analysis of the views of lic agents -...
TRANSCRIPT
ANALYSIS OF THE VIEWS OF LIC AGENTS
INTRODUCTION
Marketing of life insurance is ridden with several problems and it
calls for extraordinary skills. This consequently renders the ‘Agent’ an
indispensable link between the existing or potential insurance customers
and the Life Insurance Corporation of India. The competence of the agent
then constitutes a critical element in the promotion of insurance business.
This crucial role of the agent will, in the final analysis, contribute to the
realization of the laudable objective of the LIC of India of ‘providing financial
security’ extensively to diverse population groups in urban and rural areas,
in different segments and in all income levels, especially as envisaged in
the Marketing Policy of the Corporation. As the life insurance agent is the
central figure in the insurance marketing process, the success of insurance
company is highly dependent on the army of agents.
The job of a life insurance agent is to convert a suspect into prospect
and the prospect into a policyholder (customer). To be successful in the
profession, the agent is required to possess good knowledge about various
life insurance products/plans/schemes, products of competitors, provisions
of the Income-tax law, capital market conditions, etc.
The entire individual policies of the Corporation were sold through
individual agents up to the year 2003. Even after the emergence of
alternative marketing channels like banacassurance and corporate agents,
98 per cent of premium received by LIC of India was through the business
underwritten by individual agents. Since the alternative marketing
channels emerged in India only in the year 2003 and about 98 percent of
the premium received was through the individual agents’ business, only
individual agents were considered for the survey. A total of 200 agents
from all the ten branches in Kannur and Kasargod districts were selected for
the study. The data was collected using a structured questionnaire which is
given in the appendix. The information collected was tabulated and
presented in the following pages.
PROFILE OF THE RESPONDENTS
Gender-wise classification of the agents
Table 6.1 shows the sex-wise distribution of the respondents. Of the
total respondents, majority - 62 percent- belong to male category. Females
were 38 percent only. This shows that life insurance agency business is
dominated by males.
Table 6.1
Sex-wise Classification of Respondents
Sex Number Percent
Male 124 62.00
Female 76 38.00
Total 200 100.00
Age-wise Classification
Age is an influential factor in selecting a job. As per rules, to obtain
licence under the regulation, a person should attain at least 18 years of
age.
Table 6.2
Age-wise Classification of Respondents
Age (in Years) Number Percent
20 – 30 23 11.50
30 – 40 105 52.50
40 – 50 57 28.50
50 – 60 15 7.50
Total 200 100.00
236
Table 6.2 reveals that 52.5 percent of the respondents belong to the
age group of 30 to 40 years and 28.5 percent to 40 to 50 years. Only 11.5
percent of the respondents fall in the group of 20 to 30 years, and 7.5
percent are in the group of 50 to 60 years. The mean age of an agent is
38.2 years (S.D. 7.73). This is a clear indication that majority of the people
select the job of an LIC agent after the age of 30.
Marital Status
Marital status is another factor influencing the agency business.
Some of the development officers, while in the discussion expressed that
female agents, in many cases leave the job of life insurance agency after
they get married. Table 6.3 depicts that as high as 85 percent of the
respondents were married, 9 percent were single, and just 6 percent fall
under other categories such as divorced, widowed and the like.
Table 6.3
Marital Status of Respondents
Marital Status Number Percent
Single 18 9.00
Married 170 85.00
Other categories 12 6.00
Total 200 100.00
Education Qualification of the Agents
Educational qualification is another factor influencing the insurance
agency profession. Table 6.4 reveals that majority of the respondents
(47.50 percent) were under graduates, 5.5 percent were post-graduates, 24
percent passed Pre-Degree/Plus two, and 23 percent were SSLC holders
237
The mean number of years of education of the respondents is 13.24 (S.D.
2.24). At the same time, no professionally qualified person has been
attracted to the profession of life insurance agency business.
Table 6.4
Educational Qualification of Respondents
Education Number Percent
SSLC 46 23.00
Plus Two/Pre-Degree 48 24.00
Graduate 95 47.50
Post-graduate 11 5.50
Total 200 100.00
Occupational Status of Respondents
Table 6.5 reveals that only 63.50 percent respondents are full time
agents. The remaining 36.50 percent are in the category of retired
employees (7.50 percent), self-employed/daily wage earners (14 percent),
and businessman (15 percent).
Table 6.5
Occupational Status of Respondents
Occupation Number Percent
Full time LIC Agent 127 63.50
Retired Employees 15 7.50
Self employed / Daily wage earners 28 14.00
Business 30 15.00
Total 200 100.00
238
Family Structure of the Respondents
Family structure is another factor influencing agency business.
Family structure of the respondents is given in Table 6.6. The table reveals
that 50.50 percent of the respondents belong to nuclear family, 39.50
percent to extended family and only 10 percent to from joint family. From
the above, it can be presumed that life insurance agents prefer nuclear
family.
Table 6.6
Family Structure of Respondents
Structure Number Percent
Nuclear 101 50.50
Extended 79 39.50
Joint 20 10.00
Total 200 100.00
Family Size
Family size of the respondents is given in Table 6.7. Analysis of the
table reveals that 57.50 percent of the respondents have family members 3
to 5, 35 percent have 6 to 8 members, 5 percent have more than 8
members, and 2.5 percent have a maximum of 2 members in their family.
The mean number of members in the family of respondents is 6 (S.D. 1.88).
Table 6.7
Family Size of Respondents
No. of Members Number Percent
Below 3 5 2.50
3-6 115 57.50
6-9 70 35.00
9 and above 10 5.00
Total 200 100.00
239
Employment Status of Spouse of the Respondents
Table 6.8 discloses that 49.41 percent of the respondents’ spouses
are employed. Total of the respondents do not add 200 because 18
respondents were unmarried and 12 were either widow/widower/divorcees.
Table 6.8
Employment Status of Spouse of Respondents
Status Number Percent
Employed 84 49.41
Not Employed 55 32.35
Self-employed/Business 31 18.24
Total 170 100.00
Earning Members in the Family
As high as 63 percent of the respondents have two earning members
in their family, 19.50 percent have more than two, and in the case of 17.50
percent of the respondents, respondent himself is the only earning member
in their family. The mean number of earning members is two with a S.D. of
0.60. Table 6.9 shows the earning members in the family of the
respondents.
Table 6.9
Number of Earning Members in the Family of Respondents
Earning Members Number Percent
One 35 17.50
Two 126 63.00
Three 39 19.50
Total 200 100.00
240
Monthly Income of the Agent
The monthly income of the agents is tabulated and given in Table
6.10. It can be seen from Table 6.10 that the monthly income of agents
ranges from below Rs.5,000 to above Rs.25,000. The mean monthly
income of the respondents is Rs.10,325 per month (S.D. 5,513). At the
same time 37.50 percent of the respondents’ monthly income ranges from
Rs.10,000 to 15,000, 8.50 percent have income ranging from Rs.15,000 to
20,000, 4.50 percent have income between Rs.20,000 and Rs.25,000, and
only 1.5 percent of the respondents’ monthly income is above Rs.25,000.
It is to be noted that 48 percent of the respondents’ monthly income is less
than the average monthly income of the respondents, whereas 52 percent
of the agents are in a better financial position.
Table 6.10
Monthly Income of Respondents
Income Number Percent
Below Rs.5,000 35 17.50
Rs.5,000-10,000 61 30.50
Rs.10,000-15000 75 37.50
Rs.15,000-20000 17 8.50
Rs.20,000-25000 9 4.50
Rs.25,000 and above 3 1.50
Total 200 100.00
Family Income
Analysis of the family income of the respondents reveals that 50
percent of the respondents’ family income ranges from Rs.10,000 to 20,000
per month, while 3.5 percent of the respondents’ monthly family income is
241
above Rs.40,000. The average family income of the respondents is
Rs.17,500 per month (S.D. Rs.9,937).
Table 6.11
Family Income of Respondents
Monthly Family Income Number Percent
Below Rs. 10,000 41 20.50
Rs. 10,000 – 20,000 100 50.00
Rs. 20,000 – 30,000 34 17.00
Rs. 30,000 – 40,000 18 9.00
Rs.40,000and above 7 3.50
Total 200 100.00
On the basis of monthly income depicted in Table 6.11, it can be
concluded that 29.50 percent of the respondents belong to financially
sound families.
Category of Agents
There are two types of individual agents attached to branch offices:
(i) Rural Career Agents (RCAs), and (ii) Ordinary Agents (Direct Agents).
Urban Career Agents (UCAs) are recruited at the Career Agents’ Branch at
the Divisional Office. Table 6.12 reveals that 50 percent of the respondents
belong to the category of ordinary Agents and the remaining 50 percent to
the category of Rural Career Agents.
Table 6.12
Agency Category of Respondents
Category of Agents Number Percent
Ordinary Agent 100 50.00
Rural Career Agent 100 50.00
242
Total 200 100.00
Major Reasons for Taking Life Insurance Agency Profession
In India till recently, the profession of life insurance agency was not
considered as a permanent job. Therefore, a good number of agents
considered it as temporary means of livelihood. As and when they fully
occupies with other profession or job, they quit the job of insurance agency.
In the case of lady agents, many leave the job after getting married. Yet
there are others who take it as a part- time job. Table 6.13 shows the major
reasons that prompt the agents to take up the agency profession.
Table 6.13
Major Reasons Prompt the Agents to Take up Life Insurance Agency
Reasons Number Percent
As a means of livelihood 102 51.00
To supplement personal / family income 59 29.50
As a kind of social service 20 10.00
Pressure from friends / relatives 19 9.50
Total 200 100.00
Analysis of the table indicates that only 51 percent of the
respondents selected the agency business as a means of livelihood. The
rest 49 percent selected this job due to various other reasons like
supplementing personal income (29.50 percent), as a kind of social service
(10 percent), pressure from friends or relatives and the like (9.5 percent).
Service Period of Agents
It is a fact that business performance of agents, to a certain extent
depends up on their experience in the field. Table 6.14 depicts the service
243
period of the respondents in number of years. Respondents selected have
service experience ranging from five to twenty five years. About 47.50
percent of the respondents have experience ranging from 5 to 10 years,
23.50 percent have up to five years experience only, and 18.5 percent have
experience between 10 and 15 years. About 9 percent of the respondents
have 15 to 20 years of service and a very few (1.5 percent) have
experience above 20 years.
Table 6.14
Service Period of Respondents
Period in Years Number Percent
Up to 5 47 23.50
5 - 10 95 47.50
10 - 15 37 18.50
15 - 20 18 9.00
Above 20 3 1.50
Total 200 100.00
The average length of service of the respondents is 8.3 years with
S.D. 4.75 years. The above data reveals that more than 75 percent of the
agents have sufficient experience in the field.
Time Spent in the Field and LIC office
Life insurance agent is expected to devote a definite time in the field
to canvas prospect and to meet existing customers. At the same time, the
agent should be in the branch office to meet the development officer or the
branch manager and to render customer services like premium remittance,
obtaining loan quotations, claim settlement, etc. A professional agent is
required to keep the work schedule.
244
Table 6.15 shows that 52.5 percent of the respondents spent 2 to 4
hours per day in the field, 38.5 percent spent 4 to 6 hours; only 4.5 percent
spent above 6 hours per day. It is amazing to find that 4.50 percent of the
respondents spent less than two hours per day. Average time spent by the
respondents in the field was 3.86 hours per day with S.D. of 1.3 years. This
shows that agents do not keep a fixed time schedule for field work.
Table 6.15
Number of hours spent in the field Per Day
Hours No. Percent
Below 2 9 4.50
2 – 4 105 52.50
4 – 6 77 38.50
Above 6 9 4.50
Total 200 100.00
Table 6.16 exhibits that 62 percent of the respondents spent on an
average one hour per day in the attached branch office of the LIC. About
35 percent spent two hours per day and a very low percentage i.e., 3
percent spent three hours per day. Average time spent by the agents in
the branch office is 1. 41 hours per day i.e., about less than one and half
hours per day with S.D. of 0.54 hours.
Table 6.16
Hours spent per day in LIC office
Hours Number Percent
One 124 62.00
Two 70 35.00
Three 6 3.00
Total 200 100.00
245
246
Business under Salary Savings Scheme
It is comparatively easy to catch the prospects in the employees
segment of the house hold sector. Generally, people in this category
regularly save certain percentage of their income. They buy life insurance
policies without much compulsion, mainly to take advantage of the income
tax benefits. Table 6.17 reveals that the proportion of business of the
agents under the Salary Savings Scheme (SSS) ranges from below 20
percent to above 60 percent. Majority of the respondents (44.5%) have less
than 20 percent of their business under SSS and 2.5 percent have above 60
percent of their business under this category. The average business of
agents under Salary Savings Scheme is 24.1 percent with S.D. 14.9.
Table 6.17
Proportion of Agents’ Business under Salary Saving Scheme
Proportion Number Percent
Below 20 89 44.50
20-40 86 43.00
40-60 20 10.00
Above 60 5 2.50
Total 200 100.00
Occupational Status of Customers of LIC Agents
The customers were classified into six groups such as: a) Daily wage
earners, b) Salaried employees, c) Professionals, d) Agriculturists, e)
Business/Self employed, and f) NRIs. Salaried employees include clerks,
teachers, and officers/executives. Table 6.8 shows the occupational status
of customers of the respondents.
247
Analysis of table 6.18 reveals that majority of the agents concentrate
on salaried income, NRI and business segment of the market for life
insurance marketing. There were agents who could cover even more than
50 percent of the above category of clients in their business list. At the
same time, wage earners and agriculturists are not given that much
importance for insurance coverage. The main reason for this is agents are
afraid of more surrenders and lapse from this segment. Many agents gave
more importance to NRIs because they were able to procure major chunk of
their business from this category. At the same time, history of lapse due to
overselling can be traced more among this category.
Table 6.18
Occupational Status of Customers of Respondents
Proportion OccupationsA B C D E F
Below 10 24(15.19)
1(0.50)
47(24.74)
67(48.91)
3(1.53)
5(2.86)
10 - 20 96(60.76)
20(10.00)
88(46.32)
57(41.61)
60(30.61)
48(27.43)
20 - 30 32(20.25)
83(41.50)
47(24.74)
9(6.57)
100(51.02)
53(30.29)
30 – 40 6(3.80)
51(25.50)
6(3.16)
2(1.46)
24(12.24)
51(29.14)
40 – 50 - 23(11.50)
1(0.53)
2(1.46)
8(4.08)
9(5.14)
50 - 60 - 12(6.00)
1(0.53)
- 1(0.51)
6(3.43)
60 – 70 - 8(4.00)
- - - 1(0.57)
Above 70 - 2(1.00)
- - - 2(1.14)
Total 158 200 190 137 196 175 Note: 1) A=Wage earners; B=Salaried employees; C=Professionals;
D=Agriculturists; E = Business/Self employed; F= NRIs
2) Figures in parenthesis indicate percentage to total.
248
Other Agencies maintained by LIC Agents
As per the LIC of India (Agents) Rules 1972 and the IRDA (Licensing
of Agents) Regulations, 2000, each person aspiring to be an agent has to
undergo practical training of 100 hours in life or general insurance, as the
case may be. In case of composite agent, he/she should have completed at
least 150 hours of practical training in life and general insurance business
combined.
Table 6.19
Other Agency Business of Respondents
Type of Agency Number Percent
General insurance 43 21.50
Institutional deposit 15 7.50
Post office deposit 12 6.00
UTI and stock exchange 17 8.50
Others 28 14.00
None 85 42.50
Total 200 100.00
Note. Others include agent for Kerala State Financial Enterprises
(KSFE).
Table 6.19 reveals that 21.5 percent respondents also act as general
insurance agent, 7.5 percent respondents act as institutional deposit
agents, 6 percent Post Office deposit agents, 8.5 percent UTI and Stock
Exchange agents, another 14 percent took other agency like KSFE and the
like. The data in Table 6.19 reveals that 57.5 percent of the LIC agents
maintain other agency business. This again reveals that agents’ time is
divided between life insurance and other agency businesses.
249
Club Membership of Agents
Six clubs, viz., Corporate, Chairman, Zonal Manager, Divisional
Manager, Branch Manager and Distinguished Agents are formed to
recognize agents who perform consistently year after year. The club
members enjoy certain privileges and are vested with authority to attest
certain documents etc. Details of club membership of respondents are
given in Table 6.20.
Analysis of table 6.20 reveals that only 48.50 percent respondents
are members in various clubs and the remaining 51.50 percent of the
respondents could not perform consistently.
Table 6.20
Club Membership of Respondents
Name of Club Number Percent
Chairman 12 6.00
Zonal Manager 12 6.00
Divisional Manager 15 7.50
Branch Manager 28 14.00
Distinguished Agents Club 30 15.00
None 103 51.50
Total 200 100.00
Figure 6.1 depicts the club membership of the respondents
250
Figure 6.1Club Membership of Agents
0
10
20
30
40
50
60
Chairman ZonalManager
DivisionalManager
BranchManager
DistinguishedAgents Club
None
Club
Per
cent
age
Criteria Adopted by Agents for Recommending Life Insurance
Products
The agents are supposed to analyse the needs and desires of his/her
client while recommending life insurance protection. A true professional
agent should be a counselor as well as a financial advisor to the client.
There are three standard ways of estimating the amount of life insurance to
own. They are: (i) Human Life Value Approach (HLV), (ii) Needs Approach,
and (iii) Capital Retention Approach. An insurance agent is expected to
match the needs of the prospect with the products available. In order to
provide total coverage assessed on the basis of any of the three
approaches mentioned above, mixing of LIC’s products can be done.
Six different criteria usually used by agents were identified and the
respondents were asked to rank them from I to VI. The criteria used by
respondents are arranged in the order of rank from I to VI (Table 6.21).
251
Table 6.21
Criteria Used by Respondents for Recommending Life Insurance Products
(N = 200)
Criteria
Frequency and score Average
Weight
Rank
I II III IV V VI
Rates of commission for agent 86 70 28 8 4 4 5.07 I
Needs and desires of customer 78 50 34 24 8 6 4.74 II
Wealth and income of customer 14 18 40 50 54 24 3.08 III
Age/Education/Marriage requirements of customer
14 18 38 40 56 34 2.96 IV
Social and occupational status of customer
6 24 36 58 40 36 2.95 V
Family background of customer 2 20 24 20 38 96 2.2 VI
Table 6.21 reveals that 43 percent of the respondents give
preference to their commission, other aspects such as needs and desires of
the customer, wealth and income position of the customer are only
secondary to them. At the same time, 39 percent of the respondents
recommend products on the basis of needs and desires of the customer.
The different criteria used by respondents can be arranged in the
order of mean weight as follows: Commission for agent (5.07), needs and
desires (4.74), wealth and income (3.08), age/education/marriage
requirements (2.96), social and occupational status (2.95), and family
background of customer (2.2). Rate of commission for agent is the main
criteria used by majority of agents for recommending life insurance to their
clients. Figure 6.2 shows the criteria used by agents for recommending life
insurance products to clients, on the basis of mean score.
252
Figure 6.2Criteria Used by Agents for Recommending Life Insurance Products
0
1
2
3
4
5
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Methods Used to Canvas Clients
Unlike the case of other commodities, insurance customers do not
normally go in search of Salesman / Agent or the product. The agent has to
find out people, meet them, discuss with them and convert them to
customers. Apart from understanding the criteria, it is also interesting to
find out the methods commonly followed by the agents to canvas a
prospect. Six different methods commonly used by the agents were given
as choice and the respondents were asked to rank them. The methods
followed are arranged in the order of rank from I to VI (Table 6.22).
253
Table 6.22
Methods Used by Respondents to Canvas Prospect.
(N = 200)
MethodsFrequency and score Average
WeightRank
I II III IV V VI
Direct Meeting 79 55 27 15 13 11 4.69 I
By Offering to pay initial premium
47 34 25 29 27 38 3.65 II
Through offering personal help
28 34 39 38 32 29 3.50 III
Contacting through friends and relatives
23 27 37 41 35 37 3.25 IV
Regular visit to the organization
18 23 39 35 47 38 3.08 V
Contacting through social club
5 27 33 42 46 47 2.81 VI
It is evident from Table 6.22 that direct meeting with the prospect is
the method most commonly followed by 39.5 percent of the respondents
with an overall first rank score of 4.69. At the same time, about 23.5
percent of the respondents canvas prospects by offering to pay the initial
premium on policy, even though it is prohibited by statute (3.65). Other
methods followed in the order of rank score are: through offering personal
help (3.50), contacting through friends and relatives (3.25), regular visit to
the organization (3.08), and contacting through social club (2.81). Figure
6.3 depicts the methods in the order of rank score.
254
Figure 6.3Methods Used by Agents to Canvas Prospect
00.5
11.5
22.5
33.5
44.5
5
DirectMeeting
By Offeringto pay initial
premium
Throughoffering
personalhelp
Contactingthrough
friends andrelatives
Regular visitto the
organization
Contactingthrough
social club
q
Mean S
core
Trend in Income from LIC Agency
The respondents were asked to mention the trend in their income
from life insurance agency business over the last 3 to 5 years. The increase
or decrease in income of the agents will throw light on whether agents are
active or dormant in their business.
255
Table 6.23
Trend in Income from LIC Agency
Trend Number Percent
Increased 118 59.00
Decreased 36 18.00
Constant 46 23.00
Total 200 100.00
Table 6.23 shows that income from LIC agency increased in the case
of 59 percent of the respondents, while income of 23 percent remained
constant and the income decreased In the case of 18 percent of the
respondents during the last three to five years. This reveals that only 59
percent of the agents were active in their profession during the last three to
five years and the business of 41 percent of the agents either went down or
remained constant.
Status of Maintaining Office for LIC Agency Business
An insurance agent should have a decent office where a recognized
prospect can come and spend time and gain more knowledge on various
aspects of insurance and other livelihood affairs and go with satisfaction
after signing a proposal for insurance. It will be convenient for the
customers too to contact the agent for policy servicing. Club member
agents are entitled to get allowances for maintaining an office for life
insurance agency business.
Table 6.24
Status of Maintaining Office for LIC Agency
Status Number Percent
Maintain 58 29.00
Do not maintain 142 71.00
256
Total 200 100.00
Table 6.24 depicts that only 29 percent of the respondents maintain
an office of their own to do the life insurance business, the remaining 71
percent have no office of their own. This reveals that, many times
customers will have to go in search of the agents for matters connected
with policy servicing.
Maintaining Records Pertaining to Customers
LIC agent is required to keep record of his customers’ details
regarding the premium paid, nominations, assignment, policy loans,
conversion, surrender/lapse, etc. This shall help him/her to have a better
customer relationship. In this world of computer, it is rather easy to
maintain records of customers. Table 6.25 reveals that majority of the
respondents (80 percent) maintain records regarding premium paid only.
Only 31.5 percent of the respondents maintain record regarding
nomination, very few (13 percent) maintain details of assignment, 17
percent maintain policy loan details of customers. Conversion and maturity
details of policy are maintained by 48 percent of the respondents and very
high percent (87.5) maintain family particulars of customers. The practice
of maintaining surrender/lapse details were followed by 28 percent of the
respondents only.
Table 6.25
Status of Maintaining Records of Customers
Nature of Records Maintain Do not Maintain Total
Number Percent Number Percent
Premium paid 160 80.00 40 20.00 200
Nominations 63 31.50 137 68.50 200
Assignment 26 13.00 174 87.00 200
Policy Loans 34 17.00 166 83.00 200
257
Conversion/Maturity 96 48.00 104 52.00 200
Family Particulars 175 87.50 25 12.50 200
Surrender/Lapse 56 28.00 144 72.00 200
The above analysis reveals that maintenance of records by LIC
agents, except regarding family particulars and premium paid, is not
satisfactory.
Reading and Understanding Literature Pertaining to Life Insurance
The insurance agent in today’s situation must be a thoroughly
knowledgeable person. He/she should have an in depth knowledge in the
life insurance schemes/plans, income-tax law, capital market conditions and
the like. The agent should be fully equipped to answer the queries from the
clients. Therefore, to equip himself, he/she is required to go through
various journals, books and the like and understand the literature pertaining
to life insurance business.
Table 6.26 reveals the habit of agent reading and understanding
literature pertaining to life insurance policies/schemes before meeting
customer. It can be noticed that only 15 percent of the respondents
‘always’ read and understand the literature before meeting their customers,
while 27.5 percent read ‘most of the time’, 31 percent read ‘some times’ 20
percent read ‘rarely’ and the rest 6.5 percent ‘never’ read and understand
the literature.
Table 6.26
Habit of Reading Literature Pertaining to Life Insurance Schemes and Rules
Frequency Number Percent
Always 30 15.00
Most of the time 55 27.50
Some times 62 31.00
258
Rarely 40 20.00
Never 13 6.50
Total 200 100.00
More than 50 percent of the agents do not read and understand the
literature pertaining to life insurance before meeting the prospects. From
the above, it can be assumed that the knowledge level of majority of the
life insurance agents may not be up to the standard.
Place of Meeting
It is interesting to note the place where the agents meet the
prospects and customers for canvassing business. Table 6.27 shows the
places selected by the respondents for meeting their clients.
Table 6.27
Place of Meeting Customers
PlaceNumbe
r Percent
Home 64 32.00
Work place 27 13.50
LIC office 4 2.00
Home and work place 94 47.00
Other places 3 1.50
Home and LIC office 2 1.00
Home and Work place and Other places 6 3.00
Total 200 100.00
259
Table 6.27 reveals that meeting customers at their home is followed
by 32 percent of the respondents, 13.5 percent directly go to the work
place of customers, and a few (2 percent) select the LIC office to canvas
business. Home and work place is selected by 47 percent, one percent
selected home and LIC office, 1.5 percent selected other places, and 3
percent used home, work place and other places to meet their clients.
Other places include social clubs, public meeting places and the like.
260
Frequency of Meeting the Customers
The basic purpose of an organization is to create customers and
retain them. In today’s competitive era, where customer is the king, it is a
must for the insurers not only to make new clients, but also to maintain the
existing customer. In the insurance sector, there is an agent-client
relationship and the satisfied client can be the biggest brand ambassador
for the company (word–of–mouth advertising). Building relationship with
customers depends on the frequency of contacts and the quality of services
provided to them.
Table 6.28
Frequency of Meeting Customers
Frequency Number Percent
Weekly 7 3.50
Fortnightly 12 6.00
Monthly 47 23.50
Half-yearly 50 25.00
Yearly 59 29.50
Other occasions 25 12.50
Total 200 100.00
The duration of agent meeting the customer is given in Table 6.28.
It is pathetic to note that 29.5 percent of the respondents meet their
customers only once in a year, while 25 percent meet once in six months,
and 23.5 percent find time to meet monthly. A very low percent (6 percent)
meet their customers fortnightly and 3.5 percent meet once in a week.
About 12.5 percent meet their customers on other occasions like marriage,
birth day, and festival days. The above analysis reveals that the duration of
agent meeting their customers is not satisfactory.
261
Services Rendered to Customers
Service marketing is about promises – promises made and promises
kept to customers. The after-sale services in life insurance marketing
include reminding the premium due, collecting the premium from clients,
assistance in policy loans, assistance in claim settlement, etc. The role of
the agent is very important in these services. To build long lasting
relationship and to make the customer repeat purchase, the service
promised must be rendered promptly. Delivery gap in service arises when
there is difference between the quality standards set for service delivery
and the actual quality of the service delivery.
Table 6.29
Services Rendered to Customers
After-sale Services Number Percent
a. Reminding the premium due 31 15.50
b. Collecting the premium from customers 86 43.00
c. Giving loan quotations 14 7.00
d. Assistance in claim settlement 35 17.50
e. Housing loan and other policy servicing 24 12.00
f. All the above services 10 5.00
Total 200 100.00
Table 6.29 reveals that only 15.5 percent of the respondents remind
the customers about the premium due, another 5 percent render all
services like, reminding the premium due, assistance in claim settlement,
collecting premium from customers for remittance, assistance in policy
loans and the like. Collecting premium from customers is the main after
sales service rendered by 43 percent of the respondents. The data analyses
262
reveal that rendering all types of after-sales service was not being practiced
by 95 percent of the respondents, which resulted into a delivery gap.
Product Preference in the Market
The liberalization of the Indian economy has generated new ideas of
product development in the insurance sector. New technologies, new
inventions and changes in the economic and financial scenario, all have
thrown up new insurance needs. Since the agents are in direct contact with
the people, they will be able to judge the needs of the people for life
insurance products. The respondents were asked to rank the different
types of life insurance products on the basis of acceptability among urban
and rural people. The preferences for various life insurance products are
depicted in Table 6.30 (Urban) and 6.31 (Rural) in the order of rank score
obtained.
Table 6.30
Life Insurance Product Preference in Urban Area
(N = 200)
Types of ProductsFrequency and Rank Total
ScoreMean Score1 2 3 4 5 6 7
Money Back 81 102 11 4 1 1 0 1255 6.27
Unit Linked Plan 65 48 43 26 15 3 0 1113 5.56
Endowment 45 33 63 22 34 3 0 1024 5.12
Pension Plans 4 10 35 54 73 22 2 744 3.72
Education/Marriage
5 6 37 67 36 17 32 698 3.49
Whole life 0 0 9 22 34 103 32 473 2.36
Annuity 0 1 2 5 7 51 134 293 1.47
263
Table 6.31
Life Insurance Product Preference in Rural Area
(N= 200)
Types of ProductsFrequency and Rank Total
ScoreMean Score1 2 3 4 5 6 7
Money Back 162 27 7 1 1 1 1 1341 6.71
Endowment 11 92 30 25 34 7 1 996 4.98
Unit Linked Plan 17 34 55 44 37 11 2 909 4.55
Pension Plans 5 23 40 63 49 15 5 807 4.04
Education/Marriage 5 21 58 35 24 26 31 746 3.73
Whole life 0 0 7 21 42 100 30 475 2.37
Annuity 0 3 3 11 13 40 130 326 1.63
Analysis of Table 6.30and 6.31 reveals that money back policy is the
most acceptable product in urban and rural area. It is followed by the new
generation product called Unit Linked Life Insurance Product (ULIP). The
conventional endowment products, pension plans, special types of policies
like marriage and education policies are in the order of third, fourth, and
fifth preference. In rural area, the second preference is for conventional
endowment products (Table 6.31). The other products in the order of
preference are: ULIP, pension plans, and marriage and education policies.
Whole life and annuity insurance products got the least preference in both
urban and rural areas.
The difference in product preference mean values between urban
and rural areas is tested by calculating the ‘p’ value for each type of
product in Table 6.32.
264
Table 6.32
Analysis of Variance of Product Preference (ANOVA)
(N = 200)
Type of Product
Mean Standard Deviation ‘p’ value
Urban Rural Urban Rural
Whole Life Product 2.36 2.37 1.02 0.98 0.920517
Endowment 5.12 4.98 1.41 1.37 0.315101
Money Back 6.27 6.71 0.77 0.79 0.000001
Annuity 1.48 1.64 0.92 1.09 0.113064
Pension 3.72 4.04 1.17 1.29 0.010998
ULIP 5.56 4.55 1.34 1.39 0.000001
Education/Marriage
3.49 3.73 1.49 1.70 0.134039
The ‘p’ value obtained for whole life, endowment, annuity, and
education/marriage products is more than 0.05; hence there is no
significant difference in preference for these products between urban and
rural customers, as perceived by the agents. At the same time, since the
‘p’ value for money back, pension and ULIP products is less than 0.05, there
is significant difference in product preference for these products between
urban and rural customers of LIC, as perceived by the agents.
Acceptance of Products Recommended by Agents
The insurance agent has to assess the insurance needs and
requirements of an individual or family. The Human Life Value (HLV)
approach, Needs approach and Capital Retention approaches are the basis
for assessing the insurance needs of an individual or family. After
assessing the needs, the agent has to recommend a particular product or a
265
mix of products. Truly, the insurance agent should be a financial advisor to
the customer. If the agent is successful in marketing life insurance, there
may be every chance the prospect accepting the plans/schemes
recommended by them.
Table 6.33
Acceptance of Products Recommended by Agents
Frequency Number Percent
Always 30 15.00
Most of the times 92 46.00
Some times 59 29.50
Rarely 18 9.00
Never 1 0.50
Total 200 100.00
Table 6.33 reveals that customer ‘always’ accept plans and terms
recommended by 15 percent of the respondents. But 46 percent are of the
opinion that ‘most of the time’ customers accept, while customers ‘some
time’ accept products recommended by 29.5 percent of the respondents.
In the case of 9 percent of the respondents clients rarely accept and in the
case of 0.5 percent of the respondent, clients never accept plans/schemes
recommended by them. It reveals that about 15 percent of the agents are
always successful in marketing life insurance.
Lapse and Surrender of Policy
The life insurance policy will lapse if the policyholder fails to pay any
of the premiums due within the days of grace. If the assured is unable to
revive his policy, he can surrender the policy and get cash surrender value.
Lapse and surrender of policy mean loss of security to the insured and loss
of faith on the insurer. Agents will loose future commission on such
266
policies. Table 6.34 shows the percentage of policies lapsed or surrendered
in a year.
Table 6.34
Percentage of Policies Lapsed or Surrendered in a year
PercentageNumbe
r Percent
Less than 10 39 19.50
10 – 20 69 34.50
20 – 30 63 31.50
30 – 40 18 9.00
Above 40 11 5.50
Total 200 100.00
The study reveals that 10 to 20 percent of the policies sold by 34.5
percent of the respondents are lapsed or surrendered in a year. Policy
lapse is 20 to 30 percent in the case of 31.5 percent of the respondents.
Less than 10 percent of policies sold are lapsed in the case of 19.5 percent
of the respondents. The rate of lapse is very high (30 to 40 percent) in the
case of 9 percent, and above 40 percent in the case of 5.5 percent of the
respondents. On an average, 19.65 percent (S.D. 10.7) of the policies sold
by the respondents are lapsed or surrendered in a year.
Reason for Surrender and Lapse of Policies
Lapse and surrender of insurance policies represents loss of faith on
the insurer and loss of security to the insured. There are many reasons for
surrender and lapse of policies. Seven major reasons for surrender and
lapse of policies were identified and the respondents were asked to rank
them in the order of importance.
267
Table 6.35 reveals the frequency and rank score obtained for various
reasons of surrender and lapse of policies.
Table 6.35
Reasons for Surrender and Lapse of Policies
(N = 200)
ReasonsFrequency and Rank Mean
Weight1 2 3 4 5 6 7
Low income 124 43 20 8 4 1 0 6.36
Diversion of funds to other investments
29 52 76 30 7 6 0 5.24
Lack of service of Agents 12 40 61 52 30 5 0 4.68
Diversion of funds to other commitments
16 34 17 41 62 28 2 4.04
Lack of conviction 5 7 16 46 44 62 20 2.77
Poor service quality of LIC
3 2 6 12 39 94 44 2.3
Other reasons 11 22 4 11 14 4 11 1.67
The reasons for lapse and surrender in the order of average weight
obtained are: low income (6.36), diversion of funds to other investments
(5.24), lack of service of agents (4.68), diversion funds to other
commitments (4.04), lack of conviction (2.76), poor service quality of LIC
(2.3), and other reasons (1.67). Other reasons include over selling, low
bonus rate and the like. Figure 6.4 shows the major reasons for lapse and
surrender of policies on the basis of mean score.
268
Figure 6.4Reasons for Surrender and Lapse of Policies
0
1
2
3
4
5
6
7
Low income Diversion of
funds to other
investments
Lack of service
of Agents
Diversion of
funds to other
commitments
Lack of
conviction
Poor service
quality of LIC
Other reasons
Reason
Mea
n S
core
Customer Satisfaction perceived by agents
The satisfaction of customers perceived by agents with regard to
LIC’s service quality on certain dimensions like issue of renewal premium
notice / receipt, obtaining policy loans, settlement of claims, attention to
correspondence of customers, and other Office services were measured on
five-point scale.
269
Table 6.36
Customer Satisfaction of LIC’s Services Perceived by Agents
(N = 200)
Service Dimensions
Degree of satisfaction and frequency Total
scoreMean score
A B C D E
Premium notice 23 68 52 37 20 637 3.18
Policy loan 39 115 40 5 1 786 3.93
Maturity Claim 37 133 26 4 0 803 4.02
Death claim 22 94 72 12 0 726 3.63
Correspondence 9 52 80 49 10 601 3.01
Other office services 18 87 51 33 11 668 3.34
Note: A = Highly satisfied, B = Satisfied, C = Neither satisfied nor dissatisfied, D = Dissatisfied, and E = Highly dissatisfied.
Table 6.36 reveals that customers are satisfied in the case of
payment of maturity claim, death claim and policy loan, as the mean score
for these three dimensions are 4.02, 3.93, and 3.63 respectively. Mean
score of 3.34 for other office services such as assistance at the office
counter, premium remittance timings and the like show that they are
moderately satisfied in this regard. They are less moderately satisfied in
the case of receiving premium notice, attention to correspondence, as the
mean satisfaction score are 3.18 and 3.01 respectively.
On the basis of totality of the mean score for all items, it can be
assumed that the overall satisfaction of customers perceived by agents is
‘moderate’. It is also found that there is no significant difference in the
overall satisfaction perceived by customers and the satisfaction of
customers perceived by agents, as the level of satisfaction in both cases is
‘moderate’.
270
Difficulties experienced by the Claimants
Settlement of claim is an important after-sales service performed by
branch offices. Agents were asked to state the difficulties experienced by
the claimants at the time of settlement of claims. Five point Likert scale of
frequency of difficulties ranging from 1 (never) to 5 (always) was selected.
The score obtained was tabulated and presented in Table 6.37.
The table 6.37 reveals that obtaining death certificate is the most
difficult problem experienced by the claimants at the time of settlement of
claims, followed by title/transfer/policy missing, and age proof.
Table 6.37
Difficulties Experienced by the Claimants
(N = 200)
Nature of DifficultyFrequency Total
score
Mean
ScoreA B C D E
Age Proof 5 14 56 72 53 446 2.33
Death Certificate 12 39 74 43 32 556 2.78
Title/Transfer/Policy Missing
8 29 49 57 57 474 2.37
Note: A = Always; B = Most of the time; C = Sometimes; D = Rarely; and E = Never
Sales Promotion Campaigns
As part of the marketing process, LIC conduct sales promotion
campaigns for new products launched and in some cases to push sale of
existing products. The campaigns shall create more awareness on
insurance and various products of LIC. As the marketing intermediary,
active participation of agents shall assist the Corporation in achieving the
targets. The Divisional Manager, Branch Managers, and many of the
271
development officers were of the view that active participation of all agents
in sales promotion campaigns was not satisfactory. Table No. 6.38 exhibits
the participation of agents in the sales promotion campaigns conducted by
LIC.
Table 6.38
Participation of Agents in Sales Promotion Campaigns
Participation Number Percent
Yes 121 60.50
No 79 39.50
Total 200 100.00
Table No.6.38 reveals that 60.5 percent of the respondents
participate in sales promotion campaigns, which means that that more than
one third of the agents did not participate actively in the marketing
activities of the Corporation.
Table No. 6.39
Impact of Sales Promotion Campaigns on Agency Business
Impact on businessNumbe
r Percent
Desired level achieved 94 77.69
Not achieved 27 22.31
Total 121 100.00
The impact of sales promotion campaigns on agency business was
assessed and the result obtained in Table 6.39 shows that as high as 77.69
percent of the participants could achieve their targeted business after
active participation in the campaign. This suggests that sales promotion
campaign need to be conducted frequently and Branch Managers and
272
Development officers should ensure the active participation of all the
agents in the programme.
Training Programme for Agents
Training enhances competencies of agents and equips the
organization to face the future. In insurance, training is the instrument for
converting intangible assets into tangible outcomes. Insurance training
imparts novel approaches & ideas, faster problem solving, effective/quicker
induction and minimizes reinvention. Continuous professional development
ensures better/faster innovation, improved customer service, reducing
knowledge loss and productivity performance. In LIC, there are 7 Zonal
Training Centres, 101 Divisonal Training Centres and 520 Agents’ Training
Centres for imparting training to agents. LIC also have an on-line training
facility for imparting pre-recruitment training to agents.
Depending on the training needs, LIC also expose their agents to
different External Training Institutes (ETIs) for specialized training. Club
member agents are required to attend at least one training programme in a
period of two years. Chairman’s and Zonal Manager’s club agents are
required to attend training programme at LIC’s Zonal Training Centre once
in three years.
Table 6.40
Regularity of Attending Training Programme for Agents
AttendanceNumbe
r Percent
Regular 119 59.50
Not Regular 81 40.50
Total 200 100.00
273
Table 6.40 shows that only 59.50 percent of the respondents attend
training programme regularly. The study reveals that regular participation
of good number of agents in the training programme is not satisfactory.
The respondents were asked to state the quality of training imparted
to agents at various training centres. Agreement statement relevant for
this aspect was given on a five point scale ranging from 1 (very poor) to 5
(excellent). The result in Table 6.41 shows that majority of the
respondents are not satisfied with the quality of training. Only 9.50 percent
of the respondents rated the quality of training as excellent. At the same
time, 16.50 percent of the respondents rated the quality of training as poor
and 11.50 percent rated it as very poor.
Table 6.41
Opinion about the Quality of LIC’s Training for Agents
Opinion Number Percent
Excellent 19 9.50
Good 64 32.00
Average 61 30.50
Poor 33 16.50
Very poor 23 11.50
Total 200 100.00
The mean rate obtained is 3.12, which reveals that respondents
judge the quality of training as ‘average’. Many agents expressed the view
that there is no training manual or schedule. This suggests that LIC should
take urgent steps to improve the quality of training.
274
Figure 6.5Opinion about the Quality of LIC’s Training for Agents
(in percentage)
Good (32)
Average (30.5)
Poor(16.5)
Excellent (9.5)
Very Poor (11.5)
Figure 6.5 shows that only 41.50 percent of the agents are satisfied,
whereas the remaining 58.50 percent are not at all satisfied in the quality of
training given to them.
Interaction with Development Officer
An agent is supposed to establish regular contact with the
development officer under whom he or she is working. Frequent contact
with the development officer shall help the agent to know more about
products/plans/schemes newly introduced in the market. It also shall assist
the agent to make a joint call whenever found necessary.
Out of the total 200 agents selected for the study, 158 of them were
working under development officers. The frequency of agent meeting their
development officers is presented in Table 6.42.
275
Table 6.42
Frequency of Agent Meeting Development Officer
Frequency Number Percent
Daily 16 10.13
Weekly 55 34.81
Fortnightly 46 29.11
Monthly 28 17.72
Less frequently 13 8.23
Total 158 100.00
More than 34 percent of the respondents (55; 34.81 %) meet their
development officer once in a week, 29.11 percent (46 nos.) meet
fortnightly, 17.72 percent (28 nos.) meet once in a month, and 8.23 percent
(13 nos.) meet less frequently. The analysis reveals that frequency of
interaction with development officer is not satisfactory in the case of more
than 55 percent of the respondents.
Agency Commission
Life insurance agents get commission for the business performed by
them. It includes commission on first premium and renewal commission.
The rate of commission is different on single premium and regular premium
products. On single premium products it is 2 percent of the premium and
on regular premium products it varies from 5 to 25 percent. Table 6.43
reveals the opinion expressed by respondents about the rate of commission
offered to them.
276
Table 6.43
Opinion about Rate of Agency Commission
OpinionNumbe
r Percent
Satisfied 106 53.00
Not satisfied 49 24.50
No opinion 45 22.50
Total 200 100.00
The data given in Table 6.43 reveals that majority of the respondents
(53 percent) are satisfied and 24.50 percent are not satisfied with the
present rate of commission for agents. At the same time, 22.50 of the
respondents expressed no opinion about rate of commission offered to
them.
Awareness about Products of Private Insurers
The establishment of new insurance companies resulted into
emergence of new types of products in the market. In addition to
conventional products, the market is flooded with unit linked products and
products with rider benefits. Insurance agents have to gather knowledge
about products of competitors in order to clarify the queries of clients and
customers and to highlight add on features of products marketed by them.
Table 6.44
Awareness about the Products of Private Insurers
AwarenessNumbe
r Percent
Aware 86 43.00
Not aware 114 57.00
Total 200 100.00
277
Table 6.44 depicts that more than half of the respondents (57
percent) did not try to understand about the products of private insurers.
This shows that majority of the agents are not understanding the market in
its true sense.
AGENTS’ PERCEPTION ABOUT JOB AND JOB SATISFACTION
Life insurance agents have, historically, not had a great image in
India. People used to device innovative ways to dodge them because they
were seen as people pushing their own agenda for a quick sale and a hefty
commission. It is not sufficient to have an army of agents in terms of
numbers alone, but to have highly efficient, productive and satisfied agency
force. This army of agents needs to have quality insurance salesman. Over
the years on account of the trust and the huge network of agents that has
been built, LIC has come to occupy a special place in the hearts of its
policyholders and especially those in rural areas. The successful life
insurance salesperson has to market first the company he represents and
its credentials and thereafter himself and the product he has to offer. The
agent can acquire knowledge about various products from literature,
training classes, and from development officers and other sources. He /she
should be able to get accurate picture of the job and job prospects, and
support from the organization. At the same time, the agent should have a
feeling of job security in his mind. Degree of success in agency profession
in turn depends up on the degree of success in prospecting. A satisfied
agency force is not only an asset to the organization, but establishes and
strengthens relationships with a large number of customers and also
enhances the value of the organization over the horizons.
The respondents were asked to rate their perceived degree of
satisfaction on a three point scale about the various aspects of life
278
insurance agency profession, in order to assess the attitude of agents
towards their job and also to assess job satisfaction perceived by them. On
the basis of rating score obtained, the degree of job satisfaction of agents
and their attitude towards the profession is depicted in Table 6.45.
Table 6.45
Respondents’ Perception about Job and Job Satisfaction
(N = 200)
Dimensions
Degree of Satisfaction and Frequencies Weighte
dscore
Mean score
Low Moderate
High
Status of LIC agents job in society
44 107 49 405 2.03
Support from LIC to agency profession
23 104 73 450 2.25
Job security 67 94 39 372 1.86
Job satisfaction 17 89 94 477 2.39
Work load in agency profession 9 117 74 335 1.68
Success in prospecting 26 107 67 441 2.21
Receiving job picture from LIC 43 103 54 411 2.06
Interaction with branch manager
34 81 85 451 2.26
The analysis of Table 6.45 reveals that life insurance agents’
perception about status of their job in the society is ‘moderate’ as the mean
score obtained for this item is 2.03. About 24.50 percent respondents
perceive it as ‘high’, 53.50 percent felt it as ‘moderate’, and 22 percent
perceive it as ‘low’. Regarding the support from the organization to their
agency profession, the perception of agents is found more than moderate
as the mean score is 2.25. More than one third of the respondents (36.50
percent) felt it as ‘high’, 52 percent perceive it as ‘moderate’, and 11.50
percent perceive it as ‘low’. As regards job security, the perception of
respondents is found less moderate as the mean score obtained is 1.86.
279
About job security, 33.50 percent respondents’ perception is found ‘low’, 47
percent felt it as ‘moderate’, and 19.50 percent perceive it as ‘high’.
Respondents’ perception about job satisfaction is found more than
moderate as the mean score obtained is 2.39. Comparatively a high
percentage (47 percent) of the respondents’ perceived job satisfaction is
‘high’, 44.50 percent perceived the same as ‘moderate’, and only a small
percentage (8.50 percent) of the respondents are not satisfied with the job.
In the case of work load in agency profession, majority of the respondents
(58.50 percent) are ‘moderate’ in their view (mean score 1.68). At the
same time, 37 percent perceived it as ‘high’ and only very few (4.50
percent) perceived it as ‘low’. Regarding the degree of success in
prospecting, respondents are just ‘above moderate’ as the mean score is
2.21. Here again, 53.50 percent of the respondents succeeded in
prospecting and 33.50 percent are highly satisfied. At the same time, 13
percent of the respondents are not satisfied in prospecting. Regarding
agent receiving the accurate picture of the job and job prospects from LIC,
the satisfaction level is ‘moderate’ as the mean score is 2.06. But it is to be
noted that 21.50 percent of the respondents are not satisfied in this regard.
As regards the degree of interaction with the branch manager, the
respondents are ‘moderate’ as the mean score obtained is 2.26. The result
of the study in Table No. 6.45 further reveals that overall satisfaction of
agents towards the job and job prospects is ‘moderate’ as the mean value
obtained is 2.17 with S.D. 0.68.
Table 6.46
Overall Satisfaction Level of Respondents
Level of Satisfaction Number Percent
High 34 17.00
Moderate 136 68.00
Low 30 15.00
280
Total 200 100.00
On the basis of satisfaction scores obtained, the respondents have
been classified into three levels; namely high, moderate, and low category.
Table 6.46 and figure 6.6 clearly shows that about 17 percent of the
respondents are highly satisfied, 68 percent are moderately satisfied and
15 percent are not satisfied in the job and job prospects.
Figure 6.6Overall Satisfaction Level of Agents (in percentage)
Moderate (68)
High (17)
Low (15)
Testing of hypothesis No. 5
Since the overall mean score obtained is 2.17 the null hypothesis
that LIC agents are least satisfied in their job and job prospects is rejected.
Their satisfaction level is ‘moderate’.
PROBLEMS IN MARKETING
281
One of the distinct emerging trends after liberalization is the
enlargement of the insurance market and gradual coverage of uninsured
population. Liberalization of Indian economy has not only created new
ideas of product development and needs in the insurance sector but also
created many problems in marketing insurance products. Enlargement of
insurance market resulted in to establishment of more than a score private
insurers in the life sector. Private players have been introducing new
products, especially market linked products and offer products through
corporate, individual and bancassurance channels. They have established
their presence even in rural areas by opening business procuring centres.
In urban area too, many people are ignorant about the needs of insurance
and different types of products/schemes/plans of LIC. This has made the
job of marketer rather difficult. The public sector life insurer (i.e., LIC) need
to bear the responsibility of offering the world class services to the ultimate
users which need innovative marketing practices. Therefore, it was thought
worthwhile to identify the problems faced by the agents in marketing life
insurance products.
The respondents were asked to rank the problems faced by them, if
any, in urban and rural areas on the basis of severity. Out of the total 200
agents, 134 of them (67 percent) expressly stated that they face certain
problems in marketing. The result obtained is depicted in Table 6.47 and
6.48 for urban and rural area respectively.
Table 6.47
Marketing Problems in Urban Area
(N = 134)
Problems Rank and Frequencies Total score
Mean score
1 2 3 4 5 6 7
Inadequate training in profession
95 24 6 6 3 0 0 872 6.51
282
Inter rivalry between agents
9 51 45 16 5 6 2 687 5.13
Competition from private players
13 37 33 28 11 5 7 640 4.78
Lack of awareness of the public
9 12 38 35 33 5 2 576 4.30
Lack of conviction 4 7 2 16 43 44 18 379 2.82
Procedural delay from LIC
2 1 5 25 22 45 34 335 2.50
Non co-operation from Devp. Officers
2 2 5 8 17 29 71 263 1.96
Table 6.47 reveals that inadequate training in life insurance agency
profession is the major problem (Mean 6.51 and S.D. 0.93) faced by the
respondents in urban area in marketing life insurance products. This has
caused to low product knowledge and lack of expertise on the part of the
agents. Inter rivalry between agents is the second major problem in urban
area (Mean 5.13 & S.D. 1.25). Many of the agents were found not keeping
professional ethics in their profession. Competition from private players
(Mean 4.78 and S.D. 1.52) and lack of awareness of the public (Mean 4.30
and S.D.1.30) are other serious marketing problems in urban area.
Table 6.48
Marketing Problems in Rural Area
(N = 134)
ProblemsRank and Frequencies Total
scoreMean score1 2 3 4 5 6 7
Inadequate training in profession
34 38 40 12 7 1 2 739 5.51
Lack of awareness of
the public
57 19 8 27 18 4 1 724 5.40
Inter rivalry between 18 34 40 27 10 3 2 676 5.04
283
agents
Competition from private players
17 24 27 33 18 5 10 604 4.51
Lack of conviction 6 16 5 16 39 39 13 435 3.24
Procedural delay from LIC
1 2 5 15 29 52 30 325 2.42
Non co-operation from Devp. Officers
1 1 9 4 13 30 76 249 1.86
Table 6.48 reveals that inadequate training in life insurance agency
profession is the major problem (Mean 5.51 and S.D. 1.28) in rural area
faced by the agents in marketing life insurance products. It is followed by
lack of awareness of the public (Mean 5.51 and S.D. 1.28), inter rivalry
between agents (Mean 5.04 and S.D. 1.27), competition from private
players (Mean 4.51 and S.D. 1.66), as the second, third and fourth problems
in the order of mean score. Lack of conviction of the people (Urban Mean
2.82 & S.D. 1.37 and Rural Mean 3.24 & S.D. 1.61), procedural delay from
LIC (Urban Mean 2.50 & S.D. 1.33, Rural Mean 2.42 & S.D. 1.21), and non
co-operation from Development Officers (Urban Mean 1.96 & S.D. 1.36 and
Rural Mean 1.86 & S.D. 1.29) are other problems in the order of mean score
obtained. Figure 6.7 depicts the problems in marketing faced by agents in
urban and rural area, on the basis of mean score.
284
Figure 6.7Marketing Problems in Urban and Rural Area
0
1
2
3
4
5
6
7
Inadequatetraining inprofession
Inter rivalrybetweenagents
Competitionfrom private
players
Lack ofawarenessof the public
Lack ofconviction
Proceduraldelay from
LIC
Non co-operation
from Devp.Officers
Mea
n S
core
Urban
Rural
The significance of difference in mean values of marketing problems
in urban and rural area is tested with the help of variance analysis (Table
6.49).
Table 6.49
Analysis of Variance of Marketing Problems (ANOVA)
Source of variation Mean S.D. ‘p’ level
Urban 27.98 0.27
0.457913Rural 28.02 0.51
All Groups 28.00 0.41
Testing of hypothesis No.6
Since the ‘p’ value obtained in the analysis of variance (ANOVA) is
0.457913, it falls in the acceptance region. Hence the null hypothesis at
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0.05 level of significance is accepted and it is concluded that there is no
significant difference in marketing problems between urban and rural areas.
Perception about future of Life Insurance Business
The respondents were asked to state their opinion about the future of
life insurance business in India in the coming years. Table 6.50 shows the
result obtained from the respondents.
Table 6.50
Perception about the Future of Life Insurance Business
Perception Number Percent
Bright 133 66.50
Bleak 46 23.00
No opinion 21 10.50
Total 200 100.00
As high as 66.50 percent respondents perceive a ‘bright’ future, 23
percent perceive ‘bleak’ future and 10.50 percent have no opinion about
the future of life insurance business in India in the coming years.
Conclusion
The socio economic background of life insurance agents attached to
LIC’s branch offices in Kasargod and Kannur districts, their attitude towards
the job and job prospects, problems faced by them in marketing life
insurance products are dealt with in this chapter. The overall job
satisfaction analysis reveals that the agents are ‘moderately’ satisfied in
their profession. At the same time the agent receiving accurate picture of
the job and job prospects from the organization is not satisfactory. More
than fifty percent of the agents have no separate office of their own and no
definite work schedule. The quality of training imparted to them is not up
to the standard. Lack of professionalism among agents is a serious problem
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of life insurance agency business. Majority of the agents face problems in
marketing life insurance products and there is no significant difference
between urban and rural areas regarding the problems.
The next chapter presents the findings, recommendations and
suggestions of the study.
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