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Review of Literature

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CHAPTER II

REVIEW OF LITERATURE

Introduction

The chapter gives an overall view of the researches conducted at international and

national level to facilitate identification and understanding the areas covered so far in the

area of insurance marketing, customers‘ perception and satisfaction. It also paves the way

for future research. An extensive review of literature was undertaken to ascertain research

gap and to identify the relevant issues for the study. This chapter provides a bird‘s-eye

view of available relevant studies arranged logically in chronological order that were

carried in the previous years.

Anna Rita Bacinello and Fulvio Ortu (1996)1in their study had proposed a pricing

model for the insurance policies, which the authors believe to benefit in measuring the

performance of an interest rate sensitive assets (reference fund), and a minimum

guarantee in present. The model is cast in the celebrated term structure framework

depended by Cox, Ingersoll and Ross (1985). As for the behaviour of the investment

sequent, the study analysed two polar cases. In the first one the payments due on the

fund when the contract is still alive are not reinvested, while in the second the study

proposes a reinvestment policy. The study explains how to obtain solution for the single

premium in the no-reinvestment case, and how to implement a solution approach to

calculate numerically the single premium in the reinvestment. The authors illustrate their

analysis with numerical results that help in understanding the static properties of the

models proposed.


28

Gupta Swati (1996)2 says that insurance sector reforms are a part of the

government‘s priorities. A package of reforms is very much in the offing. There is an

immediate need of a regulatory framework to open up the insurance industry.

Basu Dev Sanyal (1997)3

in his article titled "Marketing Management in

Insurance" had proposed a model of Managerial Life Cycle (MLC). This model is closely

associated with the Product Life Cycle (PLC) theory of modern management. Based on

the marketing scenario in the Indian insurance industry, the MLC model included six

phases-introductions, growth, maturity, stagnation and decay. The study concluded that

the pace of the future growth of industry will be based on the versatility and innovative

capacity of its marketing managers.

Khanna (1997)4

categorically mentioned that life insurance policy requires

servicing and the importance of agent to render service. The author emphasis the fact that

only insurance agents can penetrate rural areas and serve the poor class clients. Further

he stressed that the need of professionalism in the entire approach of insurance marketing

which included: continued focus on the customers‘ quality of performance, technological

up gradation and minimized paper work.

Majundar (1997)5 viewed that insurance companies in general and life insurance

in particular need more professional agents to exploit opportunities of the saving market.

Most of the agents lack professional knowledge and skill. Hence, the development

officers have to train and motivate their agents properly. Further, the author commented

that the development officers must continuously make efforts to understand the pulse of

the market and advice the agents accordingly. He also pointed out that in case of death

claims, cheques may be personally delivered to the clients by agents.


29

Satyanarana Rao (1997)6

studied the causes and factors for termination from the

agency by the intermediaries (insurance agents). The study stated that the agent is the

backbone of the insurance. Insurance Corporation therefore needs to build a stable

agency. He pointed out that the dropouts from the agency cost more time in

replenishment of right person. The author point out that main factor for larger dropouts of

agents is due to unavailability of the Minimum Business Guarantee (MBG) during the

initial years. Thus, he suggests conducting agents‘ workshop at branch level, which may

reduce the rate of dropouts by promoting the selling skill.

Wakker Peter et al. (1997)7 discuss the probability of insurance policies being

reimbursed or reinvested by the policyholders on the maturity of the policy. The authors

applied utility theory for the data analysis. The study states that only a small portion of

consumers prefer to reimburse their policy in the study region, whereas, majority of the

insurance investors prefer to reinvest their money. Survey data evidences that 20 per cent

of the insurance investors demand one percent of additional premium on their policy

amounts at the time of maturity. Since the insurer was reluctant to pay the additional

premium claim, these 20 per cent clients opt to reimburse their policy(s). The study

findings state that the insurance corporate for highly reasonable claims find it difficult to

settle with expected utility theory.

Ayyar (1999)8

mentions that since the liberalization of Indian economy insurance

sector has generated new ideas of product development. The concept role of the insurance

agencies is also witnessing necessary changes. Life insurance agents are encouraged to

advice to the family on householder‘s insurance policy and on the other hand general

insurance agents‘ advisees on motor insurance. This creates differences in insurance


30

policy selling between life and general insurance agents. The author claims distinction

between life insurance agents and general insurance agents will eventually affect their

business. Therefore, the insurance sectors must promote agents and financial consultants

advising on investment problems, rather than marketers of their company products.

Gregory A. Kuhlemeyer and Garth H. Allen (1999)9 in their

research work

explored consumer satisfaction relevant to the purchase of life insurance products.

The study identified benchmarks for consumer satisfaction with the life insurance

product, the agent, and the institution. The findings of the research shows that trust,

competence, and product appropriateness play an integral part in consumer satisfaction.

Ramakrishana (2001)10

in his report describes that there is high expectation

among the public that the opening of the insurance sector to the private companies and

the entry of multinationals will not only lead to the introduction of innovative plans of

insurance but also result in significant reduction of premium rates and ensure safe

insurance experiences.

In the report submitted to the World Bank Thorsten Beck and Ian Webb (2003)11

had mentioned that life insurance has become an increasingly important part of the

financial sector over the past 40 years, providing a range of financial services for

consumers and becoming a major source of investment in the capital market. But, the

factor that drives the large variation in life insurance consumption across countries

remains unclear. Using a panel with data aggregated at different frequencies for

68 economies in 1961-2000, these authors had concluded that the economic indicators-such

as inflation, income per capita, and banking sector development and religious and

institutional indicators are the most robust predictors of the use of life insurance.


31

Education, life expectancy, the young dependency ratio, and the size of the social security

system appear to have no robust association with life insurance consumption. The results of

the research work highlight the importance of price stability and banking sector development

in fully realizing the savings and investment functions of life insurance in an economy.

Kumar (2005)12

in his study, revealed that the Life Insurance penetration, in India

is just about 2% of GDP. The life insurance premium per capita is just Rs. 550. The LIC

is the largest player with over 2000 officers. After liberalization, it has improved its

efficiency and customer services. Among the private life insurance companies ICICI

Prudential Life Insurance and Birla Sunlife are the first and second largest players. Other

prominent companies in competition are-Bajaj-Allianz, HDFC Standard Life, Kotak

Mahindra, ING Vysya Aviva Life, Metlife, etc

Nor Azila Mohammed Noor and Azil Mudamad‘s (2005)13

research study examined

customer orientation behaviour of life insurance agents in Malaysia. The study examined the

factors that influence of organizational commitment, self-monitoring and intrinsic motivation

of sales people (insurance agents). With the hypotheses test results of the study the authors

suggested that organizational commitment and basic motivation positively influence sales

people to perform customer-orientation behaviour while doing sales. Self-monitoring

however, was found to be unrelated to the adoption of customer-orientation behaviour.

Reddy (2005)14

explored the customer‘s perception towards private life insurance

companies‘ policies with reference to Bangalore city. The objectives were to know the

customer‘s opinion on (1) whether private insurance policies are alternatives of public

insurance company‘s policies or not (2) to identify that whether private insurance companies

policies are up to the customers‘ expectations or not. A sample of 400 respondents was taken


32

on the basis of convenience sampling method. The respondents were divided into two

groups (Private and government employees). Respondents felt that the policies offered by

private insurance companies are up to the consumer‘s expectations. Almost all the

respondents felt that there is no risk and no need to worry about their money since all the

private insurance companies are under the regulation of IRDA.

Namasivayam et al. (2006)15

study examined the socioeconomic factors that are

responsible for purchase of life insurance policies and the preference of the policyholders

towards various types of policies of LIC. From the analysis, the study concluded that

factors such as age, educational level and sex of the policyholders are insignificant, but

income level, occupation and family size are significant factors.

Rajesham and Rajender (2006)16

have made an attempt to highlight the

developments in insurance sector in India in a phased manner and to examine the reasons

for entry of private and foreign insurance players in the insurance market and ‗to present

the changing scenario of insurance business in India. It The paper also examined the

growth of the Indian insurance sector during the period of pre and post liberalization and

finally suggests the strategies that need to be adopted by Indian insurance sector in the

light of global scenario so as to enhance its market share. Findings suggests that

insurance companies in India are required to come up with multi-benefit policies

including tax benefits with quality based timely customer services.

Suresh (2006)17

found that branding is the new challenge in the financial service. Brand

equity‘s most trusted brand survey of 2005 shows that out of 150 top brands of 2005 only

seven brands are there for the financial services. The brand building exercises done by LIC are,

value added services, CRM, corporate advertising, targeted both rural and urban segments.


33

Dhalait (2007)18

has described the importance service in the insurance business.

The paper highlight that now there are a large number of insurers and buyers, hence the

need of serving the customers is of customer service in the insurance business. The paper

buyers, hence the need of serving the customers is of utmost importance in the ever

increasing, ever increasing, ever changing and highly competitive business scenarios.

There are some customers who don‘t even give a chance to rectify the problems and walk

over to the competitors, spreading bad words to their friends and relatives. This is really

dangerous for insurance companies, as they will loose a large number of customers

unintentionally. Also over promising is risky in insurance and hence employees should be

given good training to desist from doing so. As the management is obliged to take care of

the employees, so are the employees obliged to take care of the organization. Its two way

process and business runs in this way only.

Ogenyi E. Omar (2007)19

research study was focused on Nigerian Life Insurance

Industry. In this study 240 respondents were surveyed through a structured questionnaire

that consisted the Theory of Reasoned Action (TRA). The study found that there is

considerably unexploited potential for life insurance in Nigerian. However, it has been

found that the policyholder lacks confidence in the insurance companies. The sample

subjects ignoring contingency risks and reliance more on family for help in emergencies,

this negatively affects on life insurance purchase. Further the author suggests that the

Nigerian insurance companies should target marketing the products through effective

communication strategies.

In view of Ram Pratap Sinha (2007)20

the changing scenario of competition in the

life insurance sector has permitted the privatization of Life Insurance industry and created


34

tremendous changes in services. The paper compares 13 life insurance companies for the

financial years of 2002-03, 2003-04 and 2004-05 in respect of technical efficiency and

changes in total factor productivity. For the purpose of computation of technical

efficiency and total factor productivity, the net premium income of the observed life

insurance companies has been taken as the output, and equity capital and the number of

agents of insurance industries have been taken as the inputs. The results show that all the

life insurance exhibits positive total factor productivity growth during the period.

Tamzid Ahmed Chowdhury et.al (2007)21

based on the SURQUAL model

analyzed the Bangladesh consumers perception on insurance companies and highlighted

issues relating to non-popularity of insurance companies in Bangladesh. The study also

found the marketing issues through the Gap-model of service marketing.

Tufan, Ekrem et al. (2007)22

in their study aimed to analyse the customers'

behaviour on the different insurance in Romania and Turkey. The study also analysed the

risk-taking behaviour in insurance markets under the risk condition. The study noted that

the common public in these countries dislike thinking about uncertainty, probability and

risk that may be caused to their individual life or to their belongings. The study based on

the sample subjects‘ reaction on different situations had concluded that people prefer to

insure against higher probability, low loss hazards and suggested that insurance

companies should make a greater effort to understand how consumers think and react to

risk and uncertainty and accordingly plan their marketing activities.

Goutam Dutta et al. (2008)23

in their working paper series mentioned that the

insurance is a long-time financial mechanism. The drastic changes in Indian financial

policies have increased competition within the insurance sector and have concurrently


35

resulted in more policy choices being available in the market. Thus, the insurance seller

needs to know accurately the buyer's preference for insurance services. Based on such

multi-criterion, utility model was applied in this empirical study. The model is then used

to develop a ready reckoner for policies that have been used in comparing investors‘

behaviour across various attributes.

Guillen et al. (2008)24

noted that the number of empirical studies on customer

loyalty in the insurance sector is low. They contended that it is important to monitor

customer loyalty and business risk for the life insurance companies due to reasons such as

access to information related to the quality of portfolio, effective handling of customer

recruitment and retention strategies, evaluation of market‘s competitiveness in the

insurance sector and company‘s position in that market.

Mahesh Chand Garg and Deepti (2008)25

in their empirical study compared

technical and scale efficacy of 12 general insurance companies in India for the financial

year 2002-03 to 2005-06 using Data Envelopment Analysis (DEA). The study observed

that among the public insurers, New India is the only company which turned out to be

technically efficient on both Constant Returns to Scale (CRS) and Variable Return to

Scale (VRS) for all the years under reference. The study also state that HDFC managed to

retain 100 per cent efficiency for the last three financial years included in the study on

both VRS and CRS.

Min Li‘s (2008)26

empirical study aimed to examine both the type and nature of

life insurance purchased by households. The author developed comprehensive models of

households‘ demand for life insurance, which included demographic variables (age,

education, employment status, health status, number of children, marital status, and race),


36

economic and assets variables (income, homeownership, debts, as well as portfolio elements

such as liquid assets, certificates of deposit, mutual funds, bonds, stocks, individual

retirement accounts, annuities, other miscellaneous financial assets, and nonfinancial

assets), and psychographic variables (attitude toward risk, attitude toward leaving a

bequest, and one‘s expected life expectancy). The effects of these factors on either term

or cash value life insurance purchased by households were examined separately.

Rajesh Sharma (2008)27

says that motivating sales force is one of the most

difficult challenges faced by an organization. Motivating sales people for the long run

takes time, effort and a personalized approach that involves finding out what makes each

sales force personnel perform above average. By gaining a deeper knowledge of human

motivation, sales managers can put in place a more holistic approach – one that integrates

people, process, and technology and compensation strategies – to encourage and reward

the behaviors that help produce high performance. A better understanding of basic human

needs and of the methods that can sustain high levels of motivation among a company‘s

sales staff is very important. The organizations need to motivate and engage their best

personnel to increase the chances that those personnel will stick around and work more

efficiently. An attempt was made to identity the factors which motivate the sales force in

Indian Life insurance sector. Survey method was used. Convenience sampling was

chosen to identify and approach the companies. The factors were explored using the

Principle Component analysis and Varimax rotation method. The key motivators were

identified as Recognition, Communication, Personal Growth and development,

Challenging responsibilities, whereas the hygiene factors were Quality of Supervision,

Fringe benefits & Working Conditions.


37

Sunayna Khurana (2008)28

in her research paper analysed consumer behaviour

towards the insurance product in Hisar city of Haryana. The study examined customer

preferences regarding insurance plans and company, their purpose of buying insurance

policies, their satisfaction level and their future plans for the new insurance policy.

Ajay Suneja and Kirti Sharma (2009)29

made a study entitled ‗Pre-purchase

behaviour regarding life insurance products‘. The Indian Insurance sector is a growing

Industry. With private players in the sector the Indian customers are being treated to

efficient service, unheard of add-ons, Technology savvy agents and speedy claim

settlements. Today‘s customers demand innovative insurance salutations to their

problems and superior quality service. They are now equipped with information, and are

more educated, less loyal and highly independent. Their evolving needs are driving

companies to respond more efficiently. So, the current study has been carried to identify

the important sources of information used by insurance policy buyers and the objectives

of buying an insurance policy. An effort has been made through this study to understand

the pre-purchase behaviour of an insurance consumer. The study has come up with factors

such as marketing communication, company representative and referrals which also include

various variables as sub-factors. Hence insurance companies should focus on these factors for

making the information search a more effective and easy exercise for customers.

Bala Senthil R.S et al. (2009)30

points out that the intermediaries (Agents) are the

real sellers of the life insurance products and services. Because of globalization many

private players have come into the market and provide competitive service equal to the

public player. The agents of these players are playing a pivotal role for the success of

their companies. Though there are many studies related to the insurance industry and the


38

insurance products and services, there is no specific study related to the agents in the life

insurance services. Hence the present study focuses on this aspect with the specified

objectives, namely identification of critical success factors of the agents, the impact of

the factors on their performance and the discriminant success factors among the agents of

public and private players. The study concludes that the important critical success factors

of agents are service diversity, service quality, trust, communication and customization.

All the above said factors have a significant and positive impact on their performance.

The important discriminant factors among the agents of public and private players are the

customization and service quality. The agents of public are far better in the above factors

compared to their counterparts.

Debabrata Mitra and Amlan Ghosh (2009)31

in their research paper highlighted

emerging trends and patterns in Indian insurance business during post globalised era.

It also focuses on the role of private partners in life insurance in India. The authors have

mentioned that life insurance is of paramount importance for protecting human lives

against accidents, causalities and other types of risks. Life insurance has been dominated

by public sector in India. However, with the liberalization of Indian economy, private

sector entry in life insurance has got momentum. The public sector insurance companies,

particularly, LIC of India has emphasized on exploiting the potential of rural India as it

provides immense scope even in the post-globalized era.

Jonathan Ingram (2009)32

in his study emphasized the need for adopting

multi-channel selling strategy for insurers in the era where customers demand more

choice and control over their financial affairs. The author states that to attract more

customers insurers need to have an appropriate channel mix that should be linked with all


39

aspects of customer interface backed by administrative support. The author also cautions

the insurers that delivering brand value across different channels consistently would

require replacement of traditional functional departments with more focused Customer

Relationship Management teams consisting of risk, IT, sales, and marketing and service

delivery personnel.

Kathirvel. N. (2009)33

had stated in his article that the insurance industry is one of

the fastest growing industries in India. This study aimed to analyse the awareness created

by life insurance through various media advertisements, and to analyse the extent of

penetration of life insurance and understand the reasons behind choosing life insurance

by the sample subjects in Coimbatore city. The study found that the respondents of

Coimbatore city who preferred life insurance policy the most are agriculturists.

They want the life insurance policies to specially benefit to improve their cost of living

and standard. The author suggests that the government should take necessary steps to

make life insurance policy compulsory for every individual. Moreover, commercial

channels are the best sources for telecasting the life insurance advertisements.

Keerthi PA (2009)34

made a study to find out the dimension-wise expectations

and perceptions of the services and their relationship with the demographic factors of the

policyholders of both LIC and ICICI prudential.

The study revealed that all the policyholders expect excellent delivery of services

with respect to all the dimensions of service quality. It gave the insight into the actual

delivery of the services by LIC and ICICI prudential to its policyholders. Further it has

discussed the aspects that both the insurance companies have exhibited difference in their

delivery of services based on the profitable demographic profile of the policyholders.


40

Indeed, if all the insurance companies focus on delivering quality service without any

disparity to its policyholders it would enhance the corporate goal of more profit and

market share.

Murthy T.N et al. (2009)35

study aimed to know about the growth and development

of LIC business before and after the LPG (Liberalization, Privatization of Globalization)

concept, to study the ways to improve customer services in LIC for winning confidence,

and to make appropriate suggestions for the improvement of LIC business. The study

highlights that the Life Insurance Corporation of India (LIC) has been facing intense

competition from the new entrants and is also playing a lead role in the life insurance

industry. The LIC has retained the commendable position even after liberalization with

entry of private insurance units. The new private players with their aggressive penetration

strategies are contributing to the cause of LIC by creating insurance consciousness in the

minds of a wide cross-section of customers.

Rama Devi V. and Ramesh M. (2009)36

viewed that the insurable populace in

Andhra Pradesh are looking for avenues which suit their specific requirements, and

plenty of choices are available in the market today. The present study was conducted in

order to know investors‘ concerns and preferences, their satisfaction with life insurance

products and to determine if there is a significant relationship between demographic

details like age, work status, income, gender and marital status of the investors on one

hand and their preference for private sector player or a public sector player and

satisfaction with their life insurance products on the other hand. The study was conducted

among a sample of 200 insurance policyholders selected from 3 mandals in Guntur

District. The data was collected with the help of a well-designed questionnaire. The data


41

collected was analysed using simple statistical methods like percentages, means and

Chi-square test. The results indicated that the investors are more concerned with ease of

management of their portfolio followed by concern for tax advantage. Majority of the

respondents expressed satisfaction with their insurance products and indicated their

preference for life insurance product of public sector rather than private sector.

Sankaramuthu Kumar Sadayan Jr. and Saravannan Laxmanan (2009)37

in their

study analysed the performances of 16 life insurance companies. The authors had

comment that the insurance penetration and insurance density in India is growing at a

slow pace. Most of the life insurers in India are yet to break even, though they are in

operation for more than six years. The results of the study show that these 16 insurance

companies can perform better by going for strategic partnership with banks and post

offices, wholesale inclusion of rural masses, developing underwriting skills, and turning

grievance redressal mechanism, hiking the Foreign Direct Investment (FDI) limit to help

capital infusion and last but not the least encouraging academic institutions to go for

insurance education in a big way.

Masood H Siddiqui and Tripti Ghosh Sharma (2010)38

in their study aimed to

develop a valid and reliable instrument to measure customer observed service quality in

life insurance sector. The author developed validation instrument comprised of six

dimensions: assurance, personalized financial planning, competence, corporate image,

tangibles and technology. The analytical hierarchy process of the study highlighted the

priority areas of service instrument with assurance as the best predictor, followed by

competence and personalized financial planning. The gap scores of the study show that

there exists ample room insurance companies for improving their services quality in all


42

the aspects. The authors believe that results of the study will help the service managers

to efficiently allocate attention and resources among these dimensions on the differential

basis, consistent with the customer priorities. These findings can be used for framing

effective strategies and actions for achieving competitive advantage through customer

satisfaction and retention.

Andre P. Liebenberg, James M. Carson and Randy E. Dumm (2010)39

comment

that the earlier research conducted in insurance sectors suggests that neither the choice to

own life insurance nor the amount purchased is consistently related to the presence of

children in the household. While these perplexing findings are based on a static

framework, thus, the authors alternatively aimed to examine life insurance demand in a

dynamic framework as a function of changes in household life cycle and financial

condition. The result of the study was based on a unique panel dataset from the survey of

Consumer. The study indicates significant relation between finances and economically

events on the demand for life insurance. The study specifically found that new parents are

40 percent more likely to initiate term insurance coverage than are other households, and

that these new parents purchase two-thirds more coverage than do other households.

Garg M.C and Anju Verma (2010)40

analyzed that the population for their

research comprises all employees of public and private life insurance companies in India.

A sample of 95 employees is drawn on the basis of convenient sampling. The data is

collected using a well-structured (3-point scale) questionnaire. The responses regarding

nine dimensions of MM are measured with the help of descriptive as well as statistical

analyses. The nine dimensions are converted into four factors after applying factor

analysis through principal component analysis. Efforts are made to represent people from


43

different age groups, gender, qualification, hierarchy and type of organization. The study

found that there is no significant difference between the opinions of private and public

company respondents regarding variables of MM.

Toshiyuki Souma and Yoshiro Tsutsui (2010)41

in their research paper examine a

change in the level of competition in the Japanese life insurance industry over the last

17 years. The study estimated the first order condition for profit-maximizing insurance

oligopolies to obtain the degree of non-competition and collusion. Estimation results of

the study suggest that: not only stock companies, but also mutual companies maximize

their own profits rather than pay out dividends to policyholders; competition has become

stronger since 1995, revision of Insurance Industry Law in Japan and failures of

insurance companies promoted the competition and the competition in the recent years

have increased more than the pre-war period.

Dharmedra Singh (2011)42

in his study aims to identify the factors influencing the

selection of insurance company for purchasing the policy. An attempt has been made to

study the customers‘ preference for Insurance companies. The variables for the selection

of a company consisted of 7Ps of services marketing. The respondents were queried

about the factors which strongly influence their choice of a particular company.

The findings were analyzed using ANOVA tests for each of the 7Ps. The findings reveal

that product features, accessibility, low premium amount, advertising, proper redressal of

complaints and better claim settlement are some of the factors that drastically influence

the choice of a company.

Neetu Bala and Dr. H.S Sandhu (2011)43

in their research paper aimed to

investigate the factors influencing agents‘ perception towards Life Insurance Corporation


44

of India. The study was conducted based on a sample of 225 respondents taken from

three cities of Punjab. Factor Analytic Approach has been performed for data analysis.

The results of the study revealed the fact that Staff co-ordination is the most important

factor to influence agents‘ perception, Moreover, the study results also show that there

exists no significant difference among various groups of respondents with respect to their

perception towards Life Insurance Corporation of India.

Festus M. Epetimehin (2011)44

in his empirical study focuses on the factors

enhancing the purchase of life insurance in Nigeria. The objectives of the study were to

evaluate the factors underlying consumer perception towards investment in life insurance

and to compare the differences in consumer perception of male and female consumers.

The author says that Nigeria is a country where the average selling or purchase of Life

insurance policies is still lower than many western countries. This has led to a

considerable unexplored potential of life insurance in Nigeria. With so many life

insurance products available, one continues to wonder why the majority of Nigerian

population does not have any life policy. This resulted into finding out what factors play

very important role in life insurance policies purchase. The findings of this study provide

important insights into the insurance companies in designing their product-mix.

Therefore, consumers who intend to buy the insurance products will have a list of factors

and thus can take an informed decision in selecting an insurance product. The study will

also assist in improving the market share of companies and further help in the

development of the insurance sector. The recommendations are that the insurance

companies should concentrate on consumers‘ loyalty, service quality, ease of procedures,

satisfaction level, and company image and company-client relationship.


45

Rajeswari, K and Kartheeswari, S. (2011)45

in their research article based on the

UGC funded research work aimed to analyse the perceptions of the policyholders about

the service rendered by the LIC of India. The study intends to promote a better theoretical

understanding and recognition of the complexities to service quality and its measurement

with respect to life insurance. The study was based on 380 policyholders from

Virudhunagar District situated in South Tamilnadu. This article also examined the

relationship between the demographic factors and SERVQUAL mean score to determine

the reliability of the attributes. The Cronbach's Alpha had been used to measure

reliability of the dimensions reliability, responsiveness, assurance, empathy and

tangibles. The study found that the giant public sector life insurance company in the

study area with their thick infrastructure facilities and network of branches enjoyed a

monopoly status in spite of the competition with private players on the basis of their

service quality. The opinion survey with the policyholders also brings forth that the LIC

has served them well in regard to dissemination of product knowledge, issue of policies,

after-sales service before and after claim even though a slight discontent is reported by

minority. The authors commend that customer satisfaction is the perception of customers

on the service whether that service has met his needs and expectations. The study

findings reveal that service quality, personal factors, perception of equity and fairness,

price, product quality, situational factors and attributions for service success or failure are

the factors that influence the customer satisfaction. However, the perceptions and

expectations of the policyholders who have taken the policies from Life Insurance

Companies vary from person to person.


46

Chand Basha et al. (2012)46

in their research work aim to analyse the urban and

semi-urban centers policyholders‘ perception towards LIC (Life Insurance Corporation)

of India. The authors found that majority of the policyholders are influenced by

themselves while taking an insurance policy from LIC. They found that significant

number of policyholders felt that the premium rate is high, majority of the sample

policyholders prefer to buy money back policy and policyholders expected a return of

11-15 percent from their investments. The policyholders in the urban and semi-urban

regions also considered LIC as better option for saving.

Deep K.Thakkar (2012)47

in her article had mentioned life insurance as a tool

against protection of life of individuals. Basically it is protection against unforeseen death

of an individual. So his/her family is financially protected against such risk. The purpose

of life insurance for every individual may be different. There are large numbers of

insurance companies having wide range of insurance products. On the other hand,

consumers are so much confused as to which policy and of which company to be

purchased. So marketers are interested to know the buying behaviour of life insurance

consumers in order to form their marketing strategies.

Divya Negi and Praveen Singh (2012)48

in their study aimed to find out the

relationship of demographic characteristics of the respondents with five important factors

influencing the purchase of a life insurance product ,namely product quality, brand

image, service quality, customer friendliness, brand loyalty and commitment. Product

Quality and Brand Image came out as the highest ranking factors while Brand Loyalty

has been rated as the least important factor. The study observed that these factors vary

significantly across various demographic characteristics of the respondents.


47

Gautam V. and Kumar M (2012)49

in their research work attempted to illustrate

the attitudes of Indian consumers towards the insurance services. The study aimed to

assess the NCR (New Capital Region) householders‘ level of awareness about the

insurance services and their attitude towards insurance services. Findings of the research

show that basic socio-demographic and economic variables have significant impact on

consumers‘ attitudes towards insurance services in Indian scenario.

Inthuza S. and Push Panathan, A. (2012)50

in their study aimed to analyse the

customer preference and satisfaction of Sri Lanka Insurance Company and Ceylinco

Insurance Company. The objectives of this study are to determine the level of customer

satisfaction and preference of the Insurance services of Sri Lanka Insurance and Ceylinco

Insurance, to examine about the customer relationship management, and to compare

customer preference between the Insurance industries. The study was focused on

Vavuniya District by using random sampling method. There are various Insurance

companies that provide services to people in Vavuniya District. The overall finding of the

study shows that most of the Sri Lanka Insurance customers are dissatisfied with the poor

knowledge of policies, inconvenient place, higher charges for vehicle and other general

insurance and their investment are very difficult to return.

Manoj Sharma (2012)51

in his paper evaluated the impact of demographic factors

on the satisfaction of investors towards insurance policies. This paper also analyzes

significant relationship between demographic factors and overall satisfaction of the

customers towards the insurance policies. The study utilized the survey approach.

The sample consisted of 358 respondents. The result of the study demonstrates the

demographic factors such as age, gender, marital status, educational qualification,


48

employment status influence investors satisfaction level towards insurance policies in the

India. The result of the study highlights the importance of demographic factors which

encourages the public and private insurance companies to cater to the need of these segments.

Pulidindi Venugopal (2012)52

in his research paper aimed to measure the attitude

of uninsured people in Andhra Pradesh. The study was conducted in urban, rural and

tribal areas of East Godavari District. The study found that out of the 597 uninsured

respondents surveyed, 72.86 per cent do not know about insurance and 27.14 per cent are

aware of insurance. Among the uninsured, the potential segment is daily wage workers

and small business people. Nearly 50 per cent of the respondents surveyed are not insured

as they have negative attitude towards life insurance. The author emphasis the point that

the People with low education levels need to be convinced by the agents as they cannot

understand the various schemes offered by the companies. The author suggests that the

insurance companies should target this segment and change their attitude. The authors

also state that Marketing activities of life insurance companies is all about to inform,

bringing awareness, develop belief, to form positive attitude, to reinforce trust etc. in the

minds of the consumers by using tools such as advertising, public relations, displays, word of

mouth, sales promotion, personal selling etc. Insurers may form positive attitude or may

cause negative attitude so knowing the feelings of respondents is found to be essential.

Sridevi (2012)53

in her research paper made an endeavour to study the buyer

behaviour regarding life insurance policies in the rural area of Perambalur district.

Perambalur, being one of the agricultural districts in Tamilnadu was chosen for the study.

The study focuses on the factors which plays a major role in buying behaviour of

consumers towards life insurance policies in Perambalur area. The results of the study are


49

based on a field survey of 150 respondents by using purposive sampling technique.

The author comments that India is a country where the average selling of life insurance

policies is still lower than many western and Asian countries; still the LIC is the biggest

player in the life insurance market with approximately 65per cent market share.

Vipul Jain and Bhawna Saini (2012)54

in their research paper discuss the effect of

demographical element in consumer purchasing attitude for Life Insurance in India.

The authors comment that with the opening up of insurance sector, so many players

entered in the Indian Insurance Industry. This industry has been progressing at a rapid

growth. Insurance sector provides some security to the consumer for any type of mishaps.

This study reveals that the demographical factor has the major effect in the purchase

decision of the customer. The leadership lies not in getting the maximum policy sold but

in understanding the demography of the customer and targeting them in their way.

Finally, the success of insurance marketing depends on understanding the social and

cultural needs of the target population. It has been found that insurance market is still

open for heavy competition. It is recommended that companies dealing in insurance

should give emphasis on demographic elements to grab the opportunities available in this

sector and flourish in this competitive market.

Yiing JiaLoke and Yi Yuern Goh (2012)55

research paper aimed to determine the

socio-demographic and economic factors that have significant influence on the demand

for life insurance in Malaysia. A hurdle count-data model was used by the authors to measure

the separate decisions on the demand for life insurance which is divided into two parts:

whether to purchase a life insurance policy and if so, how many policies to purchase.


50

The results of the study reveals that there are some slight differences in the factors that

determine the decision to purchase life insurance and the quantity of life insurance

policies that a consumer will purchase.

Zahoor Ahmad Malik and Tapan Choure (2012)56

in their research study aimed to

review the various policies of LIC and its perception among the rural areas of Kashmir.

The study found that increase in tax payers‘ income does not have big influence on the

business of LIC, mainly in Pulwama and Shopain districts. The study also found that

people invest their funds in some other financial institutes rather than LIC and saves their

income tax in other ways apart from tax saving policies of LIC. Also the hypotheses test

indicates that increase in per capita income does not have any relation with increase in

number of policies so it can be concluded by saying that exposure of insurance in these

two districts is not very good, people have secured their lives in LIC but the quantity of

policies are very limited. The authors suggest that LIC should think on these lines that

premium rate is good rather than some other branches but number of policies should be

increased with some new steerages and new innovations that will lead to excellent future.

Ashfaque Ahmed (2013)57

in his researcher paper claim that in spite of awareness

about insurance in India, rural India still lacks in terms of availability of various financial

products especially the risk products like insurance. Rural insurance statistics still

indicates a significantly low penetration and poor density even after the privatisation of

insurance sector in 1999. This research paper aimed to examine the present state of

affairs of rural life insurance in India and attempts to explore the issues and challenges

which led to poor penetration of rural life insurance markets. A field survey in Aligarh

and Agra Region of the rural customers has been conducted to examine their perception


51

and attitude towards buying life insurance products. The results of the study reveal that

fact that rural India offers a tremendous scope for insurers where the protection of human

life and income generating assets is a matter of concern. The study notifies the regulators

that have also tried to impose rural insurance obligations for the insurance companies.

The paper also summarizes the rural insurance marketing practices by life insurance

players in India and offers suggestive remarks for capturing the rural potential.

Alok Kumar Rai and Srivastava Medha (2013)58

in their research paper aim to

offer the most identifiable and widely applicable antecedents of customer loyalty model.

The paper holds significant implications for academicians interested in dynamics of

customer loyalty as well as the marketers of life insurance services who are concerned

with customer relationships. The study explores the extant literature on customer loyalty

and brings out seven variables which are responsible for formation of customer loyalty.

Further, the relative importance of these variables has been ascertained through Multiple

Regression Analysis which revealed that service quality and commitment are the

strongest predictors of customer loyalty in the Indian life insurance industry. The paper

also attempts to assess the loyalty status of life insurance customers in India and draws a

comparison between public and private sector life insurance companies in order to

provide significant insights into the life insurance companies that may assist them in

devising better loyalty practices. The study found that Indian customers do care about the

public sector status of a financial service provider as it entails a sense of security and stability.

Thus, the authors suggest that insurance companies must create a difference between

customer loyalty of public sector life insurer and that of private sector life insurer.


52

Liji Panda and Bimal Chandra Mishra‘s (2013)59

study aimed to analyse the

investment pattern of LIC and different segments for investment. This study also

attempted to identify the LIC‘s investment and risk taking ability while investing in

different segment. The authors comment that LIC tries to forecast the future movement of

capital market using strategy of the economy, industry, and company also by fundamental

analysis through examination of the market, economic environment, industrial

performance, and company. The authors say that an investment refers to the commitment

of funds at present, in anticipation of some positive rate of return in future. The study

suggests that, today the spectrum of investment is indeed wide. An investment is

confronted with array of investment avenues. So the suggest that investment in equity is

in best high proportion.

It may be noticed that while there has been many macro level research studies in

the insurance almost all of them underlie insurance marketing, customers‘ perception and

satisfaction. None of these studies has however made an effort to analyze service quality

dimension of public and private life insurance companies. Hence the researcher has

identified this area as research gap and this present study is therefore focused on

highlighting the above said aspects so as to reveal the quality of services rendered by the

life insurance companies.


53

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