus-2 (d) if others then specify…………………………
6. In case if the term insurance matures then are you satisfied with the time duration of the payment of LIC?
(a) Satisfied (b) average
(c) Unsatisfied (d) not applicable
7. By what way do you prefer to pay the premium in LIC?
(a) Going personally (b) By agent
(c) Online payment (d) if others then specify…………………………..
8. If you go personally then how is the behaviour of employee to you?
(a) Satisfactory (b) Average
(c) Unsatisfactory
9. IN case you claim, then how was the response of the company?
(a) Satisfactory (b) Average
(c) Unsatisfactory (d) not applicable
10. Is the premium notice properly received at time?
(a) yes (b) no (c) sometimes
11. Do you have any insurance policies of any other company?
(a) yes (b) no
If yes, then specify the company name……………………………………………………
12. What do you feel that LIC’s return provide value for your money?
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(a) Satisfied (b) average
(c) Unsatisfactory
13. How do you feel being a LICian?
(a) Very good (b) average
(c) Very bad
14. Your valuable suggestions for the company.
………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
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