S TUDY OF FACTORS AFEECTING CONSUMERSrsquo PERCEPTION AND BUYING BEHAVIOUR WHILE PURCHASING L IFE I NSURANCE P OLICIES

A report on Internship Training Undergone at

ICICI PRUDENTIAL LIFE INSURANCE Ltd PRIORITY CIRCLE

NOIDA SECTOR 18

Submitted in partial fulfillment of the Requirement for the award of the degree of POST GRADUATE DIPLOMA IN MANAGEMENT

1

INTRODUCTION

INDUSTRY PROFILE

INSURANCE INDIA

Insurance in law and economics is a form of risk management primarily used to hedge

against the risk of a contingent loss Insurance is defined as the equitable transfer of the

risk of a potential loss from one entity to another in exchange for a premium Insurance

is a federal subject in India and has a history dating back to 1818 Life and general

insurance in India is still a nascent sector with huge potential for various global players

with the life insurance premiums accounting to 25 of the countrys GDP while general

insurance premiums to 065 of Indias GDP The Insurance sector in India has gone

through a number of phases and changes particularly in the recent years when the Govt

of India in 1999 opened up the insurance sector by allowing private companies to solicit

insurance and also allowing FDI up to 26 Ever since the Indian insurance sector is

considered as a booming market with every other global insurance company wanting to

have a lions share Currently the largest life insurance company in India is still owned

by the government

In order to provide strict state control over Insurance business many acts were

passed th first being The Insurance Act 1938 The Life Insurance in India was

completely nationalised only on 19th Janurary 1956 through the Life Insurance

Corporation Act 1956 Nationalization was accomplished by the government acquisition

of the management of the existing insurance companies This resulted in the formation of

the Life Insurance Corporation of India on 1st September 1956 which enjoyed complete

monopoly in the life insurance industry till the year 1999

The remaining 100 odd General Insurance companies were nationalized by the

General Insurance Business (Nationalisation) Act 1972 subsequently merging them into

four companies All the companies were amalgamated into National Insurance New

2

India Assurance Oriental Insurance United India Insurance which were headquartered in

each of the four metropolitan cities

Till end of 1999-2000 fiscal year two state-run insurance companies namely

Life Insurance Corporation (LIC) and General Insurance Corporation (GIC) were the

monopoly insurance (both life and non-life) providers in IndiaThe year 1999 saw the

entrance of private insurance companies in Indian insurance sector The Govt of India

then introduced the Insurance Regulatory and Development Authority Act (IRDA) in

1999 thereby de-regulating the insurance sector and allowing private companies into the

insurance Further foreign investment was also allowed and capped at 26 holding in

the Indian insurance companies

MAJOR PLAYERS

The private insurance joint ventures have collected the premium of Rs101909

crore with the investment of just Rs3 000 crore in three years of liberalization The

private life insurance players have been significantly improving their market share when

compared to 50 years Old Corporation (ie LIC) As per the figures compiled by IRDA

the Life Insurance Industry recorded a total premium underwritten of Rs 1070796 crore

for the period under review Of this private players contributed to Rs1 01909 crore

accounting for 10 percent Life Insurance Corporation of India (LIC) the public sector

giant continued to lead with a premium collection of Rs968887 crore translating into a

market share of 90 per cent In terms of number of policies and schemes sold private

sector accounted for only 377per cent as compared to 9623 per cent share of LIC (The

Economic Times 21 March 2004)

The ICICI Prudential topped among the private players in terms of premium

collection It recorded a market share of 25 per cent followed by Birla SunLife with 15

3

percent HDFC Standard and Max New York Life with a market share of approximately

15 per cent each

In case of private non-life insurance players which their market share raised to

1413 per cent recorded a growth of 7075 per cent on an annual basis while the market

share of public sector stood at 8587 per cent registering a marginal growth of 634 per

cent The overall market has recorded a growth of 1232 per cent by the end of January

2004 Among the private non-life insurance players ICICI Lombard topped the list with

a market share of 305 per cent in one year period and with an annual growth rate of

1316 per cent followed by Bajaj Allianz with 291 per cent market share and Tata AIG

with 227 per cent market share and with an annual growth rate of 6260 per cent

LIFE INSURERS

1113090 Life Insurance Corporation of India

1113090 SBI Life Insurance Co Ltd

1113090 Allianz Bajaj Life Insurance Co Ltd

1113090 Om Kotak Mahindra Life Insurance Co Ltd

ICICI Prudential Life Insurance Co Ltd

1113090 HDFC Standard Life Insurance Co Ltd

1113090 Birla Sunlife Insurance Co Ltd

1113090 I1113090G Vysya Life Insurance Co Ltd

1113090 Tata-AIG Life Insurance CoLtd

1113090 Metlife India Insurance Co Pvt Ltd

1113090 AMP Sanmar Assurance Co Ltd

1113090 Dabur CGU Life Insurance Co Pvt Ltd

1113090 Max 1113090ew York Life Insurance Co Ltd

4

COMPANY PROFILE

Indias Number One private life insurer ICICI Prudential Life Insurance

Company is a joint venture between ICICI Bank Ltd-one of Indias foremost financial

services company- and Prudential plc - a leading international financial services group

headquartered in the United Kingdom Total capital infusion stands at Rs 2060 billion

with ICICI Bank holding a stake of 74 and Prudential plc holding 26

Indiarsquos number One private insurerICICI Prudential Life Insurance Company is a joint venture

between icici bank ltd one of India foremost financial services company and prudential plc a

leading international financial services group headquartered in uk tatal capital infusion stands at rs

2060 billionwith icici bank holding a stake of 74 and prudentail

They began their operations in December 2000 after receiving approval from

Insurance Regulatory Development Authority (IRDA) and are headquartered in Mumbai

Today their nation-wide team comprises of over 580 offices over 234000 advisors and

22 banc assurance partners

INTRODUCTION OF ICICI PRUDENTIAL

ICICI Prudential was the first life insurer in India to receive a National Insurer

Financial Strength rating of AAA (Ind) from Fitch ratings For three years in a row

ICICI Prudential has been voted as Indias Most Trusted Private Life Insurer by The

Economic Times - AC Nielsen ORG Marg survey of Most Trusted Brands

The ICICI Prudential edge comes from the commitment to their customers in all

that they do ndash be it product development distribution the sales process or servicing

ICICI Prudential products have been developed after a clear and thorough understanding

of customer needs Having the right products is the first step but itrsquos equally important to

ensure that customers can access them easily and quickly To this end ICICI Prudential

has an advisor base across the length and breadth of the country and also partners with

leading banks corporate agents and brokers to distribute their products Robust risk

management and underwriting practices form the core of their business With clear

guidelines in place they ensure a smooth and hassle-free claims process

5

Entrusted with helping customers meet their long-term goals they adopt an

investment philosophy that aims to achieve risk adjusted returns over the long-term

Their 16000+ strong staff is given the opportunity to learn and grow everyday in a

multitude of ways This keeps them engaged and enthusiastic so that they can deliver on

the promise to cover customer at every step of life

For the past six years ICICI Prudential has retained its position as the No 1

private life insurer in the country with a wide range of flexible products that meet the

needs of the Indian customer at every step in life

PLANS

There are two main types of plans ndash ULIP and Traditional

Unit Linked Insurance Product

ULIPs have gained high acceptance due to attractive features they offer These

include

1113090 Flexibility Flexibility to choose sum assured Flexibility to choose premium

amount Option to change level of Premium Sum Assured even after the plan has

started Flexibility to change asset allocation by switching between funds

1113090 Transparency Charges in the plan and net amount invested are known to the

customer Customer has the convenience of tracking hisher investment performance

on a daily basis

1113091 Liquidity Customer has the option to withdraw money after few years ie the option

of low minimum tenure Partial or systematic withdrawals are allowed

1113090 Fund Options A choice of funds is provided to customers ranging from equity debt

cash or a combination They can choose the fund mix based on desired asset

allocation

Traditional Endowment Plans

These are the old type of plans available These plans cater to customers with a

low risk appetite Some of the common features of the traditional plans are

1113090 Steady Investment Major chunk of investible funds are in debt instruments Though

6

low but steady and almost assured returns are expected over the long term

1113091 Death Benefit death benefit is sum assured with guaranteed and vested bonus

1113090 Asset Creation Helps in asset creation as they are for a long tenure

1113091 Fixed Ratios Premium to sum assured ratios is fixed for each plan and age

1113090 Withdrawals Withdrawals are generally not allowed before maturity

PRODUCTS

INSURANCE SOLUTIONS FOR INDIVIDUALS

ICICI Prudential Life Insurance offers a range of innovative customer-centric products

that meet the needs of customers at every life stage Its products can be enhanced up to 4

riders to create a customized solution for each policyholder

Savings amp Wealth Creation Solutions

1113090 Cash Plus is a transparent feature-packed savings plan that offers 3 levels of

protection as well as liquidity options

1113090 Save n Protect is a traditional endowment savings plan that offers life protection

along with adequate returns

1113091 CashBak is an anticipated endowment policy ideal for meeting milestone expenses

like a childs marriage expenses for a childs higher education or purchase of an

asset It is available for terms of 15 and 20 years

1113091 LifeTime Super amp LifeTime Plus are unit-linked plans that offer customers the

flexibility and control to customize the policy to meet the changing needs at

different life stages Each offer 4 fund options - Preserver Protector Balancer and

Maximizer

1113091 Life Link Super is a single premium unit linked insurance Plan which combines life

insurance cover with the opportunity to stay invested in the stock market

1113090 Premier Life Gold is a limited premium paying plan specially structured for long-

term wealth creation

1113090 Invest Shield Life is a unit linked plan that provides premium guarantee on the

7

invested premiums and ensures that the customer receives only the benefits of fund

appreciation without any of the risks of depreciation

1113090 Invest Shield Cash back is a unit linked plan that provides premium guarantee

on the invested premiums along with flexible liquidity options

Protection Solutions

1113090 LifeGuard is a protection plan which offers life cover at low cost It is available in

3 options - level term assurance level term assurance with return of premium amp

single premium

1113090 HomeAssure is a mortgage reducing term assurance plan designed specifically to

help customers cover their home loans in a simple and cost-effective manner

Child Plans

1113090 Education insurance under the Smart Kid brand provides guaranteed educational

benefits to a child along with life insurance cover for the parent who purchases the

policy The policy is designed to provide money at important milestones in the

childs life Smart Kid plans are also available in unit-linked form - both single

premium and regular premium

Retirement Solutions

1113090 ForeverLife is a traditional retirement product that offers guaranteed returns for the

first 4 years and then declares bonuses annually

1113090 LifeTime Super Pension is a regular premium unit linked pension plan that helps

one accumulate over the long term and offers an annuity option (guaranteed income

for life) at the time of retirement

1113090 LifeLink Super Pension is a single premium unit linked pension plan

1113090 Immediate Annuity is a single premium annuity product that guarantees income for

life at the time of retirement It offers the benefit of 5 payout options

Health Solutions

1113090 Health Assure and Health Assure Plus Health Assure is a regular premium plan

which provides long term cover against 6 critical illnesses by providing policyholder

8

with financial assistance irrespective of the actual medical expenses Health Assure

Plus offers the added advantage of an equivalent life insurance cover

1113090 Cancer Care is a regular premium plan that pays cash benefit on the diagnosis as

well as at different stages in the treatment of various cancer conditions

1113090 Diabetes Care Diabetes Care is the first ever critical illness product especially for

individuals with Type 2 diabetes It makes payments on diagnosis on any of 6

diabetes related critical illnesses and also offers a coordinated care approach to

managing the condition Diabetes Care Plus also offers life cover

1113090 Hospital Care Hospital Care is structured to ensure customers receive a pre-

determined insurance amount for each procedure or hospitalization even if they

spend less Further its long-term design of a term between 10-20 years assures

policyholders the guaranteed cushion of insurance cover even if they make a claim

during the term Available for individuals between the ages of 1-60 years this is one

of the first products that will cover people up to the age of 80 years

GROUP INSURANCE SOLUTIONS

ICICI Prudential also offers Group Insurance Solutions for companies seeking to enhance

benefits to their employees

1113090 Group Gratuity Plan ICICI Prudentials group gratuity plan helps employers fund

their statutory gratuity obligation in a scientific manner The plan can also be

customized to structure schemes that can provide benefits beyond the statutory

obligations

1113090 Group Superannuation Plan ICICI Prudential offers both defined contribution

(DC) and defined benefit (DB) superannuation schemes to optimize returns for the

members of the trust and rationalize the cost Members have the option of choosing

from various annuity options or opting for a partial commutation of the annuity at

the time of retirement

1113090 Group Immediate Annuities In addition to the annuities offered to existing

superannuation customers they offer immediate annuities to superannuation funds

not managed by them

1113090 Group Term Plan ICICI Prudentials flexible group term solution helps provide

affordable cover to members of a group The cover could be uniform or based on

designationrank or a multiple of salary The benefit under the policy is paid to the

9

beneficiary nominated by the member on hisher death

Flexible Rider Options

ICICI Prudential Life offers flexible riders which can be added to the basic policy at a

marginal cost depending on the specific needs of the customer

1113090 Accident amp disability benefit If death occurs as the result of an accident during the

term of the policy the beneficiary receives an additional amount equal to the rider sum assured

under the policy If the death occurs while traveling in an authorized

mass transport vehicle the beneficiary will be entitled to twice the sum assured as

additional benefit

1113090 Critical Illness Benefit protects the insured against financial loss in the event of 9

specified critical illnesses Benefits are payable to the insured for medical expenses

prior to death

1113090 Income Benefit This rider pays the 10 of the sum assured to the nominee every

year till maturity in the event of the death of the life assured It is available on

SmarKid and CashPlus

1113090 Waiver of Premium In case of total and permanent disability due to an accident

the future premiums continue to be paid by the company till the time of maturity

This rider is available with LifeTime Super LifeTime Super Pension and CashPlus

HISTORY OF ICICI PRUDENTIAL

As mentioned earlier ICICI Prudential Life Insurance Company is a joint venture

between ICICI Bank - one of Indias foremost financial services company - and

Prudential plc - a leading international financial services group headquartered in the

United Kingdom

HISTORY OF ICICI PRUDENTIAL

As mentioned earlier icici prudential life insurance company is a joint venture between icici bank

one of India foremost financial services company and prudential plc a leading international

financial services group headquarterd in tha united kingdom

10

ICICI Bank

ICICI Bank (1113090YSEIB1113090) is Indias second largest bank and largest private sector bank

with over 50 years presence in financial services and with assets of over Rs 344658 bn

(USD 79 billion) as on March 31 2007 The Bank offers a wide range of banking

products and financial services to corporate and retail customers through a variety of

delivery channels and through its specialized subsidiaries in the areas of investment

banking life and non-life insurance private equity and asset management ICICI Bank is

a leading player in the retail banking market and services its large customer base through

a network of over 950 branches and extension counters 3300 ATMs call centers and

internet banking to ensure that customers have access to its services at all times

Prudential Plc

Established in London in 1848 Prudential plc through its businesses in the UK and

Europe the US and Asia provides retail financial services products and services to more

than 20 million customers policyholder and unit holders and manages over pound251 billion

of funds worldwide (as of 31 December 2006) In Asia Prudential is the leading

European life insurance company with life operations in China Hong Kong India

Indonesia Japan Korea Malaysia the Philippines Singapore Taiwan Thailand and

Vietnam Prudential is the second largest retail fund manager for Asian sourced assets ex-

Japan as at June 2006 Its fund management business has expanded into a total of ten markets

China Hong Kong India Japan Korea Malaysia Singapore Taiwan Vietnam

and United Arab Emirates

ICICI Prudential has been the market leader in the private life insurance sector

contributing to 30 of the growth share followed by the SBI Life Insurance with 18

share Members like Ms Shikha Sharma CEO amp MD Ms Anita Pai EVP ndash

Customer Service amp Technology Mr Puneet Nanda CIO Mr Binayak Dutta Chief ndash

Sales amp Distribution have been with the company since its inception in 2000 and are

instrumental in developing ICIC Prudential to this level

The first policy was sold on 12th December 2000 Within 1 year ICICI Prudential

achieved 25000 policies and thereby growing at a faster rate achieved 1 million policies

by October 2004 By 2010 ICICI Prudential has a target to achieve 20 million customers

AWARDS amp RECOGNITION

AWARDS

11

1113090 Indias Most Customer Responsive Insurance Company

Avaya GlobalConnect - Economic Times

Customer Responsiveness Awards

1113090 Most Trusted Private Life Insurer

The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003

2004 and 2005

1113090 Prudence Customer Centricity Award 2004 amp 2005

Prudential Corporation Asia

1113090 Best Life Insurer 2003

Outlook Money Awards 2003 amp 2004

1113090 Superbrand 2003-04

1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising

campaign

Effies 2003

RECOGNITIONS

1113090 IMM Award for Excellence

Institute of Marketing amp Management

1113090 Organisation with Innovative HR Practices

Indira Group of Institutes

1113090 Most Trusted Private Life Insurer

The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003

2004 and 2005

1113090 Prudence Customer Centricity Award 2004 amp 2005

Prudential Corporation Asia

1113090 Best Life Insurer 2003

Outlook Money Awards 2003 amp 2004

1113090 Superbrand 2003-04

1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising

campaign

Effies 2003

12

Review of Literature

Mehr and Cammack (1976) agrees that insurance is usually thought of as a product that spreads the

risk of serious but low-probability losses among a group of individuals thus providing some

financial protection to each individual Kunreuther (1979) said that his product makes good sense

particularly when the protection is purchased against potential losses so large as to be catastrophic

such as total destruction of ones home a large accident liability judgment or death of primary

family breadwinner However it has long been recognized that this sensible product is difficult to

sellv

Kahneman amp Tversky (1984) stated indeed repeated demonstrations have shown most people lack

an adequate understanding of probability and risk concepts Dhar (1997) Greenleaf and Lehmann

(1995) Tversky and Shafir (1992) have shown that offering more options can generate decision

conflict and preference uncertainty leading to decision deferral

Kotler (1973) considers insurance to be in the category of unsought goods along with products

such as preventive dental services and burial plotsHe notes that unsought goods pose special

challenges to the marketer

Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) found that subjects were more likely

to buy insurance against small high-probability losses than insurance against large low- probability

losses Hershey and Schoemaker (1980) reported the opposite result

Kunreuther (1979) ldquoIt is not the magnitude of a potential loss that inspires people to buy insurance

voluntarily ndash it is the frequency with which a loss is likely to occurrdquo

Michael L Smith (1982) said that a typical life insurance contract provides a package of options or

rights to the policy owner that is not precisely duplicated by any other combination of commonly

available contracts Viewed from this perspective life insurance enjoys a unique position in the

field of investments and should be judged in this light The paper shows that an options viewpoint

provides a more complete explanation of policy owner behavior towards life insurance than the

conventional savings-and-protection view

13

Michael L Walden (1985) told that the options package view of the whole a

whole life policy is a package of options each of which has value and is expected to influence the

price of the policy This viewpoint implies the general hypothesis that price differences between

whole life policies can be explained by differences in policy contract provisions and differences in

selected company characteristics

OBJECTIVE

o To evaluate the factors underlying consumer perception towards investment in life insurance

policies

o To compare the differences in consumer perception of male and

female consumers

RESEARCH METHODOLOGY

The Study The study was exploratory in nature with survey method being used to complete the

study

Sampling Design

Population

Population included investors in NCR region

Sample frame

Since the data was collected through personal contacts the sample frames were the individuals who

are investing in life insurance policies

Sampling elements

Individual respondents were the sampling elements

14

Sampling Techniques

Random sampling technique was used to select the samples

Sample Size

Sample size was 150 respondents

Tools Used for Data Collection

Self designed questionnaire was used for the evaluation of factors affecting consumerrsquos perception

towards insurance Data was collected on Likertrsquos type scale where 1 stood for minimum

agreement and 7 stood for maximum agreement

Tools Used for Data Analysis

Item to total correlation was applied to check the internal consistency of the questionnaire The

measures were standardized through computation of reliability and validity

Factor analysis was applied to identify the underlying factors

Z-test was applied to find out the significant differences between male and

female investors

Results and Discussions

Consistency Measure

Firstly consistency of all the items in the questionnaire is checked through item to total correlation

Under this correlation of every item with total is measured and the computed value is compared

with standard value (ie 01590) If the computed value is found less than standard value then

whole factorstatement is dropped and will be termed as inconsistent

15

SNO ITEMS COMPUTED

CORRELATIO

N VALUE

CONSISTE

NT

ACCEPTED

DROPPED

1 Awareness about terms and conditions of

policy

0671575 Consistent Accepted

2 Provide services on time 0651847 Consistent Accepted

3 Provide satisfactory services 0573518 Consistent Accepted

4 Goodwill of the company 0607722 Consistent Accepted

5 Agent is well informed about policies 0640696 Consistent Accepted

6 Co-operative and friendly agent 0598089 Consistent Accepted

7 Agent respond promptly 0696914 Consistent Accepted

8 Proper reminder of installments by

agents

0531124 Consistent Accepted

9 Employees responsible towards

customers

0685817 Consistent Accepted

10 Benefits are met by policy 0510702 Consistent Accepted

11 Selection of highly reputed company 0634614 Consistent Accepted

12 Reputation of the insurance company 0582977 Consistent Accepted

13 Hassle free settlements 0594282 Consistent Accepted

14 Personal attention on every costumer 0640192 Consistent Accepted

15 Understand Customerrsquos financial needs 0603133 Consistent Accepted

16 Fulfill its promise towards policy 0613243 Consistent Accepted

17 Provides the claims on time 0474994 Consistent Accepted

18 Settlement of claims easy and timely 0569959 Consistent Accepted

19 Satisfy with relationship to company 0621496 Consistent Accepted

20 Company able to fulfill expectation 0594265 Consistent Accepted

21 Only company I want to associate

myself

0519161 Consistent Accepted

22 Purchase more policies from the same

company

0502876 Consistent Accepted

16

23 Suggest friends and family to purchase

policy from the same company

0540626 Consistent Accepted

24 Policy benefits benchmarks 062874 Consistent Accepted

25 Investment in life insurance is more

secure than stock market

0376874 Consistent Accepted

26 Purchase further policies from other

companies

0091102 Inonsistent Dropped

Reliability

Reliability test was carried out using SPSS software and the reliability of the items was measured

The result is as follows

Cronbachrsquos Alpha 0919

It can be seen that the reliability value is more than 07 So the questionnaire is

highly reliable

Description of factors

1 Company Loyalty

This factor includes that this is the only company the consumer wants to associate himself with in

future (0814) himself would purchase more policies from the same company (0799) suggest

friends and family to purchase policy from the same company (0790) company able to fulfill

expectation (0599) Policy benefits benchmarks (0545) The highest Eigen value lies in this factor

35213 So it is been considered as the highly contributing factor towards study Therefore it is

clear that company loyalty plays an important role in investment decisions of investors

17

2 Services Quality

This factor includes hassle free settlements (0693) employees responsible towards customers

(0631) agents respond promptly (0611) investment in life insurance is more secure than stock

market (0563) satisfy with relationship to company (0537) As we can see that the Eigen value for

factor service quality is 9753 which is also a contributing factor towards the study so it can also be considered as an the study

3 Ease of Procedures

This factor includes the company provides claims on time (0852) co- operative and friendly agent

(0662) settlement of claims easy and timely (0651) agent is well informed about policies (0486) As

we can see that the Eigen value for factor ease of procedures is 5830 which is also a contributing

factor towards the study so it can also be considered as an important factor inconsumerrsquos financial

needs (0404) As we can see that the Eigen value for factor company client relationship is 4051

which is also a contributing factor towards the study so it can also be considered as an important factor

in the study

4 Satisfaction Level

This factor includes that the suggested benefits of Insurance Policy should be met to the investors

( 0774) Company provides them satisfactory services (0631) fulfill its promise about life

insurance policy (0575) Services should be provided on time(0515) and awareness of terms and

conditions of policies As we can see that the Eigen value for factor satisfaction level is 5008

which is also a contributing factor towards the study so it can also be considered as an important

factor in the study

5 Company Image

This factor includes that the insurance company should be well known in the industry (0777)

insurance provider should have goodwill in market (0758) and company of high repute (0428)As

we can see that the Eigen value for factor company image is 4878 which is also a contributing

factor towards the study so it can also be considered as an important factor in the study

18

6 Company-Client Relationship

This factor includes that the agent remind about premium installments (0778) pay personal

attention on every consumer (0505) and understand consumerrsquos financial needs (0404) As

we can see that the Eigen value for factor company client relationship is 4051 which is also a

contributing factor towards the study so it can also be considered as an important factor in the

study

Z-Test

Z-test was applied to find out significant difference between male and female investorrsquos perception

towards investment in life insurance policies

For applying Z-test mean and standard deviation was calculated then values were put in formula to

calculate standard error

Null Hypothesis Ho It states that there is no significant difference between the perception of male

and female investors towards investment in life insurance policies

GENDER MEAN SD SAMPLE

SIZE

SQUARE

OF

SD

MALE 14104 20078 75 403146

FEMALE 14594 17701 75 313348

Z = 15877

Since the value of Z is less than the standard value 196 at 5 level of significance so the null

hypothesis is accepted Therefore there is no significant difference between the perception of male

and female investors towards investment in life insurance policies

19

CONCLUSION

In present Indian market the investment habits of Indian consumers are changing very frequently

The individuals have their own perception towards various types of investment plans The study of

this research work was focused over consumerrsquos perception on investment towards Life Insurance

Services The objectives of the study were to evaluate the factors underlying consumer perception

towards investment in life insurance policies and to compare the differences in consumer

perception of male and female consumers The tests that were used for our research activities were-

Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25

items being accepted Next was Reliability Test to check the reliability of the items The

result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis

Test and the six factors that came out were Consumer Loyalty Service Quality Ease of

Procedures Satisfaction Level Company Image and Company-Client Relationship

The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind

sets for their investment pattern in insurance policies Still some actions are needed for

developing insurance market The major factors playing the role in developing

consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality

Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship

Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in

developing the market share loyalty and further development in insurance sector

20

References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)

21

Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in

Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)

22

INTRODUCTION

INDUSTRY PROFILE

INSURANCE INDIA

Insurance in law and economics is a form of risk management primarily used to hedge

against the risk of a contingent loss Insurance is defined as the equitable transfer of the

risk of a potential loss from one entity to another in exchange for a premium Insurance

is a federal subject in India and has a history dating back to 1818 Life and general

insurance in India is still a nascent sector with huge potential for various global players

with the life insurance premiums accounting to 25 of the countrys GDP while general

insurance premiums to 065 of Indias GDP The Insurance sector in India has gone

through a number of phases and changes particularly in the recent years when the Govt

of India in 1999 opened up the insurance sector by allowing private companies to solicit

insurance and also allowing FDI up to 26 Ever since the Indian insurance sector is

considered as a booming market with every other global insurance company wanting to

have a lions share Currently the largest life insurance company in India is still owned

by the government

In order to provide strict state control over Insurance business many acts were

passed th first being The Insurance Act 1938 The Life Insurance in India was

completely nationalised only on 19th Janurary 1956 through the Life Insurance

Corporation Act 1956 Nationalization was accomplished by the government acquisition

of the management of the existing insurance companies This resulted in the formation of

the Life Insurance Corporation of India on 1st September 1956 which enjoyed complete

monopoly in the life insurance industry till the year 1999

The remaining 100 odd General Insurance companies were nationalized by the

General Insurance Business (Nationalisation) Act 1972 subsequently merging them into

four companies All the companies were amalgamated into National Insurance New

2

India Assurance Oriental Insurance United India Insurance which were headquartered in

each of the four metropolitan cities

Till end of 1999-2000 fiscal year two state-run insurance companies namely

Life Insurance Corporation (LIC) and General Insurance Corporation (GIC) were the

monopoly insurance (both life and non-life) providers in IndiaThe year 1999 saw the

entrance of private insurance companies in Indian insurance sector The Govt of India

then introduced the Insurance Regulatory and Development Authority Act (IRDA) in

1999 thereby de-regulating the insurance sector and allowing private companies into the

insurance Further foreign investment was also allowed and capped at 26 holding in

the Indian insurance companies

MAJOR PLAYERS

The private insurance joint ventures have collected the premium of Rs101909

crore with the investment of just Rs3 000 crore in three years of liberalization The

private life insurance players have been significantly improving their market share when

compared to 50 years Old Corporation (ie LIC) As per the figures compiled by IRDA

the Life Insurance Industry recorded a total premium underwritten of Rs 1070796 crore

for the period under review Of this private players contributed to Rs1 01909 crore

accounting for 10 percent Life Insurance Corporation of India (LIC) the public sector

giant continued to lead with a premium collection of Rs968887 crore translating into a

market share of 90 per cent In terms of number of policies and schemes sold private

sector accounted for only 377per cent as compared to 9623 per cent share of LIC (The

Economic Times 21 March 2004)

The ICICI Prudential topped among the private players in terms of premium

collection It recorded a market share of 25 per cent followed by Birla SunLife with 15

3

percent HDFC Standard and Max New York Life with a market share of approximately

15 per cent each

In case of private non-life insurance players which their market share raised to

1413 per cent recorded a growth of 7075 per cent on an annual basis while the market

share of public sector stood at 8587 per cent registering a marginal growth of 634 per

cent The overall market has recorded a growth of 1232 per cent by the end of January

2004 Among the private non-life insurance players ICICI Lombard topped the list with

a market share of 305 per cent in one year period and with an annual growth rate of

1316 per cent followed by Bajaj Allianz with 291 per cent market share and Tata AIG

with 227 per cent market share and with an annual growth rate of 6260 per cent

LIFE INSURERS

1113090 Life Insurance Corporation of India

1113090 SBI Life Insurance Co Ltd

1113090 Allianz Bajaj Life Insurance Co Ltd

1113090 Om Kotak Mahindra Life Insurance Co Ltd

ICICI Prudential Life Insurance Co Ltd

1113090 HDFC Standard Life Insurance Co Ltd

1113090 Birla Sunlife Insurance Co Ltd

1113090 I1113090G Vysya Life Insurance Co Ltd

1113090 Tata-AIG Life Insurance CoLtd

1113090 Metlife India Insurance Co Pvt Ltd

1113090 AMP Sanmar Assurance Co Ltd

1113090 Dabur CGU Life Insurance Co Pvt Ltd

1113090 Max 1113090ew York Life Insurance Co Ltd

4

COMPANY PROFILE

Indias Number One private life insurer ICICI Prudential Life Insurance

Company is a joint venture between ICICI Bank Ltd-one of Indias foremost financial

services company- and Prudential plc - a leading international financial services group

headquartered in the United Kingdom Total capital infusion stands at Rs 2060 billion

with ICICI Bank holding a stake of 74 and Prudential plc holding 26

Indiarsquos number One private insurerICICI Prudential Life Insurance Company is a joint venture

between icici bank ltd one of India foremost financial services company and prudential plc a

leading international financial services group headquartered in uk tatal capital infusion stands at rs

2060 billionwith icici bank holding a stake of 74 and prudentail

They began their operations in December 2000 after receiving approval from

Insurance Regulatory Development Authority (IRDA) and are headquartered in Mumbai

Today their nation-wide team comprises of over 580 offices over 234000 advisors and

22 banc assurance partners

INTRODUCTION OF ICICI PRUDENTIAL

ICICI Prudential was the first life insurer in India to receive a National Insurer

Financial Strength rating of AAA (Ind) from Fitch ratings For three years in a row

ICICI Prudential has been voted as Indias Most Trusted Private Life Insurer by The

Economic Times - AC Nielsen ORG Marg survey of Most Trusted Brands

The ICICI Prudential edge comes from the commitment to their customers in all

that they do ndash be it product development distribution the sales process or servicing

ICICI Prudential products have been developed after a clear and thorough understanding

of customer needs Having the right products is the first step but itrsquos equally important to

ensure that customers can access them easily and quickly To this end ICICI Prudential

has an advisor base across the length and breadth of the country and also partners with

leading banks corporate agents and brokers to distribute their products Robust risk

management and underwriting practices form the core of their business With clear

guidelines in place they ensure a smooth and hassle-free claims process

5

Entrusted with helping customers meet their long-term goals they adopt an

investment philosophy that aims to achieve risk adjusted returns over the long-term

Their 16000+ strong staff is given the opportunity to learn and grow everyday in a

multitude of ways This keeps them engaged and enthusiastic so that they can deliver on

the promise to cover customer at every step of life

For the past six years ICICI Prudential has retained its position as the No 1

private life insurer in the country with a wide range of flexible products that meet the

needs of the Indian customer at every step in life

PLANS

There are two main types of plans ndash ULIP and Traditional

Unit Linked Insurance Product

ULIPs have gained high acceptance due to attractive features they offer These

include

1113090 Flexibility Flexibility to choose sum assured Flexibility to choose premium

amount Option to change level of Premium Sum Assured even after the plan has

started Flexibility to change asset allocation by switching between funds

1113090 Transparency Charges in the plan and net amount invested are known to the

customer Customer has the convenience of tracking hisher investment performance

on a daily basis

1113091 Liquidity Customer has the option to withdraw money after few years ie the option

of low minimum tenure Partial or systematic withdrawals are allowed

1113090 Fund Options A choice of funds is provided to customers ranging from equity debt

cash or a combination They can choose the fund mix based on desired asset

allocation

Traditional Endowment Plans

These are the old type of plans available These plans cater to customers with a

low risk appetite Some of the common features of the traditional plans are

1113090 Steady Investment Major chunk of investible funds are in debt instruments Though

6

low but steady and almost assured returns are expected over the long term

1113091 Death Benefit death benefit is sum assured with guaranteed and vested bonus

1113090 Asset Creation Helps in asset creation as they are for a long tenure

1113091 Fixed Ratios Premium to sum assured ratios is fixed for each plan and age

1113090 Withdrawals Withdrawals are generally not allowed before maturity

PRODUCTS

INSURANCE SOLUTIONS FOR INDIVIDUALS

ICICI Prudential Life Insurance offers a range of innovative customer-centric products

that meet the needs of customers at every life stage Its products can be enhanced up to 4

riders to create a customized solution for each policyholder

Savings amp Wealth Creation Solutions

1113090 Cash Plus is a transparent feature-packed savings plan that offers 3 levels of

protection as well as liquidity options

1113090 Save n Protect is a traditional endowment savings plan that offers life protection

along with adequate returns

1113091 CashBak is an anticipated endowment policy ideal for meeting milestone expenses

like a childs marriage expenses for a childs higher education or purchase of an

asset It is available for terms of 15 and 20 years

1113091 LifeTime Super amp LifeTime Plus are unit-linked plans that offer customers the

flexibility and control to customize the policy to meet the changing needs at

different life stages Each offer 4 fund options - Preserver Protector Balancer and

Maximizer

1113091 Life Link Super is a single premium unit linked insurance Plan which combines life

insurance cover with the opportunity to stay invested in the stock market

1113090 Premier Life Gold is a limited premium paying plan specially structured for long-

term wealth creation

1113090 Invest Shield Life is a unit linked plan that provides premium guarantee on the

7

invested premiums and ensures that the customer receives only the benefits of fund

appreciation without any of the risks of depreciation

1113090 Invest Shield Cash back is a unit linked plan that provides premium guarantee

on the invested premiums along with flexible liquidity options

Protection Solutions

1113090 LifeGuard is a protection plan which offers life cover at low cost It is available in

3 options - level term assurance level term assurance with return of premium amp

single premium

1113090 HomeAssure is a mortgage reducing term assurance plan designed specifically to

help customers cover their home loans in a simple and cost-effective manner

Child Plans

1113090 Education insurance under the Smart Kid brand provides guaranteed educational

benefits to a child along with life insurance cover for the parent who purchases the

policy The policy is designed to provide money at important milestones in the

childs life Smart Kid plans are also available in unit-linked form - both single

premium and regular premium

Retirement Solutions

1113090 ForeverLife is a traditional retirement product that offers guaranteed returns for the

first 4 years and then declares bonuses annually

1113090 LifeTime Super Pension is a regular premium unit linked pension plan that helps

one accumulate over the long term and offers an annuity option (guaranteed income

for life) at the time of retirement

1113090 LifeLink Super Pension is a single premium unit linked pension plan

1113090 Immediate Annuity is a single premium annuity product that guarantees income for

life at the time of retirement It offers the benefit of 5 payout options

Health Solutions

1113090 Health Assure and Health Assure Plus Health Assure is a regular premium plan

which provides long term cover against 6 critical illnesses by providing policyholder

8

with financial assistance irrespective of the actual medical expenses Health Assure

Plus offers the added advantage of an equivalent life insurance cover

1113090 Cancer Care is a regular premium plan that pays cash benefit on the diagnosis as

well as at different stages in the treatment of various cancer conditions

1113090 Diabetes Care Diabetes Care is the first ever critical illness product especially for

individuals with Type 2 diabetes It makes payments on diagnosis on any of 6

diabetes related critical illnesses and also offers a coordinated care approach to

managing the condition Diabetes Care Plus also offers life cover

1113090 Hospital Care Hospital Care is structured to ensure customers receive a pre-

determined insurance amount for each procedure or hospitalization even if they

spend less Further its long-term design of a term between 10-20 years assures

policyholders the guaranteed cushion of insurance cover even if they make a claim

during the term Available for individuals between the ages of 1-60 years this is one

of the first products that will cover people up to the age of 80 years

GROUP INSURANCE SOLUTIONS

ICICI Prudential also offers Group Insurance Solutions for companies seeking to enhance

benefits to their employees

1113090 Group Gratuity Plan ICICI Prudentials group gratuity plan helps employers fund

their statutory gratuity obligation in a scientific manner The plan can also be

customized to structure schemes that can provide benefits beyond the statutory

obligations

1113090 Group Superannuation Plan ICICI Prudential offers both defined contribution

(DC) and defined benefit (DB) superannuation schemes to optimize returns for the

members of the trust and rationalize the cost Members have the option of choosing

from various annuity options or opting for a partial commutation of the annuity at

the time of retirement

1113090 Group Immediate Annuities In addition to the annuities offered to existing

superannuation customers they offer immediate annuities to superannuation funds

not managed by them

1113090 Group Term Plan ICICI Prudentials flexible group term solution helps provide

affordable cover to members of a group The cover could be uniform or based on

designationrank or a multiple of salary The benefit under the policy is paid to the

9

beneficiary nominated by the member on hisher death

Flexible Rider Options

ICICI Prudential Life offers flexible riders which can be added to the basic policy at a

marginal cost depending on the specific needs of the customer

1113090 Accident amp disability benefit If death occurs as the result of an accident during the

term of the policy the beneficiary receives an additional amount equal to the rider sum assured

under the policy If the death occurs while traveling in an authorized

mass transport vehicle the beneficiary will be entitled to twice the sum assured as

additional benefit

1113090 Critical Illness Benefit protects the insured against financial loss in the event of 9

specified critical illnesses Benefits are payable to the insured for medical expenses

prior to death

1113090 Income Benefit This rider pays the 10 of the sum assured to the nominee every

year till maturity in the event of the death of the life assured It is available on

SmarKid and CashPlus

1113090 Waiver of Premium In case of total and permanent disability due to an accident

the future premiums continue to be paid by the company till the time of maturity

This rider is available with LifeTime Super LifeTime Super Pension and CashPlus

HISTORY OF ICICI PRUDENTIAL

As mentioned earlier ICICI Prudential Life Insurance Company is a joint venture

between ICICI Bank - one of Indias foremost financial services company - and

Prudential plc - a leading international financial services group headquartered in the

United Kingdom

HISTORY OF ICICI PRUDENTIAL

As mentioned earlier icici prudential life insurance company is a joint venture between icici bank

one of India foremost financial services company and prudential plc a leading international

financial services group headquarterd in tha united kingdom

10

ICICI Bank

ICICI Bank (1113090YSEIB1113090) is Indias second largest bank and largest private sector bank

with over 50 years presence in financial services and with assets of over Rs 344658 bn

(USD 79 billion) as on March 31 2007 The Bank offers a wide range of banking

products and financial services to corporate and retail customers through a variety of

delivery channels and through its specialized subsidiaries in the areas of investment

banking life and non-life insurance private equity and asset management ICICI Bank is

a leading player in the retail banking market and services its large customer base through

a network of over 950 branches and extension counters 3300 ATMs call centers and

internet banking to ensure that customers have access to its services at all times

Prudential Plc

Established in London in 1848 Prudential plc through its businesses in the UK and

Europe the US and Asia provides retail financial services products and services to more

than 20 million customers policyholder and unit holders and manages over pound251 billion

of funds worldwide (as of 31 December 2006) In Asia Prudential is the leading

European life insurance company with life operations in China Hong Kong India

Indonesia Japan Korea Malaysia the Philippines Singapore Taiwan Thailand and

Vietnam Prudential is the second largest retail fund manager for Asian sourced assets ex-

Japan as at June 2006 Its fund management business has expanded into a total of ten markets

China Hong Kong India Japan Korea Malaysia Singapore Taiwan Vietnam

and United Arab Emirates

ICICI Prudential has been the market leader in the private life insurance sector

contributing to 30 of the growth share followed by the SBI Life Insurance with 18

share Members like Ms Shikha Sharma CEO amp MD Ms Anita Pai EVP ndash

Customer Service amp Technology Mr Puneet Nanda CIO Mr Binayak Dutta Chief ndash

Sales amp Distribution have been with the company since its inception in 2000 and are

instrumental in developing ICIC Prudential to this level

The first policy was sold on 12th December 2000 Within 1 year ICICI Prudential

achieved 25000 policies and thereby growing at a faster rate achieved 1 million policies

by October 2004 By 2010 ICICI Prudential has a target to achieve 20 million customers

AWARDS amp RECOGNITION

AWARDS

11

1113090 Indias Most Customer Responsive Insurance Company

Avaya GlobalConnect - Economic Times

Customer Responsiveness Awards

1113090 Most Trusted Private Life Insurer

The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003

2004 and 2005

1113090 Prudence Customer Centricity Award 2004 amp 2005

Prudential Corporation Asia

1113090 Best Life Insurer 2003

Outlook Money Awards 2003 amp 2004

1113090 Superbrand 2003-04

1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising

campaign

Effies 2003

RECOGNITIONS

1113090 IMM Award for Excellence

Institute of Marketing amp Management

1113090 Organisation with Innovative HR Practices

Indira Group of Institutes

1113090 Most Trusted Private Life Insurer

The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003

2004 and 2005

1113090 Prudence Customer Centricity Award 2004 amp 2005

Prudential Corporation Asia

1113090 Best Life Insurer 2003

Outlook Money Awards 2003 amp 2004

1113090 Superbrand 2003-04

1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising

campaign

Effies 2003

12

Review of Literature

Mehr and Cammack (1976) agrees that insurance is usually thought of as a product that spreads the

risk of serious but low-probability losses among a group of individuals thus providing some

financial protection to each individual Kunreuther (1979) said that his product makes good sense

particularly when the protection is purchased against potential losses so large as to be catastrophic

such as total destruction of ones home a large accident liability judgment or death of primary

family breadwinner However it has long been recognized that this sensible product is difficult to

sellv

Kahneman amp Tversky (1984) stated indeed repeated demonstrations have shown most people lack

an adequate understanding of probability and risk concepts Dhar (1997) Greenleaf and Lehmann

(1995) Tversky and Shafir (1992) have shown that offering more options can generate decision

conflict and preference uncertainty leading to decision deferral

Kotler (1973) considers insurance to be in the category of unsought goods along with products

such as preventive dental services and burial plotsHe notes that unsought goods pose special

challenges to the marketer

Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) found that subjects were more likely

to buy insurance against small high-probability losses than insurance against large low- probability

losses Hershey and Schoemaker (1980) reported the opposite result

Kunreuther (1979) ldquoIt is not the magnitude of a potential loss that inspires people to buy insurance

voluntarily ndash it is the frequency with which a loss is likely to occurrdquo

Michael L Smith (1982) said that a typical life insurance contract provides a package of options or

rights to the policy owner that is not precisely duplicated by any other combination of commonly

available contracts Viewed from this perspective life insurance enjoys a unique position in the

field of investments and should be judged in this light The paper shows that an options viewpoint

provides a more complete explanation of policy owner behavior towards life insurance than the

conventional savings-and-protection view

13

Michael L Walden (1985) told that the options package view of the whole a

whole life policy is a package of options each of which has value and is expected to influence the

price of the policy This viewpoint implies the general hypothesis that price differences between

whole life policies can be explained by differences in policy contract provisions and differences in

selected company characteristics

OBJECTIVE

o To evaluate the factors underlying consumer perception towards investment in life insurance

policies

o To compare the differences in consumer perception of male and

female consumers

RESEARCH METHODOLOGY

The Study The study was exploratory in nature with survey method being used to complete the

study

Sampling Design

Population

Population included investors in NCR region

Sample frame

Since the data was collected through personal contacts the sample frames were the individuals who

are investing in life insurance policies

Sampling elements

Individual respondents were the sampling elements

14

Sampling Techniques

Random sampling technique was used to select the samples

Sample Size

Sample size was 150 respondents

Tools Used for Data Collection

Self designed questionnaire was used for the evaluation of factors affecting consumerrsquos perception

towards insurance Data was collected on Likertrsquos type scale where 1 stood for minimum

agreement and 7 stood for maximum agreement

Tools Used for Data Analysis

Item to total correlation was applied to check the internal consistency of the questionnaire The

measures were standardized through computation of reliability and validity

Factor analysis was applied to identify the underlying factors

Z-test was applied to find out the significant differences between male and

female investors

Results and Discussions

Consistency Measure

Firstly consistency of all the items in the questionnaire is checked through item to total correlation

Under this correlation of every item with total is measured and the computed value is compared

with standard value (ie 01590) If the computed value is found less than standard value then

whole factorstatement is dropped and will be termed as inconsistent

15

SNO ITEMS COMPUTED

CORRELATIO

N VALUE

CONSISTE

NT

ACCEPTED

DROPPED

1 Awareness about terms and conditions of

policy

0671575 Consistent Accepted

2 Provide services on time 0651847 Consistent Accepted

3 Provide satisfactory services 0573518 Consistent Accepted

4 Goodwill of the company 0607722 Consistent Accepted

5 Agent is well informed about policies 0640696 Consistent Accepted

6 Co-operative and friendly agent 0598089 Consistent Accepted

7 Agent respond promptly 0696914 Consistent Accepted

8 Proper reminder of installments by

agents

0531124 Consistent Accepted

9 Employees responsible towards

customers

0685817 Consistent Accepted

10 Benefits are met by policy 0510702 Consistent Accepted

11 Selection of highly reputed company 0634614 Consistent Accepted

12 Reputation of the insurance company 0582977 Consistent Accepted

13 Hassle free settlements 0594282 Consistent Accepted

14 Personal attention on every costumer 0640192 Consistent Accepted

15 Understand Customerrsquos financial needs 0603133 Consistent Accepted

16 Fulfill its promise towards policy 0613243 Consistent Accepted

17 Provides the claims on time 0474994 Consistent Accepted

18 Settlement of claims easy and timely 0569959 Consistent Accepted

19 Satisfy with relationship to company 0621496 Consistent Accepted

20 Company able to fulfill expectation 0594265 Consistent Accepted

21 Only company I want to associate

myself

0519161 Consistent Accepted

22 Purchase more policies from the same

company

0502876 Consistent Accepted

16

23 Suggest friends and family to purchase

policy from the same company

0540626 Consistent Accepted

24 Policy benefits benchmarks 062874 Consistent Accepted

25 Investment in life insurance is more

secure than stock market

0376874 Consistent Accepted

26 Purchase further policies from other

companies

0091102 Inonsistent Dropped

Reliability

Reliability test was carried out using SPSS software and the reliability of the items was measured

The result is as follows

Cronbachrsquos Alpha 0919

It can be seen that the reliability value is more than 07 So the questionnaire is

highly reliable

Description of factors

1 Company Loyalty

This factor includes that this is the only company the consumer wants to associate himself with in

future (0814) himself would purchase more policies from the same company (0799) suggest

friends and family to purchase policy from the same company (0790) company able to fulfill

expectation (0599) Policy benefits benchmarks (0545) The highest Eigen value lies in this factor

35213 So it is been considered as the highly contributing factor towards study Therefore it is

clear that company loyalty plays an important role in investment decisions of investors

17

2 Services Quality

This factor includes hassle free settlements (0693) employees responsible towards customers

(0631) agents respond promptly (0611) investment in life insurance is more secure than stock

market (0563) satisfy with relationship to company (0537) As we can see that the Eigen value for

factor service quality is 9753 which is also a contributing factor towards the study so it can also be considered as an the study

3 Ease of Procedures

This factor includes the company provides claims on time (0852) co- operative and friendly agent

(0662) settlement of claims easy and timely (0651) agent is well informed about policies (0486) As

we can see that the Eigen value for factor ease of procedures is 5830 which is also a contributing

factor towards the study so it can also be considered as an important factor inconsumerrsquos financial

needs (0404) As we can see that the Eigen value for factor company client relationship is 4051

which is also a contributing factor towards the study so it can also be considered as an important factor

in the study

4 Satisfaction Level

This factor includes that the suggested benefits of Insurance Policy should be met to the investors

( 0774) Company provides them satisfactory services (0631) fulfill its promise about life

insurance policy (0575) Services should be provided on time(0515) and awareness of terms and

conditions of policies As we can see that the Eigen value for factor satisfaction level is 5008

which is also a contributing factor towards the study so it can also be considered as an important

factor in the study

5 Company Image

This factor includes that the insurance company should be well known in the industry (0777)

insurance provider should have goodwill in market (0758) and company of high repute (0428)As

we can see that the Eigen value for factor company image is 4878 which is also a contributing

factor towards the study so it can also be considered as an important factor in the study

18

6 Company-Client Relationship

This factor includes that the agent remind about premium installments (0778) pay personal

attention on every consumer (0505) and understand consumerrsquos financial needs (0404) As

we can see that the Eigen value for factor company client relationship is 4051 which is also a

contributing factor towards the study so it can also be considered as an important factor in the

study

Z-Test

Z-test was applied to find out significant difference between male and female investorrsquos perception

towards investment in life insurance policies

For applying Z-test mean and standard deviation was calculated then values were put in formula to

calculate standard error

Null Hypothesis Ho It states that there is no significant difference between the perception of male

and female investors towards investment in life insurance policies

GENDER MEAN SD SAMPLE

SIZE

SQUARE

OF

SD

MALE 14104 20078 75 403146

FEMALE 14594 17701 75 313348

Z = 15877

Since the value of Z is less than the standard value 196 at 5 level of significance so the null

hypothesis is accepted Therefore there is no significant difference between the perception of male

and female investors towards investment in life insurance policies

19

CONCLUSION

In present Indian market the investment habits of Indian consumers are changing very frequently

The individuals have their own perception towards various types of investment plans The study of

this research work was focused over consumerrsquos perception on investment towards Life Insurance

Services The objectives of the study were to evaluate the factors underlying consumer perception

towards investment in life insurance policies and to compare the differences in consumer

perception of male and female consumers The tests that were used for our research activities were-

Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25

items being accepted Next was Reliability Test to check the reliability of the items The

result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis

Test and the six factors that came out were Consumer Loyalty Service Quality Ease of

Procedures Satisfaction Level Company Image and Company-Client Relationship

The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind

sets for their investment pattern in insurance policies Still some actions are needed for

developing insurance market The major factors playing the role in developing

consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality

Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship

Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in

developing the market share loyalty and further development in insurance sector

20

References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)

21

Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in

Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)

22

India Assurance Oriental Insurance United India Insurance which were headquartered in

each of the four metropolitan cities

Till end of 1999-2000 fiscal year two state-run insurance companies namely

Life Insurance Corporation (LIC) and General Insurance Corporation (GIC) were the

monopoly insurance (both life and non-life) providers in IndiaThe year 1999 saw the

entrance of private insurance companies in Indian insurance sector The Govt of India

then introduced the Insurance Regulatory and Development Authority Act (IRDA) in

1999 thereby de-regulating the insurance sector and allowing private companies into the

insurance Further foreign investment was also allowed and capped at 26 holding in

the Indian insurance companies

MAJOR PLAYERS

The private insurance joint ventures have collected the premium of Rs101909

crore with the investment of just Rs3 000 crore in three years of liberalization The

private life insurance players have been significantly improving their market share when

compared to 50 years Old Corporation (ie LIC) As per the figures compiled by IRDA

the Life Insurance Industry recorded a total premium underwritten of Rs 1070796 crore

for the period under review Of this private players contributed to Rs1 01909 crore

accounting for 10 percent Life Insurance Corporation of India (LIC) the public sector

giant continued to lead with a premium collection of Rs968887 crore translating into a

market share of 90 per cent In terms of number of policies and schemes sold private

sector accounted for only 377per cent as compared to 9623 per cent share of LIC (The

Economic Times 21 March 2004)

The ICICI Prudential topped among the private players in terms of premium

collection It recorded a market share of 25 per cent followed by Birla SunLife with 15

3

percent HDFC Standard and Max New York Life with a market share of approximately

15 per cent each

In case of private non-life insurance players which their market share raised to

1413 per cent recorded a growth of 7075 per cent on an annual basis while the market

share of public sector stood at 8587 per cent registering a marginal growth of 634 per

cent The overall market has recorded a growth of 1232 per cent by the end of January

2004 Among the private non-life insurance players ICICI Lombard topped the list with

a market share of 305 per cent in one year period and with an annual growth rate of

1316 per cent followed by Bajaj Allianz with 291 per cent market share and Tata AIG

with 227 per cent market share and with an annual growth rate of 6260 per cent

LIFE INSURERS

1113090 Life Insurance Corporation of India

1113090 SBI Life Insurance Co Ltd

1113090 Allianz Bajaj Life Insurance Co Ltd

1113090 Om Kotak Mahindra Life Insurance Co Ltd

ICICI Prudential Life Insurance Co Ltd

1113090 HDFC Standard Life Insurance Co Ltd

1113090 Birla Sunlife Insurance Co Ltd

1113090 I1113090G Vysya Life Insurance Co Ltd

1113090 Tata-AIG Life Insurance CoLtd

1113090 Metlife India Insurance Co Pvt Ltd

1113090 AMP Sanmar Assurance Co Ltd

1113090 Dabur CGU Life Insurance Co Pvt Ltd

1113090 Max 1113090ew York Life Insurance Co Ltd

4

COMPANY PROFILE

Indias Number One private life insurer ICICI Prudential Life Insurance

Company is a joint venture between ICICI Bank Ltd-one of Indias foremost financial

services company- and Prudential plc - a leading international financial services group

headquartered in the United Kingdom Total capital infusion stands at Rs 2060 billion

with ICICI Bank holding a stake of 74 and Prudential plc holding 26

Indiarsquos number One private insurerICICI Prudential Life Insurance Company is a joint venture

between icici bank ltd one of India foremost financial services company and prudential plc a

leading international financial services group headquartered in uk tatal capital infusion stands at rs

2060 billionwith icici bank holding a stake of 74 and prudentail

They began their operations in December 2000 after receiving approval from

Insurance Regulatory Development Authority (IRDA) and are headquartered in Mumbai

Today their nation-wide team comprises of over 580 offices over 234000 advisors and

22 banc assurance partners

INTRODUCTION OF ICICI PRUDENTIAL

ICICI Prudential was the first life insurer in India to receive a National Insurer

Financial Strength rating of AAA (Ind) from Fitch ratings For three years in a row

ICICI Prudential has been voted as Indias Most Trusted Private Life Insurer by The

Economic Times - AC Nielsen ORG Marg survey of Most Trusted Brands

The ICICI Prudential edge comes from the commitment to their customers in all

that they do ndash be it product development distribution the sales process or servicing

ICICI Prudential products have been developed after a clear and thorough understanding

of customer needs Having the right products is the first step but itrsquos equally important to

ensure that customers can access them easily and quickly To this end ICICI Prudential

has an advisor base across the length and breadth of the country and also partners with

leading banks corporate agents and brokers to distribute their products Robust risk

management and underwriting practices form the core of their business With clear

guidelines in place they ensure a smooth and hassle-free claims process

5

Entrusted with helping customers meet their long-term goals they adopt an

investment philosophy that aims to achieve risk adjusted returns over the long-term

Their 16000+ strong staff is given the opportunity to learn and grow everyday in a

multitude of ways This keeps them engaged and enthusiastic so that they can deliver on

the promise to cover customer at every step of life

For the past six years ICICI Prudential has retained its position as the No 1

private life insurer in the country with a wide range of flexible products that meet the

needs of the Indian customer at every step in life

PLANS

There are two main types of plans ndash ULIP and Traditional

Unit Linked Insurance Product

ULIPs have gained high acceptance due to attractive features they offer These

include

1113090 Flexibility Flexibility to choose sum assured Flexibility to choose premium

amount Option to change level of Premium Sum Assured even after the plan has

started Flexibility to change asset allocation by switching between funds

1113090 Transparency Charges in the plan and net amount invested are known to the

customer Customer has the convenience of tracking hisher investment performance

on a daily basis

1113091 Liquidity Customer has the option to withdraw money after few years ie the option

of low minimum tenure Partial or systematic withdrawals are allowed

1113090 Fund Options A choice of funds is provided to customers ranging from equity debt

cash or a combination They can choose the fund mix based on desired asset

allocation

Traditional Endowment Plans

These are the old type of plans available These plans cater to customers with a

low risk appetite Some of the common features of the traditional plans are

1113090 Steady Investment Major chunk of investible funds are in debt instruments Though

6

low but steady and almost assured returns are expected over the long term

1113091 Death Benefit death benefit is sum assured with guaranteed and vested bonus

1113090 Asset Creation Helps in asset creation as they are for a long tenure

1113091 Fixed Ratios Premium to sum assured ratios is fixed for each plan and age

1113090 Withdrawals Withdrawals are generally not allowed before maturity

PRODUCTS

INSURANCE SOLUTIONS FOR INDIVIDUALS

ICICI Prudential Life Insurance offers a range of innovative customer-centric products

that meet the needs of customers at every life stage Its products can be enhanced up to 4

riders to create a customized solution for each policyholder

Savings amp Wealth Creation Solutions

1113090 Cash Plus is a transparent feature-packed savings plan that offers 3 levels of

protection as well as liquidity options

1113090 Save n Protect is a traditional endowment savings plan that offers life protection

along with adequate returns

1113091 CashBak is an anticipated endowment policy ideal for meeting milestone expenses

like a childs marriage expenses for a childs higher education or purchase of an

asset It is available for terms of 15 and 20 years

1113091 LifeTime Super amp LifeTime Plus are unit-linked plans that offer customers the

flexibility and control to customize the policy to meet the changing needs at

different life stages Each offer 4 fund options - Preserver Protector Balancer and

Maximizer

1113091 Life Link Super is a single premium unit linked insurance Plan which combines life

insurance cover with the opportunity to stay invested in the stock market

1113090 Premier Life Gold is a limited premium paying plan specially structured for long-

term wealth creation

1113090 Invest Shield Life is a unit linked plan that provides premium guarantee on the

7

invested premiums and ensures that the customer receives only the benefits of fund

appreciation without any of the risks of depreciation

1113090 Invest Shield Cash back is a unit linked plan that provides premium guarantee

on the invested premiums along with flexible liquidity options

Protection Solutions

1113090 LifeGuard is a protection plan which offers life cover at low cost It is available in

3 options - level term assurance level term assurance with return of premium amp

single premium

1113090 HomeAssure is a mortgage reducing term assurance plan designed specifically to

help customers cover their home loans in a simple and cost-effective manner

Child Plans

1113090 Education insurance under the Smart Kid brand provides guaranteed educational

benefits to a child along with life insurance cover for the parent who purchases the

policy The policy is designed to provide money at important milestones in the

childs life Smart Kid plans are also available in unit-linked form - both single

premium and regular premium

Retirement Solutions

1113090 ForeverLife is a traditional retirement product that offers guaranteed returns for the

first 4 years and then declares bonuses annually

1113090 LifeTime Super Pension is a regular premium unit linked pension plan that helps

one accumulate over the long term and offers an annuity option (guaranteed income

for life) at the time of retirement

1113090 LifeLink Super Pension is a single premium unit linked pension plan

1113090 Immediate Annuity is a single premium annuity product that guarantees income for

life at the time of retirement It offers the benefit of 5 payout options

Health Solutions

1113090 Health Assure and Health Assure Plus Health Assure is a regular premium plan

which provides long term cover against 6 critical illnesses by providing policyholder

8

with financial assistance irrespective of the actual medical expenses Health Assure

Plus offers the added advantage of an equivalent life insurance cover

1113090 Cancer Care is a regular premium plan that pays cash benefit on the diagnosis as

well as at different stages in the treatment of various cancer conditions

1113090 Diabetes Care Diabetes Care is the first ever critical illness product especially for

individuals with Type 2 diabetes It makes payments on diagnosis on any of 6

diabetes related critical illnesses and also offers a coordinated care approach to

managing the condition Diabetes Care Plus also offers life cover

1113090 Hospital Care Hospital Care is structured to ensure customers receive a pre-

determined insurance amount for each procedure or hospitalization even if they

spend less Further its long-term design of a term between 10-20 years assures

policyholders the guaranteed cushion of insurance cover even if they make a claim

during the term Available for individuals between the ages of 1-60 years this is one

of the first products that will cover people up to the age of 80 years

GROUP INSURANCE SOLUTIONS

ICICI Prudential also offers Group Insurance Solutions for companies seeking to enhance

benefits to their employees

1113090 Group Gratuity Plan ICICI Prudentials group gratuity plan helps employers fund

their statutory gratuity obligation in a scientific manner The plan can also be

customized to structure schemes that can provide benefits beyond the statutory

obligations

1113090 Group Superannuation Plan ICICI Prudential offers both defined contribution

(DC) and defined benefit (DB) superannuation schemes to optimize returns for the

members of the trust and rationalize the cost Members have the option of choosing

from various annuity options or opting for a partial commutation of the annuity at

the time of retirement

1113090 Group Immediate Annuities In addition to the annuities offered to existing

superannuation customers they offer immediate annuities to superannuation funds

not managed by them

1113090 Group Term Plan ICICI Prudentials flexible group term solution helps provide

affordable cover to members of a group The cover could be uniform or based on

designationrank or a multiple of salary The benefit under the policy is paid to the

9

beneficiary nominated by the member on hisher death

Flexible Rider Options

ICICI Prudential Life offers flexible riders which can be added to the basic policy at a

marginal cost depending on the specific needs of the customer

1113090 Accident amp disability benefit If death occurs as the result of an accident during the

term of the policy the beneficiary receives an additional amount equal to the rider sum assured

under the policy If the death occurs while traveling in an authorized

mass transport vehicle the beneficiary will be entitled to twice the sum assured as

additional benefit

1113090 Critical Illness Benefit protects the insured against financial loss in the event of 9

specified critical illnesses Benefits are payable to the insured for medical expenses

prior to death

1113090 Income Benefit This rider pays the 10 of the sum assured to the nominee every

year till maturity in the event of the death of the life assured It is available on

SmarKid and CashPlus

1113090 Waiver of Premium In case of total and permanent disability due to an accident

the future premiums continue to be paid by the company till the time of maturity

This rider is available with LifeTime Super LifeTime Super Pension and CashPlus

HISTORY OF ICICI PRUDENTIAL

As mentioned earlier ICICI Prudential Life Insurance Company is a joint venture

between ICICI Bank - one of Indias foremost financial services company - and

Prudential plc - a leading international financial services group headquartered in the

United Kingdom

HISTORY OF ICICI PRUDENTIAL

As mentioned earlier icici prudential life insurance company is a joint venture between icici bank

one of India foremost financial services company and prudential plc a leading international

financial services group headquarterd in tha united kingdom

10

ICICI Bank

ICICI Bank (1113090YSEIB1113090) is Indias second largest bank and largest private sector bank

with over 50 years presence in financial services and with assets of over Rs 344658 bn

(USD 79 billion) as on March 31 2007 The Bank offers a wide range of banking

products and financial services to corporate and retail customers through a variety of

delivery channels and through its specialized subsidiaries in the areas of investment

banking life and non-life insurance private equity and asset management ICICI Bank is

a leading player in the retail banking market and services its large customer base through

a network of over 950 branches and extension counters 3300 ATMs call centers and

internet banking to ensure that customers have access to its services at all times

Prudential Plc

Established in London in 1848 Prudential plc through its businesses in the UK and

Europe the US and Asia provides retail financial services products and services to more

than 20 million customers policyholder and unit holders and manages over pound251 billion

of funds worldwide (as of 31 December 2006) In Asia Prudential is the leading

European life insurance company with life operations in China Hong Kong India

Indonesia Japan Korea Malaysia the Philippines Singapore Taiwan Thailand and

Vietnam Prudential is the second largest retail fund manager for Asian sourced assets ex-

Japan as at June 2006 Its fund management business has expanded into a total of ten markets

China Hong Kong India Japan Korea Malaysia Singapore Taiwan Vietnam

and United Arab Emirates

ICICI Prudential has been the market leader in the private life insurance sector

contributing to 30 of the growth share followed by the SBI Life Insurance with 18

share Members like Ms Shikha Sharma CEO amp MD Ms Anita Pai EVP ndash

Customer Service amp Technology Mr Puneet Nanda CIO Mr Binayak Dutta Chief ndash

Sales amp Distribution have been with the company since its inception in 2000 and are

instrumental in developing ICIC Prudential to this level

The first policy was sold on 12th December 2000 Within 1 year ICICI Prudential

achieved 25000 policies and thereby growing at a faster rate achieved 1 million policies

by October 2004 By 2010 ICICI Prudential has a target to achieve 20 million customers

AWARDS amp RECOGNITION

AWARDS

11

1113090 Indias Most Customer Responsive Insurance Company

Avaya GlobalConnect - Economic Times

Customer Responsiveness Awards

1113090 Most Trusted Private Life Insurer

The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003

2004 and 2005

1113090 Prudence Customer Centricity Award 2004 amp 2005

Prudential Corporation Asia

1113090 Best Life Insurer 2003

Outlook Money Awards 2003 amp 2004

1113090 Superbrand 2003-04

1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising

campaign

Effies 2003

RECOGNITIONS

1113090 IMM Award for Excellence

Institute of Marketing amp Management

1113090 Organisation with Innovative HR Practices

Indira Group of Institutes

1113090 Most Trusted Private Life Insurer

The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003

2004 and 2005

1113090 Prudence Customer Centricity Award 2004 amp 2005

Prudential Corporation Asia

1113090 Best Life Insurer 2003

Outlook Money Awards 2003 amp 2004

1113090 Superbrand 2003-04

1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising

campaign

Effies 2003

12

Review of Literature

Mehr and Cammack (1976) agrees that insurance is usually thought of as a product that spreads the

risk of serious but low-probability losses among a group of individuals thus providing some

financial protection to each individual Kunreuther (1979) said that his product makes good sense

particularly when the protection is purchased against potential losses so large as to be catastrophic

such as total destruction of ones home a large accident liability judgment or death of primary

family breadwinner However it has long been recognized that this sensible product is difficult to

sellv

Kahneman amp Tversky (1984) stated indeed repeated demonstrations have shown most people lack

an adequate understanding of probability and risk concepts Dhar (1997) Greenleaf and Lehmann

(1995) Tversky and Shafir (1992) have shown that offering more options can generate decision

conflict and preference uncertainty leading to decision deferral

Kotler (1973) considers insurance to be in the category of unsought goods along with products

such as preventive dental services and burial plotsHe notes that unsought goods pose special

challenges to the marketer

Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) found that subjects were more likely

to buy insurance against small high-probability losses than insurance against large low- probability

losses Hershey and Schoemaker (1980) reported the opposite result

Kunreuther (1979) ldquoIt is not the magnitude of a potential loss that inspires people to buy insurance

voluntarily ndash it is the frequency with which a loss is likely to occurrdquo

Michael L Smith (1982) said that a typical life insurance contract provides a package of options or

rights to the policy owner that is not precisely duplicated by any other combination of commonly

available contracts Viewed from this perspective life insurance enjoys a unique position in the

field of investments and should be judged in this light The paper shows that an options viewpoint

provides a more complete explanation of policy owner behavior towards life insurance than the

conventional savings-and-protection view

13

Michael L Walden (1985) told that the options package view of the whole a

whole life policy is a package of options each of which has value and is expected to influence the

price of the policy This viewpoint implies the general hypothesis that price differences between

whole life policies can be explained by differences in policy contract provisions and differences in

selected company characteristics

OBJECTIVE

o To evaluate the factors underlying consumer perception towards investment in life insurance

policies

o To compare the differences in consumer perception of male and

female consumers

RESEARCH METHODOLOGY

The Study The study was exploratory in nature with survey method being used to complete the

study

Sampling Design

Population

Population included investors in NCR region

Sample frame

Since the data was collected through personal contacts the sample frames were the individuals who

are investing in life insurance policies

Sampling elements

Individual respondents were the sampling elements

14

Sampling Techniques

Random sampling technique was used to select the samples

Sample Size

Sample size was 150 respondents

Tools Used for Data Collection

Self designed questionnaire was used for the evaluation of factors affecting consumerrsquos perception

towards insurance Data was collected on Likertrsquos type scale where 1 stood for minimum

agreement and 7 stood for maximum agreement

Tools Used for Data Analysis

Item to total correlation was applied to check the internal consistency of the questionnaire The

measures were standardized through computation of reliability and validity

Factor analysis was applied to identify the underlying factors

Z-test was applied to find out the significant differences between male and

female investors

Results and Discussions

Consistency Measure

Firstly consistency of all the items in the questionnaire is checked through item to total correlation

Under this correlation of every item with total is measured and the computed value is compared

with standard value (ie 01590) If the computed value is found less than standard value then

whole factorstatement is dropped and will be termed as inconsistent

15

SNO ITEMS COMPUTED

CORRELATIO

N VALUE

CONSISTE

NT

ACCEPTED

DROPPED

1 Awareness about terms and conditions of

policy

0671575 Consistent Accepted

2 Provide services on time 0651847 Consistent Accepted

3 Provide satisfactory services 0573518 Consistent Accepted

4 Goodwill of the company 0607722 Consistent Accepted

5 Agent is well informed about policies 0640696 Consistent Accepted

6 Co-operative and friendly agent 0598089 Consistent Accepted

7 Agent respond promptly 0696914 Consistent Accepted

8 Proper reminder of installments by

agents

0531124 Consistent Accepted

9 Employees responsible towards

customers

0685817 Consistent Accepted

10 Benefits are met by policy 0510702 Consistent Accepted

11 Selection of highly reputed company 0634614 Consistent Accepted

12 Reputation of the insurance company 0582977 Consistent Accepted

13 Hassle free settlements 0594282 Consistent Accepted

14 Personal attention on every costumer 0640192 Consistent Accepted

15 Understand Customerrsquos financial needs 0603133 Consistent Accepted

16 Fulfill its promise towards policy 0613243 Consistent Accepted

17 Provides the claims on time 0474994 Consistent Accepted

18 Settlement of claims easy and timely 0569959 Consistent Accepted

19 Satisfy with relationship to company 0621496 Consistent Accepted

20 Company able to fulfill expectation 0594265 Consistent Accepted

21 Only company I want to associate

myself

0519161 Consistent Accepted

22 Purchase more policies from the same

company

0502876 Consistent Accepted

16

23 Suggest friends and family to purchase

policy from the same company

0540626 Consistent Accepted

24 Policy benefits benchmarks 062874 Consistent Accepted

25 Investment in life insurance is more

secure than stock market

0376874 Consistent Accepted

26 Purchase further policies from other

companies

0091102 Inonsistent Dropped

Reliability

Reliability test was carried out using SPSS software and the reliability of the items was measured

The result is as follows

Cronbachrsquos Alpha 0919

It can be seen that the reliability value is more than 07 So the questionnaire is

highly reliable

Description of factors

1 Company Loyalty

This factor includes that this is the only company the consumer wants to associate himself with in

future (0814) himself would purchase more policies from the same company (0799) suggest

friends and family to purchase policy from the same company (0790) company able to fulfill

expectation (0599) Policy benefits benchmarks (0545) The highest Eigen value lies in this factor

35213 So it is been considered as the highly contributing factor towards study Therefore it is

clear that company loyalty plays an important role in investment decisions of investors

17

2 Services Quality

This factor includes hassle free settlements (0693) employees responsible towards customers

(0631) agents respond promptly (0611) investment in life insurance is more secure than stock

market (0563) satisfy with relationship to company (0537) As we can see that the Eigen value for

factor service quality is 9753 which is also a contributing factor towards the study so it can also be considered as an the study

3 Ease of Procedures

This factor includes the company provides claims on time (0852) co- operative and friendly agent

(0662) settlement of claims easy and timely (0651) agent is well informed about policies (0486) As

we can see that the Eigen value for factor ease of procedures is 5830 which is also a contributing

factor towards the study so it can also be considered as an important factor inconsumerrsquos financial

needs (0404) As we can see that the Eigen value for factor company client relationship is 4051

which is also a contributing factor towards the study so it can also be considered as an important factor

in the study

4 Satisfaction Level

This factor includes that the suggested benefits of Insurance Policy should be met to the investors

( 0774) Company provides them satisfactory services (0631) fulfill its promise about life

insurance policy (0575) Services should be provided on time(0515) and awareness of terms and

conditions of policies As we can see that the Eigen value for factor satisfaction level is 5008

which is also a contributing factor towards the study so it can also be considered as an important

factor in the study

5 Company Image

This factor includes that the insurance company should be well known in the industry (0777)

insurance provider should have goodwill in market (0758) and company of high repute (0428)As

we can see that the Eigen value for factor company image is 4878 which is also a contributing

factor towards the study so it can also be considered as an important factor in the study

18

6 Company-Client Relationship

This factor includes that the agent remind about premium installments (0778) pay personal

attention on every consumer (0505) and understand consumerrsquos financial needs (0404) As

we can see that the Eigen value for factor company client relationship is 4051 which is also a

contributing factor towards the study so it can also be considered as an important factor in the

study

Z-Test

Z-test was applied to find out significant difference between male and female investorrsquos perception

towards investment in life insurance policies

For applying Z-test mean and standard deviation was calculated then values were put in formula to

calculate standard error

Null Hypothesis Ho It states that there is no significant difference between the perception of male

and female investors towards investment in life insurance policies

GENDER MEAN SD SAMPLE

SIZE

SQUARE

OF

SD

MALE 14104 20078 75 403146

FEMALE 14594 17701 75 313348

Z = 15877

Since the value of Z is less than the standard value 196 at 5 level of significance so the null

hypothesis is accepted Therefore there is no significant difference between the perception of male

and female investors towards investment in life insurance policies

19

CONCLUSION

In present Indian market the investment habits of Indian consumers are changing very frequently

The individuals have their own perception towards various types of investment plans The study of

this research work was focused over consumerrsquos perception on investment towards Life Insurance

Services The objectives of the study were to evaluate the factors underlying consumer perception

towards investment in life insurance policies and to compare the differences in consumer

perception of male and female consumers The tests that were used for our research activities were-

Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25

items being accepted Next was Reliability Test to check the reliability of the items The

result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis

Test and the six factors that came out were Consumer Loyalty Service Quality Ease of

Procedures Satisfaction Level Company Image and Company-Client Relationship

The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind

sets for their investment pattern in insurance policies Still some actions are needed for

developing insurance market The major factors playing the role in developing

consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality

Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship

Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in

developing the market share loyalty and further development in insurance sector

20

References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)

21

Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in

Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)

22

percent HDFC Standard and Max New York Life with a market share of approximately

15 per cent each

In case of private non-life insurance players which their market share raised to

1413 per cent recorded a growth of 7075 per cent on an annual basis while the market

share of public sector stood at 8587 per cent registering a marginal growth of 634 per

cent The overall market has recorded a growth of 1232 per cent by the end of January

2004 Among the private non-life insurance players ICICI Lombard topped the list with

a market share of 305 per cent in one year period and with an annual growth rate of

1316 per cent followed by Bajaj Allianz with 291 per cent market share and Tata AIG

with 227 per cent market share and with an annual growth rate of 6260 per cent

LIFE INSURERS

1113090 Life Insurance Corporation of India

1113090 SBI Life Insurance Co Ltd

1113090 Allianz Bajaj Life Insurance Co Ltd

1113090 Om Kotak Mahindra Life Insurance Co Ltd

ICICI Prudential Life Insurance Co Ltd

1113090 HDFC Standard Life Insurance Co Ltd

1113090 Birla Sunlife Insurance Co Ltd

1113090 I1113090G Vysya Life Insurance Co Ltd

1113090 Tata-AIG Life Insurance CoLtd

1113090 Metlife India Insurance Co Pvt Ltd

1113090 AMP Sanmar Assurance Co Ltd

1113090 Dabur CGU Life Insurance Co Pvt Ltd

1113090 Max 1113090ew York Life Insurance Co Ltd

4

COMPANY PROFILE

Indias Number One private life insurer ICICI Prudential Life Insurance

Company is a joint venture between ICICI Bank Ltd-one of Indias foremost financial

services company- and Prudential plc - a leading international financial services group

headquartered in the United Kingdom Total capital infusion stands at Rs 2060 billion

with ICICI Bank holding a stake of 74 and Prudential plc holding 26

Indiarsquos number One private insurerICICI Prudential Life Insurance Company is a joint venture

between icici bank ltd one of India foremost financial services company and prudential plc a

leading international financial services group headquartered in uk tatal capital infusion stands at rs

2060 billionwith icici bank holding a stake of 74 and prudentail

They began their operations in December 2000 after receiving approval from

Insurance Regulatory Development Authority (IRDA) and are headquartered in Mumbai

Today their nation-wide team comprises of over 580 offices over 234000 advisors and

22 banc assurance partners

INTRODUCTION OF ICICI PRUDENTIAL

ICICI Prudential was the first life insurer in India to receive a National Insurer

Financial Strength rating of AAA (Ind) from Fitch ratings For three years in a row

ICICI Prudential has been voted as Indias Most Trusted Private Life Insurer by The

Economic Times - AC Nielsen ORG Marg survey of Most Trusted Brands

The ICICI Prudential edge comes from the commitment to their customers in all

that they do ndash be it product development distribution the sales process or servicing

ICICI Prudential products have been developed after a clear and thorough understanding

of customer needs Having the right products is the first step but itrsquos equally important to

ensure that customers can access them easily and quickly To this end ICICI Prudential

has an advisor base across the length and breadth of the country and also partners with

leading banks corporate agents and brokers to distribute their products Robust risk

management and underwriting practices form the core of their business With clear

guidelines in place they ensure a smooth and hassle-free claims process

5

Entrusted with helping customers meet their long-term goals they adopt an

investment philosophy that aims to achieve risk adjusted returns over the long-term

Their 16000+ strong staff is given the opportunity to learn and grow everyday in a

multitude of ways This keeps them engaged and enthusiastic so that they can deliver on

the promise to cover customer at every step of life

For the past six years ICICI Prudential has retained its position as the No 1

private life insurer in the country with a wide range of flexible products that meet the

needs of the Indian customer at every step in life

PLANS

There are two main types of plans ndash ULIP and Traditional

Unit Linked Insurance Product

ULIPs have gained high acceptance due to attractive features they offer These

include

1113090 Flexibility Flexibility to choose sum assured Flexibility to choose premium

amount Option to change level of Premium Sum Assured even after the plan has

started Flexibility to change asset allocation by switching between funds

1113090 Transparency Charges in the plan and net amount invested are known to the

customer Customer has the convenience of tracking hisher investment performance

on a daily basis

1113091 Liquidity Customer has the option to withdraw money after few years ie the option

of low minimum tenure Partial or systematic withdrawals are allowed

1113090 Fund Options A choice of funds is provided to customers ranging from equity debt

cash or a combination They can choose the fund mix based on desired asset

allocation

Traditional Endowment Plans

These are the old type of plans available These plans cater to customers with a

low risk appetite Some of the common features of the traditional plans are

1113090 Steady Investment Major chunk of investible funds are in debt instruments Though

6

low but steady and almost assured returns are expected over the long term

1113091 Death Benefit death benefit is sum assured with guaranteed and vested bonus

1113090 Asset Creation Helps in asset creation as they are for a long tenure

1113091 Fixed Ratios Premium to sum assured ratios is fixed for each plan and age

1113090 Withdrawals Withdrawals are generally not allowed before maturity

PRODUCTS

INSURANCE SOLUTIONS FOR INDIVIDUALS

ICICI Prudential Life Insurance offers a range of innovative customer-centric products

that meet the needs of customers at every life stage Its products can be enhanced up to 4

riders to create a customized solution for each policyholder

Savings amp Wealth Creation Solutions

1113090 Cash Plus is a transparent feature-packed savings plan that offers 3 levels of

protection as well as liquidity options

1113090 Save n Protect is a traditional endowment savings plan that offers life protection

along with adequate returns

1113091 CashBak is an anticipated endowment policy ideal for meeting milestone expenses

like a childs marriage expenses for a childs higher education or purchase of an

asset It is available for terms of 15 and 20 years

1113091 LifeTime Super amp LifeTime Plus are unit-linked plans that offer customers the

flexibility and control to customize the policy to meet the changing needs at

different life stages Each offer 4 fund options - Preserver Protector Balancer and

Maximizer

1113091 Life Link Super is a single premium unit linked insurance Plan which combines life

insurance cover with the opportunity to stay invested in the stock market

1113090 Premier Life Gold is a limited premium paying plan specially structured for long-

term wealth creation

1113090 Invest Shield Life is a unit linked plan that provides premium guarantee on the

7

invested premiums and ensures that the customer receives only the benefits of fund

appreciation without any of the risks of depreciation

1113090 Invest Shield Cash back is a unit linked plan that provides premium guarantee

on the invested premiums along with flexible liquidity options

Protection Solutions

1113090 LifeGuard is a protection plan which offers life cover at low cost It is available in

3 options - level term assurance level term assurance with return of premium amp

single premium

1113090 HomeAssure is a mortgage reducing term assurance plan designed specifically to

help customers cover their home loans in a simple and cost-effective manner

Child Plans

1113090 Education insurance under the Smart Kid brand provides guaranteed educational

benefits to a child along with life insurance cover for the parent who purchases the

policy The policy is designed to provide money at important milestones in the

childs life Smart Kid plans are also available in unit-linked form - both single

premium and regular premium

Retirement Solutions

1113090 ForeverLife is a traditional retirement product that offers guaranteed returns for the

first 4 years and then declares bonuses annually

1113090 LifeTime Super Pension is a regular premium unit linked pension plan that helps

one accumulate over the long term and offers an annuity option (guaranteed income

for life) at the time of retirement

1113090 LifeLink Super Pension is a single premium unit linked pension plan

1113090 Immediate Annuity is a single premium annuity product that guarantees income for

life at the time of retirement It offers the benefit of 5 payout options

Health Solutions

1113090 Health Assure and Health Assure Plus Health Assure is a regular premium plan

which provides long term cover against 6 critical illnesses by providing policyholder

8

with financial assistance irrespective of the actual medical expenses Health Assure

Plus offers the added advantage of an equivalent life insurance cover

1113090 Cancer Care is a regular premium plan that pays cash benefit on the diagnosis as

well as at different stages in the treatment of various cancer conditions

1113090 Diabetes Care Diabetes Care is the first ever critical illness product especially for

individuals with Type 2 diabetes It makes payments on diagnosis on any of 6

diabetes related critical illnesses and also offers a coordinated care approach to

managing the condition Diabetes Care Plus also offers life cover

1113090 Hospital Care Hospital Care is structured to ensure customers receive a pre-

determined insurance amount for each procedure or hospitalization even if they

spend less Further its long-term design of a term between 10-20 years assures

policyholders the guaranteed cushion of insurance cover even if they make a claim

during the term Available for individuals between the ages of 1-60 years this is one

of the first products that will cover people up to the age of 80 years

GROUP INSURANCE SOLUTIONS

ICICI Prudential also offers Group Insurance Solutions for companies seeking to enhance

benefits to their employees

1113090 Group Gratuity Plan ICICI Prudentials group gratuity plan helps employers fund

their statutory gratuity obligation in a scientific manner The plan can also be

customized to structure schemes that can provide benefits beyond the statutory

obligations

1113090 Group Superannuation Plan ICICI Prudential offers both defined contribution

(DC) and defined benefit (DB) superannuation schemes to optimize returns for the

members of the trust and rationalize the cost Members have the option of choosing

from various annuity options or opting for a partial commutation of the annuity at

the time of retirement

1113090 Group Immediate Annuities In addition to the annuities offered to existing

superannuation customers they offer immediate annuities to superannuation funds

not managed by them

1113090 Group Term Plan ICICI Prudentials flexible group term solution helps provide

affordable cover to members of a group The cover could be uniform or based on

designationrank or a multiple of salary The benefit under the policy is paid to the

9

beneficiary nominated by the member on hisher death

Flexible Rider Options

ICICI Prudential Life offers flexible riders which can be added to the basic policy at a

marginal cost depending on the specific needs of the customer

1113090 Accident amp disability benefit If death occurs as the result of an accident during the

term of the policy the beneficiary receives an additional amount equal to the rider sum assured

under the policy If the death occurs while traveling in an authorized

mass transport vehicle the beneficiary will be entitled to twice the sum assured as

additional benefit

1113090 Critical Illness Benefit protects the insured against financial loss in the event of 9

specified critical illnesses Benefits are payable to the insured for medical expenses

prior to death

1113090 Income Benefit This rider pays the 10 of the sum assured to the nominee every

year till maturity in the event of the death of the life assured It is available on

SmarKid and CashPlus

1113090 Waiver of Premium In case of total and permanent disability due to an accident

the future premiums continue to be paid by the company till the time of maturity

This rider is available with LifeTime Super LifeTime Super Pension and CashPlus

HISTORY OF ICICI PRUDENTIAL

As mentioned earlier ICICI Prudential Life Insurance Company is a joint venture

between ICICI Bank - one of Indias foremost financial services company - and

Prudential plc - a leading international financial services group headquartered in the

United Kingdom

HISTORY OF ICICI PRUDENTIAL

As mentioned earlier icici prudential life insurance company is a joint venture between icici bank

one of India foremost financial services company and prudential plc a leading international

financial services group headquarterd in tha united kingdom

10

ICICI Bank

ICICI Bank (1113090YSEIB1113090) is Indias second largest bank and largest private sector bank

with over 50 years presence in financial services and with assets of over Rs 344658 bn

(USD 79 billion) as on March 31 2007 The Bank offers a wide range of banking

products and financial services to corporate and retail customers through a variety of

delivery channels and through its specialized subsidiaries in the areas of investment

banking life and non-life insurance private equity and asset management ICICI Bank is

a leading player in the retail banking market and services its large customer base through

a network of over 950 branches and extension counters 3300 ATMs call centers and

internet banking to ensure that customers have access to its services at all times

Prudential Plc

Established in London in 1848 Prudential plc through its businesses in the UK and

Europe the US and Asia provides retail financial services products and services to more

than 20 million customers policyholder and unit holders and manages over pound251 billion

of funds worldwide (as of 31 December 2006) In Asia Prudential is the leading

European life insurance company with life operations in China Hong Kong India

Indonesia Japan Korea Malaysia the Philippines Singapore Taiwan Thailand and

Vietnam Prudential is the second largest retail fund manager for Asian sourced assets ex-

Japan as at June 2006 Its fund management business has expanded into a total of ten markets

China Hong Kong India Japan Korea Malaysia Singapore Taiwan Vietnam

and United Arab Emirates

ICICI Prudential has been the market leader in the private life insurance sector

contributing to 30 of the growth share followed by the SBI Life Insurance with 18

share Members like Ms Shikha Sharma CEO amp MD Ms Anita Pai EVP ndash

Customer Service amp Technology Mr Puneet Nanda CIO Mr Binayak Dutta Chief ndash

Sales amp Distribution have been with the company since its inception in 2000 and are

instrumental in developing ICIC Prudential to this level

The first policy was sold on 12th December 2000 Within 1 year ICICI Prudential

achieved 25000 policies and thereby growing at a faster rate achieved 1 million policies

by October 2004 By 2010 ICICI Prudential has a target to achieve 20 million customers

AWARDS amp RECOGNITION

AWARDS

11

1113090 Indias Most Customer Responsive Insurance Company

Avaya GlobalConnect - Economic Times

Customer Responsiveness Awards

1113090 Most Trusted Private Life Insurer

The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003

2004 and 2005

1113090 Prudence Customer Centricity Award 2004 amp 2005

Prudential Corporation Asia

1113090 Best Life Insurer 2003

Outlook Money Awards 2003 amp 2004

1113090 Superbrand 2003-04

1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising

campaign

Effies 2003

RECOGNITIONS

1113090 IMM Award for Excellence

Institute of Marketing amp Management

1113090 Organisation with Innovative HR Practices

Indira Group of Institutes

1113090 Most Trusted Private Life Insurer

The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003

2004 and 2005

1113090 Prudence Customer Centricity Award 2004 amp 2005

Prudential Corporation Asia

1113090 Best Life Insurer 2003

Outlook Money Awards 2003 amp 2004

1113090 Superbrand 2003-04

1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising

campaign

Effies 2003

12

Review of Literature

Mehr and Cammack (1976) agrees that insurance is usually thought of as a product that spreads the

risk of serious but low-probability losses among a group of individuals thus providing some

financial protection to each individual Kunreuther (1979) said that his product makes good sense

particularly when the protection is purchased against potential losses so large as to be catastrophic

such as total destruction of ones home a large accident liability judgment or death of primary

family breadwinner However it has long been recognized that this sensible product is difficult to

sellv

Kahneman amp Tversky (1984) stated indeed repeated demonstrations have shown most people lack

an adequate understanding of probability and risk concepts Dhar (1997) Greenleaf and Lehmann

(1995) Tversky and Shafir (1992) have shown that offering more options can generate decision

conflict and preference uncertainty leading to decision deferral

Kotler (1973) considers insurance to be in the category of unsought goods along with products

such as preventive dental services and burial plotsHe notes that unsought goods pose special

challenges to the marketer

Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) found that subjects were more likely

to buy insurance against small high-probability losses than insurance against large low- probability

losses Hershey and Schoemaker (1980) reported the opposite result

Kunreuther (1979) ldquoIt is not the magnitude of a potential loss that inspires people to buy insurance

voluntarily ndash it is the frequency with which a loss is likely to occurrdquo

Michael L Smith (1982) said that a typical life insurance contract provides a package of options or

rights to the policy owner that is not precisely duplicated by any other combination of commonly

available contracts Viewed from this perspective life insurance enjoys a unique position in the

field of investments and should be judged in this light The paper shows that an options viewpoint

provides a more complete explanation of policy owner behavior towards life insurance than the

conventional savings-and-protection view

13

Michael L Walden (1985) told that the options package view of the whole a

whole life policy is a package of options each of which has value and is expected to influence the

price of the policy This viewpoint implies the general hypothesis that price differences between

whole life policies can be explained by differences in policy contract provisions and differences in

selected company characteristics

OBJECTIVE

o To evaluate the factors underlying consumer perception towards investment in life insurance

policies

o To compare the differences in consumer perception of male and

female consumers

RESEARCH METHODOLOGY

The Study The study was exploratory in nature with survey method being used to complete the

study

Sampling Design

Population

Population included investors in NCR region

Sample frame

Since the data was collected through personal contacts the sample frames were the individuals who

are investing in life insurance policies

Sampling elements

Individual respondents were the sampling elements

14

Sampling Techniques

Random sampling technique was used to select the samples

Sample Size

Sample size was 150 respondents

Tools Used for Data Collection

Self designed questionnaire was used for the evaluation of factors affecting consumerrsquos perception

towards insurance Data was collected on Likertrsquos type scale where 1 stood for minimum

agreement and 7 stood for maximum agreement

Tools Used for Data Analysis

Item to total correlation was applied to check the internal consistency of the questionnaire The

measures were standardized through computation of reliability and validity

Factor analysis was applied to identify the underlying factors

Z-test was applied to find out the significant differences between male and

female investors

Results and Discussions

Consistency Measure

Firstly consistency of all the items in the questionnaire is checked through item to total correlation

Under this correlation of every item with total is measured and the computed value is compared

with standard value (ie 01590) If the computed value is found less than standard value then

whole factorstatement is dropped and will be termed as inconsistent

15

SNO ITEMS COMPUTED

CORRELATIO

N VALUE

CONSISTE

NT

ACCEPTED

DROPPED

1 Awareness about terms and conditions of

policy

0671575 Consistent Accepted

2 Provide services on time 0651847 Consistent Accepted

3 Provide satisfactory services 0573518 Consistent Accepted

4 Goodwill of the company 0607722 Consistent Accepted

5 Agent is well informed about policies 0640696 Consistent Accepted

6 Co-operative and friendly agent 0598089 Consistent Accepted

7 Agent respond promptly 0696914 Consistent Accepted

8 Proper reminder of installments by

agents

0531124 Consistent Accepted

9 Employees responsible towards

customers

0685817 Consistent Accepted

10 Benefits are met by policy 0510702 Consistent Accepted

11 Selection of highly reputed company 0634614 Consistent Accepted

12 Reputation of the insurance company 0582977 Consistent Accepted

13 Hassle free settlements 0594282 Consistent Accepted

14 Personal attention on every costumer 0640192 Consistent Accepted

15 Understand Customerrsquos financial needs 0603133 Consistent Accepted

16 Fulfill its promise towards policy 0613243 Consistent Accepted

17 Provides the claims on time 0474994 Consistent Accepted

18 Settlement of claims easy and timely 0569959 Consistent Accepted

19 Satisfy with relationship to company 0621496 Consistent Accepted

20 Company able to fulfill expectation 0594265 Consistent Accepted

21 Only company I want to associate

myself

0519161 Consistent Accepted

22 Purchase more policies from the same

company

0502876 Consistent Accepted

16

23 Suggest friends and family to purchase

policy from the same company

0540626 Consistent Accepted

24 Policy benefits benchmarks 062874 Consistent Accepted

25 Investment in life insurance is more

secure than stock market

0376874 Consistent Accepted

26 Purchase further policies from other

companies

0091102 Inonsistent Dropped

Reliability

Reliability test was carried out using SPSS software and the reliability of the items was measured

The result is as follows

Cronbachrsquos Alpha 0919

It can be seen that the reliability value is more than 07 So the questionnaire is

highly reliable

Description of factors

1 Company Loyalty

This factor includes that this is the only company the consumer wants to associate himself with in

future (0814) himself would purchase more policies from the same company (0799) suggest

friends and family to purchase policy from the same company (0790) company able to fulfill

expectation (0599) Policy benefits benchmarks (0545) The highest Eigen value lies in this factor

35213 So it is been considered as the highly contributing factor towards study Therefore it is

clear that company loyalty plays an important role in investment decisions of investors

17

2 Services Quality

This factor includes hassle free settlements (0693) employees responsible towards customers

(0631) agents respond promptly (0611) investment in life insurance is more secure than stock

market (0563) satisfy with relationship to company (0537) As we can see that the Eigen value for

factor service quality is 9753 which is also a contributing factor towards the study so it can also be considered as an the study

3 Ease of Procedures

This factor includes the company provides claims on time (0852) co- operative and friendly agent

(0662) settlement of claims easy and timely (0651) agent is well informed about policies (0486) As

we can see that the Eigen value for factor ease of procedures is 5830 which is also a contributing

factor towards the study so it can also be considered as an important factor inconsumerrsquos financial

needs (0404) As we can see that the Eigen value for factor company client relationship is 4051

which is also a contributing factor towards the study so it can also be considered as an important factor

in the study

4 Satisfaction Level

This factor includes that the suggested benefits of Insurance Policy should be met to the investors

( 0774) Company provides them satisfactory services (0631) fulfill its promise about life

insurance policy (0575) Services should be provided on time(0515) and awareness of terms and

conditions of policies As we can see that the Eigen value for factor satisfaction level is 5008

which is also a contributing factor towards the study so it can also be considered as an important

factor in the study

5 Company Image

This factor includes that the insurance company should be well known in the industry (0777)

insurance provider should have goodwill in market (0758) and company of high repute (0428)As

we can see that the Eigen value for factor company image is 4878 which is also a contributing

factor towards the study so it can also be considered as an important factor in the study

18

6 Company-Client Relationship

This factor includes that the agent remind about premium installments (0778) pay personal

attention on every consumer (0505) and understand consumerrsquos financial needs (0404) As

we can see that the Eigen value for factor company client relationship is 4051 which is also a

contributing factor towards the study so it can also be considered as an important factor in the

study

Z-Test

Z-test was applied to find out significant difference between male and female investorrsquos perception

towards investment in life insurance policies

For applying Z-test mean and standard deviation was calculated then values were put in formula to

calculate standard error

Null Hypothesis Ho It states that there is no significant difference between the perception of male

and female investors towards investment in life insurance policies

GENDER MEAN SD SAMPLE

SIZE

SQUARE

OF

SD

MALE 14104 20078 75 403146

FEMALE 14594 17701 75 313348

Z = 15877

Since the value of Z is less than the standard value 196 at 5 level of significance so the null

hypothesis is accepted Therefore there is no significant difference between the perception of male

and female investors towards investment in life insurance policies

19

CONCLUSION

In present Indian market the investment habits of Indian consumers are changing very frequently

The individuals have their own perception towards various types of investment plans The study of

this research work was focused over consumerrsquos perception on investment towards Life Insurance

Services The objectives of the study were to evaluate the factors underlying consumer perception

towards investment in life insurance policies and to compare the differences in consumer

perception of male and female consumers The tests that were used for our research activities were-

Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25

items being accepted Next was Reliability Test to check the reliability of the items The

result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis

Test and the six factors that came out were Consumer Loyalty Service Quality Ease of

Procedures Satisfaction Level Company Image and Company-Client Relationship

The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind

sets for their investment pattern in insurance policies Still some actions are needed for

developing insurance market The major factors playing the role in developing

consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality

Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship

Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in

developing the market share loyalty and further development in insurance sector

20

References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)

21

Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in

Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)

22

COMPANY PROFILE

Indias Number One private life insurer ICICI Prudential Life Insurance

Company is a joint venture between ICICI Bank Ltd-one of Indias foremost financial

services company- and Prudential plc - a leading international financial services group

headquartered in the United Kingdom Total capital infusion stands at Rs 2060 billion

with ICICI Bank holding a stake of 74 and Prudential plc holding 26

Indiarsquos number One private insurerICICI Prudential Life Insurance Company is a joint venture

between icici bank ltd one of India foremost financial services company and prudential plc a

leading international financial services group headquartered in uk tatal capital infusion stands at rs

2060 billionwith icici bank holding a stake of 74 and prudentail

They began their operations in December 2000 after receiving approval from

Insurance Regulatory Development Authority (IRDA) and are headquartered in Mumbai

Today their nation-wide team comprises of over 580 offices over 234000 advisors and

22 banc assurance partners

INTRODUCTION OF ICICI PRUDENTIAL

ICICI Prudential was the first life insurer in India to receive a National Insurer

Financial Strength rating of AAA (Ind) from Fitch ratings For three years in a row

ICICI Prudential has been voted as Indias Most Trusted Private Life Insurer by The

Economic Times - AC Nielsen ORG Marg survey of Most Trusted Brands

The ICICI Prudential edge comes from the commitment to their customers in all

that they do ndash be it product development distribution the sales process or servicing

ICICI Prudential products have been developed after a clear and thorough understanding

of customer needs Having the right products is the first step but itrsquos equally important to

ensure that customers can access them easily and quickly To this end ICICI Prudential

has an advisor base across the length and breadth of the country and also partners with

leading banks corporate agents and brokers to distribute their products Robust risk

management and underwriting practices form the core of their business With clear

guidelines in place they ensure a smooth and hassle-free claims process

5

Entrusted with helping customers meet their long-term goals they adopt an

investment philosophy that aims to achieve risk adjusted returns over the long-term

Their 16000+ strong staff is given the opportunity to learn and grow everyday in a

multitude of ways This keeps them engaged and enthusiastic so that they can deliver on

the promise to cover customer at every step of life

For the past six years ICICI Prudential has retained its position as the No 1

private life insurer in the country with a wide range of flexible products that meet the

needs of the Indian customer at every step in life

PLANS

There are two main types of plans ndash ULIP and Traditional

Unit Linked Insurance Product

ULIPs have gained high acceptance due to attractive features they offer These

include

1113090 Flexibility Flexibility to choose sum assured Flexibility to choose premium

amount Option to change level of Premium Sum Assured even after the plan has

started Flexibility to change asset allocation by switching between funds

1113090 Transparency Charges in the plan and net amount invested are known to the

customer Customer has the convenience of tracking hisher investment performance

on a daily basis

1113091 Liquidity Customer has the option to withdraw money after few years ie the option

of low minimum tenure Partial or systematic withdrawals are allowed

1113090 Fund Options A choice of funds is provided to customers ranging from equity debt

cash or a combination They can choose the fund mix based on desired asset

allocation

Traditional Endowment Plans

These are the old type of plans available These plans cater to customers with a

low risk appetite Some of the common features of the traditional plans are

1113090 Steady Investment Major chunk of investible funds are in debt instruments Though

6

low but steady and almost assured returns are expected over the long term

1113091 Death Benefit death benefit is sum assured with guaranteed and vested bonus

1113090 Asset Creation Helps in asset creation as they are for a long tenure

1113091 Fixed Ratios Premium to sum assured ratios is fixed for each plan and age

1113090 Withdrawals Withdrawals are generally not allowed before maturity

PRODUCTS

INSURANCE SOLUTIONS FOR INDIVIDUALS

ICICI Prudential Life Insurance offers a range of innovative customer-centric products

that meet the needs of customers at every life stage Its products can be enhanced up to 4

riders to create a customized solution for each policyholder

Savings amp Wealth Creation Solutions

1113090 Cash Plus is a transparent feature-packed savings plan that offers 3 levels of

protection as well as liquidity options

1113090 Save n Protect is a traditional endowment savings plan that offers life protection

along with adequate returns

1113091 CashBak is an anticipated endowment policy ideal for meeting milestone expenses

like a childs marriage expenses for a childs higher education or purchase of an

asset It is available for terms of 15 and 20 years

1113091 LifeTime Super amp LifeTime Plus are unit-linked plans that offer customers the

flexibility and control to customize the policy to meet the changing needs at

different life stages Each offer 4 fund options - Preserver Protector Balancer and

Maximizer

1113091 Life Link Super is a single premium unit linked insurance Plan which combines life

insurance cover with the opportunity to stay invested in the stock market

1113090 Premier Life Gold is a limited premium paying plan specially structured for long-

term wealth creation

1113090 Invest Shield Life is a unit linked plan that provides premium guarantee on the

7

invested premiums and ensures that the customer receives only the benefits of fund

appreciation without any of the risks of depreciation

1113090 Invest Shield Cash back is a unit linked plan that provides premium guarantee

on the invested premiums along with flexible liquidity options

Protection Solutions

1113090 LifeGuard is a protection plan which offers life cover at low cost It is available in

3 options - level term assurance level term assurance with return of premium amp

single premium

1113090 HomeAssure is a mortgage reducing term assurance plan designed specifically to

help customers cover their home loans in a simple and cost-effective manner

Child Plans

1113090 Education insurance under the Smart Kid brand provides guaranteed educational

benefits to a child along with life insurance cover for the parent who purchases the

policy The policy is designed to provide money at important milestones in the

childs life Smart Kid plans are also available in unit-linked form - both single

premium and regular premium

Retirement Solutions

1113090 ForeverLife is a traditional retirement product that offers guaranteed returns for the

first 4 years and then declares bonuses annually

1113090 LifeTime Super Pension is a regular premium unit linked pension plan that helps

one accumulate over the long term and offers an annuity option (guaranteed income

for life) at the time of retirement

1113090 LifeLink Super Pension is a single premium unit linked pension plan

1113090 Immediate Annuity is a single premium annuity product that guarantees income for

life at the time of retirement It offers the benefit of 5 payout options

Health Solutions

1113090 Health Assure and Health Assure Plus Health Assure is a regular premium plan

which provides long term cover against 6 critical illnesses by providing policyholder

8

with financial assistance irrespective of the actual medical expenses Health Assure

Plus offers the added advantage of an equivalent life insurance cover

1113090 Cancer Care is a regular premium plan that pays cash benefit on the diagnosis as

well as at different stages in the treatment of various cancer conditions

1113090 Diabetes Care Diabetes Care is the first ever critical illness product especially for

individuals with Type 2 diabetes It makes payments on diagnosis on any of 6

diabetes related critical illnesses and also offers a coordinated care approach to

managing the condition Diabetes Care Plus also offers life cover

1113090 Hospital Care Hospital Care is structured to ensure customers receive a pre-

determined insurance amount for each procedure or hospitalization even if they

spend less Further its long-term design of a term between 10-20 years assures

policyholders the guaranteed cushion of insurance cover even if they make a claim

during the term Available for individuals between the ages of 1-60 years this is one

of the first products that will cover people up to the age of 80 years

GROUP INSURANCE SOLUTIONS

ICICI Prudential also offers Group Insurance Solutions for companies seeking to enhance

benefits to their employees

1113090 Group Gratuity Plan ICICI Prudentials group gratuity plan helps employers fund

their statutory gratuity obligation in a scientific manner The plan can also be

customized to structure schemes that can provide benefits beyond the statutory

obligations

1113090 Group Superannuation Plan ICICI Prudential offers both defined contribution

(DC) and defined benefit (DB) superannuation schemes to optimize returns for the

members of the trust and rationalize the cost Members have the option of choosing

from various annuity options or opting for a partial commutation of the annuity at

the time of retirement

1113090 Group Immediate Annuities In addition to the annuities offered to existing

superannuation customers they offer immediate annuities to superannuation funds

not managed by them

1113090 Group Term Plan ICICI Prudentials flexible group term solution helps provide

affordable cover to members of a group The cover could be uniform or based on

designationrank or a multiple of salary The benefit under the policy is paid to the

9

beneficiary nominated by the member on hisher death

Flexible Rider Options

ICICI Prudential Life offers flexible riders which can be added to the basic policy at a

marginal cost depending on the specific needs of the customer

1113090 Accident amp disability benefit If death occurs as the result of an accident during the

term of the policy the beneficiary receives an additional amount equal to the rider sum assured

under the policy If the death occurs while traveling in an authorized

mass transport vehicle the beneficiary will be entitled to twice the sum assured as

additional benefit

1113090 Critical Illness Benefit protects the insured against financial loss in the event of 9

specified critical illnesses Benefits are payable to the insured for medical expenses

prior to death

1113090 Income Benefit This rider pays the 10 of the sum assured to the nominee every

year till maturity in the event of the death of the life assured It is available on

SmarKid and CashPlus

1113090 Waiver of Premium In case of total and permanent disability due to an accident

the future premiums continue to be paid by the company till the time of maturity

This rider is available with LifeTime Super LifeTime Super Pension and CashPlus

HISTORY OF ICICI PRUDENTIAL

As mentioned earlier ICICI Prudential Life Insurance Company is a joint venture

between ICICI Bank - one of Indias foremost financial services company - and

Prudential plc - a leading international financial services group headquartered in the

United Kingdom

HISTORY OF ICICI PRUDENTIAL

As mentioned earlier icici prudential life insurance company is a joint venture between icici bank

one of India foremost financial services company and prudential plc a leading international

financial services group headquarterd in tha united kingdom

10

ICICI Bank

ICICI Bank (1113090YSEIB1113090) is Indias second largest bank and largest private sector bank

with over 50 years presence in financial services and with assets of over Rs 344658 bn

(USD 79 billion) as on March 31 2007 The Bank offers a wide range of banking

products and financial services to corporate and retail customers through a variety of

delivery channels and through its specialized subsidiaries in the areas of investment

banking life and non-life insurance private equity and asset management ICICI Bank is

a leading player in the retail banking market and services its large customer base through

a network of over 950 branches and extension counters 3300 ATMs call centers and

internet banking to ensure that customers have access to its services at all times

Prudential Plc

Established in London in 1848 Prudential plc through its businesses in the UK and

Europe the US and Asia provides retail financial services products and services to more

than 20 million customers policyholder and unit holders and manages over pound251 billion

of funds worldwide (as of 31 December 2006) In Asia Prudential is the leading

European life insurance company with life operations in China Hong Kong India

Indonesia Japan Korea Malaysia the Philippines Singapore Taiwan Thailand and

Vietnam Prudential is the second largest retail fund manager for Asian sourced assets ex-

Japan as at June 2006 Its fund management business has expanded into a total of ten markets

China Hong Kong India Japan Korea Malaysia Singapore Taiwan Vietnam

and United Arab Emirates

ICICI Prudential has been the market leader in the private life insurance sector

contributing to 30 of the growth share followed by the SBI Life Insurance with 18

share Members like Ms Shikha Sharma CEO amp MD Ms Anita Pai EVP ndash

Customer Service amp Technology Mr Puneet Nanda CIO Mr Binayak Dutta Chief ndash

Sales amp Distribution have been with the company since its inception in 2000 and are

instrumental in developing ICIC Prudential to this level

The first policy was sold on 12th December 2000 Within 1 year ICICI Prudential

achieved 25000 policies and thereby growing at a faster rate achieved 1 million policies

by October 2004 By 2010 ICICI Prudential has a target to achieve 20 million customers

AWARDS amp RECOGNITION

AWARDS

11

1113090 Indias Most Customer Responsive Insurance Company

Avaya GlobalConnect - Economic Times

Customer Responsiveness Awards

1113090 Most Trusted Private Life Insurer

The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003

2004 and 2005

1113090 Prudence Customer Centricity Award 2004 amp 2005

Prudential Corporation Asia

1113090 Best Life Insurer 2003

Outlook Money Awards 2003 amp 2004

1113090 Superbrand 2003-04

1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising

campaign

Effies 2003

RECOGNITIONS

1113090 IMM Award for Excellence

Institute of Marketing amp Management

1113090 Organisation with Innovative HR Practices

Indira Group of Institutes

1113090 Most Trusted Private Life Insurer

The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003

2004 and 2005

1113090 Prudence Customer Centricity Award 2004 amp 2005

Prudential Corporation Asia

1113090 Best Life Insurer 2003

Outlook Money Awards 2003 amp 2004

1113090 Superbrand 2003-04

1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising

campaign

Effies 2003

12

Review of Literature

Mehr and Cammack (1976) agrees that insurance is usually thought of as a product that spreads the

risk of serious but low-probability losses among a group of individuals thus providing some

financial protection to each individual Kunreuther (1979) said that his product makes good sense

particularly when the protection is purchased against potential losses so large as to be catastrophic

such as total destruction of ones home a large accident liability judgment or death of primary

family breadwinner However it has long been recognized that this sensible product is difficult to

sellv

Kahneman amp Tversky (1984) stated indeed repeated demonstrations have shown most people lack

an adequate understanding of probability and risk concepts Dhar (1997) Greenleaf and Lehmann

(1995) Tversky and Shafir (1992) have shown that offering more options can generate decision

conflict and preference uncertainty leading to decision deferral

Kotler (1973) considers insurance to be in the category of unsought goods along with products

such as preventive dental services and burial plotsHe notes that unsought goods pose special

challenges to the marketer

Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) found that subjects were more likely

to buy insurance against small high-probability losses than insurance against large low- probability

losses Hershey and Schoemaker (1980) reported the opposite result

Kunreuther (1979) ldquoIt is not the magnitude of a potential loss that inspires people to buy insurance

voluntarily ndash it is the frequency with which a loss is likely to occurrdquo

Michael L Smith (1982) said that a typical life insurance contract provides a package of options or

rights to the policy owner that is not precisely duplicated by any other combination of commonly

available contracts Viewed from this perspective life insurance enjoys a unique position in the

field of investments and should be judged in this light The paper shows that an options viewpoint

provides a more complete explanation of policy owner behavior towards life insurance than the

conventional savings-and-protection view

13

Michael L Walden (1985) told that the options package view of the whole a

whole life policy is a package of options each of which has value and is expected to influence the

price of the policy This viewpoint implies the general hypothesis that price differences between

whole life policies can be explained by differences in policy contract provisions and differences in

selected company characteristics

OBJECTIVE

o To evaluate the factors underlying consumer perception towards investment in life insurance

policies

o To compare the differences in consumer perception of male and

female consumers

RESEARCH METHODOLOGY

The Study The study was exploratory in nature with survey method being used to complete the

study

Sampling Design

Population

Population included investors in NCR region

Sample frame

Since the data was collected through personal contacts the sample frames were the individuals who

are investing in life insurance policies

Sampling elements

Individual respondents were the sampling elements

14

Sampling Techniques

Random sampling technique was used to select the samples

Sample Size

Sample size was 150 respondents

Tools Used for Data Collection

Self designed questionnaire was used for the evaluation of factors affecting consumerrsquos perception

towards insurance Data was collected on Likertrsquos type scale where 1 stood for minimum

agreement and 7 stood for maximum agreement

Tools Used for Data Analysis

Item to total correlation was applied to check the internal consistency of the questionnaire The

measures were standardized through computation of reliability and validity

Factor analysis was applied to identify the underlying factors

Z-test was applied to find out the significant differences between male and

female investors

Results and Discussions

Consistency Measure

Firstly consistency of all the items in the questionnaire is checked through item to total correlation

Under this correlation of every item with total is measured and the computed value is compared

with standard value (ie 01590) If the computed value is found less than standard value then

whole factorstatement is dropped and will be termed as inconsistent

15

SNO ITEMS COMPUTED

CORRELATIO

N VALUE

CONSISTE

NT

ACCEPTED

DROPPED

1 Awareness about terms and conditions of

policy

0671575 Consistent Accepted

2 Provide services on time 0651847 Consistent Accepted

3 Provide satisfactory services 0573518 Consistent Accepted

4 Goodwill of the company 0607722 Consistent Accepted

5 Agent is well informed about policies 0640696 Consistent Accepted

6 Co-operative and friendly agent 0598089 Consistent Accepted

7 Agent respond promptly 0696914 Consistent Accepted

8 Proper reminder of installments by

agents

0531124 Consistent Accepted

9 Employees responsible towards

customers

0685817 Consistent Accepted

10 Benefits are met by policy 0510702 Consistent Accepted

11 Selection of highly reputed company 0634614 Consistent Accepted

12 Reputation of the insurance company 0582977 Consistent Accepted

13 Hassle free settlements 0594282 Consistent Accepted

14 Personal attention on every costumer 0640192 Consistent Accepted

15 Understand Customerrsquos financial needs 0603133 Consistent Accepted

16 Fulfill its promise towards policy 0613243 Consistent Accepted

17 Provides the claims on time 0474994 Consistent Accepted

18 Settlement of claims easy and timely 0569959 Consistent Accepted

19 Satisfy with relationship to company 0621496 Consistent Accepted

20 Company able to fulfill expectation 0594265 Consistent Accepted

21 Only company I want to associate

myself

0519161 Consistent Accepted

22 Purchase more policies from the same

company

0502876 Consistent Accepted

16

23 Suggest friends and family to purchase

policy from the same company

0540626 Consistent Accepted

24 Policy benefits benchmarks 062874 Consistent Accepted

25 Investment in life insurance is more

secure than stock market

0376874 Consistent Accepted

26 Purchase further policies from other

companies

0091102 Inonsistent Dropped

Reliability

Reliability test was carried out using SPSS software and the reliability of the items was measured

The result is as follows

Cronbachrsquos Alpha 0919

It can be seen that the reliability value is more than 07 So the questionnaire is

highly reliable

Description of factors

1 Company Loyalty

This factor includes that this is the only company the consumer wants to associate himself with in

future (0814) himself would purchase more policies from the same company (0799) suggest

friends and family to purchase policy from the same company (0790) company able to fulfill

expectation (0599) Policy benefits benchmarks (0545) The highest Eigen value lies in this factor

35213 So it is been considered as the highly contributing factor towards study Therefore it is

clear that company loyalty plays an important role in investment decisions of investors

17

2 Services Quality

This factor includes hassle free settlements (0693) employees responsible towards customers

(0631) agents respond promptly (0611) investment in life insurance is more secure than stock

market (0563) satisfy with relationship to company (0537) As we can see that the Eigen value for

factor service quality is 9753 which is also a contributing factor towards the study so it can also be considered as an the study

3 Ease of Procedures

This factor includes the company provides claims on time (0852) co- operative and friendly agent

(0662) settlement of claims easy and timely (0651) agent is well informed about policies (0486) As

we can see that the Eigen value for factor ease of procedures is 5830 which is also a contributing

factor towards the study so it can also be considered as an important factor inconsumerrsquos financial

needs (0404) As we can see that the Eigen value for factor company client relationship is 4051

which is also a contributing factor towards the study so it can also be considered as an important factor

in the study

4 Satisfaction Level

This factor includes that the suggested benefits of Insurance Policy should be met to the investors

( 0774) Company provides them satisfactory services (0631) fulfill its promise about life

insurance policy (0575) Services should be provided on time(0515) and awareness of terms and

conditions of policies As we can see that the Eigen value for factor satisfaction level is 5008

which is also a contributing factor towards the study so it can also be considered as an important

factor in the study

5 Company Image

This factor includes that the insurance company should be well known in the industry (0777)

insurance provider should have goodwill in market (0758) and company of high repute (0428)As

we can see that the Eigen value for factor company image is 4878 which is also a contributing

factor towards the study so it can also be considered as an important factor in the study

18

6 Company-Client Relationship

This factor includes that the agent remind about premium installments (0778) pay personal

attention on every consumer (0505) and understand consumerrsquos financial needs (0404) As

we can see that the Eigen value for factor company client relationship is 4051 which is also a

contributing factor towards the study so it can also be considered as an important factor in the

study

Z-Test

Z-test was applied to find out significant difference between male and female investorrsquos perception

towards investment in life insurance policies

For applying Z-test mean and standard deviation was calculated then values were put in formula to

calculate standard error

Null Hypothesis Ho It states that there is no significant difference between the perception of male

and female investors towards investment in life insurance policies

GENDER MEAN SD SAMPLE

SIZE

SQUARE

OF

SD

MALE 14104 20078 75 403146

FEMALE 14594 17701 75 313348

Z = 15877

Since the value of Z is less than the standard value 196 at 5 level of significance so the null

hypothesis is accepted Therefore there is no significant difference between the perception of male

and female investors towards investment in life insurance policies

19

CONCLUSION

In present Indian market the investment habits of Indian consumers are changing very frequently

The individuals have their own perception towards various types of investment plans The study of

this research work was focused over consumerrsquos perception on investment towards Life Insurance

Services The objectives of the study were to evaluate the factors underlying consumer perception

towards investment in life insurance policies and to compare the differences in consumer

perception of male and female consumers The tests that were used for our research activities were-

Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25

items being accepted Next was Reliability Test to check the reliability of the items The

result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis

Test and the six factors that came out were Consumer Loyalty Service Quality Ease of

Procedures Satisfaction Level Company Image and Company-Client Relationship

The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind

sets for their investment pattern in insurance policies Still some actions are needed for

developing insurance market The major factors playing the role in developing

consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality

Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship

Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in

developing the market share loyalty and further development in insurance sector

20

References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)

21

Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in

Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)

22

Entrusted with helping customers meet their long-term goals they adopt an

investment philosophy that aims to achieve risk adjusted returns over the long-term

Their 16000+ strong staff is given the opportunity to learn and grow everyday in a

multitude of ways This keeps them engaged and enthusiastic so that they can deliver on

the promise to cover customer at every step of life

For the past six years ICICI Prudential has retained its position as the No 1

private life insurer in the country with a wide range of flexible products that meet the

needs of the Indian customer at every step in life

PLANS

There are two main types of plans ndash ULIP and Traditional

Unit Linked Insurance Product

ULIPs have gained high acceptance due to attractive features they offer These

include

1113090 Flexibility Flexibility to choose sum assured Flexibility to choose premium

amount Option to change level of Premium Sum Assured even after the plan has

started Flexibility to change asset allocation by switching between funds

1113090 Transparency Charges in the plan and net amount invested are known to the

customer Customer has the convenience of tracking hisher investment performance

on a daily basis

1113091 Liquidity Customer has the option to withdraw money after few years ie the option

of low minimum tenure Partial or systematic withdrawals are allowed

1113090 Fund Options A choice of funds is provided to customers ranging from equity debt

cash or a combination They can choose the fund mix based on desired asset

allocation

Traditional Endowment Plans

These are the old type of plans available These plans cater to customers with a

low risk appetite Some of the common features of the traditional plans are

1113090 Steady Investment Major chunk of investible funds are in debt instruments Though

6

low but steady and almost assured returns are expected over the long term

1113091 Death Benefit death benefit is sum assured with guaranteed and vested bonus

1113090 Asset Creation Helps in asset creation as they are for a long tenure

1113091 Fixed Ratios Premium to sum assured ratios is fixed for each plan and age

1113090 Withdrawals Withdrawals are generally not allowed before maturity

PRODUCTS

INSURANCE SOLUTIONS FOR INDIVIDUALS

ICICI Prudential Life Insurance offers a range of innovative customer-centric products

that meet the needs of customers at every life stage Its products can be enhanced up to 4

riders to create a customized solution for each policyholder

Savings amp Wealth Creation Solutions

1113090 Cash Plus is a transparent feature-packed savings plan that offers 3 levels of

protection as well as liquidity options

1113090 Save n Protect is a traditional endowment savings plan that offers life protection

along with adequate returns

1113091 CashBak is an anticipated endowment policy ideal for meeting milestone expenses

like a childs marriage expenses for a childs higher education or purchase of an

asset It is available for terms of 15 and 20 years

1113091 LifeTime Super amp LifeTime Plus are unit-linked plans that offer customers the

flexibility and control to customize the policy to meet the changing needs at

different life stages Each offer 4 fund options - Preserver Protector Balancer and

Maximizer

1113091 Life Link Super is a single premium unit linked insurance Plan which combines life

insurance cover with the opportunity to stay invested in the stock market

1113090 Premier Life Gold is a limited premium paying plan specially structured for long-

term wealth creation

1113090 Invest Shield Life is a unit linked plan that provides premium guarantee on the

7

invested premiums and ensures that the customer receives only the benefits of fund

appreciation without any of the risks of depreciation

1113090 Invest Shield Cash back is a unit linked plan that provides premium guarantee

on the invested premiums along with flexible liquidity options

Protection Solutions

1113090 LifeGuard is a protection plan which offers life cover at low cost It is available in

3 options - level term assurance level term assurance with return of premium amp

single premium

1113090 HomeAssure is a mortgage reducing term assurance plan designed specifically to

help customers cover their home loans in a simple and cost-effective manner

Child Plans

1113090 Education insurance under the Smart Kid brand provides guaranteed educational

benefits to a child along with life insurance cover for the parent who purchases the

policy The policy is designed to provide money at important milestones in the

childs life Smart Kid plans are also available in unit-linked form - both single

premium and regular premium

Retirement Solutions

1113090 ForeverLife is a traditional retirement product that offers guaranteed returns for the

first 4 years and then declares bonuses annually

1113090 LifeTime Super Pension is a regular premium unit linked pension plan that helps

one accumulate over the long term and offers an annuity option (guaranteed income

for life) at the time of retirement

1113090 LifeLink Super Pension is a single premium unit linked pension plan

1113090 Immediate Annuity is a single premium annuity product that guarantees income for

life at the time of retirement It offers the benefit of 5 payout options

Health Solutions

1113090 Health Assure and Health Assure Plus Health Assure is a regular premium plan

which provides long term cover against 6 critical illnesses by providing policyholder

8

with financial assistance irrespective of the actual medical expenses Health Assure

Plus offers the added advantage of an equivalent life insurance cover

1113090 Cancer Care is a regular premium plan that pays cash benefit on the diagnosis as

well as at different stages in the treatment of various cancer conditions

1113090 Diabetes Care Diabetes Care is the first ever critical illness product especially for

individuals with Type 2 diabetes It makes payments on diagnosis on any of 6

diabetes related critical illnesses and also offers a coordinated care approach to

managing the condition Diabetes Care Plus also offers life cover

1113090 Hospital Care Hospital Care is structured to ensure customers receive a pre-

determined insurance amount for each procedure or hospitalization even if they

spend less Further its long-term design of a term between 10-20 years assures

policyholders the guaranteed cushion of insurance cover even if they make a claim

during the term Available for individuals between the ages of 1-60 years this is one

of the first products that will cover people up to the age of 80 years

GROUP INSURANCE SOLUTIONS

ICICI Prudential also offers Group Insurance Solutions for companies seeking to enhance

benefits to their employees

1113090 Group Gratuity Plan ICICI Prudentials group gratuity plan helps employers fund

their statutory gratuity obligation in a scientific manner The plan can also be

customized to structure schemes that can provide benefits beyond the statutory

obligations

1113090 Group Superannuation Plan ICICI Prudential offers both defined contribution

(DC) and defined benefit (DB) superannuation schemes to optimize returns for the

members of the trust and rationalize the cost Members have the option of choosing

from various annuity options or opting for a partial commutation of the annuity at

the time of retirement

1113090 Group Immediate Annuities In addition to the annuities offered to existing

superannuation customers they offer immediate annuities to superannuation funds

not managed by them

1113090 Group Term Plan ICICI Prudentials flexible group term solution helps provide

affordable cover to members of a group The cover could be uniform or based on

designationrank or a multiple of salary The benefit under the policy is paid to the

9

beneficiary nominated by the member on hisher death

Flexible Rider Options

ICICI Prudential Life offers flexible riders which can be added to the basic policy at a

marginal cost depending on the specific needs of the customer

1113090 Accident amp disability benefit If death occurs as the result of an accident during the

term of the policy the beneficiary receives an additional amount equal to the rider sum assured

under the policy If the death occurs while traveling in an authorized

mass transport vehicle the beneficiary will be entitled to twice the sum assured as

additional benefit

1113090 Critical Illness Benefit protects the insured against financial loss in the event of 9

specified critical illnesses Benefits are payable to the insured for medical expenses

prior to death

1113090 Income Benefit This rider pays the 10 of the sum assured to the nominee every

year till maturity in the event of the death of the life assured It is available on

SmarKid and CashPlus

1113090 Waiver of Premium In case of total and permanent disability due to an accident

the future premiums continue to be paid by the company till the time of maturity

This rider is available with LifeTime Super LifeTime Super Pension and CashPlus

HISTORY OF ICICI PRUDENTIAL

As mentioned earlier ICICI Prudential Life Insurance Company is a joint venture

between ICICI Bank - one of Indias foremost financial services company - and

Prudential plc - a leading international financial services group headquartered in the

United Kingdom

HISTORY OF ICICI PRUDENTIAL

As mentioned earlier icici prudential life insurance company is a joint venture between icici bank

one of India foremost financial services company and prudential plc a leading international

financial services group headquarterd in tha united kingdom

10

ICICI Bank

ICICI Bank (1113090YSEIB1113090) is Indias second largest bank and largest private sector bank

with over 50 years presence in financial services and with assets of over Rs 344658 bn

(USD 79 billion) as on March 31 2007 The Bank offers a wide range of banking

products and financial services to corporate and retail customers through a variety of

delivery channels and through its specialized subsidiaries in the areas of investment

banking life and non-life insurance private equity and asset management ICICI Bank is

a leading player in the retail banking market and services its large customer base through

a network of over 950 branches and extension counters 3300 ATMs call centers and

internet banking to ensure that customers have access to its services at all times

Prudential Plc

Established in London in 1848 Prudential plc through its businesses in the UK and

Europe the US and Asia provides retail financial services products and services to more

than 20 million customers policyholder and unit holders and manages over pound251 billion

of funds worldwide (as of 31 December 2006) In Asia Prudential is the leading

European life insurance company with life operations in China Hong Kong India

Indonesia Japan Korea Malaysia the Philippines Singapore Taiwan Thailand and

Vietnam Prudential is the second largest retail fund manager for Asian sourced assets ex-

Japan as at June 2006 Its fund management business has expanded into a total of ten markets

China Hong Kong India Japan Korea Malaysia Singapore Taiwan Vietnam

and United Arab Emirates

ICICI Prudential has been the market leader in the private life insurance sector

contributing to 30 of the growth share followed by the SBI Life Insurance with 18

share Members like Ms Shikha Sharma CEO amp MD Ms Anita Pai EVP ndash

Customer Service amp Technology Mr Puneet Nanda CIO Mr Binayak Dutta Chief ndash

Sales amp Distribution have been with the company since its inception in 2000 and are

instrumental in developing ICIC Prudential to this level

The first policy was sold on 12th December 2000 Within 1 year ICICI Prudential

achieved 25000 policies and thereby growing at a faster rate achieved 1 million policies

by October 2004 By 2010 ICICI Prudential has a target to achieve 20 million customers

AWARDS amp RECOGNITION

AWARDS

11

1113090 Indias Most Customer Responsive Insurance Company

Avaya GlobalConnect - Economic Times

Customer Responsiveness Awards

1113090 Most Trusted Private Life Insurer

The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003

2004 and 2005

1113090 Prudence Customer Centricity Award 2004 amp 2005

Prudential Corporation Asia

1113090 Best Life Insurer 2003

Outlook Money Awards 2003 amp 2004

1113090 Superbrand 2003-04

1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising

campaign

Effies 2003

RECOGNITIONS

1113090 IMM Award for Excellence

Institute of Marketing amp Management

1113090 Organisation with Innovative HR Practices

Indira Group of Institutes

1113090 Most Trusted Private Life Insurer

The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003

2004 and 2005

1113090 Prudence Customer Centricity Award 2004 amp 2005

Prudential Corporation Asia

1113090 Best Life Insurer 2003

Outlook Money Awards 2003 amp 2004

1113090 Superbrand 2003-04

1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising

campaign

Effies 2003

12

Review of Literature

Mehr and Cammack (1976) agrees that insurance is usually thought of as a product that spreads the

risk of serious but low-probability losses among a group of individuals thus providing some

financial protection to each individual Kunreuther (1979) said that his product makes good sense

particularly when the protection is purchased against potential losses so large as to be catastrophic

such as total destruction of ones home a large accident liability judgment or death of primary

family breadwinner However it has long been recognized that this sensible product is difficult to

sellv

Kahneman amp Tversky (1984) stated indeed repeated demonstrations have shown most people lack

an adequate understanding of probability and risk concepts Dhar (1997) Greenleaf and Lehmann

(1995) Tversky and Shafir (1992) have shown that offering more options can generate decision

conflict and preference uncertainty leading to decision deferral

Kotler (1973) considers insurance to be in the category of unsought goods along with products

such as preventive dental services and burial plotsHe notes that unsought goods pose special

challenges to the marketer

Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) found that subjects were more likely

to buy insurance against small high-probability losses than insurance against large low- probability

losses Hershey and Schoemaker (1980) reported the opposite result

Kunreuther (1979) ldquoIt is not the magnitude of a potential loss that inspires people to buy insurance

voluntarily ndash it is the frequency with which a loss is likely to occurrdquo

Michael L Smith (1982) said that a typical life insurance contract provides a package of options or

rights to the policy owner that is not precisely duplicated by any other combination of commonly

available contracts Viewed from this perspective life insurance enjoys a unique position in the

field of investments and should be judged in this light The paper shows that an options viewpoint

provides a more complete explanation of policy owner behavior towards life insurance than the

conventional savings-and-protection view

13

Michael L Walden (1985) told that the options package view of the whole a

whole life policy is a package of options each of which has value and is expected to influence the

price of the policy This viewpoint implies the general hypothesis that price differences between

whole life policies can be explained by differences in policy contract provisions and differences in

selected company characteristics

OBJECTIVE

o To evaluate the factors underlying consumer perception towards investment in life insurance

policies

o To compare the differences in consumer perception of male and

female consumers

RESEARCH METHODOLOGY

The Study The study was exploratory in nature with survey method being used to complete the

study

Sampling Design

Population

Population included investors in NCR region

Sample frame

Since the data was collected through personal contacts the sample frames were the individuals who

are investing in life insurance policies

Sampling elements

Individual respondents were the sampling elements

14

Sampling Techniques

Random sampling technique was used to select the samples

Sample Size

Sample size was 150 respondents

Tools Used for Data Collection

Self designed questionnaire was used for the evaluation of factors affecting consumerrsquos perception

towards insurance Data was collected on Likertrsquos type scale where 1 stood for minimum

agreement and 7 stood for maximum agreement

Tools Used for Data Analysis

Item to total correlation was applied to check the internal consistency of the questionnaire The

measures were standardized through computation of reliability and validity

Factor analysis was applied to identify the underlying factors

Z-test was applied to find out the significant differences between male and

female investors

Results and Discussions

Consistency Measure

Firstly consistency of all the items in the questionnaire is checked through item to total correlation

Under this correlation of every item with total is measured and the computed value is compared

with standard value (ie 01590) If the computed value is found less than standard value then

whole factorstatement is dropped and will be termed as inconsistent

15

SNO ITEMS COMPUTED

CORRELATIO

N VALUE

CONSISTE

NT

ACCEPTED

DROPPED

1 Awareness about terms and conditions of

policy

0671575 Consistent Accepted

2 Provide services on time 0651847 Consistent Accepted

3 Provide satisfactory services 0573518 Consistent Accepted

4 Goodwill of the company 0607722 Consistent Accepted

5 Agent is well informed about policies 0640696 Consistent Accepted

6 Co-operative and friendly agent 0598089 Consistent Accepted

7 Agent respond promptly 0696914 Consistent Accepted

8 Proper reminder of installments by

agents

0531124 Consistent Accepted

9 Employees responsible towards

customers

0685817 Consistent Accepted

10 Benefits are met by policy 0510702 Consistent Accepted

11 Selection of highly reputed company 0634614 Consistent Accepted

12 Reputation of the insurance company 0582977 Consistent Accepted

13 Hassle free settlements 0594282 Consistent Accepted

14 Personal attention on every costumer 0640192 Consistent Accepted

15 Understand Customerrsquos financial needs 0603133 Consistent Accepted

16 Fulfill its promise towards policy 0613243 Consistent Accepted

17 Provides the claims on time 0474994 Consistent Accepted

18 Settlement of claims easy and timely 0569959 Consistent Accepted

19 Satisfy with relationship to company 0621496 Consistent Accepted

20 Company able to fulfill expectation 0594265 Consistent Accepted

21 Only company I want to associate

myself

0519161 Consistent Accepted

22 Purchase more policies from the same

company

0502876 Consistent Accepted

16

23 Suggest friends and family to purchase

policy from the same company

0540626 Consistent Accepted

24 Policy benefits benchmarks 062874 Consistent Accepted

25 Investment in life insurance is more

secure than stock market

0376874 Consistent Accepted

26 Purchase further policies from other

companies

0091102 Inonsistent Dropped

Reliability

Reliability test was carried out using SPSS software and the reliability of the items was measured

The result is as follows

Cronbachrsquos Alpha 0919

It can be seen that the reliability value is more than 07 So the questionnaire is

highly reliable

Description of factors

1 Company Loyalty

This factor includes that this is the only company the consumer wants to associate himself with in

future (0814) himself would purchase more policies from the same company (0799) suggest

friends and family to purchase policy from the same company (0790) company able to fulfill

expectation (0599) Policy benefits benchmarks (0545) The highest Eigen value lies in this factor

35213 So it is been considered as the highly contributing factor towards study Therefore it is

clear that company loyalty plays an important role in investment decisions of investors

17

2 Services Quality

This factor includes hassle free settlements (0693) employees responsible towards customers

(0631) agents respond promptly (0611) investment in life insurance is more secure than stock

market (0563) satisfy with relationship to company (0537) As we can see that the Eigen value for

factor service quality is 9753 which is also a contributing factor towards the study so it can also be considered as an the study

3 Ease of Procedures

This factor includes the company provides claims on time (0852) co- operative and friendly agent

(0662) settlement of claims easy and timely (0651) agent is well informed about policies (0486) As

we can see that the Eigen value for factor ease of procedures is 5830 which is also a contributing

factor towards the study so it can also be considered as an important factor inconsumerrsquos financial

needs (0404) As we can see that the Eigen value for factor company client relationship is 4051

which is also a contributing factor towards the study so it can also be considered as an important factor

in the study

4 Satisfaction Level

This factor includes that the suggested benefits of Insurance Policy should be met to the investors

( 0774) Company provides them satisfactory services (0631) fulfill its promise about life

insurance policy (0575) Services should be provided on time(0515) and awareness of terms and

conditions of policies As we can see that the Eigen value for factor satisfaction level is 5008

which is also a contributing factor towards the study so it can also be considered as an important

factor in the study

5 Company Image

This factor includes that the insurance company should be well known in the industry (0777)

insurance provider should have goodwill in market (0758) and company of high repute (0428)As

we can see that the Eigen value for factor company image is 4878 which is also a contributing

factor towards the study so it can also be considered as an important factor in the study

18

6 Company-Client Relationship

This factor includes that the agent remind about premium installments (0778) pay personal

attention on every consumer (0505) and understand consumerrsquos financial needs (0404) As

we can see that the Eigen value for factor company client relationship is 4051 which is also a

contributing factor towards the study so it can also be considered as an important factor in the

study

Z-Test

Z-test was applied to find out significant difference between male and female investorrsquos perception

towards investment in life insurance policies

For applying Z-test mean and standard deviation was calculated then values were put in formula to

calculate standard error

Null Hypothesis Ho It states that there is no significant difference between the perception of male

and female investors towards investment in life insurance policies

GENDER MEAN SD SAMPLE

SIZE

SQUARE

OF

SD

MALE 14104 20078 75 403146

FEMALE 14594 17701 75 313348

Z = 15877

Since the value of Z is less than the standard value 196 at 5 level of significance so the null

hypothesis is accepted Therefore there is no significant difference between the perception of male

and female investors towards investment in life insurance policies

19

CONCLUSION

In present Indian market the investment habits of Indian consumers are changing very frequently

The individuals have their own perception towards various types of investment plans The study of

this research work was focused over consumerrsquos perception on investment towards Life Insurance

Services The objectives of the study were to evaluate the factors underlying consumer perception

towards investment in life insurance policies and to compare the differences in consumer

perception of male and female consumers The tests that were used for our research activities were-

Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25

items being accepted Next was Reliability Test to check the reliability of the items The

result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis

Test and the six factors that came out were Consumer Loyalty Service Quality Ease of

Procedures Satisfaction Level Company Image and Company-Client Relationship

The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind

sets for their investment pattern in insurance policies Still some actions are needed for

developing insurance market The major factors playing the role in developing

consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality

Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship

Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in

developing the market share loyalty and further development in insurance sector

20

References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)

21

Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in

Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)

22

low but steady and almost assured returns are expected over the long term

1113091 Death Benefit death benefit is sum assured with guaranteed and vested bonus

1113090 Asset Creation Helps in asset creation as they are for a long tenure

1113091 Fixed Ratios Premium to sum assured ratios is fixed for each plan and age

1113090 Withdrawals Withdrawals are generally not allowed before maturity

PRODUCTS

INSURANCE SOLUTIONS FOR INDIVIDUALS

ICICI Prudential Life Insurance offers a range of innovative customer-centric products

that meet the needs of customers at every life stage Its products can be enhanced up to 4

riders to create a customized solution for each policyholder

Savings amp Wealth Creation Solutions

1113090 Cash Plus is a transparent feature-packed savings plan that offers 3 levels of

protection as well as liquidity options

1113090 Save n Protect is a traditional endowment savings plan that offers life protection

along with adequate returns

1113091 CashBak is an anticipated endowment policy ideal for meeting milestone expenses

like a childs marriage expenses for a childs higher education or purchase of an

asset It is available for terms of 15 and 20 years

1113091 LifeTime Super amp LifeTime Plus are unit-linked plans that offer customers the

flexibility and control to customize the policy to meet the changing needs at

different life stages Each offer 4 fund options - Preserver Protector Balancer and

Maximizer

1113091 Life Link Super is a single premium unit linked insurance Plan which combines life

insurance cover with the opportunity to stay invested in the stock market

1113090 Premier Life Gold is a limited premium paying plan specially structured for long-

term wealth creation

1113090 Invest Shield Life is a unit linked plan that provides premium guarantee on the

7

invested premiums and ensures that the customer receives only the benefits of fund

appreciation without any of the risks of depreciation

1113090 Invest Shield Cash back is a unit linked plan that provides premium guarantee

on the invested premiums along with flexible liquidity options

Protection Solutions

1113090 LifeGuard is a protection plan which offers life cover at low cost It is available in

3 options - level term assurance level term assurance with return of premium amp

single premium

1113090 HomeAssure is a mortgage reducing term assurance plan designed specifically to

help customers cover their home loans in a simple and cost-effective manner

Child Plans

1113090 Education insurance under the Smart Kid brand provides guaranteed educational

benefits to a child along with life insurance cover for the parent who purchases the

policy The policy is designed to provide money at important milestones in the

childs life Smart Kid plans are also available in unit-linked form - both single

premium and regular premium

Retirement Solutions

1113090 ForeverLife is a traditional retirement product that offers guaranteed returns for the

first 4 years and then declares bonuses annually

1113090 LifeTime Super Pension is a regular premium unit linked pension plan that helps

one accumulate over the long term and offers an annuity option (guaranteed income

for life) at the time of retirement

1113090 LifeLink Super Pension is a single premium unit linked pension plan

1113090 Immediate Annuity is a single premium annuity product that guarantees income for

life at the time of retirement It offers the benefit of 5 payout options

Health Solutions

1113090 Health Assure and Health Assure Plus Health Assure is a regular premium plan

which provides long term cover against 6 critical illnesses by providing policyholder

8

with financial assistance irrespective of the actual medical expenses Health Assure

Plus offers the added advantage of an equivalent life insurance cover

1113090 Cancer Care is a regular premium plan that pays cash benefit on the diagnosis as

well as at different stages in the treatment of various cancer conditions

1113090 Diabetes Care Diabetes Care is the first ever critical illness product especially for

individuals with Type 2 diabetes It makes payments on diagnosis on any of 6

diabetes related critical illnesses and also offers a coordinated care approach to

managing the condition Diabetes Care Plus also offers life cover

1113090 Hospital Care Hospital Care is structured to ensure customers receive a pre-

determined insurance amount for each procedure or hospitalization even if they

spend less Further its long-term design of a term between 10-20 years assures

policyholders the guaranteed cushion of insurance cover even if they make a claim

during the term Available for individuals between the ages of 1-60 years this is one

of the first products that will cover people up to the age of 80 years

GROUP INSURANCE SOLUTIONS

ICICI Prudential also offers Group Insurance Solutions for companies seeking to enhance

benefits to their employees

1113090 Group Gratuity Plan ICICI Prudentials group gratuity plan helps employers fund

their statutory gratuity obligation in a scientific manner The plan can also be

customized to structure schemes that can provide benefits beyond the statutory

obligations

1113090 Group Superannuation Plan ICICI Prudential offers both defined contribution

(DC) and defined benefit (DB) superannuation schemes to optimize returns for the

members of the trust and rationalize the cost Members have the option of choosing

from various annuity options or opting for a partial commutation of the annuity at

the time of retirement

1113090 Group Immediate Annuities In addition to the annuities offered to existing

superannuation customers they offer immediate annuities to superannuation funds

not managed by them

1113090 Group Term Plan ICICI Prudentials flexible group term solution helps provide

affordable cover to members of a group The cover could be uniform or based on

designationrank or a multiple of salary The benefit under the policy is paid to the

9

beneficiary nominated by the member on hisher death

Flexible Rider Options

ICICI Prudential Life offers flexible riders which can be added to the basic policy at a

marginal cost depending on the specific needs of the customer

1113090 Accident amp disability benefit If death occurs as the result of an accident during the

term of the policy the beneficiary receives an additional amount equal to the rider sum assured

under the policy If the death occurs while traveling in an authorized

mass transport vehicle the beneficiary will be entitled to twice the sum assured as

additional benefit

1113090 Critical Illness Benefit protects the insured against financial loss in the event of 9

specified critical illnesses Benefits are payable to the insured for medical expenses

prior to death

1113090 Income Benefit This rider pays the 10 of the sum assured to the nominee every

year till maturity in the event of the death of the life assured It is available on

SmarKid and CashPlus

1113090 Waiver of Premium In case of total and permanent disability due to an accident

the future premiums continue to be paid by the company till the time of maturity

This rider is available with LifeTime Super LifeTime Super Pension and CashPlus

HISTORY OF ICICI PRUDENTIAL

As mentioned earlier ICICI Prudential Life Insurance Company is a joint venture

between ICICI Bank - one of Indias foremost financial services company - and

Prudential plc - a leading international financial services group headquartered in the

United Kingdom

HISTORY OF ICICI PRUDENTIAL

As mentioned earlier icici prudential life insurance company is a joint venture between icici bank

one of India foremost financial services company and prudential plc a leading international

financial services group headquarterd in tha united kingdom

10

ICICI Bank

ICICI Bank (1113090YSEIB1113090) is Indias second largest bank and largest private sector bank

with over 50 years presence in financial services and with assets of over Rs 344658 bn

(USD 79 billion) as on March 31 2007 The Bank offers a wide range of banking

products and financial services to corporate and retail customers through a variety of

delivery channels and through its specialized subsidiaries in the areas of investment

banking life and non-life insurance private equity and asset management ICICI Bank is

a leading player in the retail banking market and services its large customer base through

a network of over 950 branches and extension counters 3300 ATMs call centers and

internet banking to ensure that customers have access to its services at all times

Prudential Plc

Established in London in 1848 Prudential plc through its businesses in the UK and

Europe the US and Asia provides retail financial services products and services to more

than 20 million customers policyholder and unit holders and manages over pound251 billion

of funds worldwide (as of 31 December 2006) In Asia Prudential is the leading

European life insurance company with life operations in China Hong Kong India

Indonesia Japan Korea Malaysia the Philippines Singapore Taiwan Thailand and

Vietnam Prudential is the second largest retail fund manager for Asian sourced assets ex-

Japan as at June 2006 Its fund management business has expanded into a total of ten markets

China Hong Kong India Japan Korea Malaysia Singapore Taiwan Vietnam

and United Arab Emirates

ICICI Prudential has been the market leader in the private life insurance sector

contributing to 30 of the growth share followed by the SBI Life Insurance with 18

share Members like Ms Shikha Sharma CEO amp MD Ms Anita Pai EVP ndash

Customer Service amp Technology Mr Puneet Nanda CIO Mr Binayak Dutta Chief ndash

Sales amp Distribution have been with the company since its inception in 2000 and are

instrumental in developing ICIC Prudential to this level

The first policy was sold on 12th December 2000 Within 1 year ICICI Prudential

achieved 25000 policies and thereby growing at a faster rate achieved 1 million policies

by October 2004 By 2010 ICICI Prudential has a target to achieve 20 million customers

AWARDS amp RECOGNITION

AWARDS

11

1113090 Indias Most Customer Responsive Insurance Company

Avaya GlobalConnect - Economic Times

Customer Responsiveness Awards

1113090 Most Trusted Private Life Insurer

The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003

2004 and 2005

1113090 Prudence Customer Centricity Award 2004 amp 2005

Prudential Corporation Asia

1113090 Best Life Insurer 2003

Outlook Money Awards 2003 amp 2004

1113090 Superbrand 2003-04

1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising

campaign

Effies 2003

RECOGNITIONS

1113090 IMM Award for Excellence

Institute of Marketing amp Management

1113090 Organisation with Innovative HR Practices

Indira Group of Institutes

1113090 Most Trusted Private Life Insurer

The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003

2004 and 2005

1113090 Prudence Customer Centricity Award 2004 amp 2005

Prudential Corporation Asia

1113090 Best Life Insurer 2003

Outlook Money Awards 2003 amp 2004

1113090 Superbrand 2003-04

1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising

campaign

Effies 2003

12

Review of Literature

Mehr and Cammack (1976) agrees that insurance is usually thought of as a product that spreads the

risk of serious but low-probability losses among a group of individuals thus providing some

financial protection to each individual Kunreuther (1979) said that his product makes good sense

particularly when the protection is purchased against potential losses so large as to be catastrophic

such as total destruction of ones home a large accident liability judgment or death of primary

family breadwinner However it has long been recognized that this sensible product is difficult to

sellv

Kahneman amp Tversky (1984) stated indeed repeated demonstrations have shown most people lack

an adequate understanding of probability and risk concepts Dhar (1997) Greenleaf and Lehmann

(1995) Tversky and Shafir (1992) have shown that offering more options can generate decision

conflict and preference uncertainty leading to decision deferral

Kotler (1973) considers insurance to be in the category of unsought goods along with products

such as preventive dental services and burial plotsHe notes that unsought goods pose special

challenges to the marketer

Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) found that subjects were more likely

to buy insurance against small high-probability losses than insurance against large low- probability

losses Hershey and Schoemaker (1980) reported the opposite result

Kunreuther (1979) ldquoIt is not the magnitude of a potential loss that inspires people to buy insurance

voluntarily ndash it is the frequency with which a loss is likely to occurrdquo

Michael L Smith (1982) said that a typical life insurance contract provides a package of options or

rights to the policy owner that is not precisely duplicated by any other combination of commonly

available contracts Viewed from this perspective life insurance enjoys a unique position in the

field of investments and should be judged in this light The paper shows that an options viewpoint

provides a more complete explanation of policy owner behavior towards life insurance than the

conventional savings-and-protection view

13

Michael L Walden (1985) told that the options package view of the whole a

whole life policy is a package of options each of which has value and is expected to influence the

price of the policy This viewpoint implies the general hypothesis that price differences between

whole life policies can be explained by differences in policy contract provisions and differences in

selected company characteristics

OBJECTIVE

o To evaluate the factors underlying consumer perception towards investment in life insurance

policies

o To compare the differences in consumer perception of male and

female consumers

RESEARCH METHODOLOGY

The Study The study was exploratory in nature with survey method being used to complete the

study

Sampling Design

Population

Population included investors in NCR region

Sample frame

Since the data was collected through personal contacts the sample frames were the individuals who

are investing in life insurance policies

Sampling elements

Individual respondents were the sampling elements

14

Sampling Techniques

Random sampling technique was used to select the samples

Sample Size

Sample size was 150 respondents

Tools Used for Data Collection

Self designed questionnaire was used for the evaluation of factors affecting consumerrsquos perception

towards insurance Data was collected on Likertrsquos type scale where 1 stood for minimum

agreement and 7 stood for maximum agreement

Tools Used for Data Analysis

Item to total correlation was applied to check the internal consistency of the questionnaire The

measures were standardized through computation of reliability and validity

Factor analysis was applied to identify the underlying factors

Z-test was applied to find out the significant differences between male and

female investors

Results and Discussions

Consistency Measure

Firstly consistency of all the items in the questionnaire is checked through item to total correlation

Under this correlation of every item with total is measured and the computed value is compared

with standard value (ie 01590) If the computed value is found less than standard value then

whole factorstatement is dropped and will be termed as inconsistent

15

SNO ITEMS COMPUTED

CORRELATIO

N VALUE

CONSISTE

NT

ACCEPTED

DROPPED

1 Awareness about terms and conditions of

policy

0671575 Consistent Accepted

2 Provide services on time 0651847 Consistent Accepted

3 Provide satisfactory services 0573518 Consistent Accepted

4 Goodwill of the company 0607722 Consistent Accepted

5 Agent is well informed about policies 0640696 Consistent Accepted

6 Co-operative and friendly agent 0598089 Consistent Accepted

7 Agent respond promptly 0696914 Consistent Accepted

8 Proper reminder of installments by

agents

0531124 Consistent Accepted

9 Employees responsible towards

customers

0685817 Consistent Accepted

10 Benefits are met by policy 0510702 Consistent Accepted

11 Selection of highly reputed company 0634614 Consistent Accepted

12 Reputation of the insurance company 0582977 Consistent Accepted

13 Hassle free settlements 0594282 Consistent Accepted

14 Personal attention on every costumer 0640192 Consistent Accepted

15 Understand Customerrsquos financial needs 0603133 Consistent Accepted

16 Fulfill its promise towards policy 0613243 Consistent Accepted

17 Provides the claims on time 0474994 Consistent Accepted

18 Settlement of claims easy and timely 0569959 Consistent Accepted

19 Satisfy with relationship to company 0621496 Consistent Accepted

20 Company able to fulfill expectation 0594265 Consistent Accepted

21 Only company I want to associate

myself

0519161 Consistent Accepted

22 Purchase more policies from the same

company

0502876 Consistent Accepted

16

23 Suggest friends and family to purchase

policy from the same company

0540626 Consistent Accepted

24 Policy benefits benchmarks 062874 Consistent Accepted

25 Investment in life insurance is more

secure than stock market

0376874 Consistent Accepted

26 Purchase further policies from other

companies

0091102 Inonsistent Dropped

Reliability

Reliability test was carried out using SPSS software and the reliability of the items was measured

The result is as follows

Cronbachrsquos Alpha 0919

It can be seen that the reliability value is more than 07 So the questionnaire is

highly reliable

Description of factors

1 Company Loyalty

This factor includes that this is the only company the consumer wants to associate himself with in

future (0814) himself would purchase more policies from the same company (0799) suggest

friends and family to purchase policy from the same company (0790) company able to fulfill

expectation (0599) Policy benefits benchmarks (0545) The highest Eigen value lies in this factor

35213 So it is been considered as the highly contributing factor towards study Therefore it is

clear that company loyalty plays an important role in investment decisions of investors

17

2 Services Quality

This factor includes hassle free settlements (0693) employees responsible towards customers

(0631) agents respond promptly (0611) investment in life insurance is more secure than stock

market (0563) satisfy with relationship to company (0537) As we can see that the Eigen value for

factor service quality is 9753 which is also a contributing factor towards the study so it can also be considered as an the study

3 Ease of Procedures

This factor includes the company provides claims on time (0852) co- operative and friendly agent

(0662) settlement of claims easy and timely (0651) agent is well informed about policies (0486) As

we can see that the Eigen value for factor ease of procedures is 5830 which is also a contributing

factor towards the study so it can also be considered as an important factor inconsumerrsquos financial

needs (0404) As we can see that the Eigen value for factor company client relationship is 4051

which is also a contributing factor towards the study so it can also be considered as an important factor

in the study

4 Satisfaction Level

This factor includes that the suggested benefits of Insurance Policy should be met to the investors

( 0774) Company provides them satisfactory services (0631) fulfill its promise about life

insurance policy (0575) Services should be provided on time(0515) and awareness of terms and

conditions of policies As we can see that the Eigen value for factor satisfaction level is 5008

which is also a contributing factor towards the study so it can also be considered as an important

factor in the study

5 Company Image

This factor includes that the insurance company should be well known in the industry (0777)

insurance provider should have goodwill in market (0758) and company of high repute (0428)As

we can see that the Eigen value for factor company image is 4878 which is also a contributing

factor towards the study so it can also be considered as an important factor in the study

18

6 Company-Client Relationship

This factor includes that the agent remind about premium installments (0778) pay personal

attention on every consumer (0505) and understand consumerrsquos financial needs (0404) As

we can see that the Eigen value for factor company client relationship is 4051 which is also a

contributing factor towards the study so it can also be considered as an important factor in the

study

Z-Test

Z-test was applied to find out significant difference between male and female investorrsquos perception

towards investment in life insurance policies

For applying Z-test mean and standard deviation was calculated then values were put in formula to

calculate standard error

Null Hypothesis Ho It states that there is no significant difference between the perception of male

and female investors towards investment in life insurance policies

GENDER MEAN SD SAMPLE

SIZE

SQUARE

OF

SD

MALE 14104 20078 75 403146

FEMALE 14594 17701 75 313348

Z = 15877

Since the value of Z is less than the standard value 196 at 5 level of significance so the null

hypothesis is accepted Therefore there is no significant difference between the perception of male

and female investors towards investment in life insurance policies

19

CONCLUSION

In present Indian market the investment habits of Indian consumers are changing very frequently

The individuals have their own perception towards various types of investment plans The study of

this research work was focused over consumerrsquos perception on investment towards Life Insurance

Services The objectives of the study were to evaluate the factors underlying consumer perception

towards investment in life insurance policies and to compare the differences in consumer

perception of male and female consumers The tests that were used for our research activities were-

Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25

items being accepted Next was Reliability Test to check the reliability of the items The

result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis

Test and the six factors that came out were Consumer Loyalty Service Quality Ease of

Procedures Satisfaction Level Company Image and Company-Client Relationship

The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind

sets for their investment pattern in insurance policies Still some actions are needed for

developing insurance market The major factors playing the role in developing

consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality

Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship

Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in

developing the market share loyalty and further development in insurance sector

20

References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)

21

Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in

Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)

22

invested premiums and ensures that the customer receives only the benefits of fund

appreciation without any of the risks of depreciation

1113090 Invest Shield Cash back is a unit linked plan that provides premium guarantee

on the invested premiums along with flexible liquidity options

Protection Solutions

1113090 LifeGuard is a protection plan which offers life cover at low cost It is available in

3 options - level term assurance level term assurance with return of premium amp

single premium

1113090 HomeAssure is a mortgage reducing term assurance plan designed specifically to

help customers cover their home loans in a simple and cost-effective manner

Child Plans

1113090 Education insurance under the Smart Kid brand provides guaranteed educational

benefits to a child along with life insurance cover for the parent who purchases the

policy The policy is designed to provide money at important milestones in the

childs life Smart Kid plans are also available in unit-linked form - both single

premium and regular premium

Retirement Solutions

1113090 ForeverLife is a traditional retirement product that offers guaranteed returns for the

first 4 years and then declares bonuses annually

1113090 LifeTime Super Pension is a regular premium unit linked pension plan that helps

one accumulate over the long term and offers an annuity option (guaranteed income

for life) at the time of retirement

1113090 LifeLink Super Pension is a single premium unit linked pension plan

1113090 Immediate Annuity is a single premium annuity product that guarantees income for

life at the time of retirement It offers the benefit of 5 payout options

Health Solutions

1113090 Health Assure and Health Assure Plus Health Assure is a regular premium plan

which provides long term cover against 6 critical illnesses by providing policyholder

8

with financial assistance irrespective of the actual medical expenses Health Assure

Plus offers the added advantage of an equivalent life insurance cover

1113090 Cancer Care is a regular premium plan that pays cash benefit on the diagnosis as

well as at different stages in the treatment of various cancer conditions

1113090 Diabetes Care Diabetes Care is the first ever critical illness product especially for

individuals with Type 2 diabetes It makes payments on diagnosis on any of 6

diabetes related critical illnesses and also offers a coordinated care approach to

managing the condition Diabetes Care Plus also offers life cover

1113090 Hospital Care Hospital Care is structured to ensure customers receive a pre-

determined insurance amount for each procedure or hospitalization even if they

spend less Further its long-term design of a term between 10-20 years assures

policyholders the guaranteed cushion of insurance cover even if they make a claim

during the term Available for individuals between the ages of 1-60 years this is one

of the first products that will cover people up to the age of 80 years

GROUP INSURANCE SOLUTIONS

ICICI Prudential also offers Group Insurance Solutions for companies seeking to enhance

benefits to their employees

1113090 Group Gratuity Plan ICICI Prudentials group gratuity plan helps employers fund

their statutory gratuity obligation in a scientific manner The plan can also be

customized to structure schemes that can provide benefits beyond the statutory

obligations

1113090 Group Superannuation Plan ICICI Prudential offers both defined contribution

(DC) and defined benefit (DB) superannuation schemes to optimize returns for the

members of the trust and rationalize the cost Members have the option of choosing

from various annuity options or opting for a partial commutation of the annuity at

the time of retirement

1113090 Group Immediate Annuities In addition to the annuities offered to existing

superannuation customers they offer immediate annuities to superannuation funds

not managed by them

1113090 Group Term Plan ICICI Prudentials flexible group term solution helps provide

affordable cover to members of a group The cover could be uniform or based on

designationrank or a multiple of salary The benefit under the policy is paid to the

9

beneficiary nominated by the member on hisher death

Flexible Rider Options

ICICI Prudential Life offers flexible riders which can be added to the basic policy at a

marginal cost depending on the specific needs of the customer

1113090 Accident amp disability benefit If death occurs as the result of an accident during the

term of the policy the beneficiary receives an additional amount equal to the rider sum assured

under the policy If the death occurs while traveling in an authorized

mass transport vehicle the beneficiary will be entitled to twice the sum assured as

additional benefit

1113090 Critical Illness Benefit protects the insured against financial loss in the event of 9

specified critical illnesses Benefits are payable to the insured for medical expenses

prior to death

1113090 Income Benefit This rider pays the 10 of the sum assured to the nominee every

year till maturity in the event of the death of the life assured It is available on

SmarKid and CashPlus

1113090 Waiver of Premium In case of total and permanent disability due to an accident

the future premiums continue to be paid by the company till the time of maturity

This rider is available with LifeTime Super LifeTime Super Pension and CashPlus

HISTORY OF ICICI PRUDENTIAL

As mentioned earlier ICICI Prudential Life Insurance Company is a joint venture

between ICICI Bank - one of Indias foremost financial services company - and

Prudential plc - a leading international financial services group headquartered in the

United Kingdom

HISTORY OF ICICI PRUDENTIAL

As mentioned earlier icici prudential life insurance company is a joint venture between icici bank

one of India foremost financial services company and prudential plc a leading international

financial services group headquarterd in tha united kingdom

10

ICICI Bank

ICICI Bank (1113090YSEIB1113090) is Indias second largest bank and largest private sector bank

with over 50 years presence in financial services and with assets of over Rs 344658 bn

(USD 79 billion) as on March 31 2007 The Bank offers a wide range of banking

products and financial services to corporate and retail customers through a variety of

delivery channels and through its specialized subsidiaries in the areas of investment

banking life and non-life insurance private equity and asset management ICICI Bank is

a leading player in the retail banking market and services its large customer base through

a network of over 950 branches and extension counters 3300 ATMs call centers and

internet banking to ensure that customers have access to its services at all times

Prudential Plc

Established in London in 1848 Prudential plc through its businesses in the UK and

Europe the US and Asia provides retail financial services products and services to more

than 20 million customers policyholder and unit holders and manages over pound251 billion

of funds worldwide (as of 31 December 2006) In Asia Prudential is the leading

European life insurance company with life operations in China Hong Kong India

Indonesia Japan Korea Malaysia the Philippines Singapore Taiwan Thailand and

Vietnam Prudential is the second largest retail fund manager for Asian sourced assets ex-

Japan as at June 2006 Its fund management business has expanded into a total of ten markets

China Hong Kong India Japan Korea Malaysia Singapore Taiwan Vietnam

and United Arab Emirates

ICICI Prudential has been the market leader in the private life insurance sector

contributing to 30 of the growth share followed by the SBI Life Insurance with 18

share Members like Ms Shikha Sharma CEO amp MD Ms Anita Pai EVP ndash

Customer Service amp Technology Mr Puneet Nanda CIO Mr Binayak Dutta Chief ndash

Sales amp Distribution have been with the company since its inception in 2000 and are

instrumental in developing ICIC Prudential to this level

The first policy was sold on 12th December 2000 Within 1 year ICICI Prudential

achieved 25000 policies and thereby growing at a faster rate achieved 1 million policies

by October 2004 By 2010 ICICI Prudential has a target to achieve 20 million customers

AWARDS amp RECOGNITION

AWARDS

11

1113090 Indias Most Customer Responsive Insurance Company

Avaya GlobalConnect - Economic Times

Customer Responsiveness Awards

1113090 Most Trusted Private Life Insurer

The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003

2004 and 2005

1113090 Prudence Customer Centricity Award 2004 amp 2005

Prudential Corporation Asia

1113090 Best Life Insurer 2003

Outlook Money Awards 2003 amp 2004

1113090 Superbrand 2003-04

1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising

campaign

Effies 2003

RECOGNITIONS

1113090 IMM Award for Excellence

Institute of Marketing amp Management

1113090 Organisation with Innovative HR Practices

Indira Group of Institutes

1113090 Most Trusted Private Life Insurer

The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003

2004 and 2005

1113090 Prudence Customer Centricity Award 2004 amp 2005

Prudential Corporation Asia

1113090 Best Life Insurer 2003

Outlook Money Awards 2003 amp 2004

1113090 Superbrand 2003-04

1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising

campaign

Effies 2003

12

Review of Literature

Mehr and Cammack (1976) agrees that insurance is usually thought of as a product that spreads the

risk of serious but low-probability losses among a group of individuals thus providing some

financial protection to each individual Kunreuther (1979) said that his product makes good sense

particularly when the protection is purchased against potential losses so large as to be catastrophic

such as total destruction of ones home a large accident liability judgment or death of primary

family breadwinner However it has long been recognized that this sensible product is difficult to

sellv

Kahneman amp Tversky (1984) stated indeed repeated demonstrations have shown most people lack

an adequate understanding of probability and risk concepts Dhar (1997) Greenleaf and Lehmann

(1995) Tversky and Shafir (1992) have shown that offering more options can generate decision

conflict and preference uncertainty leading to decision deferral

Kotler (1973) considers insurance to be in the category of unsought goods along with products

such as preventive dental services and burial plotsHe notes that unsought goods pose special

challenges to the marketer

Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) found that subjects were more likely

to buy insurance against small high-probability losses than insurance against large low- probability

losses Hershey and Schoemaker (1980) reported the opposite result

Kunreuther (1979) ldquoIt is not the magnitude of a potential loss that inspires people to buy insurance

voluntarily ndash it is the frequency with which a loss is likely to occurrdquo

Michael L Smith (1982) said that a typical life insurance contract provides a package of options or

rights to the policy owner that is not precisely duplicated by any other combination of commonly

available contracts Viewed from this perspective life insurance enjoys a unique position in the

field of investments and should be judged in this light The paper shows that an options viewpoint

provides a more complete explanation of policy owner behavior towards life insurance than the

conventional savings-and-protection view

13

Michael L Walden (1985) told that the options package view of the whole a

whole life policy is a package of options each of which has value and is expected to influence the

price of the policy This viewpoint implies the general hypothesis that price differences between

whole life policies can be explained by differences in policy contract provisions and differences in

selected company characteristics

OBJECTIVE

o To evaluate the factors underlying consumer perception towards investment in life insurance

policies

o To compare the differences in consumer perception of male and

female consumers

RESEARCH METHODOLOGY

The Study The study was exploratory in nature with survey method being used to complete the

study

Sampling Design

Population

Population included investors in NCR region

Sample frame

Since the data was collected through personal contacts the sample frames were the individuals who

are investing in life insurance policies

Sampling elements

Individual respondents were the sampling elements

14

Sampling Techniques

Random sampling technique was used to select the samples

Sample Size

Sample size was 150 respondents

Tools Used for Data Collection

Self designed questionnaire was used for the evaluation of factors affecting consumerrsquos perception

towards insurance Data was collected on Likertrsquos type scale where 1 stood for minimum

agreement and 7 stood for maximum agreement

Tools Used for Data Analysis

Item to total correlation was applied to check the internal consistency of the questionnaire The

measures were standardized through computation of reliability and validity

Factor analysis was applied to identify the underlying factors

Z-test was applied to find out the significant differences between male and

female investors

Results and Discussions

Consistency Measure

Firstly consistency of all the items in the questionnaire is checked through item to total correlation

Under this correlation of every item with total is measured and the computed value is compared

with standard value (ie 01590) If the computed value is found less than standard value then

whole factorstatement is dropped and will be termed as inconsistent

15

SNO ITEMS COMPUTED

CORRELATIO

N VALUE

CONSISTE

NT

ACCEPTED

DROPPED

1 Awareness about terms and conditions of

policy

0671575 Consistent Accepted

2 Provide services on time 0651847 Consistent Accepted

3 Provide satisfactory services 0573518 Consistent Accepted

4 Goodwill of the company 0607722 Consistent Accepted

5 Agent is well informed about policies 0640696 Consistent Accepted

6 Co-operative and friendly agent 0598089 Consistent Accepted

7 Agent respond promptly 0696914 Consistent Accepted

8 Proper reminder of installments by

agents

0531124 Consistent Accepted

9 Employees responsible towards

customers

0685817 Consistent Accepted

10 Benefits are met by policy 0510702 Consistent Accepted

11 Selection of highly reputed company 0634614 Consistent Accepted

12 Reputation of the insurance company 0582977 Consistent Accepted

13 Hassle free settlements 0594282 Consistent Accepted

14 Personal attention on every costumer 0640192 Consistent Accepted

15 Understand Customerrsquos financial needs 0603133 Consistent Accepted

16 Fulfill its promise towards policy 0613243 Consistent Accepted

17 Provides the claims on time 0474994 Consistent Accepted

18 Settlement of claims easy and timely 0569959 Consistent Accepted

19 Satisfy with relationship to company 0621496 Consistent Accepted

20 Company able to fulfill expectation 0594265 Consistent Accepted

21 Only company I want to associate

myself

0519161 Consistent Accepted

22 Purchase more policies from the same

company

0502876 Consistent Accepted

16

23 Suggest friends and family to purchase

policy from the same company

0540626 Consistent Accepted

24 Policy benefits benchmarks 062874 Consistent Accepted

25 Investment in life insurance is more

secure than stock market

0376874 Consistent Accepted

26 Purchase further policies from other

companies

0091102 Inonsistent Dropped

Reliability

Reliability test was carried out using SPSS software and the reliability of the items was measured

The result is as follows

Cronbachrsquos Alpha 0919

It can be seen that the reliability value is more than 07 So the questionnaire is

highly reliable

Description of factors

1 Company Loyalty

This factor includes that this is the only company the consumer wants to associate himself with in

future (0814) himself would purchase more policies from the same company (0799) suggest

friends and family to purchase policy from the same company (0790) company able to fulfill

expectation (0599) Policy benefits benchmarks (0545) The highest Eigen value lies in this factor

35213 So it is been considered as the highly contributing factor towards study Therefore it is

clear that company loyalty plays an important role in investment decisions of investors

17

2 Services Quality

This factor includes hassle free settlements (0693) employees responsible towards customers

(0631) agents respond promptly (0611) investment in life insurance is more secure than stock

market (0563) satisfy with relationship to company (0537) As we can see that the Eigen value for

factor service quality is 9753 which is also a contributing factor towards the study so it can also be considered as an the study

3 Ease of Procedures

This factor includes the company provides claims on time (0852) co- operative and friendly agent

(0662) settlement of claims easy and timely (0651) agent is well informed about policies (0486) As

we can see that the Eigen value for factor ease of procedures is 5830 which is also a contributing

factor towards the study so it can also be considered as an important factor inconsumerrsquos financial

needs (0404) As we can see that the Eigen value for factor company client relationship is 4051

which is also a contributing factor towards the study so it can also be considered as an important factor

in the study

4 Satisfaction Level

This factor includes that the suggested benefits of Insurance Policy should be met to the investors

( 0774) Company provides them satisfactory services (0631) fulfill its promise about life

insurance policy (0575) Services should be provided on time(0515) and awareness of terms and

conditions of policies As we can see that the Eigen value for factor satisfaction level is 5008

which is also a contributing factor towards the study so it can also be considered as an important

factor in the study

5 Company Image

This factor includes that the insurance company should be well known in the industry (0777)

insurance provider should have goodwill in market (0758) and company of high repute (0428)As

we can see that the Eigen value for factor company image is 4878 which is also a contributing

factor towards the study so it can also be considered as an important factor in the study

18

6 Company-Client Relationship

This factor includes that the agent remind about premium installments (0778) pay personal

attention on every consumer (0505) and understand consumerrsquos financial needs (0404) As

we can see that the Eigen value for factor company client relationship is 4051 which is also a

contributing factor towards the study so it can also be considered as an important factor in the

study

Z-Test

Z-test was applied to find out significant difference between male and female investorrsquos perception

towards investment in life insurance policies

For applying Z-test mean and standard deviation was calculated then values were put in formula to

calculate standard error

Null Hypothesis Ho It states that there is no significant difference between the perception of male

and female investors towards investment in life insurance policies

GENDER MEAN SD SAMPLE

SIZE

SQUARE

OF

SD

MALE 14104 20078 75 403146

FEMALE 14594 17701 75 313348

Z = 15877

Since the value of Z is less than the standard value 196 at 5 level of significance so the null

hypothesis is accepted Therefore there is no significant difference between the perception of male

and female investors towards investment in life insurance policies

19

CONCLUSION

In present Indian market the investment habits of Indian consumers are changing very frequently

The individuals have their own perception towards various types of investment plans The study of

this research work was focused over consumerrsquos perception on investment towards Life Insurance

Services The objectives of the study were to evaluate the factors underlying consumer perception

towards investment in life insurance policies and to compare the differences in consumer

perception of male and female consumers The tests that were used for our research activities were-

Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25

items being accepted Next was Reliability Test to check the reliability of the items The

result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis

Test and the six factors that came out were Consumer Loyalty Service Quality Ease of

Procedures Satisfaction Level Company Image and Company-Client Relationship

The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind

sets for their investment pattern in insurance policies Still some actions are needed for

developing insurance market The major factors playing the role in developing

consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality

Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship

Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in

developing the market share loyalty and further development in insurance sector

20

References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)

21

Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in

Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)

22

with financial assistance irrespective of the actual medical expenses Health Assure

Plus offers the added advantage of an equivalent life insurance cover

1113090 Cancer Care is a regular premium plan that pays cash benefit on the diagnosis as

well as at different stages in the treatment of various cancer conditions

1113090 Diabetes Care Diabetes Care is the first ever critical illness product especially for

individuals with Type 2 diabetes It makes payments on diagnosis on any of 6

diabetes related critical illnesses and also offers a coordinated care approach to

managing the condition Diabetes Care Plus also offers life cover

1113090 Hospital Care Hospital Care is structured to ensure customers receive a pre-

determined insurance amount for each procedure or hospitalization even if they

spend less Further its long-term design of a term between 10-20 years assures

policyholders the guaranteed cushion of insurance cover even if they make a claim

during the term Available for individuals between the ages of 1-60 years this is one

of the first products that will cover people up to the age of 80 years

GROUP INSURANCE SOLUTIONS

ICICI Prudential also offers Group Insurance Solutions for companies seeking to enhance

benefits to their employees

1113090 Group Gratuity Plan ICICI Prudentials group gratuity plan helps employers fund

their statutory gratuity obligation in a scientific manner The plan can also be

customized to structure schemes that can provide benefits beyond the statutory

obligations

1113090 Group Superannuation Plan ICICI Prudential offers both defined contribution

(DC) and defined benefit (DB) superannuation schemes to optimize returns for the

members of the trust and rationalize the cost Members have the option of choosing

from various annuity options or opting for a partial commutation of the annuity at

the time of retirement

1113090 Group Immediate Annuities In addition to the annuities offered to existing

superannuation customers they offer immediate annuities to superannuation funds

not managed by them

1113090 Group Term Plan ICICI Prudentials flexible group term solution helps provide

affordable cover to members of a group The cover could be uniform or based on

designationrank or a multiple of salary The benefit under the policy is paid to the

9

beneficiary nominated by the member on hisher death

Flexible Rider Options

ICICI Prudential Life offers flexible riders which can be added to the basic policy at a

marginal cost depending on the specific needs of the customer

1113090 Accident amp disability benefit If death occurs as the result of an accident during the

term of the policy the beneficiary receives an additional amount equal to the rider sum assured

under the policy If the death occurs while traveling in an authorized

mass transport vehicle the beneficiary will be entitled to twice the sum assured as

additional benefit

1113090 Critical Illness Benefit protects the insured against financial loss in the event of 9

specified critical illnesses Benefits are payable to the insured for medical expenses

prior to death

1113090 Income Benefit This rider pays the 10 of the sum assured to the nominee every

year till maturity in the event of the death of the life assured It is available on

SmarKid and CashPlus

1113090 Waiver of Premium In case of total and permanent disability due to an accident

the future premiums continue to be paid by the company till the time of maturity

This rider is available with LifeTime Super LifeTime Super Pension and CashPlus

HISTORY OF ICICI PRUDENTIAL

As mentioned earlier ICICI Prudential Life Insurance Company is a joint venture

between ICICI Bank - one of Indias foremost financial services company - and

Prudential plc - a leading international financial services group headquartered in the

United Kingdom

HISTORY OF ICICI PRUDENTIAL

As mentioned earlier icici prudential life insurance company is a joint venture between icici bank

one of India foremost financial services company and prudential plc a leading international

financial services group headquarterd in tha united kingdom

10

ICICI Bank

ICICI Bank (1113090YSEIB1113090) is Indias second largest bank and largest private sector bank

with over 50 years presence in financial services and with assets of over Rs 344658 bn

(USD 79 billion) as on March 31 2007 The Bank offers a wide range of banking

products and financial services to corporate and retail customers through a variety of

delivery channels and through its specialized subsidiaries in the areas of investment

banking life and non-life insurance private equity and asset management ICICI Bank is

a leading player in the retail banking market and services its large customer base through

a network of over 950 branches and extension counters 3300 ATMs call centers and

internet banking to ensure that customers have access to its services at all times

Prudential Plc

Established in London in 1848 Prudential plc through its businesses in the UK and

Europe the US and Asia provides retail financial services products and services to more

than 20 million customers policyholder and unit holders and manages over pound251 billion

of funds worldwide (as of 31 December 2006) In Asia Prudential is the leading

European life insurance company with life operations in China Hong Kong India

Indonesia Japan Korea Malaysia the Philippines Singapore Taiwan Thailand and

Vietnam Prudential is the second largest retail fund manager for Asian sourced assets ex-

Japan as at June 2006 Its fund management business has expanded into a total of ten markets

China Hong Kong India Japan Korea Malaysia Singapore Taiwan Vietnam

and United Arab Emirates

ICICI Prudential has been the market leader in the private life insurance sector

contributing to 30 of the growth share followed by the SBI Life Insurance with 18

share Members like Ms Shikha Sharma CEO amp MD Ms Anita Pai EVP ndash

Customer Service amp Technology Mr Puneet Nanda CIO Mr Binayak Dutta Chief ndash

Sales amp Distribution have been with the company since its inception in 2000 and are

instrumental in developing ICIC Prudential to this level

The first policy was sold on 12th December 2000 Within 1 year ICICI Prudential

achieved 25000 policies and thereby growing at a faster rate achieved 1 million policies

by October 2004 By 2010 ICICI Prudential has a target to achieve 20 million customers

AWARDS amp RECOGNITION

AWARDS

11

1113090 Indias Most Customer Responsive Insurance Company

Avaya GlobalConnect - Economic Times

Customer Responsiveness Awards

1113090 Most Trusted Private Life Insurer

The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003

2004 and 2005

1113090 Prudence Customer Centricity Award 2004 amp 2005

Prudential Corporation Asia

1113090 Best Life Insurer 2003

Outlook Money Awards 2003 amp 2004

1113090 Superbrand 2003-04

1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising

campaign

Effies 2003

RECOGNITIONS

1113090 IMM Award for Excellence

Institute of Marketing amp Management

1113090 Organisation with Innovative HR Practices

Indira Group of Institutes

1113090 Most Trusted Private Life Insurer

The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003

2004 and 2005

1113090 Prudence Customer Centricity Award 2004 amp 2005

Prudential Corporation Asia

1113090 Best Life Insurer 2003

Outlook Money Awards 2003 amp 2004

1113090 Superbrand 2003-04

1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising

campaign

Effies 2003

12

Review of Literature

Mehr and Cammack (1976) agrees that insurance is usually thought of as a product that spreads the

risk of serious but low-probability losses among a group of individuals thus providing some

financial protection to each individual Kunreuther (1979) said that his product makes good sense

particularly when the protection is purchased against potential losses so large as to be catastrophic

such as total destruction of ones home a large accident liability judgment or death of primary

family breadwinner However it has long been recognized that this sensible product is difficult to

sellv

Kahneman amp Tversky (1984) stated indeed repeated demonstrations have shown most people lack

an adequate understanding of probability and risk concepts Dhar (1997) Greenleaf and Lehmann

(1995) Tversky and Shafir (1992) have shown that offering more options can generate decision

conflict and preference uncertainty leading to decision deferral

Kotler (1973) considers insurance to be in the category of unsought goods along with products

such as preventive dental services and burial plotsHe notes that unsought goods pose special

challenges to the marketer

Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) found that subjects were more likely

to buy insurance against small high-probability losses than insurance against large low- probability

losses Hershey and Schoemaker (1980) reported the opposite result

Kunreuther (1979) ldquoIt is not the magnitude of a potential loss that inspires people to buy insurance

voluntarily ndash it is the frequency with which a loss is likely to occurrdquo

Michael L Smith (1982) said that a typical life insurance contract provides a package of options or

rights to the policy owner that is not precisely duplicated by any other combination of commonly

available contracts Viewed from this perspective life insurance enjoys a unique position in the

field of investments and should be judged in this light The paper shows that an options viewpoint

provides a more complete explanation of policy owner behavior towards life insurance than the

conventional savings-and-protection view

13

Michael L Walden (1985) told that the options package view of the whole a

whole life policy is a package of options each of which has value and is expected to influence the

price of the policy This viewpoint implies the general hypothesis that price differences between

whole life policies can be explained by differences in policy contract provisions and differences in

selected company characteristics

OBJECTIVE

o To evaluate the factors underlying consumer perception towards investment in life insurance

policies

o To compare the differences in consumer perception of male and

female consumers

RESEARCH METHODOLOGY

The Study The study was exploratory in nature with survey method being used to complete the

study

Sampling Design

Population

Population included investors in NCR region

Sample frame

Since the data was collected through personal contacts the sample frames were the individuals who

are investing in life insurance policies

Sampling elements

Individual respondents were the sampling elements

14

Sampling Techniques

Random sampling technique was used to select the samples

Sample Size

Sample size was 150 respondents

Tools Used for Data Collection

Self designed questionnaire was used for the evaluation of factors affecting consumerrsquos perception

towards insurance Data was collected on Likertrsquos type scale where 1 stood for minimum

agreement and 7 stood for maximum agreement

Tools Used for Data Analysis

Item to total correlation was applied to check the internal consistency of the questionnaire The

measures were standardized through computation of reliability and validity

Factor analysis was applied to identify the underlying factors

Z-test was applied to find out the significant differences between male and

female investors

Results and Discussions

Consistency Measure

Firstly consistency of all the items in the questionnaire is checked through item to total correlation

Under this correlation of every item with total is measured and the computed value is compared

with standard value (ie 01590) If the computed value is found less than standard value then

whole factorstatement is dropped and will be termed as inconsistent

15

SNO ITEMS COMPUTED

CORRELATIO

N VALUE

CONSISTE

NT

ACCEPTED

DROPPED

1 Awareness about terms and conditions of

policy

0671575 Consistent Accepted

2 Provide services on time 0651847 Consistent Accepted

3 Provide satisfactory services 0573518 Consistent Accepted

4 Goodwill of the company 0607722 Consistent Accepted

5 Agent is well informed about policies 0640696 Consistent Accepted

6 Co-operative and friendly agent 0598089 Consistent Accepted

7 Agent respond promptly 0696914 Consistent Accepted

8 Proper reminder of installments by

agents

0531124 Consistent Accepted

9 Employees responsible towards

customers

0685817 Consistent Accepted

10 Benefits are met by policy 0510702 Consistent Accepted

11 Selection of highly reputed company 0634614 Consistent Accepted

12 Reputation of the insurance company 0582977 Consistent Accepted

13 Hassle free settlements 0594282 Consistent Accepted

14 Personal attention on every costumer 0640192 Consistent Accepted

15 Understand Customerrsquos financial needs 0603133 Consistent Accepted

16 Fulfill its promise towards policy 0613243 Consistent Accepted

17 Provides the claims on time 0474994 Consistent Accepted

18 Settlement of claims easy and timely 0569959 Consistent Accepted

19 Satisfy with relationship to company 0621496 Consistent Accepted

20 Company able to fulfill expectation 0594265 Consistent Accepted

21 Only company I want to associate

myself

0519161 Consistent Accepted

22 Purchase more policies from the same

company

0502876 Consistent Accepted

16

23 Suggest friends and family to purchase

policy from the same company

0540626 Consistent Accepted

24 Policy benefits benchmarks 062874 Consistent Accepted

25 Investment in life insurance is more

secure than stock market

0376874 Consistent Accepted

26 Purchase further policies from other

companies

0091102 Inonsistent Dropped

Reliability

Reliability test was carried out using SPSS software and the reliability of the items was measured

The result is as follows

Cronbachrsquos Alpha 0919

It can be seen that the reliability value is more than 07 So the questionnaire is

highly reliable

Description of factors

1 Company Loyalty

This factor includes that this is the only company the consumer wants to associate himself with in

future (0814) himself would purchase more policies from the same company (0799) suggest

friends and family to purchase policy from the same company (0790) company able to fulfill

expectation (0599) Policy benefits benchmarks (0545) The highest Eigen value lies in this factor

35213 So it is been considered as the highly contributing factor towards study Therefore it is

clear that company loyalty plays an important role in investment decisions of investors

17

2 Services Quality

This factor includes hassle free settlements (0693) employees responsible towards customers

(0631) agents respond promptly (0611) investment in life insurance is more secure than stock

market (0563) satisfy with relationship to company (0537) As we can see that the Eigen value for

factor service quality is 9753 which is also a contributing factor towards the study so it can also be considered as an the study

3 Ease of Procedures

This factor includes the company provides claims on time (0852) co- operative and friendly agent

(0662) settlement of claims easy and timely (0651) agent is well informed about policies (0486) As

we can see that the Eigen value for factor ease of procedures is 5830 which is also a contributing

factor towards the study so it can also be considered as an important factor inconsumerrsquos financial

needs (0404) As we can see that the Eigen value for factor company client relationship is 4051

which is also a contributing factor towards the study so it can also be considered as an important factor

in the study

4 Satisfaction Level

This factor includes that the suggested benefits of Insurance Policy should be met to the investors

( 0774) Company provides them satisfactory services (0631) fulfill its promise about life

insurance policy (0575) Services should be provided on time(0515) and awareness of terms and

conditions of policies As we can see that the Eigen value for factor satisfaction level is 5008

which is also a contributing factor towards the study so it can also be considered as an important

factor in the study

5 Company Image

This factor includes that the insurance company should be well known in the industry (0777)

insurance provider should have goodwill in market (0758) and company of high repute (0428)As

we can see that the Eigen value for factor company image is 4878 which is also a contributing

factor towards the study so it can also be considered as an important factor in the study

18

6 Company-Client Relationship

This factor includes that the agent remind about premium installments (0778) pay personal

attention on every consumer (0505) and understand consumerrsquos financial needs (0404) As

we can see that the Eigen value for factor company client relationship is 4051 which is also a

contributing factor towards the study so it can also be considered as an important factor in the

study

Z-Test

Z-test was applied to find out significant difference between male and female investorrsquos perception

towards investment in life insurance policies

For applying Z-test mean and standard deviation was calculated then values were put in formula to

calculate standard error

Null Hypothesis Ho It states that there is no significant difference between the perception of male

and female investors towards investment in life insurance policies

GENDER MEAN SD SAMPLE

SIZE

SQUARE

OF

SD

MALE 14104 20078 75 403146

FEMALE 14594 17701 75 313348

Z = 15877

Since the value of Z is less than the standard value 196 at 5 level of significance so the null

hypothesis is accepted Therefore there is no significant difference between the perception of male

and female investors towards investment in life insurance policies

19

CONCLUSION

In present Indian market the investment habits of Indian consumers are changing very frequently

The individuals have their own perception towards various types of investment plans The study of

this research work was focused over consumerrsquos perception on investment towards Life Insurance

Services The objectives of the study were to evaluate the factors underlying consumer perception

towards investment in life insurance policies and to compare the differences in consumer

perception of male and female consumers The tests that were used for our research activities were-

Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25

items being accepted Next was Reliability Test to check the reliability of the items The

result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis

Test and the six factors that came out were Consumer Loyalty Service Quality Ease of

Procedures Satisfaction Level Company Image and Company-Client Relationship

The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind

sets for their investment pattern in insurance policies Still some actions are needed for

developing insurance market The major factors playing the role in developing

consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality

Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship

Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in

developing the market share loyalty and further development in insurance sector

20

References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)

21

Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in

Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)

22

beneficiary nominated by the member on hisher death

Flexible Rider Options

ICICI Prudential Life offers flexible riders which can be added to the basic policy at a

marginal cost depending on the specific needs of the customer

1113090 Accident amp disability benefit If death occurs as the result of an accident during the

term of the policy the beneficiary receives an additional amount equal to the rider sum assured

under the policy If the death occurs while traveling in an authorized

mass transport vehicle the beneficiary will be entitled to twice the sum assured as

additional benefit

1113090 Critical Illness Benefit protects the insured against financial loss in the event of 9

specified critical illnesses Benefits are payable to the insured for medical expenses

prior to death

1113090 Income Benefit This rider pays the 10 of the sum assured to the nominee every

year till maturity in the event of the death of the life assured It is available on

SmarKid and CashPlus

1113090 Waiver of Premium In case of total and permanent disability due to an accident

the future premiums continue to be paid by the company till the time of maturity

This rider is available with LifeTime Super LifeTime Super Pension and CashPlus

HISTORY OF ICICI PRUDENTIAL

As mentioned earlier ICICI Prudential Life Insurance Company is a joint venture

between ICICI Bank - one of Indias foremost financial services company - and

Prudential plc - a leading international financial services group headquartered in the

United Kingdom

HISTORY OF ICICI PRUDENTIAL

As mentioned earlier icici prudential life insurance company is a joint venture between icici bank

one of India foremost financial services company and prudential plc a leading international

financial services group headquarterd in tha united kingdom

10

ICICI Bank

ICICI Bank (1113090YSEIB1113090) is Indias second largest bank and largest private sector bank

with over 50 years presence in financial services and with assets of over Rs 344658 bn

(USD 79 billion) as on March 31 2007 The Bank offers a wide range of banking

products and financial services to corporate and retail customers through a variety of

delivery channels and through its specialized subsidiaries in the areas of investment

banking life and non-life insurance private equity and asset management ICICI Bank is

a leading player in the retail banking market and services its large customer base through

a network of over 950 branches and extension counters 3300 ATMs call centers and

internet banking to ensure that customers have access to its services at all times

Prudential Plc

Established in London in 1848 Prudential plc through its businesses in the UK and

Europe the US and Asia provides retail financial services products and services to more

than 20 million customers policyholder and unit holders and manages over pound251 billion

of funds worldwide (as of 31 December 2006) In Asia Prudential is the leading

European life insurance company with life operations in China Hong Kong India

Indonesia Japan Korea Malaysia the Philippines Singapore Taiwan Thailand and

Vietnam Prudential is the second largest retail fund manager for Asian sourced assets ex-

Japan as at June 2006 Its fund management business has expanded into a total of ten markets

China Hong Kong India Japan Korea Malaysia Singapore Taiwan Vietnam

and United Arab Emirates

ICICI Prudential has been the market leader in the private life insurance sector

contributing to 30 of the growth share followed by the SBI Life Insurance with 18

share Members like Ms Shikha Sharma CEO amp MD Ms Anita Pai EVP ndash

Customer Service amp Technology Mr Puneet Nanda CIO Mr Binayak Dutta Chief ndash

Sales amp Distribution have been with the company since its inception in 2000 and are

instrumental in developing ICIC Prudential to this level

The first policy was sold on 12th December 2000 Within 1 year ICICI Prudential

achieved 25000 policies and thereby growing at a faster rate achieved 1 million policies

by October 2004 By 2010 ICICI Prudential has a target to achieve 20 million customers

AWARDS amp RECOGNITION

AWARDS

11

1113090 Indias Most Customer Responsive Insurance Company

Avaya GlobalConnect - Economic Times

Customer Responsiveness Awards

1113090 Most Trusted Private Life Insurer

The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003

2004 and 2005

1113090 Prudence Customer Centricity Award 2004 amp 2005

Prudential Corporation Asia

1113090 Best Life Insurer 2003

Outlook Money Awards 2003 amp 2004

1113090 Superbrand 2003-04

1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising

campaign

Effies 2003

RECOGNITIONS

1113090 IMM Award for Excellence

Institute of Marketing amp Management

1113090 Organisation with Innovative HR Practices

Indira Group of Institutes

1113090 Most Trusted Private Life Insurer

The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003

2004 and 2005

1113090 Prudence Customer Centricity Award 2004 amp 2005

Prudential Corporation Asia

1113090 Best Life Insurer 2003

Outlook Money Awards 2003 amp 2004

1113090 Superbrand 2003-04

1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising

campaign

Effies 2003

12

Review of Literature

Mehr and Cammack (1976) agrees that insurance is usually thought of as a product that spreads the

risk of serious but low-probability losses among a group of individuals thus providing some

financial protection to each individual Kunreuther (1979) said that his product makes good sense

particularly when the protection is purchased against potential losses so large as to be catastrophic

such as total destruction of ones home a large accident liability judgment or death of primary

family breadwinner However it has long been recognized that this sensible product is difficult to

sellv

Kahneman amp Tversky (1984) stated indeed repeated demonstrations have shown most people lack

an adequate understanding of probability and risk concepts Dhar (1997) Greenleaf and Lehmann

(1995) Tversky and Shafir (1992) have shown that offering more options can generate decision

conflict and preference uncertainty leading to decision deferral

Kotler (1973) considers insurance to be in the category of unsought goods along with products

such as preventive dental services and burial plotsHe notes that unsought goods pose special

challenges to the marketer

Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) found that subjects were more likely

to buy insurance against small high-probability losses than insurance against large low- probability

losses Hershey and Schoemaker (1980) reported the opposite result

Kunreuther (1979) ldquoIt is not the magnitude of a potential loss that inspires people to buy insurance

voluntarily ndash it is the frequency with which a loss is likely to occurrdquo

Michael L Smith (1982) said that a typical life insurance contract provides a package of options or

rights to the policy owner that is not precisely duplicated by any other combination of commonly

available contracts Viewed from this perspective life insurance enjoys a unique position in the

field of investments and should be judged in this light The paper shows that an options viewpoint

provides a more complete explanation of policy owner behavior towards life insurance than the

conventional savings-and-protection view

13

Michael L Walden (1985) told that the options package view of the whole a

whole life policy is a package of options each of which has value and is expected to influence the

price of the policy This viewpoint implies the general hypothesis that price differences between

whole life policies can be explained by differences in policy contract provisions and differences in

selected company characteristics

OBJECTIVE

o To evaluate the factors underlying consumer perception towards investment in life insurance

policies

o To compare the differences in consumer perception of male and

female consumers

RESEARCH METHODOLOGY

The Study The study was exploratory in nature with survey method being used to complete the

study

Sampling Design

Population

Population included investors in NCR region

Sample frame

Since the data was collected through personal contacts the sample frames were the individuals who

are investing in life insurance policies

Sampling elements

Individual respondents were the sampling elements

14

Sampling Techniques

Random sampling technique was used to select the samples

Sample Size

Sample size was 150 respondents

Tools Used for Data Collection

Self designed questionnaire was used for the evaluation of factors affecting consumerrsquos perception

towards insurance Data was collected on Likertrsquos type scale where 1 stood for minimum

agreement and 7 stood for maximum agreement

Tools Used for Data Analysis

Item to total correlation was applied to check the internal consistency of the questionnaire The

measures were standardized through computation of reliability and validity

Factor analysis was applied to identify the underlying factors

Z-test was applied to find out the significant differences between male and

female investors

Results and Discussions

Consistency Measure

Firstly consistency of all the items in the questionnaire is checked through item to total correlation

Under this correlation of every item with total is measured and the computed value is compared

with standard value (ie 01590) If the computed value is found less than standard value then

whole factorstatement is dropped and will be termed as inconsistent

15

SNO ITEMS COMPUTED

CORRELATIO

N VALUE

CONSISTE

NT

ACCEPTED

DROPPED

1 Awareness about terms and conditions of

policy

0671575 Consistent Accepted

2 Provide services on time 0651847 Consistent Accepted

3 Provide satisfactory services 0573518 Consistent Accepted

4 Goodwill of the company 0607722 Consistent Accepted

5 Agent is well informed about policies 0640696 Consistent Accepted

6 Co-operative and friendly agent 0598089 Consistent Accepted

7 Agent respond promptly 0696914 Consistent Accepted

8 Proper reminder of installments by

agents

0531124 Consistent Accepted

9 Employees responsible towards

customers

0685817 Consistent Accepted

10 Benefits are met by policy 0510702 Consistent Accepted

11 Selection of highly reputed company 0634614 Consistent Accepted

12 Reputation of the insurance company 0582977 Consistent Accepted

13 Hassle free settlements 0594282 Consistent Accepted

14 Personal attention on every costumer 0640192 Consistent Accepted

15 Understand Customerrsquos financial needs 0603133 Consistent Accepted

16 Fulfill its promise towards policy 0613243 Consistent Accepted

17 Provides the claims on time 0474994 Consistent Accepted

18 Settlement of claims easy and timely 0569959 Consistent Accepted

19 Satisfy with relationship to company 0621496 Consistent Accepted

20 Company able to fulfill expectation 0594265 Consistent Accepted

21 Only company I want to associate

myself

0519161 Consistent Accepted

22 Purchase more policies from the same

company

0502876 Consistent Accepted

16

23 Suggest friends and family to purchase

policy from the same company

0540626 Consistent Accepted

24 Policy benefits benchmarks 062874 Consistent Accepted

25 Investment in life insurance is more

secure than stock market

0376874 Consistent Accepted

26 Purchase further policies from other

companies

0091102 Inonsistent Dropped

Reliability

Reliability test was carried out using SPSS software and the reliability of the items was measured

The result is as follows

Cronbachrsquos Alpha 0919

It can be seen that the reliability value is more than 07 So the questionnaire is

highly reliable

Description of factors

1 Company Loyalty

This factor includes that this is the only company the consumer wants to associate himself with in

future (0814) himself would purchase more policies from the same company (0799) suggest

friends and family to purchase policy from the same company (0790) company able to fulfill

expectation (0599) Policy benefits benchmarks (0545) The highest Eigen value lies in this factor

35213 So it is been considered as the highly contributing factor towards study Therefore it is

clear that company loyalty plays an important role in investment decisions of investors

17

2 Services Quality

This factor includes hassle free settlements (0693) employees responsible towards customers

(0631) agents respond promptly (0611) investment in life insurance is more secure than stock

market (0563) satisfy with relationship to company (0537) As we can see that the Eigen value for

factor service quality is 9753 which is also a contributing factor towards the study so it can also be considered as an the study

3 Ease of Procedures

This factor includes the company provides claims on time (0852) co- operative and friendly agent

(0662) settlement of claims easy and timely (0651) agent is well informed about policies (0486) As

we can see that the Eigen value for factor ease of procedures is 5830 which is also a contributing

factor towards the study so it can also be considered as an important factor inconsumerrsquos financial

needs (0404) As we can see that the Eigen value for factor company client relationship is 4051

which is also a contributing factor towards the study so it can also be considered as an important factor

in the study

4 Satisfaction Level

This factor includes that the suggested benefits of Insurance Policy should be met to the investors

( 0774) Company provides them satisfactory services (0631) fulfill its promise about life

insurance policy (0575) Services should be provided on time(0515) and awareness of terms and

conditions of policies As we can see that the Eigen value for factor satisfaction level is 5008

which is also a contributing factor towards the study so it can also be considered as an important

factor in the study

5 Company Image

This factor includes that the insurance company should be well known in the industry (0777)

insurance provider should have goodwill in market (0758) and company of high repute (0428)As

we can see that the Eigen value for factor company image is 4878 which is also a contributing

factor towards the study so it can also be considered as an important factor in the study

18

6 Company-Client Relationship

This factor includes that the agent remind about premium installments (0778) pay personal

attention on every consumer (0505) and understand consumerrsquos financial needs (0404) As

we can see that the Eigen value for factor company client relationship is 4051 which is also a

contributing factor towards the study so it can also be considered as an important factor in the

study

Z-Test

Z-test was applied to find out significant difference between male and female investorrsquos perception

towards investment in life insurance policies

For applying Z-test mean and standard deviation was calculated then values were put in formula to

calculate standard error

Null Hypothesis Ho It states that there is no significant difference between the perception of male

and female investors towards investment in life insurance policies

GENDER MEAN SD SAMPLE

SIZE

SQUARE

OF

SD

MALE 14104 20078 75 403146

FEMALE 14594 17701 75 313348

Z = 15877

Since the value of Z is less than the standard value 196 at 5 level of significance so the null

hypothesis is accepted Therefore there is no significant difference between the perception of male

and female investors towards investment in life insurance policies

19

CONCLUSION

In present Indian market the investment habits of Indian consumers are changing very frequently

The individuals have their own perception towards various types of investment plans The study of

this research work was focused over consumerrsquos perception on investment towards Life Insurance

Services The objectives of the study were to evaluate the factors underlying consumer perception

towards investment in life insurance policies and to compare the differences in consumer

perception of male and female consumers The tests that were used for our research activities were-

Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25

items being accepted Next was Reliability Test to check the reliability of the items The

result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis

Test and the six factors that came out were Consumer Loyalty Service Quality Ease of

Procedures Satisfaction Level Company Image and Company-Client Relationship

The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind

sets for their investment pattern in insurance policies Still some actions are needed for

developing insurance market The major factors playing the role in developing

consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality

Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship

Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in

developing the market share loyalty and further development in insurance sector

20

References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)

21

Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in

Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)

22

ICICI Bank

ICICI Bank (1113090YSEIB1113090) is Indias second largest bank and largest private sector bank

with over 50 years presence in financial services and with assets of over Rs 344658 bn

(USD 79 billion) as on March 31 2007 The Bank offers a wide range of banking

products and financial services to corporate and retail customers through a variety of

delivery channels and through its specialized subsidiaries in the areas of investment

banking life and non-life insurance private equity and asset management ICICI Bank is

a leading player in the retail banking market and services its large customer base through

a network of over 950 branches and extension counters 3300 ATMs call centers and

internet banking to ensure that customers have access to its services at all times

Prudential Plc

Established in London in 1848 Prudential plc through its businesses in the UK and

Europe the US and Asia provides retail financial services products and services to more

than 20 million customers policyholder and unit holders and manages over pound251 billion

of funds worldwide (as of 31 December 2006) In Asia Prudential is the leading

European life insurance company with life operations in China Hong Kong India

Indonesia Japan Korea Malaysia the Philippines Singapore Taiwan Thailand and

Vietnam Prudential is the second largest retail fund manager for Asian sourced assets ex-

Japan as at June 2006 Its fund management business has expanded into a total of ten markets

China Hong Kong India Japan Korea Malaysia Singapore Taiwan Vietnam

and United Arab Emirates

ICICI Prudential has been the market leader in the private life insurance sector

contributing to 30 of the growth share followed by the SBI Life Insurance with 18

share Members like Ms Shikha Sharma CEO amp MD Ms Anita Pai EVP ndash

Customer Service amp Technology Mr Puneet Nanda CIO Mr Binayak Dutta Chief ndash

Sales amp Distribution have been with the company since its inception in 2000 and are

instrumental in developing ICIC Prudential to this level

The first policy was sold on 12th December 2000 Within 1 year ICICI Prudential

achieved 25000 policies and thereby growing at a faster rate achieved 1 million policies

by October 2004 By 2010 ICICI Prudential has a target to achieve 20 million customers

AWARDS amp RECOGNITION

AWARDS

11

1113090 Indias Most Customer Responsive Insurance Company

Avaya GlobalConnect - Economic Times

Customer Responsiveness Awards

1113090 Most Trusted Private Life Insurer

The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003

2004 and 2005

1113090 Prudence Customer Centricity Award 2004 amp 2005

Prudential Corporation Asia

1113090 Best Life Insurer 2003

Outlook Money Awards 2003 amp 2004

1113090 Superbrand 2003-04

1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising

campaign

Effies 2003

RECOGNITIONS

1113090 IMM Award for Excellence

Institute of Marketing amp Management

1113090 Organisation with Innovative HR Practices

Indira Group of Institutes

1113090 Most Trusted Private Life Insurer

The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003

2004 and 2005

1113090 Prudence Customer Centricity Award 2004 amp 2005

Prudential Corporation Asia

1113090 Best Life Insurer 2003

Outlook Money Awards 2003 amp 2004

1113090 Superbrand 2003-04

1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising

campaign

Effies 2003

12

Review of Literature

Mehr and Cammack (1976) agrees that insurance is usually thought of as a product that spreads the

risk of serious but low-probability losses among a group of individuals thus providing some

financial protection to each individual Kunreuther (1979) said that his product makes good sense

particularly when the protection is purchased against potential losses so large as to be catastrophic

such as total destruction of ones home a large accident liability judgment or death of primary

family breadwinner However it has long been recognized that this sensible product is difficult to

sellv

Kahneman amp Tversky (1984) stated indeed repeated demonstrations have shown most people lack

an adequate understanding of probability and risk concepts Dhar (1997) Greenleaf and Lehmann

(1995) Tversky and Shafir (1992) have shown that offering more options can generate decision

conflict and preference uncertainty leading to decision deferral

Kotler (1973) considers insurance to be in the category of unsought goods along with products

such as preventive dental services and burial plotsHe notes that unsought goods pose special

challenges to the marketer

Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) found that subjects were more likely

to buy insurance against small high-probability losses than insurance against large low- probability

losses Hershey and Schoemaker (1980) reported the opposite result

Kunreuther (1979) ldquoIt is not the magnitude of a potential loss that inspires people to buy insurance

voluntarily ndash it is the frequency with which a loss is likely to occurrdquo

Michael L Smith (1982) said that a typical life insurance contract provides a package of options or

rights to the policy owner that is not precisely duplicated by any other combination of commonly

available contracts Viewed from this perspective life insurance enjoys a unique position in the

field of investments and should be judged in this light The paper shows that an options viewpoint

provides a more complete explanation of policy owner behavior towards life insurance than the

conventional savings-and-protection view

13

Michael L Walden (1985) told that the options package view of the whole a

whole life policy is a package of options each of which has value and is expected to influence the

price of the policy This viewpoint implies the general hypothesis that price differences between

whole life policies can be explained by differences in policy contract provisions and differences in

selected company characteristics

OBJECTIVE

o To evaluate the factors underlying consumer perception towards investment in life insurance

policies

o To compare the differences in consumer perception of male and

female consumers

RESEARCH METHODOLOGY

The Study The study was exploratory in nature with survey method being used to complete the

study

Sampling Design

Population

Population included investors in NCR region

Sample frame

Since the data was collected through personal contacts the sample frames were the individuals who

are investing in life insurance policies

Sampling elements

Individual respondents were the sampling elements

14

Sampling Techniques

Random sampling technique was used to select the samples

Sample Size

Sample size was 150 respondents

Tools Used for Data Collection

Self designed questionnaire was used for the evaluation of factors affecting consumerrsquos perception

towards insurance Data was collected on Likertrsquos type scale where 1 stood for minimum

agreement and 7 stood for maximum agreement

Tools Used for Data Analysis

Item to total correlation was applied to check the internal consistency of the questionnaire The

measures were standardized through computation of reliability and validity

Factor analysis was applied to identify the underlying factors

Z-test was applied to find out the significant differences between male and

female investors

Results and Discussions

Consistency Measure

Firstly consistency of all the items in the questionnaire is checked through item to total correlation

Under this correlation of every item with total is measured and the computed value is compared

with standard value (ie 01590) If the computed value is found less than standard value then

whole factorstatement is dropped and will be termed as inconsistent

15

SNO ITEMS COMPUTED

CORRELATIO

N VALUE

CONSISTE

NT

ACCEPTED

DROPPED

1 Awareness about terms and conditions of

policy

0671575 Consistent Accepted

2 Provide services on time 0651847 Consistent Accepted

3 Provide satisfactory services 0573518 Consistent Accepted

4 Goodwill of the company 0607722 Consistent Accepted

5 Agent is well informed about policies 0640696 Consistent Accepted

6 Co-operative and friendly agent 0598089 Consistent Accepted

7 Agent respond promptly 0696914 Consistent Accepted

8 Proper reminder of installments by

agents

0531124 Consistent Accepted

9 Employees responsible towards

customers

0685817 Consistent Accepted

10 Benefits are met by policy 0510702 Consistent Accepted

11 Selection of highly reputed company 0634614 Consistent Accepted

12 Reputation of the insurance company 0582977 Consistent Accepted

13 Hassle free settlements 0594282 Consistent Accepted

14 Personal attention on every costumer 0640192 Consistent Accepted

15 Understand Customerrsquos financial needs 0603133 Consistent Accepted

16 Fulfill its promise towards policy 0613243 Consistent Accepted

17 Provides the claims on time 0474994 Consistent Accepted

18 Settlement of claims easy and timely 0569959 Consistent Accepted

19 Satisfy with relationship to company 0621496 Consistent Accepted

20 Company able to fulfill expectation 0594265 Consistent Accepted

21 Only company I want to associate

myself

0519161 Consistent Accepted

22 Purchase more policies from the same

company

0502876 Consistent Accepted

16

23 Suggest friends and family to purchase

policy from the same company

0540626 Consistent Accepted

24 Policy benefits benchmarks 062874 Consistent Accepted

25 Investment in life insurance is more

secure than stock market

0376874 Consistent Accepted

26 Purchase further policies from other

companies

0091102 Inonsistent Dropped

Reliability

Reliability test was carried out using SPSS software and the reliability of the items was measured

The result is as follows

Cronbachrsquos Alpha 0919

It can be seen that the reliability value is more than 07 So the questionnaire is

highly reliable

Description of factors

1 Company Loyalty

This factor includes that this is the only company the consumer wants to associate himself with in

future (0814) himself would purchase more policies from the same company (0799) suggest

friends and family to purchase policy from the same company (0790) company able to fulfill

expectation (0599) Policy benefits benchmarks (0545) The highest Eigen value lies in this factor

35213 So it is been considered as the highly contributing factor towards study Therefore it is

clear that company loyalty plays an important role in investment decisions of investors

17

2 Services Quality

This factor includes hassle free settlements (0693) employees responsible towards customers

(0631) agents respond promptly (0611) investment in life insurance is more secure than stock

market (0563) satisfy with relationship to company (0537) As we can see that the Eigen value for

factor service quality is 9753 which is also a contributing factor towards the study so it can also be considered as an the study

3 Ease of Procedures

This factor includes the company provides claims on time (0852) co- operative and friendly agent

(0662) settlement of claims easy and timely (0651) agent is well informed about policies (0486) As

we can see that the Eigen value for factor ease of procedures is 5830 which is also a contributing

factor towards the study so it can also be considered as an important factor inconsumerrsquos financial

needs (0404) As we can see that the Eigen value for factor company client relationship is 4051

which is also a contributing factor towards the study so it can also be considered as an important factor

in the study

4 Satisfaction Level

This factor includes that the suggested benefits of Insurance Policy should be met to the investors

( 0774) Company provides them satisfactory services (0631) fulfill its promise about life

insurance policy (0575) Services should be provided on time(0515) and awareness of terms and

conditions of policies As we can see that the Eigen value for factor satisfaction level is 5008

which is also a contributing factor towards the study so it can also be considered as an important

factor in the study

5 Company Image

This factor includes that the insurance company should be well known in the industry (0777)

insurance provider should have goodwill in market (0758) and company of high repute (0428)As

we can see that the Eigen value for factor company image is 4878 which is also a contributing

factor towards the study so it can also be considered as an important factor in the study

18

6 Company-Client Relationship

This factor includes that the agent remind about premium installments (0778) pay personal

attention on every consumer (0505) and understand consumerrsquos financial needs (0404) As

we can see that the Eigen value for factor company client relationship is 4051 which is also a

contributing factor towards the study so it can also be considered as an important factor in the

study

Z-Test

Z-test was applied to find out significant difference between male and female investorrsquos perception

towards investment in life insurance policies

For applying Z-test mean and standard deviation was calculated then values were put in formula to

calculate standard error

Null Hypothesis Ho It states that there is no significant difference between the perception of male

and female investors towards investment in life insurance policies

GENDER MEAN SD SAMPLE

SIZE

SQUARE

OF

SD

MALE 14104 20078 75 403146

FEMALE 14594 17701 75 313348

Z = 15877

Since the value of Z is less than the standard value 196 at 5 level of significance so the null

hypothesis is accepted Therefore there is no significant difference between the perception of male

and female investors towards investment in life insurance policies

19

CONCLUSION

In present Indian market the investment habits of Indian consumers are changing very frequently

The individuals have their own perception towards various types of investment plans The study of

this research work was focused over consumerrsquos perception on investment towards Life Insurance

Services The objectives of the study were to evaluate the factors underlying consumer perception

towards investment in life insurance policies and to compare the differences in consumer

perception of male and female consumers The tests that were used for our research activities were-

Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25

items being accepted Next was Reliability Test to check the reliability of the items The

result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis

Test and the six factors that came out were Consumer Loyalty Service Quality Ease of

Procedures Satisfaction Level Company Image and Company-Client Relationship

The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind

sets for their investment pattern in insurance policies Still some actions are needed for

developing insurance market The major factors playing the role in developing

consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality

Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship

Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in

developing the market share loyalty and further development in insurance sector

20

References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)

21

Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in

Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)

22

1113090 Indias Most Customer Responsive Insurance Company

Avaya GlobalConnect - Economic Times

Customer Responsiveness Awards

1113090 Most Trusted Private Life Insurer

The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003

2004 and 2005

1113090 Prudence Customer Centricity Award 2004 amp 2005

Prudential Corporation Asia

1113090 Best Life Insurer 2003

Outlook Money Awards 2003 amp 2004

1113090 Superbrand 2003-04

1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising

campaign

Effies 2003

RECOGNITIONS

1113090 IMM Award for Excellence

Institute of Marketing amp Management

1113090 Organisation with Innovative HR Practices

Indira Group of Institutes

1113090 Most Trusted Private Life Insurer

The Economic Times - A C Nielsen Survey of Most Trusted Brands ndash 2003

2004 and 2005

1113090 Prudence Customer Centricity Award 2004 amp 2005

Prudential Corporation Asia

1113090 Best Life Insurer 2003

Outlook Money Awards 2003 amp 2004

1113090 Superbrand 2003-04

1113090 Silver Effie for Effectiveness of the lsquoRetire from Work not lifersquo advertising

campaign

Effies 2003

12

Review of Literature

Mehr and Cammack (1976) agrees that insurance is usually thought of as a product that spreads the

risk of serious but low-probability losses among a group of individuals thus providing some

financial protection to each individual Kunreuther (1979) said that his product makes good sense

particularly when the protection is purchased against potential losses so large as to be catastrophic

such as total destruction of ones home a large accident liability judgment or death of primary

family breadwinner However it has long been recognized that this sensible product is difficult to

sellv

Kahneman amp Tversky (1984) stated indeed repeated demonstrations have shown most people lack

an adequate understanding of probability and risk concepts Dhar (1997) Greenleaf and Lehmann

(1995) Tversky and Shafir (1992) have shown that offering more options can generate decision

conflict and preference uncertainty leading to decision deferral

Kotler (1973) considers insurance to be in the category of unsought goods along with products

such as preventive dental services and burial plotsHe notes that unsought goods pose special

challenges to the marketer

Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) found that subjects were more likely

to buy insurance against small high-probability losses than insurance against large low- probability

losses Hershey and Schoemaker (1980) reported the opposite result

Kunreuther (1979) ldquoIt is not the magnitude of a potential loss that inspires people to buy insurance

voluntarily ndash it is the frequency with which a loss is likely to occurrdquo

Michael L Smith (1982) said that a typical life insurance contract provides a package of options or

rights to the policy owner that is not precisely duplicated by any other combination of commonly

available contracts Viewed from this perspective life insurance enjoys a unique position in the

field of investments and should be judged in this light The paper shows that an options viewpoint

provides a more complete explanation of policy owner behavior towards life insurance than the

conventional savings-and-protection view

13

Michael L Walden (1985) told that the options package view of the whole a

whole life policy is a package of options each of which has value and is expected to influence the

price of the policy This viewpoint implies the general hypothesis that price differences between

whole life policies can be explained by differences in policy contract provisions and differences in

selected company characteristics

OBJECTIVE

o To evaluate the factors underlying consumer perception towards investment in life insurance

policies

o To compare the differences in consumer perception of male and

female consumers

RESEARCH METHODOLOGY

The Study The study was exploratory in nature with survey method being used to complete the

study

Sampling Design

Population

Population included investors in NCR region

Sample frame

Since the data was collected through personal contacts the sample frames were the individuals who

are investing in life insurance policies

Sampling elements

Individual respondents were the sampling elements

14

Sampling Techniques

Random sampling technique was used to select the samples

Sample Size

Sample size was 150 respondents

Tools Used for Data Collection

Self designed questionnaire was used for the evaluation of factors affecting consumerrsquos perception

towards insurance Data was collected on Likertrsquos type scale where 1 stood for minimum

agreement and 7 stood for maximum agreement

Tools Used for Data Analysis

Item to total correlation was applied to check the internal consistency of the questionnaire The

measures were standardized through computation of reliability and validity

Factor analysis was applied to identify the underlying factors

Z-test was applied to find out the significant differences between male and

female investors

Results and Discussions

Consistency Measure

Firstly consistency of all the items in the questionnaire is checked through item to total correlation

Under this correlation of every item with total is measured and the computed value is compared

with standard value (ie 01590) If the computed value is found less than standard value then

whole factorstatement is dropped and will be termed as inconsistent

15

SNO ITEMS COMPUTED

CORRELATIO

N VALUE

CONSISTE

NT

ACCEPTED

DROPPED

1 Awareness about terms and conditions of

policy

0671575 Consistent Accepted

2 Provide services on time 0651847 Consistent Accepted

3 Provide satisfactory services 0573518 Consistent Accepted

4 Goodwill of the company 0607722 Consistent Accepted

5 Agent is well informed about policies 0640696 Consistent Accepted

6 Co-operative and friendly agent 0598089 Consistent Accepted

7 Agent respond promptly 0696914 Consistent Accepted

8 Proper reminder of installments by

agents

0531124 Consistent Accepted

9 Employees responsible towards

customers

0685817 Consistent Accepted

10 Benefits are met by policy 0510702 Consistent Accepted

11 Selection of highly reputed company 0634614 Consistent Accepted

12 Reputation of the insurance company 0582977 Consistent Accepted

13 Hassle free settlements 0594282 Consistent Accepted

14 Personal attention on every costumer 0640192 Consistent Accepted

15 Understand Customerrsquos financial needs 0603133 Consistent Accepted

16 Fulfill its promise towards policy 0613243 Consistent Accepted

17 Provides the claims on time 0474994 Consistent Accepted

18 Settlement of claims easy and timely 0569959 Consistent Accepted

19 Satisfy with relationship to company 0621496 Consistent Accepted

20 Company able to fulfill expectation 0594265 Consistent Accepted

21 Only company I want to associate

myself

0519161 Consistent Accepted

22 Purchase more policies from the same

company

0502876 Consistent Accepted

16

23 Suggest friends and family to purchase

policy from the same company

0540626 Consistent Accepted

24 Policy benefits benchmarks 062874 Consistent Accepted

25 Investment in life insurance is more

secure than stock market

0376874 Consistent Accepted

26 Purchase further policies from other

companies

0091102 Inonsistent Dropped

Reliability

Reliability test was carried out using SPSS software and the reliability of the items was measured

The result is as follows

Cronbachrsquos Alpha 0919

It can be seen that the reliability value is more than 07 So the questionnaire is

highly reliable

Description of factors

1 Company Loyalty

This factor includes that this is the only company the consumer wants to associate himself with in

future (0814) himself would purchase more policies from the same company (0799) suggest

friends and family to purchase policy from the same company (0790) company able to fulfill

expectation (0599) Policy benefits benchmarks (0545) The highest Eigen value lies in this factor

35213 So it is been considered as the highly contributing factor towards study Therefore it is

clear that company loyalty plays an important role in investment decisions of investors

17

2 Services Quality

This factor includes hassle free settlements (0693) employees responsible towards customers

(0631) agents respond promptly (0611) investment in life insurance is more secure than stock

market (0563) satisfy with relationship to company (0537) As we can see that the Eigen value for

factor service quality is 9753 which is also a contributing factor towards the study so it can also be considered as an the study

3 Ease of Procedures

This factor includes the company provides claims on time (0852) co- operative and friendly agent

(0662) settlement of claims easy and timely (0651) agent is well informed about policies (0486) As

we can see that the Eigen value for factor ease of procedures is 5830 which is also a contributing

factor towards the study so it can also be considered as an important factor inconsumerrsquos financial

needs (0404) As we can see that the Eigen value for factor company client relationship is 4051

which is also a contributing factor towards the study so it can also be considered as an important factor

in the study

4 Satisfaction Level

This factor includes that the suggested benefits of Insurance Policy should be met to the investors

( 0774) Company provides them satisfactory services (0631) fulfill its promise about life

insurance policy (0575) Services should be provided on time(0515) and awareness of terms and

conditions of policies As we can see that the Eigen value for factor satisfaction level is 5008

which is also a contributing factor towards the study so it can also be considered as an important

factor in the study

5 Company Image

This factor includes that the insurance company should be well known in the industry (0777)

insurance provider should have goodwill in market (0758) and company of high repute (0428)As

we can see that the Eigen value for factor company image is 4878 which is also a contributing

factor towards the study so it can also be considered as an important factor in the study

18

6 Company-Client Relationship

This factor includes that the agent remind about premium installments (0778) pay personal

attention on every consumer (0505) and understand consumerrsquos financial needs (0404) As

we can see that the Eigen value for factor company client relationship is 4051 which is also a

contributing factor towards the study so it can also be considered as an important factor in the

study

Z-Test

Z-test was applied to find out significant difference between male and female investorrsquos perception

towards investment in life insurance policies

For applying Z-test mean and standard deviation was calculated then values were put in formula to

calculate standard error

Null Hypothesis Ho It states that there is no significant difference between the perception of male

and female investors towards investment in life insurance policies

GENDER MEAN SD SAMPLE

SIZE

SQUARE

OF

SD

MALE 14104 20078 75 403146

FEMALE 14594 17701 75 313348

Z = 15877

Since the value of Z is less than the standard value 196 at 5 level of significance so the null

hypothesis is accepted Therefore there is no significant difference between the perception of male

and female investors towards investment in life insurance policies

19

CONCLUSION

In present Indian market the investment habits of Indian consumers are changing very frequently

The individuals have their own perception towards various types of investment plans The study of

this research work was focused over consumerrsquos perception on investment towards Life Insurance

Services The objectives of the study were to evaluate the factors underlying consumer perception

towards investment in life insurance policies and to compare the differences in consumer

perception of male and female consumers The tests that were used for our research activities were-

Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25

items being accepted Next was Reliability Test to check the reliability of the items The

result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis

Test and the six factors that came out were Consumer Loyalty Service Quality Ease of

Procedures Satisfaction Level Company Image and Company-Client Relationship

The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind

sets for their investment pattern in insurance policies Still some actions are needed for

developing insurance market The major factors playing the role in developing

consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality

Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship

Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in

developing the market share loyalty and further development in insurance sector

20

References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)

21

Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in

Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)

22

Review of Literature

Mehr and Cammack (1976) agrees that insurance is usually thought of as a product that spreads the

risk of serious but low-probability losses among a group of individuals thus providing some

financial protection to each individual Kunreuther (1979) said that his product makes good sense

particularly when the protection is purchased against potential losses so large as to be catastrophic

such as total destruction of ones home a large accident liability judgment or death of primary

family breadwinner However it has long been recognized that this sensible product is difficult to

sellv

Kahneman amp Tversky (1984) stated indeed repeated demonstrations have shown most people lack

an adequate understanding of probability and risk concepts Dhar (1997) Greenleaf and Lehmann

(1995) Tversky and Shafir (1992) have shown that offering more options can generate decision

conflict and preference uncertainty leading to decision deferral

Kotler (1973) considers insurance to be in the category of unsought goods along with products

such as preventive dental services and burial plotsHe notes that unsought goods pose special

challenges to the marketer

Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) found that subjects were more likely

to buy insurance against small high-probability losses than insurance against large low- probability

losses Hershey and Schoemaker (1980) reported the opposite result

Kunreuther (1979) ldquoIt is not the magnitude of a potential loss that inspires people to buy insurance

voluntarily ndash it is the frequency with which a loss is likely to occurrdquo

Michael L Smith (1982) said that a typical life insurance contract provides a package of options or

rights to the policy owner that is not precisely duplicated by any other combination of commonly

available contracts Viewed from this perspective life insurance enjoys a unique position in the

field of investments and should be judged in this light The paper shows that an options viewpoint

provides a more complete explanation of policy owner behavior towards life insurance than the

conventional savings-and-protection view

13

Michael L Walden (1985) told that the options package view of the whole a

whole life policy is a package of options each of which has value and is expected to influence the

price of the policy This viewpoint implies the general hypothesis that price differences between

whole life policies can be explained by differences in policy contract provisions and differences in

selected company characteristics

OBJECTIVE

o To evaluate the factors underlying consumer perception towards investment in life insurance

policies

o To compare the differences in consumer perception of male and

female consumers

RESEARCH METHODOLOGY

The Study The study was exploratory in nature with survey method being used to complete the

study

Sampling Design

Population

Population included investors in NCR region

Sample frame

Since the data was collected through personal contacts the sample frames were the individuals who

are investing in life insurance policies

Sampling elements

Individual respondents were the sampling elements

14

Sampling Techniques

Random sampling technique was used to select the samples

Sample Size

Sample size was 150 respondents

Tools Used for Data Collection

Self designed questionnaire was used for the evaluation of factors affecting consumerrsquos perception

towards insurance Data was collected on Likertrsquos type scale where 1 stood for minimum

agreement and 7 stood for maximum agreement

Tools Used for Data Analysis

Item to total correlation was applied to check the internal consistency of the questionnaire The

measures were standardized through computation of reliability and validity

Factor analysis was applied to identify the underlying factors

Z-test was applied to find out the significant differences between male and

female investors

Results and Discussions

Consistency Measure

Firstly consistency of all the items in the questionnaire is checked through item to total correlation

Under this correlation of every item with total is measured and the computed value is compared

with standard value (ie 01590) If the computed value is found less than standard value then

whole factorstatement is dropped and will be termed as inconsistent

15

SNO ITEMS COMPUTED

CORRELATIO

N VALUE

CONSISTE

NT

ACCEPTED

DROPPED

1 Awareness about terms and conditions of

policy

0671575 Consistent Accepted

2 Provide services on time 0651847 Consistent Accepted

3 Provide satisfactory services 0573518 Consistent Accepted

4 Goodwill of the company 0607722 Consistent Accepted

5 Agent is well informed about policies 0640696 Consistent Accepted

6 Co-operative and friendly agent 0598089 Consistent Accepted

7 Agent respond promptly 0696914 Consistent Accepted

8 Proper reminder of installments by

agents

0531124 Consistent Accepted

9 Employees responsible towards

customers

0685817 Consistent Accepted

10 Benefits are met by policy 0510702 Consistent Accepted

11 Selection of highly reputed company 0634614 Consistent Accepted

12 Reputation of the insurance company 0582977 Consistent Accepted

13 Hassle free settlements 0594282 Consistent Accepted

14 Personal attention on every costumer 0640192 Consistent Accepted

15 Understand Customerrsquos financial needs 0603133 Consistent Accepted

16 Fulfill its promise towards policy 0613243 Consistent Accepted

17 Provides the claims on time 0474994 Consistent Accepted

18 Settlement of claims easy and timely 0569959 Consistent Accepted

19 Satisfy with relationship to company 0621496 Consistent Accepted

20 Company able to fulfill expectation 0594265 Consistent Accepted

21 Only company I want to associate

myself

0519161 Consistent Accepted

22 Purchase more policies from the same

company

0502876 Consistent Accepted

16

23 Suggest friends and family to purchase

policy from the same company

0540626 Consistent Accepted

24 Policy benefits benchmarks 062874 Consistent Accepted

25 Investment in life insurance is more

secure than stock market

0376874 Consistent Accepted

26 Purchase further policies from other

companies

0091102 Inonsistent Dropped

Reliability

Reliability test was carried out using SPSS software and the reliability of the items was measured

The result is as follows

Cronbachrsquos Alpha 0919

It can be seen that the reliability value is more than 07 So the questionnaire is

highly reliable

Description of factors

1 Company Loyalty

This factor includes that this is the only company the consumer wants to associate himself with in

future (0814) himself would purchase more policies from the same company (0799) suggest

friends and family to purchase policy from the same company (0790) company able to fulfill

expectation (0599) Policy benefits benchmarks (0545) The highest Eigen value lies in this factor

35213 So it is been considered as the highly contributing factor towards study Therefore it is

clear that company loyalty plays an important role in investment decisions of investors

17

2 Services Quality

This factor includes hassle free settlements (0693) employees responsible towards customers

(0631) agents respond promptly (0611) investment in life insurance is more secure than stock

market (0563) satisfy with relationship to company (0537) As we can see that the Eigen value for

factor service quality is 9753 which is also a contributing factor towards the study so it can also be considered as an the study

3 Ease of Procedures

This factor includes the company provides claims on time (0852) co- operative and friendly agent

(0662) settlement of claims easy and timely (0651) agent is well informed about policies (0486) As

we can see that the Eigen value for factor ease of procedures is 5830 which is also a contributing

factor towards the study so it can also be considered as an important factor inconsumerrsquos financial

needs (0404) As we can see that the Eigen value for factor company client relationship is 4051

which is also a contributing factor towards the study so it can also be considered as an important factor

in the study

4 Satisfaction Level

This factor includes that the suggested benefits of Insurance Policy should be met to the investors

( 0774) Company provides them satisfactory services (0631) fulfill its promise about life

insurance policy (0575) Services should be provided on time(0515) and awareness of terms and

conditions of policies As we can see that the Eigen value for factor satisfaction level is 5008

which is also a contributing factor towards the study so it can also be considered as an important

factor in the study

5 Company Image

This factor includes that the insurance company should be well known in the industry (0777)

insurance provider should have goodwill in market (0758) and company of high repute (0428)As

we can see that the Eigen value for factor company image is 4878 which is also a contributing

factor towards the study so it can also be considered as an important factor in the study

18

6 Company-Client Relationship

This factor includes that the agent remind about premium installments (0778) pay personal

attention on every consumer (0505) and understand consumerrsquos financial needs (0404) As

we can see that the Eigen value for factor company client relationship is 4051 which is also a

contributing factor towards the study so it can also be considered as an important factor in the

study

Z-Test

Z-test was applied to find out significant difference between male and female investorrsquos perception

towards investment in life insurance policies

For applying Z-test mean and standard deviation was calculated then values were put in formula to

calculate standard error

Null Hypothesis Ho It states that there is no significant difference between the perception of male

and female investors towards investment in life insurance policies

GENDER MEAN SD SAMPLE

SIZE

SQUARE

OF

SD

MALE 14104 20078 75 403146

FEMALE 14594 17701 75 313348

Z = 15877

Since the value of Z is less than the standard value 196 at 5 level of significance so the null

hypothesis is accepted Therefore there is no significant difference between the perception of male

and female investors towards investment in life insurance policies

19

CONCLUSION

In present Indian market the investment habits of Indian consumers are changing very frequently

The individuals have their own perception towards various types of investment plans The study of

this research work was focused over consumerrsquos perception on investment towards Life Insurance

Services The objectives of the study were to evaluate the factors underlying consumer perception

towards investment in life insurance policies and to compare the differences in consumer

perception of male and female consumers The tests that were used for our research activities were-

Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25

items being accepted Next was Reliability Test to check the reliability of the items The

result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis

Test and the six factors that came out were Consumer Loyalty Service Quality Ease of

Procedures Satisfaction Level Company Image and Company-Client Relationship

The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind

sets for their investment pattern in insurance policies Still some actions are needed for

developing insurance market The major factors playing the role in developing

consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality

Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship

Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in

developing the market share loyalty and further development in insurance sector

20

References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)

21

Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in

Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)

22

Michael L Walden (1985) told that the options package view of the whole a

whole life policy is a package of options each of which has value and is expected to influence the

price of the policy This viewpoint implies the general hypothesis that price differences between

whole life policies can be explained by differences in policy contract provisions and differences in

selected company characteristics

OBJECTIVE

o To evaluate the factors underlying consumer perception towards investment in life insurance

policies

o To compare the differences in consumer perception of male and

female consumers

RESEARCH METHODOLOGY

The Study The study was exploratory in nature with survey method being used to complete the

study

Sampling Design

Population

Population included investors in NCR region

Sample frame

Since the data was collected through personal contacts the sample frames were the individuals who

are investing in life insurance policies

Sampling elements

Individual respondents were the sampling elements

14

Sampling Techniques

Random sampling technique was used to select the samples

Sample Size

Sample size was 150 respondents

Tools Used for Data Collection

Self designed questionnaire was used for the evaluation of factors affecting consumerrsquos perception

towards insurance Data was collected on Likertrsquos type scale where 1 stood for minimum

agreement and 7 stood for maximum agreement

Tools Used for Data Analysis

Item to total correlation was applied to check the internal consistency of the questionnaire The

measures were standardized through computation of reliability and validity

Factor analysis was applied to identify the underlying factors

Z-test was applied to find out the significant differences between male and

female investors

Results and Discussions

Consistency Measure

Firstly consistency of all the items in the questionnaire is checked through item to total correlation

Under this correlation of every item with total is measured and the computed value is compared

with standard value (ie 01590) If the computed value is found less than standard value then

whole factorstatement is dropped and will be termed as inconsistent

15

SNO ITEMS COMPUTED

CORRELATIO

N VALUE

CONSISTE

NT

ACCEPTED

DROPPED

1 Awareness about terms and conditions of

policy

0671575 Consistent Accepted

2 Provide services on time 0651847 Consistent Accepted

3 Provide satisfactory services 0573518 Consistent Accepted

4 Goodwill of the company 0607722 Consistent Accepted

5 Agent is well informed about policies 0640696 Consistent Accepted

6 Co-operative and friendly agent 0598089 Consistent Accepted

7 Agent respond promptly 0696914 Consistent Accepted

8 Proper reminder of installments by

agents

0531124 Consistent Accepted

9 Employees responsible towards

customers

0685817 Consistent Accepted

10 Benefits are met by policy 0510702 Consistent Accepted

11 Selection of highly reputed company 0634614 Consistent Accepted

12 Reputation of the insurance company 0582977 Consistent Accepted

13 Hassle free settlements 0594282 Consistent Accepted

14 Personal attention on every costumer 0640192 Consistent Accepted

15 Understand Customerrsquos financial needs 0603133 Consistent Accepted

16 Fulfill its promise towards policy 0613243 Consistent Accepted

17 Provides the claims on time 0474994 Consistent Accepted

18 Settlement of claims easy and timely 0569959 Consistent Accepted

19 Satisfy with relationship to company 0621496 Consistent Accepted

20 Company able to fulfill expectation 0594265 Consistent Accepted

21 Only company I want to associate

myself

0519161 Consistent Accepted

22 Purchase more policies from the same

company

0502876 Consistent Accepted

16

23 Suggest friends and family to purchase

policy from the same company

0540626 Consistent Accepted

24 Policy benefits benchmarks 062874 Consistent Accepted

25 Investment in life insurance is more

secure than stock market

0376874 Consistent Accepted

26 Purchase further policies from other

companies

0091102 Inonsistent Dropped

Reliability

Reliability test was carried out using SPSS software and the reliability of the items was measured

The result is as follows

Cronbachrsquos Alpha 0919

It can be seen that the reliability value is more than 07 So the questionnaire is

highly reliable

Description of factors

1 Company Loyalty

This factor includes that this is the only company the consumer wants to associate himself with in

future (0814) himself would purchase more policies from the same company (0799) suggest

friends and family to purchase policy from the same company (0790) company able to fulfill

expectation (0599) Policy benefits benchmarks (0545) The highest Eigen value lies in this factor

35213 So it is been considered as the highly contributing factor towards study Therefore it is

clear that company loyalty plays an important role in investment decisions of investors

17

2 Services Quality

This factor includes hassle free settlements (0693) employees responsible towards customers

(0631) agents respond promptly (0611) investment in life insurance is more secure than stock

market (0563) satisfy with relationship to company (0537) As we can see that the Eigen value for

factor service quality is 9753 which is also a contributing factor towards the study so it can also be considered as an the study

3 Ease of Procedures

This factor includes the company provides claims on time (0852) co- operative and friendly agent

(0662) settlement of claims easy and timely (0651) agent is well informed about policies (0486) As

we can see that the Eigen value for factor ease of procedures is 5830 which is also a contributing

factor towards the study so it can also be considered as an important factor inconsumerrsquos financial

needs (0404) As we can see that the Eigen value for factor company client relationship is 4051

which is also a contributing factor towards the study so it can also be considered as an important factor

in the study

4 Satisfaction Level

This factor includes that the suggested benefits of Insurance Policy should be met to the investors

( 0774) Company provides them satisfactory services (0631) fulfill its promise about life

insurance policy (0575) Services should be provided on time(0515) and awareness of terms and

conditions of policies As we can see that the Eigen value for factor satisfaction level is 5008

which is also a contributing factor towards the study so it can also be considered as an important

factor in the study

5 Company Image

This factor includes that the insurance company should be well known in the industry (0777)

insurance provider should have goodwill in market (0758) and company of high repute (0428)As

we can see that the Eigen value for factor company image is 4878 which is also a contributing

factor towards the study so it can also be considered as an important factor in the study

18

6 Company-Client Relationship

This factor includes that the agent remind about premium installments (0778) pay personal

attention on every consumer (0505) and understand consumerrsquos financial needs (0404) As

we can see that the Eigen value for factor company client relationship is 4051 which is also a

contributing factor towards the study so it can also be considered as an important factor in the

study

Z-Test

Z-test was applied to find out significant difference between male and female investorrsquos perception

towards investment in life insurance policies

For applying Z-test mean and standard deviation was calculated then values were put in formula to

calculate standard error

Null Hypothesis Ho It states that there is no significant difference between the perception of male

and female investors towards investment in life insurance policies

GENDER MEAN SD SAMPLE

SIZE

SQUARE

OF

SD

MALE 14104 20078 75 403146

FEMALE 14594 17701 75 313348

Z = 15877

Since the value of Z is less than the standard value 196 at 5 level of significance so the null

hypothesis is accepted Therefore there is no significant difference between the perception of male

and female investors towards investment in life insurance policies

19

CONCLUSION

In present Indian market the investment habits of Indian consumers are changing very frequently

The individuals have their own perception towards various types of investment plans The study of

this research work was focused over consumerrsquos perception on investment towards Life Insurance

Services The objectives of the study were to evaluate the factors underlying consumer perception

towards investment in life insurance policies and to compare the differences in consumer

perception of male and female consumers The tests that were used for our research activities were-

Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25

items being accepted Next was Reliability Test to check the reliability of the items The

result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis

Test and the six factors that came out were Consumer Loyalty Service Quality Ease of

Procedures Satisfaction Level Company Image and Company-Client Relationship

The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind

sets for their investment pattern in insurance policies Still some actions are needed for

developing insurance market The major factors playing the role in developing

consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality

Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship

Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in

developing the market share loyalty and further development in insurance sector

20

References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)

21

Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in

Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)

22

Sampling Techniques

Random sampling technique was used to select the samples

Sample Size

Sample size was 150 respondents

Tools Used for Data Collection

Self designed questionnaire was used for the evaluation of factors affecting consumerrsquos perception

towards insurance Data was collected on Likertrsquos type scale where 1 stood for minimum

agreement and 7 stood for maximum agreement

Tools Used for Data Analysis

Item to total correlation was applied to check the internal consistency of the questionnaire The

measures were standardized through computation of reliability and validity

Factor analysis was applied to identify the underlying factors

Z-test was applied to find out the significant differences between male and

female investors

Results and Discussions

Consistency Measure

Firstly consistency of all the items in the questionnaire is checked through item to total correlation

Under this correlation of every item with total is measured and the computed value is compared

with standard value (ie 01590) If the computed value is found less than standard value then

whole factorstatement is dropped and will be termed as inconsistent

15

SNO ITEMS COMPUTED

CORRELATIO

N VALUE

CONSISTE

NT

ACCEPTED

DROPPED

1 Awareness about terms and conditions of

policy

0671575 Consistent Accepted

2 Provide services on time 0651847 Consistent Accepted

3 Provide satisfactory services 0573518 Consistent Accepted

4 Goodwill of the company 0607722 Consistent Accepted

5 Agent is well informed about policies 0640696 Consistent Accepted

6 Co-operative and friendly agent 0598089 Consistent Accepted

7 Agent respond promptly 0696914 Consistent Accepted

8 Proper reminder of installments by

agents

0531124 Consistent Accepted

9 Employees responsible towards

customers

0685817 Consistent Accepted

10 Benefits are met by policy 0510702 Consistent Accepted

11 Selection of highly reputed company 0634614 Consistent Accepted

12 Reputation of the insurance company 0582977 Consistent Accepted

13 Hassle free settlements 0594282 Consistent Accepted

14 Personal attention on every costumer 0640192 Consistent Accepted

15 Understand Customerrsquos financial needs 0603133 Consistent Accepted

16 Fulfill its promise towards policy 0613243 Consistent Accepted

17 Provides the claims on time 0474994 Consistent Accepted

18 Settlement of claims easy and timely 0569959 Consistent Accepted

19 Satisfy with relationship to company 0621496 Consistent Accepted

20 Company able to fulfill expectation 0594265 Consistent Accepted

21 Only company I want to associate

myself

0519161 Consistent Accepted

22 Purchase more policies from the same

company

0502876 Consistent Accepted

16

23 Suggest friends and family to purchase

policy from the same company

0540626 Consistent Accepted

24 Policy benefits benchmarks 062874 Consistent Accepted

25 Investment in life insurance is more

secure than stock market

0376874 Consistent Accepted

26 Purchase further policies from other

companies

0091102 Inonsistent Dropped

Reliability

Reliability test was carried out using SPSS software and the reliability of the items was measured

The result is as follows

Cronbachrsquos Alpha 0919

It can be seen that the reliability value is more than 07 So the questionnaire is

highly reliable

Description of factors

1 Company Loyalty

This factor includes that this is the only company the consumer wants to associate himself with in

future (0814) himself would purchase more policies from the same company (0799) suggest

friends and family to purchase policy from the same company (0790) company able to fulfill

expectation (0599) Policy benefits benchmarks (0545) The highest Eigen value lies in this factor

35213 So it is been considered as the highly contributing factor towards study Therefore it is

clear that company loyalty plays an important role in investment decisions of investors

17

2 Services Quality

This factor includes hassle free settlements (0693) employees responsible towards customers

(0631) agents respond promptly (0611) investment in life insurance is more secure than stock

market (0563) satisfy with relationship to company (0537) As we can see that the Eigen value for

factor service quality is 9753 which is also a contributing factor towards the study so it can also be considered as an the study

3 Ease of Procedures

This factor includes the company provides claims on time (0852) co- operative and friendly agent

(0662) settlement of claims easy and timely (0651) agent is well informed about policies (0486) As

we can see that the Eigen value for factor ease of procedures is 5830 which is also a contributing

factor towards the study so it can also be considered as an important factor inconsumerrsquos financial

needs (0404) As we can see that the Eigen value for factor company client relationship is 4051

which is also a contributing factor towards the study so it can also be considered as an important factor

in the study

4 Satisfaction Level

This factor includes that the suggested benefits of Insurance Policy should be met to the investors

( 0774) Company provides them satisfactory services (0631) fulfill its promise about life

insurance policy (0575) Services should be provided on time(0515) and awareness of terms and

conditions of policies As we can see that the Eigen value for factor satisfaction level is 5008

which is also a contributing factor towards the study so it can also be considered as an important

factor in the study

5 Company Image

This factor includes that the insurance company should be well known in the industry (0777)

insurance provider should have goodwill in market (0758) and company of high repute (0428)As

we can see that the Eigen value for factor company image is 4878 which is also a contributing

factor towards the study so it can also be considered as an important factor in the study

18

6 Company-Client Relationship

This factor includes that the agent remind about premium installments (0778) pay personal

attention on every consumer (0505) and understand consumerrsquos financial needs (0404) As

we can see that the Eigen value for factor company client relationship is 4051 which is also a

contributing factor towards the study so it can also be considered as an important factor in the

study

Z-Test

Z-test was applied to find out significant difference between male and female investorrsquos perception

towards investment in life insurance policies

For applying Z-test mean and standard deviation was calculated then values were put in formula to

calculate standard error

Null Hypothesis Ho It states that there is no significant difference between the perception of male

and female investors towards investment in life insurance policies

GENDER MEAN SD SAMPLE

SIZE

SQUARE

OF

SD

MALE 14104 20078 75 403146

FEMALE 14594 17701 75 313348

Z = 15877

Since the value of Z is less than the standard value 196 at 5 level of significance so the null

hypothesis is accepted Therefore there is no significant difference between the perception of male

and female investors towards investment in life insurance policies

19

CONCLUSION

In present Indian market the investment habits of Indian consumers are changing very frequently

The individuals have their own perception towards various types of investment plans The study of

this research work was focused over consumerrsquos perception on investment towards Life Insurance

Services The objectives of the study were to evaluate the factors underlying consumer perception

towards investment in life insurance policies and to compare the differences in consumer

perception of male and female consumers The tests that were used for our research activities were-

Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25

items being accepted Next was Reliability Test to check the reliability of the items The

result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis

Test and the six factors that came out were Consumer Loyalty Service Quality Ease of

Procedures Satisfaction Level Company Image and Company-Client Relationship

The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind

sets for their investment pattern in insurance policies Still some actions are needed for

developing insurance market The major factors playing the role in developing

consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality

Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship

Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in

developing the market share loyalty and further development in insurance sector

20

References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)

21

Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in

Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)

22

SNO ITEMS COMPUTED

CORRELATIO

N VALUE

CONSISTE

NT

ACCEPTED

DROPPED

1 Awareness about terms and conditions of

policy

0671575 Consistent Accepted

2 Provide services on time 0651847 Consistent Accepted

3 Provide satisfactory services 0573518 Consistent Accepted

4 Goodwill of the company 0607722 Consistent Accepted

5 Agent is well informed about policies 0640696 Consistent Accepted

6 Co-operative and friendly agent 0598089 Consistent Accepted

7 Agent respond promptly 0696914 Consistent Accepted

8 Proper reminder of installments by

agents

0531124 Consistent Accepted

9 Employees responsible towards

customers

0685817 Consistent Accepted

10 Benefits are met by policy 0510702 Consistent Accepted

11 Selection of highly reputed company 0634614 Consistent Accepted

12 Reputation of the insurance company 0582977 Consistent Accepted

13 Hassle free settlements 0594282 Consistent Accepted

14 Personal attention on every costumer 0640192 Consistent Accepted

15 Understand Customerrsquos financial needs 0603133 Consistent Accepted

16 Fulfill its promise towards policy 0613243 Consistent Accepted

17 Provides the claims on time 0474994 Consistent Accepted

18 Settlement of claims easy and timely 0569959 Consistent Accepted

19 Satisfy with relationship to company 0621496 Consistent Accepted

20 Company able to fulfill expectation 0594265 Consistent Accepted

21 Only company I want to associate

myself

0519161 Consistent Accepted

22 Purchase more policies from the same

company

0502876 Consistent Accepted

16

23 Suggest friends and family to purchase

policy from the same company

0540626 Consistent Accepted

24 Policy benefits benchmarks 062874 Consistent Accepted

25 Investment in life insurance is more

secure than stock market

0376874 Consistent Accepted

26 Purchase further policies from other

companies

0091102 Inonsistent Dropped

Reliability

Reliability test was carried out using SPSS software and the reliability of the items was measured

The result is as follows

Cronbachrsquos Alpha 0919

It can be seen that the reliability value is more than 07 So the questionnaire is

highly reliable

Description of factors

1 Company Loyalty

This factor includes that this is the only company the consumer wants to associate himself with in

future (0814) himself would purchase more policies from the same company (0799) suggest

friends and family to purchase policy from the same company (0790) company able to fulfill

expectation (0599) Policy benefits benchmarks (0545) The highest Eigen value lies in this factor

35213 So it is been considered as the highly contributing factor towards study Therefore it is

clear that company loyalty plays an important role in investment decisions of investors

17

2 Services Quality

This factor includes hassle free settlements (0693) employees responsible towards customers

(0631) agents respond promptly (0611) investment in life insurance is more secure than stock

market (0563) satisfy with relationship to company (0537) As we can see that the Eigen value for

factor service quality is 9753 which is also a contributing factor towards the study so it can also be considered as an the study

3 Ease of Procedures

This factor includes the company provides claims on time (0852) co- operative and friendly agent

(0662) settlement of claims easy and timely (0651) agent is well informed about policies (0486) As

we can see that the Eigen value for factor ease of procedures is 5830 which is also a contributing

factor towards the study so it can also be considered as an important factor inconsumerrsquos financial

needs (0404) As we can see that the Eigen value for factor company client relationship is 4051

which is also a contributing factor towards the study so it can also be considered as an important factor

in the study

4 Satisfaction Level

This factor includes that the suggested benefits of Insurance Policy should be met to the investors

( 0774) Company provides them satisfactory services (0631) fulfill its promise about life

insurance policy (0575) Services should be provided on time(0515) and awareness of terms and

conditions of policies As we can see that the Eigen value for factor satisfaction level is 5008

which is also a contributing factor towards the study so it can also be considered as an important

factor in the study

5 Company Image

This factor includes that the insurance company should be well known in the industry (0777)

insurance provider should have goodwill in market (0758) and company of high repute (0428)As

we can see that the Eigen value for factor company image is 4878 which is also a contributing

factor towards the study so it can also be considered as an important factor in the study

18

6 Company-Client Relationship

This factor includes that the agent remind about premium installments (0778) pay personal

attention on every consumer (0505) and understand consumerrsquos financial needs (0404) As

we can see that the Eigen value for factor company client relationship is 4051 which is also a

contributing factor towards the study so it can also be considered as an important factor in the

study

Z-Test

Z-test was applied to find out significant difference between male and female investorrsquos perception

towards investment in life insurance policies

For applying Z-test mean and standard deviation was calculated then values were put in formula to

calculate standard error

Null Hypothesis Ho It states that there is no significant difference between the perception of male

and female investors towards investment in life insurance policies

GENDER MEAN SD SAMPLE

SIZE

SQUARE

OF

SD

MALE 14104 20078 75 403146

FEMALE 14594 17701 75 313348

Z = 15877

Since the value of Z is less than the standard value 196 at 5 level of significance so the null

hypothesis is accepted Therefore there is no significant difference between the perception of male

and female investors towards investment in life insurance policies

19

CONCLUSION

In present Indian market the investment habits of Indian consumers are changing very frequently

The individuals have their own perception towards various types of investment plans The study of

this research work was focused over consumerrsquos perception on investment towards Life Insurance

Services The objectives of the study were to evaluate the factors underlying consumer perception

towards investment in life insurance policies and to compare the differences in consumer

perception of male and female consumers The tests that were used for our research activities were-

Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25

items being accepted Next was Reliability Test to check the reliability of the items The

result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis

Test and the six factors that came out were Consumer Loyalty Service Quality Ease of

Procedures Satisfaction Level Company Image and Company-Client Relationship

The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind

sets for their investment pattern in insurance policies Still some actions are needed for

developing insurance market The major factors playing the role in developing

consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality

Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship

Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in

developing the market share loyalty and further development in insurance sector

20

References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)

21

Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in

Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)

22

23 Suggest friends and family to purchase

policy from the same company

0540626 Consistent Accepted

24 Policy benefits benchmarks 062874 Consistent Accepted

25 Investment in life insurance is more

secure than stock market

0376874 Consistent Accepted

26 Purchase further policies from other

companies

0091102 Inonsistent Dropped

Reliability

Reliability test was carried out using SPSS software and the reliability of the items was measured

The result is as follows

Cronbachrsquos Alpha 0919

It can be seen that the reliability value is more than 07 So the questionnaire is

highly reliable

Description of factors

1 Company Loyalty

This factor includes that this is the only company the consumer wants to associate himself with in

future (0814) himself would purchase more policies from the same company (0799) suggest

friends and family to purchase policy from the same company (0790) company able to fulfill

expectation (0599) Policy benefits benchmarks (0545) The highest Eigen value lies in this factor

35213 So it is been considered as the highly contributing factor towards study Therefore it is

clear that company loyalty plays an important role in investment decisions of investors

17

2 Services Quality

This factor includes hassle free settlements (0693) employees responsible towards customers

(0631) agents respond promptly (0611) investment in life insurance is more secure than stock

market (0563) satisfy with relationship to company (0537) As we can see that the Eigen value for

factor service quality is 9753 which is also a contributing factor towards the study so it can also be considered as an the study

3 Ease of Procedures

This factor includes the company provides claims on time (0852) co- operative and friendly agent

(0662) settlement of claims easy and timely (0651) agent is well informed about policies (0486) As

we can see that the Eigen value for factor ease of procedures is 5830 which is also a contributing

factor towards the study so it can also be considered as an important factor inconsumerrsquos financial

needs (0404) As we can see that the Eigen value for factor company client relationship is 4051

which is also a contributing factor towards the study so it can also be considered as an important factor

in the study

4 Satisfaction Level

This factor includes that the suggested benefits of Insurance Policy should be met to the investors

( 0774) Company provides them satisfactory services (0631) fulfill its promise about life

insurance policy (0575) Services should be provided on time(0515) and awareness of terms and

conditions of policies As we can see that the Eigen value for factor satisfaction level is 5008

which is also a contributing factor towards the study so it can also be considered as an important

factor in the study

5 Company Image

This factor includes that the insurance company should be well known in the industry (0777)

insurance provider should have goodwill in market (0758) and company of high repute (0428)As

we can see that the Eigen value for factor company image is 4878 which is also a contributing

factor towards the study so it can also be considered as an important factor in the study

18

6 Company-Client Relationship

This factor includes that the agent remind about premium installments (0778) pay personal

attention on every consumer (0505) and understand consumerrsquos financial needs (0404) As

we can see that the Eigen value for factor company client relationship is 4051 which is also a

contributing factor towards the study so it can also be considered as an important factor in the

study

Z-Test

Z-test was applied to find out significant difference between male and female investorrsquos perception

towards investment in life insurance policies

For applying Z-test mean and standard deviation was calculated then values were put in formula to

calculate standard error

Null Hypothesis Ho It states that there is no significant difference between the perception of male

and female investors towards investment in life insurance policies

GENDER MEAN SD SAMPLE

SIZE

SQUARE

OF

SD

MALE 14104 20078 75 403146

FEMALE 14594 17701 75 313348

Z = 15877

Since the value of Z is less than the standard value 196 at 5 level of significance so the null

hypothesis is accepted Therefore there is no significant difference between the perception of male

and female investors towards investment in life insurance policies

19

CONCLUSION

In present Indian market the investment habits of Indian consumers are changing very frequently

The individuals have their own perception towards various types of investment plans The study of

this research work was focused over consumerrsquos perception on investment towards Life Insurance

Services The objectives of the study were to evaluate the factors underlying consumer perception

towards investment in life insurance policies and to compare the differences in consumer

perception of male and female consumers The tests that were used for our research activities were-

Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25

items being accepted Next was Reliability Test to check the reliability of the items The

result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis

Test and the six factors that came out were Consumer Loyalty Service Quality Ease of

Procedures Satisfaction Level Company Image and Company-Client Relationship

The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind

sets for their investment pattern in insurance policies Still some actions are needed for

developing insurance market The major factors playing the role in developing

consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality

Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship

Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in

developing the market share loyalty and further development in insurance sector

20

References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)

21

Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in

Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)

22

2 Services Quality

This factor includes hassle free settlements (0693) employees responsible towards customers

(0631) agents respond promptly (0611) investment in life insurance is more secure than stock

market (0563) satisfy with relationship to company (0537) As we can see that the Eigen value for

factor service quality is 9753 which is also a contributing factor towards the study so it can also be considered as an the study

3 Ease of Procedures

This factor includes the company provides claims on time (0852) co- operative and friendly agent

(0662) settlement of claims easy and timely (0651) agent is well informed about policies (0486) As

we can see that the Eigen value for factor ease of procedures is 5830 which is also a contributing

factor towards the study so it can also be considered as an important factor inconsumerrsquos financial

needs (0404) As we can see that the Eigen value for factor company client relationship is 4051

which is also a contributing factor towards the study so it can also be considered as an important factor

in the study

4 Satisfaction Level

This factor includes that the suggested benefits of Insurance Policy should be met to the investors

( 0774) Company provides them satisfactory services (0631) fulfill its promise about life

insurance policy (0575) Services should be provided on time(0515) and awareness of terms and

conditions of policies As we can see that the Eigen value for factor satisfaction level is 5008

which is also a contributing factor towards the study so it can also be considered as an important

factor in the study

5 Company Image

This factor includes that the insurance company should be well known in the industry (0777)

insurance provider should have goodwill in market (0758) and company of high repute (0428)As

we can see that the Eigen value for factor company image is 4878 which is also a contributing

factor towards the study so it can also be considered as an important factor in the study

18

6 Company-Client Relationship

This factor includes that the agent remind about premium installments (0778) pay personal

attention on every consumer (0505) and understand consumerrsquos financial needs (0404) As

we can see that the Eigen value for factor company client relationship is 4051 which is also a

contributing factor towards the study so it can also be considered as an important factor in the

study

Z-Test

Z-test was applied to find out significant difference between male and female investorrsquos perception

towards investment in life insurance policies

For applying Z-test mean and standard deviation was calculated then values were put in formula to

calculate standard error

Null Hypothesis Ho It states that there is no significant difference between the perception of male

and female investors towards investment in life insurance policies

GENDER MEAN SD SAMPLE

SIZE

SQUARE

OF

SD

MALE 14104 20078 75 403146

FEMALE 14594 17701 75 313348

Z = 15877

Since the value of Z is less than the standard value 196 at 5 level of significance so the null

hypothesis is accepted Therefore there is no significant difference between the perception of male

and female investors towards investment in life insurance policies

19

CONCLUSION

In present Indian market the investment habits of Indian consumers are changing very frequently

The individuals have their own perception towards various types of investment plans The study of

this research work was focused over consumerrsquos perception on investment towards Life Insurance

Services The objectives of the study were to evaluate the factors underlying consumer perception

towards investment in life insurance policies and to compare the differences in consumer

perception of male and female consumers The tests that were used for our research activities were-

Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25

items being accepted Next was Reliability Test to check the reliability of the items The

result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis

Test and the six factors that came out were Consumer Loyalty Service Quality Ease of

Procedures Satisfaction Level Company Image and Company-Client Relationship

The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind

sets for their investment pattern in insurance policies Still some actions are needed for

developing insurance market The major factors playing the role in developing

consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality

Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship

Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in

developing the market share loyalty and further development in insurance sector

20

References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)

21

Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in

Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)

22

6 Company-Client Relationship

This factor includes that the agent remind about premium installments (0778) pay personal

attention on every consumer (0505) and understand consumerrsquos financial needs (0404) As

we can see that the Eigen value for factor company client relationship is 4051 which is also a

contributing factor towards the study so it can also be considered as an important factor in the

study

Z-Test

Z-test was applied to find out significant difference between male and female investorrsquos perception

towards investment in life insurance policies

For applying Z-test mean and standard deviation was calculated then values were put in formula to

calculate standard error

Null Hypothesis Ho It states that there is no significant difference between the perception of male

and female investors towards investment in life insurance policies

GENDER MEAN SD SAMPLE

SIZE

SQUARE

OF

SD

MALE 14104 20078 75 403146

FEMALE 14594 17701 75 313348

Z = 15877

Since the value of Z is less than the standard value 196 at 5 level of significance so the null

hypothesis is accepted Therefore there is no significant difference between the perception of male

and female investors towards investment in life insurance policies

19

CONCLUSION

In present Indian market the investment habits of Indian consumers are changing very frequently

The individuals have their own perception towards various types of investment plans The study of

this research work was focused over consumerrsquos perception on investment towards Life Insurance

Services The objectives of the study were to evaluate the factors underlying consumer perception

towards investment in life insurance policies and to compare the differences in consumer

perception of male and female consumers The tests that were used for our research activities were-

Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25

items being accepted Next was Reliability Test to check the reliability of the items The

result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis

Test and the six factors that came out were Consumer Loyalty Service Quality Ease of

Procedures Satisfaction Level Company Image and Company-Client Relationship

The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind

sets for their investment pattern in insurance policies Still some actions are needed for

developing insurance market The major factors playing the role in developing

consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality

Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship

Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in

developing the market share loyalty and further development in insurance sector

20

References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)

21

Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in

Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)

22

CONCLUSION

In present Indian market the investment habits of Indian consumers are changing very frequently

The individuals have their own perception towards various types of investment plans The study of

this research work was focused over consumerrsquos perception on investment towards Life Insurance

Services The objectives of the study were to evaluate the factors underlying consumer perception

towards investment in life insurance policies and to compare the differences in consumer

perception of male and female consumers The tests that were used for our research activities were-

Item to Total Correlation Test which we applied on 26 items and only one was dropped out 25

items being accepted Next was Reliability Test to check the reliability of the items The

result was 0915 Therefore the items were highly reliable Then we applied the Factor Analysis

Test and the six factors that came out were Consumer Loyalty Service Quality Ease of

Procedures Satisfaction Level Company Image and Company-Client Relationship

The consumerrsquos perception towards Life Insurance Policies is positive It developed a positive mind

sets for their investment pattern in insurance policies Still some actions are needed for

developing insurance market The major factors playing the role in developing

consumerrsquos perception towards Life Insurance Policies are Consumer Loyalty Service Quality

Ease of Procedures Satisfaction Level Company Image and Company-Client Relationship

Insurance industry has to go ahead A lot of opportunities are still waiting This research will help in

developing the market share loyalty and further development in insurance sector

20

References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)

21

Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in

Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)

22

References Berger Jonah A Michaele Draganska Itamar Simonson (1938) Stanford University Graduate School of Business Dhar Greenleaf and Lehmann Tversky and Shaffer( 1997) by Journal Of Consumer Research (Vol 24) Diacon Stephen (2001) International Journal of Bank Marketing Formisano Roger A (1981) The Journal of Risk and Insurance (Vol48 no1 pp59-79) Fried B Robert and Lewis Staphanie E (2004) Choosing a Long Term Insurance Policy Understanding and Improving the Process Grundel Helmut Post Thomas Schulze Roman (2005) Managing Demographic Risk in Life Insurance Company Kahneman D Tversky A (1979) Prospect Theory An analysis of decision under risk Econometrica (Vol47 pp- 263-292) Kahneman D Tversky A (1984) Choices values and frames American Psychologist (Vol39 pp-341-350) Kirchler and Angela Christian Hubert (1999 accepted 1999 Available online 1999) Institute of Psychology University of Vienna Kotler P (1973) ldquoAtmospherics as on marketing toolrdquo Journal of Retailing pp-48-64 Kunreuther H (1979) An experimental study of insurance decisions Journal of Risk and Insurance(Vol 46 No4pp 603-618)

21

Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in

Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)

22

Mills E ( 2006) The Insurance Industry Prepares for Climate Change Interview with Paul Thacker in

Environmental Science amp Technology Slovic Fischhoff Lichtenstein Corrigan and Combs (1977) Decision Research (vol2 issue 2 pp83-93) Smith Michael L(1982) The Journal of Risk and Insurance (Vol49 no4 pp583-601) Walden Michael L (1985) The Journal of Risk and Insurance (Vol52 no1 pp44-58) Wong Amy (2004) Managing Service Quality (Vol14 No5 pp365-376)

22