‘A CASE ANALYSIS ON PERCEPTION OF INVESTORS TOWARDS

‘A CASE ANALYSIS ON PERCEPTION OF INVESTORS TOWARDS INVESTING

IN LIFE INSURANCE PRODUCTS OF SHRIRAM LIFE COMPANY LTD’

1Pawan Pandey &

2Prof. Purnima Sarkar

1Student, Amity Global Business School, Bhubaneshwar

2Asst. Prof. - Finance, Amity Global Business School, Bhubaneshwar

[email protected],

[email protected]

ABSTRACT

Perception is a conscious or unconscious state of awareness or understanding of one's

surroundings that exists within the mind and formed through sensory signals stimulated by

current conditions, expectations and past memories. The confluence of complex sensory

inputs often times creates a perception that is unreliable or unverifiable. In other words, it

may not be based in reality.

Investor Perceptions is a leading provider of authoritative and considered investor feedback.

IP delivers an independent perspective into how shareholders and the key underweight

institutions view a company, its management and its prospects

Insurance is a contract providing for payment of sum of money to the person assured or

failing him to the person entitled to receive the same on the happening of certain event.

Uncertainty of death is inherent in human life. It is this risk, which gives rise to the necessity

for some form of protection against the financial loss arising from death. Insurance

substitutes this uncertainty by certainty

Keywords: life insurance, financial loss, indemnity

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INTRODUCTION OF THE STUDY

“The business of insurance is related to the protection of the economic values of the assets”.

Every human being has the tendency to save to protect him from risks or events of future.

Insurance is one form of savings where in people try to assure themselves against risks or

uncertainty of future. It assurance against risks or events or losses. People can save their

earnings either in form gold, fixed assets like property or in banking and insurances. All the

savings if the country account for gross domestic savings. In India, all those savings rate is

high but people prefer to invest either in gold or fixed assets so they can make money out of

it. Hence insurance sector each still untapped in India.

An investor; an individual who commits money to investment products with the expectation

of financial return. Generally, the primary concern of an investor is to minimize risk while

maximizing return, as opposed to a speculator, who is willing to accept a higher level of risk

in the hopes of collecting higher-than-average profits. Investors‟ behaviour is the study of

how individuals make decision to spend their available resources (time, money and efforts)

on investment related items. it helps the marketers to understand what, why, where, when and

how an investor behaves with respect to products and services. Knowing answer to this

question let marketers to design their marketing strategies accordingly.

Perception: A conscious or unconscious state of awareness or understanding of one's

surroundings that exists within the mind and formed through sensory signals stimulated by

current conditions, expectations and past memories. The confluence of complex sensory

inputs often times creates a perception that is unreliable or unverifiable. In other words, it

may not be based in reality.

Investors Perception: Investor Perceptions is a leading provider of authoritative and

considered investor feedback. IP delivers an independent perspective into how shareholders

and the key underweight institutions view a company, its management and its prospects. We

analyse in depth the key factors that collectively define a company's investment proposition

and ultimately determine the valuation the market places on the shares. Being aware of the

opinions and views of investors assists companies to improve their communication with the

market and to ensure the investment proposition is properly understood and is reflected in the

valuation of the shares, which in turn will influence its cost of capital.

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INSURANCE

Insurance is a contract providing for payment of sum of money to the person assured or

failing him to the person entitled to receive the same on the happening of certain event.

Uncertainty of death is inherent in human life. It is this risk, which gives rise to the necessity

for some form of protection against the financial loss arising from death. Insurance

substitutes this uncertainty by certainty. The objective of insurance is normally to provide:

1. Family protection

2. Provision for old age

3. Protection against risks

• Insurance cover is essential because it provides the following benefit:

• A lump sum payment to the nominees in the time of the death of the policy holder.

• A regular payment to the nominees in the event of the death of the policy holder. Tax

benefit, as premiums paid reduce the liability of tax.

• Relieves economic hardships in the family on the uneventful death of the sole income

holder.

• Inculcates the habit of savings.

Need for Life Insurance

Today there is no shortage of investment options for a person to choose from. Modern day

investments includes gold, property, fixed income instruments, mutual funds and of course

life insurance. Given the plethora of choices, it becomes imperative to make the right choice

when investing your hard earned money. Life insurance is a unique investment that helps you

to meet you deals needs savings for life’s important goals and protecting your assets.

Life insurance is the only investment option that offers specific products tailor made for

different life stages. It thus ensures that benefits offered to the customer reflect the needs of

the customer at that particular life stage.

OBJECTIVES OF THE STUDY

1. To know the customer behavior towards the products.

2. To know investment pattern of customer.

3. Study of financial behavior of investors regarding Life insurance.

4. To find out the risk and return of Life Insurance plan

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5. To find out the relevant advantages and disadvantages of both the insurance plan.

SCOPE OF THE STUDY

• The result of this research would help the company to have a better understanding

about the consumer’s perceptions towards Life Insurance.

• The study helps the company by creating awareness about the consumers of different

ages and income levels.

• The study also enables the company to focus the consumer’s preferences and

expectations on the product which they offer.

LITERATURE REVIEW

This chapter presents the review of literature to identify and understand the implications of

different issues related to consumer perception and satisfaction towards public and private

life insurances companies in India. The literature on life insurance industry in India includes

books, compendia, theses, dissertations, study reports and articles published by academicians

and researchers in different periodicals. The review of this literature gives an idea to

concentrate on the unexplored area and to make the present study more distinct from other

studies. The literature available is presented below:

Baal N. and Sandhog H. S. (August 2011), a study on Life Insurance Corporation of India

(LIC) the capital demanding business, supplies the most important financial instruments to

customers directed at safety as well as long term savings. The present study by examines the

parts affecting agent’s perception towards Life Insurance Corporation of India. Moreover,

analysis of one way arrangement has also been performed to test the important results to

show that no important differences exist among various groups of respondent regarding to

their apprehension towards Life Insurance Corporation of India.

Baal N. and Sandhog H. S. et al (August 2011), with the access of so many players in the

field and the consistent competitive activism, the choate area of the service sector is

observing a multi-dimensional, purposeful, consumer-friendly approach, shedding off the

apathy that had come to be affiliated with the sector. The findings of the study imply that the

gap scores do not amalgamate into five dimensions of service quality rather, than the

perception scores merge into three dimensions.

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Meera C. and Eswari M. (November 2011), in modern aggressive environment services are

ameliorate accumulating more denotation. Nowadays, greater absorption is paid to all the

bank customer touch points, address to optimise the reciprocal and user friendly services. The

aim of the study by is to crumb the customers bliss towards cross selling of insurance

products and other services accomplished by private sector banks.

Singh H. and Loll M (December 2011), states that life insurance is one of the fastest

growing and emerging markets in India. Insurance diffusion in rural area – the insurance

industry has an acceptation grant in socio-economic development. Objective of the present

study is to appraise the opportunities for insurers in the rural market and what would be new

action to tap the highly underinsured rural area.

Friar F. and Khanbashi M. et al (December 2011), this study is one of the most conscious

actions taken in alluring and gratifying needs of customers is chattering a charismatic

information mechanism and feedback process between organisation and customers. The aim

of this study by, is finding of the variation between anticipation of the employees and

customers towards service quality in insurance industry of Iran. The study revealed that there

is cogent difference between the anticipation of staff and customers towards the tangibles

dimension while the anticipation of both the groups towards the other dimensions is

homogenous.

RESEARCH METHODOLOGY

Methodology is a systematic way of solving a problem it includes the research method for

solving a problem it includes the research method for solving the problems.

Type of Research: Descriptive research

SAMPLE DESIGN

The target population of the study consists of various respondents of various places. This

survey was done by collecting the data from the respondents.

SAMPLE SIZE

After due consultation with the company supervisor as well as with the college guide, also

keeping in mind the requirements of the company for the research ,the sample size that was

found to be appropriate for the study was 50.

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SAMPLING TECHNIQUE

The sampling technique that adapted to conduct the survey was convenient sampling and the

area of the research was concentrated in the city of Bhubaneswar only. The survey was

conducted by visiting different places like colleges, corporate offices, respondent’s home,

railway stations etc.

DATA SOURCE

The task of data collection begins after a research problem has been defined. In this study

data was collected through both primary and secondary data source.

A. PRIMARY DATA

A primary data is data which is collected for gathering information first time and to

analyse the problem. In this study the primary data was collected among the

consumers offer using questionnaire.

B. SECONDARY DATA

Secondary data consists of information that already exists somewhere, having been

collected for some other proposes. In this study secondary data was collected from

company website, magazines and brochures.

SWOT ANALYSIS OF SRIRAM LIFE INSURANCE

• Strengths:

1. Insurance policies for all strata’s of society

2. Policies with consideration for social Impact

3. International expertise of Sanlam group

4. Spread of 750 offices across India

5. More than 75,000 loyal and dedicated agents and has a customer base of 30 lacs

chit subscribers and investors

• Weakness:

1. Low key I.T infrastructure as compared to big brands

2. Low Marketing and brand presence as compared to other competitors

3. Insurance companies have a poor image when it comes to payment of dues

• Opportunities:

1. Growing rural market

2. Earning Urban Youth looking for investments

3. Cross selling through financial services such as banking.

• Threats:

1. Stringent Economic measures by Government and RBI

2. Entry of new NBFCs in the sector.

2.

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DATA ANALYSIS

Demographic Profile of Responde

The above figure defines the annual income of respondents. Out of 50 respondents 45% are

under the income range of below one lakh where as only 4% of respondents are earning more

than 5 lakhs. A percentage of 22% are within th

29% are within 1.01 lakh to 3 lakh.

The above figure shows out of 50 respondents 81% of persons are savings less than 15% of

their salary. Only a least of 4% of persons are saving more than 25% of their salary. 15%

ANNUAL INCOME LEVEL

below Rs 1 lakh

15%

WHAT % OF SALARY DO YOU USUALLY

DATA ANALYSIS & INTERPRETATION

Demographic Profile of Respondents

FIGURE 1

figure defines the annual income of respondents. Out of 50 respondents 45% are


than 5 lakhs. A percentage of 22% are within the income range of 3.01 lakh to 5

29% are within 1.01 lakh to 3 lakh.

FIGURE 2



45%

29%

22%

4%

ANNUAL INCOME LEVEL

below Rs 1 lakh rs 1 - 3 lakh Rs 3 - 5 lakh above 5 lakh

81%

0% 4%

WHAT % OF SALARY DO YOU USUALLY

SAVE?

less than 15%

15-20%

20-25

more than 25%

figure defines the annual income of respondents. Out of 50 respondents 45% are


e income range of 3.01 lakh to 5 lakh and



less than 15%

more than 25%

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numbers of persons are savings within the range of 15

salary.

Majority of 53% of respondents out of 50 prefer to investment in short term. 31% of

respondents prefer to investment in long term. Rest 16% of persons prefer to investment in

both long and short term to meet varied group of requirements.

The above figure signifies that out of 50 respondents 90% of respondents have life insurance

policy and rest 8% of persons have not purchased a single life insurance policy on their

tells that Indians are not fully aware about life insurance protection.

WHAT KIND OF INVESTMENT DO YOU PREFER?

DO YOU HAVE LIFE INSURANCE POLICY?

savings within the range of 15-20% and 0% on 20-

FIGURE 3



both long and short term to meet varied group of requirements.

FIGURE 4


policy and rest 8% of persons have not purchased a single life insurance policy on their

tells that Indians are not fully aware about life insurance protection.

53%31%

16%

WHAT KIND OF INVESTMENT DO YOU PREFER?

short term27 long term both

90%

8%2%


yes no maybe

-25% of their




policy and rest 8% of persons have not purchased a single life insurance policy on their life. It


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Out of 50 respondents 59% have insurance policy/s in LIC of India and 18% are in

possession of life insurance policies

in ICICI PRUDENTIAL and only 2% respondent have policy in other companies.

The above figure shows that out of fifty respondents 28 numbers (55%) desire to buy a new

life insurance policy in Shriram Life I

in buying life insurance policy.

18%

19%

IF YES THEN WHICH INSURANCE COMPANY

POLICY DO YOU PREFER?

22%

23%

DO YOU WANT TO BUY A NEW POLICY

WOULD YOU LIKE TO INVEST IN SHRIRAM

FIGURE 5


session of life insurance policies in BAJAJ ALLIANZ, 19% of respondents have p


FIGURE 6


surance policy in Shriram Life Insurance company and rest 11 (22%) are not interested

59%

19%

2%2%


POLICY DO YOU PREFER?

lic of india

bajaj allianz

icici prudential

Shriram life

Hdfc sanchaya plus

55%22%

23%

DO YOU WANT TO BUY A NEW POLICY

WOULD YOU LIKE TO INVEST IN SHRIRAM

COMPANY?

yes

no

maybe


in BAJAJ ALLIANZ, 19% of respondents have policies



(22%) are not interested


lic of india

bajaj allianz

icici prudential

Shriram life

Hdfc sanchaya plus

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Out of 50 respondents 51% are interested in Shriram Life I

because of its growth potential. 25% numbers of respondents in the said company are buying

for utmost good faith. Only 2% says his purchase was driven by different other reasons for

different reasons. Rest 22% are not interested in Shriram Life I

Above figure out of 50 respondents 32 said premium

from life insurance company and 16 said important rest others either important or not

important, And in charges while buying policy from life insurance company 18 said highly

important and 25 said important and 5 have said neutral rest others said n

the policy term while buying policy out of 50 respondents 22 said highly important 24 said

25%

2%

22%

IF YES WHAT WILL MAKE YOU TO INVEST IN

SHRIRAM LIFE INSURANCE?

010203040

WHAT PARAMETERS YOU HAVE LOOKED INTO AT THE TIME

OF BUYING POLICY FROM LIFE INSURANCE COMPANY

Highly Important Important

FIGURE 7

51% are interested in Shriram Life Insurance to buy a life insurance


utmost good faith. Only 2% says his purchase was driven by different other reasons for

are not interested in Shriram Life Insurance.

FIGURE 8

50 respondents 32 said premium highly important while buying

and 16 said important rest others either important or not


important and 25 said important and 5 have said neutral rest others said not important, And in


51%

25%

22%


SHRIRAM LIFE INSURANCE?

growth potential

utmost good faith

others

no answer


OF BUYING POLICY FROM LIFE INSURANCE COMPANY?

Important Neutral Least Important Not Important

nsurance to buy a life insurance


utmost good faith. Only 2% says his purchase was driven by different other reasons for

highly important while buying policy

and 16 said important rest others either important or not


ot important, And in



growth potential

utmost good faith

others

no answer


Not Important

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important rest 3 said neutral or not important. And in Rider benefits 28 said highly important

15 said important rest others have said neutral. And in bonus and interest 34 said highly

important or 11 said important rest others said either important or not important. And in

accessibility 25 said highly important 20 said important rest others said either important or

not important, about company image 33 said highly important and 10 said important rest

others said either important or not important.

FINDINGS

• According to the survey safety is the most important criterion which is accepted

among all the respondents towards their investment alternatives followed by return,

brand name, tax benefit, liquidity and capital growth.

• According to the study premium and company image is to be the highly important

criteria which we consider before taking up life insurance this is mainly because

people expect safety and security for their money which they invest.

• People who belong to different age groups have different perception regarding the

most important criteria before taking the decision on a life insurance.

• The scheme mostly preferred by insurance holder was life protection schemes like

death benefit followed by money growth plans like high return plans.

• It was found that nearly 50% of the respondents usually save less than 15% and the

kind of investment mostly preferred by the respondents were both long and short

term.

• Consumer awareness of Shriram Life Insurance is less as compared to the PSUs. So

efforts should be made to increase the awareness of the company.

LIMITATIONS OF THE RESEARCH

The sample size chosen for the questionnaire was only 50 and that may not represent

the true picture of the consumer perception about the life insurance sector.

The research got confined to the city of Bhubaneswar. The respondent belonged only

to Bhubaneswar and not others who were out of Bhubaneswar.

Nearly the number of respondents are 36 in the age group of below 30. Few student

respondent were chosen and fortunately all have life insurance policies by their name.

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The second highest age group is 31-40 .This group of persons are at the planning

stage of their life and good number of life insurance buyer are found under this group.

The product offered by different companies had different options and names in them,

so at the time of comparison it became very difficult. The parameters for comparison

were also different in the selected companies.

One of the important criteria that was selected by the respondents which they consider

before taking an insurance policy was “company image” but there was no parameter

available to compare criteria like this between the companies.

SUGGESTIONS

1. Consumer should be aware of company‘s profile and returns associated with

insurance.

2. The financial advisor should be right enough to serve the consumer. The

consumer should also be aware of the advisor or others who is looking after their

investment.

3. Company should publish their performance by comparing it with their competitors.

4. Company should adopt strategies to explore that private insurance companies are

safer and securer than public insurance company like LIC.

5. Middle income people suggest that premium can be collected on monthly basis

instead of twice a year.

CONCLUSION

The study titled ”Study of consumers perception about Life insurance policies enables the life

insurance companies to understand how consumer’s perception differs from person to person.

How a consumer selects, organizes and interprets the service quality, and product quality of

different life insurance policies, offers by various life insurance companies.

The response of the insurance companies has been very positive and within a short

span of time, the Indian Insurance market scenario has seen a perceptible change in terms of

improved customer service benchmark and introduction of innovative and tailors made

products.Most of the insurance majors have represented in the form of joint venture in Indian

market.The new products that have been introduced by the companies have certain innovative

features in terms of better customer services and also wider covers. This has given customer

sample choice to select the products.

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BIBLIOGRAPHY

1. PHILIP KOTLER (2001) ‘Marketing Management Prenticehall Pvt.ltd. New

Delhi, Millennium edition

2. KOTHARI C.R(1999)’Research Methodology’ Wishwa Prakashan, New

Delhi,2nd

edition.

3. LEONG.SCHFFMAN and LESLIE LAZAR KANUK (2007) Consumer

Behaviour Prentice Hall Pvt. Ltd. New Delhi.9th

edition.

WEBSITES :

1. WWW.Shriramlifeinsurance.com

2. www.irda.org

3. www.slideshare.net

4. www.academia.edu

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Documents

‘A CASE ANALYSIS ON PERCEPTION OF INVESTORS TOWARDS