PROJECT REPORT ON A study on consumer behavior towards insurance products with special reference to ICICI Prudential

Submitted in partial fulfillment of the requirement for the award of MASTER OF BUSINESS ADMINISTRATION Of Bangalore University Submitted By: Kudachi Umesh Gangappa (Reg No: 06KXCM6005) Under the Guidance of Prof: Ramanath.H.R

SURANA COLLEGE P. G. CENTRE CA#17, Kengeri Satellite Town BANGALORE-560060 2008 SURANA PG CENTRE 1

Student Declaration

I here by declare this dissertation A study on consumer behavior towards insurance products with special reference to ICICI Prudential is based on the original work carried on by me under the guidance of Prof. Ramanath. H.R towards the partial fulfillment of requirement for the award of Master of Business Administration of Bangalore University. I further declare that this project or any part there of has not been submitted for any other Degree or Diploma of Bangalore university or any other university.

Place: Bangalore Date:

Kudachi Umesh Gangappa Reg No- 06KXCM6005

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Acknowledgement

I take this opportunity to express my sincere gratitude to Director Dr. V Prabhu Dev for providing me right kind of atmosphere, which helped me to complete my project successfully. Its my pleasure to thank to Prof. Ramanath. H .R Department of MBA for his guidance in this project. Words cant express my gratitude to my parents whose genuine interest and encouragement helped me a lot to this dissertation. Last but not least I thank to all the faculty members of Surana College and my friends who have directly or indirectly helped me in the some way or the other in bringing out this dissertation.

Date:

Kudachi Umesh Gangappa

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EXECUTIVE SUMMARYInsurance is the pooling of fortuitous losses by transfer of such risk to insures, who agreed to provide the pecuniary benefit on their occurrence, or to render service connected with risk. It is the transfer of financial responsibility for the risk at the point of occurrence and conventionally involves the insurer in a commitment to pay. growth of trade and commerce. by this sector. ICICI PRUDENTIAL has maintained its lead amongst the private players of life insurance with a market share of about 39%. The biggest achievement is in pension segment, where company introduced a slew of products and captured around 23% of the total pension market. ICICI Prudential have a customer centric growth strategy and has taken a number of strategies against this. The consumers are the largest economic group in any country and the present day business activities are because of consumers only. Thus, consumers are the pillars of the economy. The consumers are not only the heart of marketing system, but also the controller of marketing functions. But it the modern marketing system consumers sovereignty has become a myth on account of the variety of problems in the process of merchandising. The study of consumer behaviour enables marketers to understand and predict consumer behaviour in the market place; It also promote understanding of the role that consumption plays in the lives of individual. The insurance service lead to efficient and productive allocation of capital resources, facilitate Globalization will certainly increase insurance penetration and all professionals shall equip themselves to exploit opportunities offered

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This gives me an opportunity to work on with this endeavor focusing on the study of consumer behaviour to wards the insurance products with special reference to ICICI PRUDNETIAL. The primary objective of the study is to understand the attitudes and perception of respondents towards insurance products.

The introductory chapter gives and insight to the insurance industry. It briefly explains about the history of live insurance sector. It also contain the organizational profile of ICICI PRUDNETIAL, stating about its mile stones, vision, products, protection solutions, advertising effectiveness and finally about its marketing strategies and challenges. The second chapter gives a glimpses idea about the area of dissertation i.e. theoretical background of the study. This part clearly explains the theoretical part of consumer behaviour in general. It also includes statement of the problem, need and impotents of the present study and focal objectives of the dissertation undertaken. The third chapter explains about literature review. It briefly describes what all are the information source for the present study and what benefits has derived from the reference of those literatures. Next part explains about the research methodology. With the basic understanding of the study research design was formulated. To collect the data, questionnaires consisting of 25 questions were prepared. The necessary data were collected through personal interviews and interaction with both company personnel and holders of life insurance policies. This chapter specifically explains about the type of research, sample technique, sample size, actual collection of data and the tools used for the testing of hypothesis. The last but one chapter contains the analysis and interpretation of data collected. The collected data was coded through tally bars and presented in percentage wise and 8 SURANA PG CENTRE

depicted in the form of graphical representation. It also included the hypothesis test about the overall result of the present study. The last chapter is entirely the exploration of the research study giving all respondents opinion in nutshell as findings i.e. starting the around percentage of customers behave positively towards the ICICI PRUDENTIALS products. The dissertation ends up with the suggestions in order to modify the current system for a higher growth and progress.

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TABLE OF CONTENTS Chapter One: The Introduction 1 Life Insurance ------------------------------------------------------------------------ 01 2 Indian Insurance Market ------------------------------------------------------------ 04 2.1 Need For Insurance ------------------------------------------------------------------ 06 2.2 Type of Insurance Policy------------------------------------------------------------ 07 2.3 Future of Life Insurance Market---------------------------------------------------- 09 2.4 Theoretical Background of the Study---------------------------------------------- 11 2.5 Model of Consumer Behaviour----------------------------------------------------- 15 2.6 Types of consumer Buying Behaviour--------------------------------------------- 19 2.7 Consumer decision Making --------------------------------------------------------- 20 Chapter Two: Research Design 2.1 Statement of problem----------------------------------------------------------------- 23 2.2 Need and Importance of Study------------------------------------------------------ 23 2.3 Objective of the study---------------------------------------------------------------- 25 2.4 Methodology -------------------------------------------------------------------------- 25 Chapter Three: Profiles of the company-------------------------------------------- 27 Chapter Four: Analysis of Data and Interpretations----------------------------- 34 Chapter Five: Summary of Findings, Recommendations and Conclusion 5.1 Findings-------------------------------------------------------------------------------- 82 5.2 Recommendations-------------------------------------------------------------------- 84 5.3 Conclusion----------------------------------------------------------------------------- 89 BIBLIOGRAPHY------------------------------------------------------------------------ 90 ANNEXURES----------------------------------------------------------------------------- 91

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LIST OF TABLES Table No: 1 2 3 4 5 TITLE Table showing monthly income of the Respondents Table showing the monthly saving of the respondents Table showing the purpose of savings of the Respondents Table showing investment preference of the respondents Table showing the respondents who are actively planning their investments taking care of tax implications Table showing respondents level of information regarding insurance products Table showing companies preferred for taking life insurance polices Table showing the polices preferred by the respondents Table showing how much insurance premium is paid monthly by the respondents Table showing the purpose for which the respondents have taken the policy Table showing the who pays premium for the respondents Table showing whose life is insured as per the policy taken by the respondents Table showing the level of information regarding The products of ICICI PRUDENTIAL PAGE No: 34 36 38 40 42

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44 46 48 50 52 54 56 58 11

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Table showing ICICI PRUDENTIAL advisors who have contacted the respondents Table showing the polices preferred by the respondents owing ICICI PRUDENTIAL Life insurance policy Table showing the rating of the services offered by ICICI PRUDENTIAL

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LIST OF TABLES Table No: 17(a) 17(b) 18(a) TITLE Table showing whether the respondents a satisfied with the service of the company Table showing whether the respondents a satisfied with the service of the advisors Table showing whether the respondents a satisfied with the service of the insurance products. PAGE No: 66 68 70 72 74 76 78

18(b) Table showing whether the respondents a satisfied with the service of the investment plans. 19 20 21 Table showing how frequently respondents Like to pay their premium Table showing whether the ICICI PRUDNETIAL policy holders receiving premium notice in advance Table showing the respondents opinion regarding Whether the ICICI PRUDNETIAL web site is Informative and suggestive

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Table showing the number of respondents who are interested to hold more policies other than the one they are using now

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1. INTRODUCTION1.1 LIFE INSURANCE Life insurance is a contract providing for a payment of a 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: a. b. Family protection and Provision for old age.

HISTORY AND PRESENT STATUS OF INSURANCE MARKET IN INDIA The insurance sector in India has come a full circle from being an open competitive market to nationalization and back to a liberalized market again. Tracing the developments in the Indian insurance sector reviles the 360-degre turn witnessed over a period of almost two centuries. A brief history of the insurance sector The business of life insurance in India in its existing form started in India in the 1818 with the establishment of Oriental Life Insurance Company in Calcutta. Some of the important milestones in the life insurance business in India are:

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1912: The India Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. 1928: The Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-insurance business. 1938: earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interest of the insuring public. 1956: 245 Indian and foreign insurers and provident societies are taken over by the central government and nationalized. LIC found by an Act of Parliament, viz. LIC Act 1956, with a capital contribution of rupees Five Crores from the Government of India. Insurance sector reforms In 1993, Malhotra Committee, headed by former Finance Secretary and RBI Governor R.N. Malhotra, was formed to evaluate the Indian insurance industry and recommend its future direction. The Malhotra committee setup with the objective of complimenting the reforms initiated in the financial sector. The reforms where aimed at creating an more efficient and competitive financial system suitable for the requirements of the economy keeping in mind the structural changes currently underway and recognizing that insurance is an important part of the overall financial system where it was necessary to address the need for similar reforms In 1994, the Committee submitted the report and some of the key recommendations included: i. Structure Government stake in the insurance companies to be brought down to 50% Government should take over the holdings of GIC and its subsidiaries so that these subsidiaries can act as independent corporations All the insurance company should be given greater freedom to operate. ii. Competition 14

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Private companies with a minimum paid up capital of Rs. 1bn should be should be allowed to enter the industry. No company should dealing both the life and general insurance through Single entity. Foreign companies may be allowed to enter the industry in collaboration With the domestic companies Postal Life Insurance should be allowed to operate in the rural market. Only one State Level Life Insurance Company should be allowed to Operated in each state iii. Regulatory body The Insurance Act should be changed. An insurance regulatory body should be setup

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1.2 INDIAN INSURANCE MARKET Insurance is an Rs 400 billion business in India, and together with banking services adds about 7% to Indias GDP. Gross premium collection is abut 2% of GDP and has been growing by 15 to 20% per annum. India also has the highest number of life insurance policies in force in the world, and total investable funds with the LIC are almost 8% of GDP. Yet more than three fourth of Indias insurable population has no life insurance or pension cover. Health insurance of any kind is negligible and other forms of non life insurance are much below international standards. To tap the vast insurance potential and to mobilize long term savings we need reforms with include revitalizing and restructuring of the public sector companies, and opening up the sector to private players. A statutory body needs to be made to regulate The market and promote a healthy market structure. of following three functions: a. b. c. Protection of consumers interest To ensure financial soundness and solvency of the insurance industry, and To ensure health growth of insurance market. An insurance policy protects the buyer at some cost against the financial loss Insurance Regulatory Authority (IRA) is one such body, which checks on these tendencies. IRA role comprise

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Arising form a specified risk. Different situations and different people require a different mix of risk cost combinations. schemes of different kinds. Unfortunately the concept of insurance is not popular in our country. As per the latest estimates, the total premium income generated by life and general insurance in India is estimated at around 1.95% of GDP. How ever Indias share of world insurance market has shown an increase of 10% from 0.31% in 1996-97 to 0.34% in 1997-98. Indias market share in the life insurance business showed a real growth of 11% there by outperforming global average of 7.7%. Non life insurance business grew by 3.1% against global average of 0.20%. In India insurance pending per capita was among the last in the world at $7.6 compared to $7 in the previous year. Amongst the emerging economies, India is one of the least insured countries but the potential for future growth is phenomenal, as a significant portion of its population is in services and the life expectancy also increased over the years. The nationalized insurance industry has not offered consumers a variety of products. Opening of the sector to private firms will foster competition, innovation and variety of products. It would also generate greater awareness on the need for buying insurance as a service and not merely for tax exemption, which is currently done on the demand side, a Strong correlation between demand for insurance and pre capita income level suggests that high economic growth can spur growth in demand for insurance. Also there exists a strong correlation between insurance density and social indicators such as literacy. With social development, insurance demand will grow. Why life insurance? Life Insurance cover is essential for it provides the following benefits: A lump sum payment to the nominees at the time of the death of the policy holder; SURANA PG CENTRE 17 Insurance companies provided these by offering

A regular payment to the nominees in the event of the death of the policy holder; Tax benefits, 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 saving.

1.3 NEED FOR INSURANCE The need for life insurance comes from the need to safeguard our family. If you Care for you familys needs you will definitely consider insurance. Today insurance has become even more important due to the disintegration of the prevalent joint family system, a system in which a number of generations co-existed in harmony, a system in which a sense of financial security was always there as there were more earning members. Times have changed and the nuclear family has emerged. A part form the other pitfalls of a nuclear family, a high sense of insecurity is observed in it today besides, the family has shrunk. Needs are increasing with time and fulfillment of these need is a big question mark. How will you be able to satisfy all those needs? Better lifestyle, good education, and your long desired house. But again you just cannot fritter away all your earnings. You need to save a part of it for the future too- a wise decision. This is where insurance helps you. Factors such as fewer number of earning members, stress, pollution increased competition, higher ambitions etc. are some of the reasons why insurance has gained important and where insurance plays a successful role.

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1.4 TYPES OF INSURANCE POLICIES Broadly there are 3 types of life insurance policies: 1. Term insurance plans: pure life covers where you pay for your risk cover and do not expect to receive anything s/else in return is now available in India. Opting for such policy will improve the efficiency of policy premium and enable you for a bigger risk cover for the same cost. These are term insurance plans with maturity benefits; some term plans give you premium amounts back with interest. This is a marketing ploy to suit general psychology and should normally involve higher premium cost. 2. Whole life insurance plans: whole life policies require you to pay premium through out your life and cover risk for your whole life. The policies with out profit are cheaper. 3. Endowment insurance plans (with or with out money back): endowment policies are costliest among this group, money back policies involve paying highest premium. They give you maturity benefits (normally, sum assured) and additional profit by way of bonus, guaranteed additions; loyalty bonus etc. money policies also provide partial payment back to you at pre-set time periods. DEFINITION OF SOME TYPES OF POLICIES 1. ANNUITY SURANA PG CENTRE 19

An annuity is a steady stream of equal payments that one receives every year, or every month either for life or a fixed number of years, as return after making an investment either as a lump sum or through installments paid over a certain number of years, a specific sum. Upon the death of the annuitant, or at the expiry of the expiry of the period fixed for annuity payments, the invested annuity fund is refunded usually along with a small bonus. Annuities differ from all other forms of life insurance in one fundamental way they do not provided any insurance cover by offer a guaranteed income for a certain period or for life. Typically annuities are bought to generate income during ones retired life, which is why they are also called pension plans. An annuity provides a solution to the biggest financial insecurity of old age after one retires and the income from salary ceases. 2. ENDOWMENT: Endowment policies cover the risk for a specified period at the end of which the sum assured is paid back to the policyholder along with the entire bonus accumulated during the term of the policy. It is this feature the payment of the endowment to the policyholder upon the completion of the policys term -, which rightly accounts for the popularity of endowment policies. Typically, ones responsibility for the financial protection of the family reduce significantly once the children are grown up and independently settled. The focus then shifts to managing a smaller family perhaps only oneself and ones spouse after retirement. This is where the endowment the original sum assured and the accumulated bonus received back comes handy. You can either use the endowment amount for buying an annuity policy to generate a monthly pension for the whole life, or put it in any other suitable investment of you choice. This is the major benefit of an endowment policy over a whole life. 3. MONEY BACK: Unlike endowment plans, in money back policies, the policyholder gets periodic severance payments during the term of the policy and a lump sum amount on SURANA PG CENTRE 20

Surviving its term. In the event of death during the term of the policy, the beneficiary gets full sum assured without any deductions for the amount paid till date, and no further premiums are required to be paid. These types of policies are very popular, since they can be tailored to get large amounts at specific periods as per the needs of the policyholder.

1.5 FURTURE OF LIFE INSURANCE MARKET Even at modest estimates the size of life insurance market in India could be Around Rs. 40000 bn covering just 250 mn people. LIC had enjoyed the monopoly of the big life insurance market since 1956. LIC was in for a surprise now a then when it found that, among air crash casualties or rail accident victims, only very few had life insurance cover. In fact LIC did attempt to evaluate the size of the market and look at broad homogeneous segments of the market based on the data provided by Decennial Census Report relating to worker population categorized intogroup based on occupations. However LICs major segmentations were the urban rural, male female and medical non-medical segments. The census of occupation data was used more as a framework for formulating the business plans. But, now with the entry of new player, very conscious of their market shares, the evaluation of the size of the market for life insurance assumes importance. The market size with its viable segments is to be identified and suitable products to meet the needs of these segments developed. Market size ever expanding This market size is dynamic and ever expanding. The growth is dictated by several factors such as: 1. An addition of around 20mn of new population each year, SURANA PG CENTRE 21

2. More and more persons due to improvements in economic conditions move continuously into the zone of people with ability to pay premium for a life insurance policy. 3. Many among the existing policyholders are grossly under insured. They need and can afford additional insurance. These can be made to join the market as potential prospects for additional insurance. These form the creamy layers market capable of being very good source of high volume of business.

Taking all these factors into account it can be seen that the size of the market for life insurance in India is enormous. Assuming the number of persons who can be sold an insurance policy to be 250 mn, in terms of number of policies, this works out to 400 mn (250 mn* 1.6) polices. In financial terms, taking the average size of the policy as Rs 1 lakh, the sum assured works out to Rs 40000 bn or $ 800 bn. The first years premium income can be assume as Rs 6250 per annum per policy (LICs annual premium per new policy during 2001 2002 was Rs 6384 and many new private companies have crossed Rs 7000 as average first year premium. So the new premium income potential of this market is Rs 2500 bn or $ 50 bn. These figures would only keep increasing year by year due to improvement in the economic conditions leading to increase in the number of potential prospects as discussed earlier.

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1.6 THEORITICAL BACKGROUND OF THE STUDY Services are going to move in this decade to being the front edge of the industry Louis V. Grastner, 2001 Services are deeds, processes and performance. The core offerings of hospital, hotels, banks and insurance companies comprise primarily deeds and actions performed for customers. It is implied that intangibility is a key determinate of a service. A popular definition describes service as any act or performance that one party can offer to another that is essentially intangible and does not result in the ownership of any thing Service marketing Service marketing concepts and strategies has developed in response to the tremendous growth of service industries, resulting in their increase importance to the US and world economies. Trade and services is growing worldwide. The tremendous growth and economic contributions of the service sector have drawn increasing attention to the issues and problems of service sector industries worldwide. Consumer Behavior in Service Marketing The primary objective of service producers and marketer is identical to that of all marketers; to develop and provide offerings that satisfy consumer needs and expectations 23 SURANA PG CENTRE

there own survival. Service marketers need to be able to close the customer gap between expectation and perception. Customer expectation of service Customer expectations are beliefs about service delivery that function as standards or reference points against which performance is judged. Because customers compare their perceptions of performance with these reference points when evaluating service quality, though knowledge about customer expectations is critical to service marketing. Knowing what customer expects is the first and possible most critical step in delivering quality service. Being wrong about what customers what can mean losing a customers business when another company hits the target exactly. Being wrong can also mean expending money, time and other resources on things that dont count to customers. Being wrong can even mean not surviving in a fiercely competitive market. The extent to which customers recognize and are willing to accept the variation is called zone of tolerance. If service drops below adequate service-the minimum level considered acceptable-customers will be frustrated and their satisfaction with the company will be undermined. If service performance is higher than zone of tolerance at the top end-where performance exceeds desired service-customers will be very pleased and probably quite surprised as well. BRIEF DESCRITPTION OF CONSUMER BHEAVIOUR AND ATTITUED TOWARDXZ THE LIFE INSURANCE PRODUCTS Gandhiji captured the essence of customer management when said A customer is the most important visitor on our premises. He is not dependent on us. We are dependent on him. He is not an interruption on work. He is the purpose of it and, not an outsider on out premises. He is a part of it. We are not doing a favour by serving him. He is doing us a favour by giving us the opportunity to do so. SURANA PG CENTRE 24

CONSUMER BEHAVOIUR One official definition of consumer behavior is the study of individuals, groups, or organizations and the processes they use to select. Secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society. It brings up some useful points: Behaviour occurs either for the individual, or in the context of a group (e.g., friends influence what kinds of clothes a person wears) or an organization (people on the job make decisions as to which products the firm should use). Consumer behavior involves the use and disposal of products as well as the study of how they are purchased. Products use in often of great interest to the marketer, because this may influence how a product is best positioned or how we can encourage increased consumption. Since many environmental problems result from product disposal (e.g., motor oil being sent into sewage systems to save the recycling fee, or garbage pilling up at landfills) this is also an area of interest. The impact of consumer behavior on society is also of relevance. For example, aggressive marketing of high fat foods, or aggressive marketing of easy credit, may have serious repercussions for the national health and economy. The most obvious application of consumer behavior is for making better marketing campaigns. For example, by understanding that consumers are more receptive to food advertising when they are hunger, we learn to schedule snack advertisements late in the afternoon. By understanding that new products are usually initially adopted by a few consumers and only spread later, and then only gradually, to the rest of the population, we learn that (1) companies that introduce new products must be well financed so that they can stay afloat until their products become a commercial success and (2) it is important to please initial customers, since they will in turn influence may subsequent customers brand choices. Need to study consumer behavior: SURANA PG CENTRE 25

The study of consumers helps firms and organizations improve their marketing strategies by understanding issues such as how: The psychology of how consumers think, feel, reason, and select between Deferent alternatives (e.g., brands, products The psychology of how the consumers is influenced by his or his environment (e.g., culture, family, media) The behavior of consumers while shopping or making other marketing decisions Limitations in consumer knowledge or information processing abilities influence decision strategies differ between products that differ in their level of importance or interest that they entail for the consumer How marketers can adapt and improve their marketing campaigns and marketing strategies to more effectively reach the consumer. Understanding these issues helps us adapt our strategies by taking the consumer into considerations. According to section 2 on the Consumer Protection Act, 1986 consumer means any person who Buys any goods for a consideration which has been paid or promised or partly paid and partly promise or under any system of differed payment and includes any user of such goods other than the person who buys such good for consideration paid or promised or partly paid or partly promised or under any system of deferred payment when such use is made with the approval of such person but does not includes a person who obtains such goods for resale or for any purpose or Hires or avails of any services for a consideration which has been paid or Promised or partly paid and partly promised or under any system of deferred payment and includes any beneficiary of such services other than the person who hires or avails of the services for consideration paid or promised or partly paid and

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partly promised or under any system of deferred payments when such services are availed of with the approval of the first-mentioned person. Note: THE CONSUMER PROTECTIOPN ACT, 1986 An act to provide for the better protection of the interests of consumers and for that purpose to make provisions for the establishment of consumers councils and other authorities for the settlement of consumers disputes and for matter connected therewith. 1.7 A MODEL OF CONSUMER BEHAVIOR At one time, marketers could understand consumers through the daily experience Selling to them. But the growth of companies and markets has removed many marketing managers form direct contact with customers. Increasingly, mangers have had to rely on the 7 Os framework for consumer research to answer the following key questions about market: Who constitutes the market? What does the market buy? Why does the market buy? Occupants Objects Objectives

Who participates in the buying? Organizations How does the market buy? When does the market buy? Where does the market buy? SURANA PG CENTRE Operations Occasions Outlets 27

The starting point for understanding buyer behavior is stimulus-response model shown below. Marketing and environmental stimuli enter the buyers consciousness. The buyers characteristics and decision process lead to certain purchase decisions. The markets task is to understand what in the buyers consciousness between the arrival of outside stimuli and the buyers purchase decisions. They must answer two questions: How to the buyers characteristics-cultural, social, personal, and psychological-influence buying behavior? How does the buyer make purchasing decision?

TABLE SHOWING MODEL OF CONSUMER BEHAVIORMarketing stimuli Other stimuli Buyers characteristics Buyers Decision making process Problem Recognition Information Search Evaluation Decision Post Purchase Behavior Buyers decision

Product Price Place Promotion

Economical Technology Political Cultural

Cultural Social Personal Psychological

Product Choice Brand Choice Dealer Choice Purchase Timing Purchase Amount

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The Interpersonal Determinants of Consumer Behavior1. Cultural influences Culture can be defined as values, beliefs, preferences, and tastes that are handed down from one generation to the next. Although cultural values are shown to change, they do change over time. Basic core values are slow to change. Cultural differences are important for the international marketer who is involved in understanding the potential of target markets and constructing effective marketing programs. A culture includes numerous subgroups with their own distinguishing modes of behavior called subcultures. Subcultures are based upon such factors are race, nationality, age, rural vs. urban, sex, religion, and geographical distribution among others. 2. Social influences All interactions with and influences resulting form both formal and informal group memberships other than the family are included. Form the group, individuals receive norms, status, and roles. Norms are values, attitudes, and behaviors that a group deems appropriate for its members. Status is a person of the individual. SURANA PG CENTRE 29

The phenomenon refers to research project that demonstrate the impact groups and group norms have on an individuals behavior. Reference groups are those whose value structures and standards influence a person behavior. A person need not be an actual member of a particular reference group in order to be influenced by it. Strong influence by a group on a members purchase requires two conditions: The purchased product must be conspicuous, a brand or product not everybody owns. Social class membership can affect both lifestyle and purchasing behavior, thought to what extent, researcher has not determined. 3. Family influence Because of the close, continuing interactions among family members, the family often represents the strongest source of group influence. Like other groups, the family has set of norms, roles, and status. Four roles have been utilized in research on family decision-making: Each partner makes Autonomic an equal number of decisions. Husband dominates. Wife dominates. Syncretism both partners jointly make most decisions. The role of young children in purchasing decision-making is also changing. Children influence their parents and Santa Claus to buy certain toys, clothing and cereals, and so forth. Teenagers, in May cases have become the household-purchasing agent in their family unit. Whether perceptions will occur is determined by the interaction of two types of factors: 1. Stimulus factors-characteristics of the physical object SURANA PG CENTRE 30

2. Individual factors-characteristics of the person receiving the incoming stimuli

1.8 TYPES OF CONSUMER BUYING BEHAVIOUR Consumer always want to create an assortment of products which satisfies their needs and wants in the present and also in the future. To realize this aim, the consumer has to make a lot of decisions. These purchasing decisions can be classified into three main categories of decisions: 1. Routine response behavior This behavior happens when the consumer regularly buys cheap products that needs very little search and also very little decision effort. In this care the consumer prefers a special brand but he also knows other brands of the same product class to have an alternative to buy if there is some thing wrong with his favorite brand. 2. Limited Decision Making This is the case if the consumer buys a product occasionally or if there is a new brand, he doesnt know about, in a familiar product category. For this type of decision-making, the consumer needs a moderate amount of time for gathering information and deliberation. 3. Extensive Decision-making This is the most complex decision making behavior. It happens when a purchase includes unfamiliar, expensive or infrequently bought products; for e.g. cars, house etc. 31 SURANA PG CENTRE

the buyer uses a lot of time evaluating alternative brands or choices and also seeking information. A big contrast to the extensive decision making process that were mentioned earlier is the behavior of the impulse buyers. These people do not plan conscious to buy; they have a persistent urge to buy something immediately if they like it. But often these people get in emotional conflicts; they often feel guilty because of their limited finances or some thing else.

1.9 CONSUMER DECISION MAKING: Consumer decision-making process

NEED RECOGNITION

INFORMATION SEARCH

EVALUATION OF ALTERNATIVES

POST PURCHASE BEHAVIOUR SURANA PG CENTRE

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This decision process can be divided into five stages: 1) Problem Recognition This occurs when the buyer notices that there is a difference between the desired state and the actual conditions. The consumer gets aware that he has to change some thing to get satisfied. For example, if somebody needs a care to get to work and one day the car stops working. In his situation the person recognizes that there is a difference between the desired state (a working car) and the actual condition (a broken car). 2) Information search After recognizing the problem, the buyer searches for information about a new product, which can solve his problem and also is able to satisfy his needs. Here we distinguish two aspects to an information search: In the internal search, buyer checks first if they have any information about the needed product in their memory. If they cannot get enough information for their memory for a decision, they are looking for more information in an external search. In the external search the buyer may focus on communication with friends or relatives, to here about SURANA PG CENTRE 33

their experience with special brands. He also can obtain information from public sources like manufactures, sales persons, or product test organizations. 3) Evaluation of Alternatives To evaluate the products of which the buyer got information is looking for criteria to compare the products. These criteria are for example characteristics or features that the buyer wants (or does not want). The buyer also thinks about how important each criterion is; because some features may carry more weight than others. This evaluation of the consumer can be influenced by the marketer by framing the alternatives-that means the manner how the marketer describes the products and its features. 4) Purchase In this stage the consumer chooses the product or brand, which he wants to buy. This selection is based on the result of the previous evaluation stage. There is also a set of criterions, which must be taken into account: One of the most important criterions is the product availability, which may influence which brand is purchased. If the favorite brand is not available at the moment the consumer may choose the brand that is ranked second. Other criterions that also could be important for the consumer are for example the price, delivery, guarantees, maintenance agreements, and installation and credit agreements.

5) Post purchase evaluation After the purchase the buyer begins to check the product with actual performance meet the expected level. In this stage man of criteria used in the evaluation alternatives stage are used again. The result is either satisfaction or dissatisfaction. SURANA PG CENTRE 34

2. DESIGN OF THE STUDY2.1 STATEMENT OF THE PROBLEM The title of the present research is A study on consumer behavior towards the Insurance products with special to references to ICICI PRUDENTIAL ICICI (Industrial Credit and Investment Corporation of India), which was one of the largest developmental banks, has ventured into many areas of finance-in fact it has become a universal banking brand. Prudential one of the worlds leading insurance company has joined hand with ICICI to offer insurance products. Though private Insurance companies are in the infancy stage, the impact on the insurance market is tangible. The marketing strategies of these private operators have forced LIC to change its gears. 2.2 NEED AND IMPROTANCE OF THE STUDY SURANA PG CENTRE 35

Since the opening up of insurance market to private operators, India is considered one of the hottest places with the majority of the market being untapped. Though there are restrictions for foreign operators many companies have entered the Indian market and are operating as joint venture partners. The change in the nature and structure of competition has changed the nature of the insurance products offerings. The perception of the market about the insurance, which was earlier negative, is gradually becoming positive. It is necessary to understand what make people to buy insurance products; who influences the buying decision and the market attitude towards insurance products. In this perspective, the present study has concentrated to analyze the behavior exhibited by the consumers of ICICI Prudential. It necessities to understand the attitudes of consumers towards products and services offered by ICICI Prudential. The study about consumers helps the company to improve their marketing strategies by understanding the consumers. For example, by understanding that a number of different messages compete for our potential customers attention, company learns that to be effective, advertisement must usually be repeated extensively. Company also learn that consumers will some times be persuaded more by logical arguments, but at other times will be persuaded more by emotional or symbolic appeals. By understanding the Consumer the company will be able to make a more informed decision as to which strategy to employ.

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36

2.3 OBJECTIVE OF THE STUDY 1. To understand the attitudes and perception of respondents towards insurance insurance products. 2. To understand the purchase behavior towards insurance products. 3. To study the respondents awareness towards ICICI PRUDENTIAL 4. To know people perception towards investments available in the market and their risk perception. 5. To analyze the investment strategies of respondents. 6. To know the present consumer trend prevailing in the market. 7. To offer suggestion based upon the findings. 2.4 METHODOLOGY Type of research Every decision poses unique needs for information, and relevant strategies can be developed based on the information gathered through research. Research is the systematic objective and exhaustive search for and study of facts relevant to the problem. SURANA PG CENTRE 37

Research design means the framework of study that leads to the collection and analysis of data. It is a conceptual structure with in which research is conducted. It facilitates smooth sailing of various research operations to make the research as effective as possible. The study was conducted as an exploratory sampling survey method to collect primary and secondary data.

Primary Source of Data Primary data are those collected by the investigator himself for the first time and thus they are original in character, they are collected for a particular purpose. A well-structured questionnaire was personally administrated to the selected sample to collect the primary data. Secondary Sources of Data Secondary data are those, which have already been collected by some other persons for their purpose and published. Secondary data are usually in the shape of finished products. Tow types of secondary data were collected for the preparation of the project work: Internal Data was generated from companys brochures, manuals and annual reports. SURANA PG CENTRE 38

External Data, on the other hand, was generated from magazines, research books and internet (websites). Statistical Tools and Techniques Simple statistical techniques such as drawing of percentage, calculating the mean score. Table for analyzing and graphs for pictorial understanding were used in the study.

3. PROFILE OF THE COMPANYCOMPANY PROFILE: ICICI PRUDETIAL Life Insurance was established in 2000 with a commitment to expand and reshape the life insurance industry in India. The company was amongst the first private sector insurance company to begin operations after receiving approval from Insurance Regulatory Development Authority (IRDA), and in the time since, has taken several steps towards realizing its goal. THE COMPANY: ICICI PRUDNETIAL Life Insurance Company is joint venture between ICICI, a premier financial powerhouse and prudential plc; a leading international financial services group headquarters in the United Kingdom. ICICI Prudential was amongst the first private sector insurance company to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). SURANA PG CENTRE 39

ICICI and Prudential come together in 1993 to form prudential ICICI Asset Management Company, which has today emerged as one of the leading mutual funds in India. The two companies bring together two of the strongest financial service brands in Asia, known for their professionalism, excellent quality of service and long term commitment to customers. Riding on the success of this relationship, the two companies joined hands once more in2000, to form ICICI PENDENTIAL Life Insurance, with a commitment to provide leading-edge life insurance solutions. company, and Prudential plc has 26%. ICICI Bank has 74% stake in the

PRUDENTIAL POLICES: Established in 1848, Prudential plc is a leading international financial services company in UK with around US $ 250 bn funds under management, and more than 16 mn customers worldwide. Prudential has brought to market and integrated range of financial services products that now includes life assurance, pensions, mutual funds, banking, investment management and general insurance. In Asia prudential is UKs largest life insurance company with a vast network of 22 life and mutual fund operations in 12 countries- china, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, Philippines, Singapore, Taiwan, Thailand and Vietnam. the region. DISTRUBUTION: ICICI PRUDENTIAL has one of the largest distribution networks amongst private life insurance in India, have commenced operations in 28 cities and towns in India. These are: Ahmedabad, Bangalore, Chandigarh, Chennai, Coimbatore, Gurgaon, 40 SURANA PG CENTRE Since 1923, prudential has championed customer centric products and services, supported by over 60000 staff and agents across

Hydrebad, Indore, Jaipur, Jalandhar, Kanpur, Cochin, Kolkotta, Kottaym, Lucknow, Ludhina, Madhurai, Mangalore, Meerut, Mumbai, Nagpore, Nasic, Noida, New Delhi, Pune, Thane, Vadodara and Vashi. The company has a largest number of banc assurance tie-ups, having agreement with ICICI Bank, Citi Bank, Allahabad Bank, Federal Bank, South Indian Bank, Bank of India, Lord Krishna Bank, and Punjab&Maharashra Co-operative Bank, as well as some corporate agents. It has also tied-up with organizations like Dahn for distribution of Salaam Zindagi, a policy for the socially and economically under privilege sections of society.

SERVICE: ICICI PRUDENTIAL has recruited and trained over 18000 insurance agents to interface with and advice customers, and has the highest number amongst private life insures on the renowned Million Dollar Round Table (MDRT). Further, it leverages its state-of-the art IT infrastructure to provide superior quality of service to customers.

MILESTONES ICICI PRUDENTIAL life insurance has crossed Rs 500 Crore premium income mark on March 31, 2003 having issued nearly 350000 policies for a sum assured of Rs.8700 Crore since its inception. The last fiscal has seen significant growth for ICICI PRUDENTIAL across all segments, with 246827 policies issued in the period April 2002-March 2003, and Rs. 348 Crore premium from new business in the same period, a 200 per cent growth over the previous fiscal (April 2001-March 2002). VISION SURANA PG CENTRE 41

To make ICICI PRUDNETIAL the dominate pensions player build on trust by world-class people and service. This we hope to achieve by: Understanding the needs of customers and offering them superior products and service. Leveraging technology to service customers quickly, efficiently and conveniently Developing and implementing superior risk management and investment strategies to offers sustainable and stable returns to our policyholders. Providing and enabling environment to foster growth and learning for our employees. And above all, building transparency in all our dealings. PRODUCTS Insurance Solutions for Individuals ICICI PRUDNETIAL life insurance offers a range of innovative, customer centric products that meet the needs of customer at every life stage. Its 13 products can be enhanced with up to four riders, to create a customized solution for each policyholder. Savings Solutions ICICI PRUDNETIAL Save n Protect is a traditional endowment savings plan than offers life protection along with adequate returns. ICICI PRUDNETIAL 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. Protection Solutions

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42

ICICI PRUDNETIAL Life Guard is a protection plan, which offers life covers at very low cost. It is available in there options level term assurance, level assurance with return of premium and single premium. Child Solutions ICICI PRUDNETIAL SmartKid 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 childs life. Market linked Solutions ICICI PRUDNETIAL Lifelink is a single premium Market Linked Insurance Plan, which combines life insurance cover with the opportunity to stay, invested in the stock market. ICICI PRUDNETIAL LifeTime offers customers the flexibility and control to customize the policy to meet the changing needs at different life stages. It offers three investment options Growth Plan, Income Plan and Balanced Plan. Retirement Solutions ICICI PRUDNETIAL ForeverLife is retirement product targeted at individuals in their thirties. ICICI PRUDNETIAL LifeTime Pension is a regular premium market linked pension plan. ICICI PRUDNETIAL LifeLink Pension is a single premium market linked pension plan. Group Insurance Solutions: ICICI PRUDNETIAL also offers Group Insurance Solutions for companies seeking to enhance benefits to their employees. ICICI PRUDNETIAL Group Gratuity Plan: ICICI Prus Group Gratuity Plan helps employers funds their statutory gratuity obligation in a scientific manner. The plan can also be customized to structure schemes that can provide benefits beyond statutory obligations. SURANA PG CENTRE 43

ICICI PRUDNETIAL Group Superannuation Plan: ICICI Pru offers a flexible defined contribution superannuation scheme to provide a retirement kitty for each member of the group. Employees have the option of choosing from various annuity options or opting for a partial commutation of the annuity at the time of retirement. ICICI PRUDNETIAL Group Term Plan: ICICI Prus flexible group term solution helps to provide affordable cover to members of a group. The cover could be uniform or based designation or rank or a multiple of salary. The benefit the policy is paid to the beneficiary nominated by the member on his/her death.

Flexible Rider Options ICICI PRUDNETIAL life offers for flexible riders, which can be added to the basic policy at a marginal cost, depending on the specific needs of the customer. 1. Accident & 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 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. 2. Level Term Cover: This rider provides the option to increase the risk cover. the may be increased for an additional amount upto a maximum of the existing basics sum assured on your policy. 3. Critical Illness Benefit: Protects the insured against the financial loss in the Event of 9 specified critical illnesses. Benefits are payable to the insured for medical expenses prior to death. SURANA PG CENTRE 44

The marketing challenges facing ICICI Pru: The challenge therefore was to change established category drivers (death payment and tax saving) and to get the consumer to evaluated insurance on a more emotional plat form (protection) rather than a mere rational decision (tax savings). Creative strategy: The essence of the creative strategy: To get the consumer to re look at insurance as a means to lead a worry free life and not as a necessary evil. To this effect the core brand insight highlighted was As head of the family, it is my responsibility to take care of my love ones and protect them from the uncertainties of life, summed up in the advertising idea: we cover you at every step in life.

Media Strategy In a market likely to be cluttered, we used multiple touch points to reach the consumer. The role for each medium was envisaged. The TV medium was used to enhance the emotional link with the brand. Strategic use of 15 sec. edits facilitated high frequency levels. In print, the cost per response rather than the cost per thousand as responses were measured in form of call ins. Radio FM, Cinema, Internet were use to create a media multiplier effect. The results of communication efforts Being no: one in awareness and saliency. Awareness: ICICI Pru showed a significant jump in awareness between Feb and Sept 2001. Image: highest score among all insurance players including LIC, on image parameters like safety, modernity, service, good returns, etc. Intention to invest: next only to LIC as per research (all source: research by ORG Marg). SURANA PG CENTRE 45

4. ANALYSIS OF DATA AND INTERPRETATIONTABLE NO: 1 Table showing the monthly income of the respondents PARTICULARS Less than 10000 10000-20000 20000-30000 30000-40000 More than 40000 SURANA PG CENTRE FREQUENCY 24 30 18 12 06 PERCENTAGE 27% 34% 20% 13% 6% 46

Total

90

100%

GRAPH NO: 1

Monthly Income45 40 35 30 25 20 15 10 5 0 39

15 7 9 6

less than 10000

10000 20000

20000 30000 percentage

30000 40000

more than 40000

Analysis and Interpretation:Form the above table it can be observed that: 27% of the 90 respondents have a monthly income of not less than 10000 34% of the respondents have a monthly income of 10000-20000 20% of the respondents have a monthly income of 20000-30000 13% of the respondents have a monthly income of 30000-40000 6% of the respondents have a monthly income of more than 40000

Inference:47

SURANA PG CENTRE

Less % respondents have higher income that is more than 40000. Majority respondents fall under the income groups between 10000-20000 followed by rest.

TABLE NO: 2 Table showing the monthly savings of respondents PARTICULARS Less than 20000 20000-40000 40000-60000 60000-80000 More than 80000 SURANA PG CENTRE FREQUENCY 21 39 15 09 06 PERCENTAGE 23% 43% 17% 10% 7% 48

Total

90

100%

GRAPH NO: 2Monthly savings of Respondents 40 35No of Respondents

39

30 25 20 15 10 5 0 1 7 15 9 6

less than 10000 10000 - 20000 20000 - 30000 30000 - 40000 more than 40000

Analysis and Interpretation:From the above table it can be observed that: 23% of the 90 respondents have a monthly savings of less than 2000 43% of the respondents have a monthly savings of 2000-4000 17% of the respondents have a monthly savings of 4000-6000 10% of the respondents have a monthly savings of 6000-8000 7% of the respondents have a monthly savings of more than 8000

Inference:SURANA PG CENTRE 49

Majority of the respondents have saving between 2000-4000 and few respondents have higher saving of more than 800.

TABLE NO: 3 Table showing the purpose of savings of the respondents PARTICULARS Less than 20000 To buy durables To buy jewelers To buy hose or Site Education SURANA PG CENTRE FREQUENCY 21 12 09 15 30 PERCENTAGE 23% 13% 10% 17% 34% 50

Others TOTAL GRAPH NO: 3

03 90

03% 100%

P u r p o s e O f S a v in g35 30 25 20 15 10 5 0 30 21 16 9 3 1 F re q u e n c y 15 M e d ic a l e x p e n s e s T o b u y d u ra b le s T o b u y je w e lle rs T o b u y h o u s e o r s it e E d u c a t io n O t h e rs

Analysis and Interpretation:From the above table it can be observed that: 23% of the 90 respondents make saving for the purpose of medical Expenses 13% of the respondents make savings for the purpose to buy durables 10% of the respondents make saving for the purpose to buy jewelers 17% of the respondents make savings for the purpose to buy house or Site 34% of the respondents make savings for the purpose of education

Particular

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51

03% of the respondents make saving for some other purpose like Marriage, entrepreneurship etc.

Inference:Majority of the respondents are investing their saving for the purpose of education followed by medical expense and remaining lesser % of respondents are using their saving for purpose like marriage, entrepreneurship etc.

TABLE NO: 4 Table showing the investment preference of the respondents PARTICULARS Bank deposit Insurance Shares Debentures SURANA PG CENTRE FREQUENCY 30 15 06 03 PERCENTAGE 34% 17% 7% 3% 52

Real estate Gold Mutual funds Chit funds TOTAL

12 15 06 03 90

13% 17% 6% 3% 100%

GRAPH: 4 The investment preference of the respondents:6 3

15

30

12

Bank deposit Insurance shares Debentures real estate Gold Mutual funds chit funds

3

6

15

Analysis and Interpretation:From the above table it can be observed that: 34% of the 90 respondents preferred to make investments in banker deposits 17% of the respondents preferred to make investments in insurance 3% of the respondents preferred to make investments in debentures 13% of the respondents preferred to make investments in real estate 17% of the respondents preferred to make investments in gold SURANA PG CENTRE 53

6% of the respondents preferred to make investments in mutual funds 3% of the respondents preferred to make investment in chit funds

Inference:Majority of the respondents that is about 34% are investing in Bank deposit followed by Insurance, Gold, Real estate, Mutual funds, and only few of respondents prefer to invest in Chit funds and debentures.

TABLE NO: 5 Table showing the respondents who are actively planning their Investments taking care of tax implications

PARTICULARS Yes No SURANA PG CENTRE

FREQUENCY 72 18

PERCENTAGE 80% 20% 54

TOTAL GRAPH NO: 5

90

100%

The respondents who are actively planning their investments taking Care of tax implications

Respondants who plan their investments taking care of tax implications

20% Yes No 80%

Analysis and Interpretation:From the above table it can be observed that: 80% of the 90 respondents actively plan their investments taking care of tax implications 20% of the respondents do not plan their investments taking care of tax implications

Inference:SURANA PG CENTRE 55

About 80% of the respondents actively plan their investments taking care of tax implication and only few are not concerned about tax implication.

TABLE NO: 6 Table showing the respondents level of information regarding Insurance products

PARTICULARS Good SURANA PG CENTRE

FREQUENCY 21

PERCENTAGE 24% 56

Moderate Poor TOTAL

54 15 90

60% 16% 100%

GRAPH NO: 6 The respondents level of information regarding insurance products:

60% R e s p o n d e n t s 50% 40% 30% 20% 10% 0% Good Moderate Particulars Poor

Analysis and Interpretation:From the above table it can be observed that: 24% of the 90 respondents have a good level of knowledge and information regarding insurance products 60% of the respondents have an average level of knowledge and information regarding insurance products 16% have a poor knowledge and information regarding insurance products SURANA PG CENTRE 57

Inference:Majority of the respondents have an average level of knowledge regarding insurance products.

TABLE NO: 7 The companies preferred for taking life insurance policies by the Respondents PARTICULARS LIC Respondents 36 PERCENTAGE 40% 58

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ICICI Birla Sun life ING VYSYA Others Total

30 12 06 06 90

33% 13% 7% 7% 100%

GRAPH NO. 7 The companies preferred for taking life insurance polices by the Respondents

7% 7%

LIC ICICI Birla Sunlife

13%

40%

ING VYSYA Others

33%

Analysis and Interpretation:Form the above table it can be observed that: 40% of the respondents prefer LIC 33% of the respondents prefer ICICI 13% of the respondents prefer Birla Sun life SURANA PG CENTRE 59

7% of the respondents prefer ING VYSYA 7% of the respondents prefer others

Inference:Majority of the respondents prefer ICICI Prudential followed by ICICI Prudential, Birla sun life, ING VYSYA and rest.

TALBE NO: 8 Table showing the policies preferred by the respondent PARTICULARS SURANA PG CENTRE FREQUENCY PERCENTAGE 60

Annuity Money back Endowment Term TOTAL GRAPH NO: 8

39 30 15 06 90

44% 33% 17% 6% 100%

The policies preferred by the respondent

50% Respondents 40% 30% 20% 10% 0%

39 30

15 6 Annuity Money back Endowment Term

Particulars

Analysis and Interpretation:From the above table it can be observed that: 44% of the respondents prefer annuity policy SURANA PG CENTRE 61

33% of the respondents prefer money back 17% of the respondents prefer endowment 6% of the respondents prefer term polices

Inference:Annuity policy is prefer by majority of the respondents followed by Money back, Endowment, Term policies are prefer by fewer respondents.

TABLE NO: 9 The showing how much insurance premium is paid monthly by the Respondents

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62

PARTICULARS Less than 1000 1000-2000 2000-3000 3000-4000 More than 4000 TOTAL

FREQUENCY 42 27 12 06 03 90

PERCENTAGE 47% 30% 13% 6.5% 3.5% 100%

GRAPH NO: 9 Insurance premium is paid monthly by the respondents

Less than 1000 1000-2000 2000-3000 3000-4000 More than 4000

Analysis and Interpretation:From the above table it can be observed that: 47% of the 90 respondents used to pay a monthly premium of less Than 1000 SURANA PG CENTRE 63

30% of the respondents pay a monthly premium of 1000-2000 13% of the respondents pay a monthly premium of 2000-3000 6.5% of the respondents pay a monthly premium of 3000-4000 3.5% of the respondents pay a monthly premium of more than 4000

Inference:Majority of the respondents prefer to pay monthly premium of less than 1000 and only few respondents are paying higher monthly premium of more than 4000.

TABLE NO: 10 Table showing the purpose for which the respondents have taken the Policy SURANA PG CENTRE 64

PARTICULARS Tax purpose Future security Childrens Education Marriage Others TOTAL GRAPH NO: 10

FREQUENCY 36 30 15 03 06 90

PERCENTAGE 40% 34% 16% 3.5% 6.5% 100%

The purpose for which the respondents have taken the policy

Oe th rs Respondents

Mrria e a g

c ild n h re 's e ua n d c tio

F tu s c rity u re e u

T xp rp s a u oe

0

1 0

2 0

3 0

4 0

Fe u n y r qe c

Analysis and Interpretation:From the above table it can be observed that: SURANA PG CENTRE 65

40% of the 90 respondents have taken the policy for the purpose of tax saving 34% of the respondents have taken the policy for the purpose of future security 16% of the respondents have taken the policy for the purpose of childrens education 6.5% of the respondents have taken the policy for some other purpose like accidents, natural calamities etc. 3.5% of the respondents have opted life insurance policies for Marriage purpose

Inference:Majority of the respondents have taken the policy for the purpose of tax saving followed by future security, purpose of childrens education and same other purpose like accidents, national calamities only few option for marriage purpose.

TABLE NO: 11 SURANA PG CENTRE 66

The showing the person the person who pays premium for the Respondent

PARTICULARS Self Employer Spouse Others TOTAL GRAPH NO: 11

FREQUENCY 45 21 15 09 90

PERCENTAGE 50% 24% 16% 10% 100%

The person the person who pays premium for the respondent

45R e s p o n d e n t s

40 35 30 25 20 15 10 5 0 Self Employer Spouse Others

Particulars

Analysis and Interpretation:SURANA PG CENTRE 67

From the above table it can be observed that: 50% of the 90 respondents premium is paid by themselves 24% of the respondents premium is paid by their employees 16% of the respondents premium is paid by their spouse 10% of the respondents premium is paid by persons other than the above three

Inference:Half of the respondents premium is paid by themselves followed by their Employees, Spouse and others.

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68

TABLE NO: 12 Table showing whose life is insured as per the policy taken by the Respondents PARTICULARS Self Spouse Children Parents TOTAL GRAPH NO: 12 Whose life is insured as per the policy taken by the respondents FREQUENCY 54 18 09 09 90 PERCENTAGE 60% 20% 10% 10% 100%

R e s p o n d e n t s

60 50 40 30 20 10 0 S e lf S p ouseP articu lars

54

18 9 child ren 9 p are nts

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69

Analysis and Interpretation:From the above table it can be observed that: 60% of the 90 respondents have insured their life itself as per the policy taken 20% of the respondents have insured their spouse life as per the policy taken 10% of the respondents have insured their childrens life as per the policy taken 10% of the respondents have insured their parents life as per the policy taken

Inference:Majority of the respondents have insured their life itself followed by their spouse. Equal respondents of response have insured for children and Parent life.

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TABLE: 13 Table showing the level of information of the respondents regarding the products of ICICI PRUDNETIAL PARTICULARS Good Moderate Poor TOTAL GRAPH NO: 13 The level of information of the respondents regarding the products of ICIC PRUDENTIAL FREQUENCY 51 30 09 90 PERCENTAGE 60% 34% 6% 100%

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71

9

Good

30

Moderate

51

Poor

Analysis and Interpretation:From the above table it can be observed that: 56% of the 90 respondents have a good level of information regarding the Products of ICICI PRUDNETIAL 34% of the respondents have an average level of information regarding the products of ICICI PRUDENTIAL 10% of the respondents have only poor information regarding the Products of ICICI PRUDENTIAL

Inference:More than half the % of respondents have good level of information regarding ICICI Prudential products and few % of respondents have poor information regarding their products which is negligible. SURANA PG CENTRE 72

TABLE NO: 14 ICICI PRUDENTIAL advisors who have contacted the respondents

PARTICULARS Yes No TOTAL GRAPH NO: 14

FREQUENCY 36 54 90

PERCENTAGE 40% 60% 100%

ICICI PRUDENTIAL advisors who have contacted the respondents

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73

36Yes No

54

Analysis and Interpretation:From the above table it can be observed that: 40% of the 90 respondents have contacted by the advisors of ICICI PRUDENTIAL 60% of the respondents have not contacted by the advisors of ICICI PRUDENTIAL

Inference:Majority of respondents are not contact the advisor of the ICICI Prudential which needs to be given impotents to improve the service

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74

TABLE NO: 15 Table showing the policies preferred by the respondents owing ICICI PRUDENTIAL life insurance policy PARTICULARS Annuity Money back Endowment Term TOTAL GRAPH NO: 15 SURANA PG CENTRE 75 FREQUENCY 15 09 03 03 30 PERCENTAGE 50% 30% 10% 10% 100%

The policies preferred by the respondents owing ICICI PRUDENTIAL Life insurance policy

R e s p o n d e n t s

16 14 12 10 8 6 4 2 0

15

9 3 Annuity Money back particulars Endowment

3 Term

Analysis and Interpretation:From the above table it can be observed that: 50% of 30 respondents who are owing ICICI Prudential life insurance Policy prefer annuity policy 30% of the 30 respondents prefer money back policy 10% of the respondents prefer endowment policy 10% of the respondents prefer term policy

Inference:About half the % of respondents are prefer annuity policy followed Money back policy equal % of respondents that is above 10% prefer in Endowment and Term policy SURANA PG CENTRE 76

TABLE NO: 16 Table showing the rating of the service offered by ICICI PRUDENTIAL

PARTICULARS Good Average Poor TOTAL GRAPH NO: 16

FREQUENCY 15 12 03 30

PERCENTAGE 50% 40% 10% 100%

The rating of the service offered by ICICI PRUDENTIAL 77

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3

15 12

Good Moderate Poor

Analysis and Interpretation:From the above table it can be inferred that: 50% of the 30 respondents have an opinion that service offered by ICICI PRUDENTIAL is good 40% of the respondents have rated its service as average. 10% of the respondents have rated its service as poor.

Inference:50% of the respondents have good opinion regarding the service of ICICI Prudential and only few respondents rated its service has poor.

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TABLE NO: 17(a) Table showing whether the respondents are satisfied with the service of The company

PARTICULARS Yes No TOTAL

FREQUENCY 24 06 30

PERCENTAGE 80% 20% 100%

GRAPH NO: 17(a) SURANA PG CENTRE 79

The respondents are satisfied with the service of the company

6

Yes No

24

Analysis and Interpretation:From the above table it can be inferred that: 80% of the 30 respondents are satisfied with the service of ICICI PRUDENTIAL 20% of the respondents are not satisfied with its service

Inference:More than 80% of the respondents are the satisfied with the service of ICIC Prudential this is shows the good service of ICIC Prudential.

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80

TABLE NO: 17(b) Table showing whether the respondents are satisfied with the service of ICICI PRUDENTIAL advisors

PARTICULARS Yes No TOTAL

FREQUENCY 18 12 30

PERCENTAGE 60% 40% 100%

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81

GRAPH NO: 17 (b) The respondents are satisfied with the service of ICICI PRUDENTIAL Advisors

12

Yes

No18

Analysis and Interpretation:From the above table it can be inferred that: 60% of the 30 respondents are satisfied with the service provide by ICICI PRUDENTIAL advisors 40% of 10 respondents are not satisfied with advisors service

Inference:

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82

By analysis we interfere that, majority of the advisor are providing good service to the customers. This causes to increase the brand awareness of the ICICI Prudential as well as it increases customer satisfaction.

TABLE NO: 18(a) Table showing whether the respondents are satisfied with the Insurance products:

PARTICULARS Yes No TOTAL

FREQUENCY 21 09 30

PERCENTAGE 70% 30% 100%

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83

GRAPH NO: 18 (a) The respondents are satisfied with the Insurance products:

Analysis and Interpretation:From the above table it can be inferred that: 70% of the 21 respondents are satisfied with the Insurance products 30% of 09 respondents are not satisfied with the Insurance products

Inference:

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84

Majority of the respondents are satisfied with the ICICI Prudential insurance products and only few are not satisfied with them.

TABLE NO: 18(b) Table showing whether the respondents are satisfied with the Investment plans:

PARTICULARS Yes SURANA PG CENTRE

FREQUENCY 23

PERCENTAGE 77% 85

No TOTAL

07 30

23% 100%

GRAPH NO: 18 (b) The respondents are satisfied with the Investment plans:

Analysis and Interpretation:From the above table it can be inferred that: 77% of the 23 respondents are satisfied with the Investment plans 23% of 07 respondents are not satisfied with the Investment plans

Inference:SURANA PG CENTRE 86

More than 70% of respondents are satisfied with the invested plan and few are not satisfied.

TABLE NO: 19 Table showing how frequently respondents like to pay their premium

PARTICULARS SURANA PG CENTRE

FREQUENCY

PERCENTAGE 87

Monthly Quarterly Half-yearly Yearly TOTAL GRAPH NO: 19

12 09 06 03 30

40% 30% 20% 10% 100%

Frequently respondents like to pay their premium

3 9 6

Monthly Quarterly half-yearly Yearly

12

Analysis and Interpretation:From the above table it can be inferred that: 40% of the 30 respondents like to pay their premium monthly 30% of the respondents like to pay their premium quarterly 88

SURANA PG CENTRE

20% of the respondents like to pay their premium half yearly 10% of the respondents like to pay their premium yearly

Inference:Majority of the respondents are like to pay their premium quarterly remaining is like to pay their premiums Monthly, Half yearly, and very few are yearly.

TABLE NO: 20 Table showing whether the ICIC PRUDENTI9AL policy holders are receiving premium notice in advance

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89

PARTICULARS Yes No TOTAL

FREQUENCY 21 09 30

PERCENTAGE 70% 30% 100%

GRAPH NO: 20 The ICICI PRUDENTIAL policy holders are receiving premium notice In advance

25 20 15 10 5 0

Particulars

Yes

No

Analysis and Interpretation:From the above table it can be observed that: 70% of the 30 respondents have agreed that they are receiving premium notice in advance 90 SURANA PG CENTRE

30% of the respondents have not agreed that they are receiving premium notice in advance

Inference:About 70% of respondents are receiving premium notice in advance, and other have not agreed with their.

TABLE NO: 21 Table showing the respondents opinion regarding whether the ICICI PRIDENTIAL website www.iciciprulife.com is informative and Suggestive SURANA PG CENTRE 91

PARTICULARS Yes No TOTAL GRAPH NO: 21

FREQUENCY 12 18 30

PERCENTAGE 40% 60% 100%

Respondents opinion regarding whether the ICIC PRUDENTIAL Website www.iciciprulife.com is informative and suggestive

18 16 14 12 10 8 6 4 2 0 Particulars Yes No

Analysis and Interpretation:From the above table it can be observed that: 92

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40% of the 30 respondents has an opinion that ICIC PRUDENTIAL Website is informative and suggestive 60% of the respondents has and opinion that ICICI PRUDENTIAL Website is not informative and suggestive

Inference:More than 50% the respondents are satisfied with the information provided by ICICI Prudential website and remaining not.

TABLE NO: 22 Table showing the number of respondents who are interested to hold More policies other than one they are using now SURANA PG CENTRE 93

PARTICULARS Yes No TOTAL GRAPH NO: 22

FREQUENCY 18 12 30

PERCENTAGE 60% 40% 100%

Number of respondents who are interested to hold more policies other than one they are using now

12 Yes No 18

Analysis and Interpretation:94

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From the above table it can be observed that: 60% of the 30 respondents are interested to hold more policies 40% of the respondents are not interested to hold more than one policy

Inference:Majority of the respondents are interested to hold more than 1 policy, remaining are not interested only in one policy.

5. FINDINGS, SUGGESTIONS ANG CONCLUSIONSURANA PG CENTRE 95

5.1 FINDINGS LIC is the clear market leader across all age groups and income levels. May be ICICI PRUDENTIAL can excuse it self that people in the age of more than 55 year category could not take it policies because ICICI PRUDENTIAL was not around when these people made their life insurance choices. LIC. Majority of the respondents i.e. 39 respondents have a monthly savings around 2000-4000, 15 respondents said that they have monthly savings around 40006000 and monthly savings of less than 2000, 21 respondents around 6000-8000, 9 respondents and more than 800. It is inferred from the study that, 30 respondents make the savings for the purpose of education, 09 respondents make the savings for the purpose of medical expenses, 15 respondents make the savings to buy house or site and few respondents make savings to buy durable, to buy jewelers and some other purpose also. Birla Sunlife is ICICI PRUDENTIALS main competitor for the higher income group and competitors includes Max New York, HDFC Standard Life, SBI Life etc. Potential for ICCI PRUDENTIAL exists in the category of respondents aged 25-45 years old earning less than 10000 per month. As awareness of life insurance is gaining ground here and tomorrow respondents from here will be growing upwardly mobile and will invest larger amounts in life insurance. Most of the respondents are well informed about the products of ICICI PRUDNETIAL, 30 respondent have an average knowledge and 09 respondents have only a poor knowledge about it But what is disturbing is that the young age group (25-35) also prefers the government run

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The ICICI PRUDENTIAL network of advisors should be increased and their targeting tactics should be strengthened as our of 90 people surveyed only 36 were contacted by ICICI PURDNETIAL advisors previously. One respondent said he would have taken ICICI PRUDENTIALS Policy had not Birla Sunlife approached him earlier. This shows adage the early Bird catches the worm is very true here. Majority of ICICI policyholders rates its service as good.

It is found the majority of the ICICI PRUDNETIAL policyholders are satisfied with the service of both the company and advisors. With improving economic conditions people can afford to take up more policies, which is slowly, but surely coming. Thus ICICI PRUDENTIAL can tap into the 40% market held by LIC. It also point out that ICICI PRUDENTIAL has 67% of market potential as many of the existing policy holders are grossly under insured and they can take additional insurance policies as they progress in their career.

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5.2 SUGGESTIONS 1. Affordable schemes must be launched for the 20 30 years olds drawing less than 5000 rupees per month. This category will rise in the future and ICICI Prudential must concentrate on catching them young so that the company can generate more income from the longer service lives of the younger potential policyholders. ICICI Prudential must not limit itself to serve only the affluent, as it will be ignoring a large chuck of aspiration Indians. It would be wise for the company to target young people in the above category and grow along with them as they and the nation prospers. 2. Many respondents in the 20 40 years old category are saving to buy a house/ Site. ICICI Prudential can capitalize on this yearning by offering house loans With low interest if customers take up its insurance policies. 3. Many respondents in their answer as to why they did not take ICICI Prudential policies said that ICICI Prudential being a private insurer its reliability and long term existence is a big question mark. This myth must be broken through an Ad-campaign through radio, television, print, interest that tells that ICICI is nothing by the Industrial Credit and Investment Corporation of India which was set up as a public limited company on January 5, 1955 by the government. Hence it has existed for 48 years close to half a century and has gone from strength to strength, so why not even in the future? It can exist for an even longer time with its tremendous reserves and valuable experience in the financial sector. Even the advisors must sell this fact of the company to the discerning public.

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4. Website Changes: a) ICICI Prudential must advertise more about its website in the mass media so people can gain first hand knowledge about its products at their convenience in a more detailed manner. b) The website is good but instead of having a glossary as a separate entity, link words which are difficult to understand for a first timer (even if it is as simple as premium) must be marked up (underlined) in the text, which upon clicking must open out to a window giving details. c) A page must be devoted on why life insurance must be taken plus real life stories of how people without insurance protection suffered when tragedies struck them. In contrast happy stories of those who were smart must be given. d) Links to other sites extolling the virtues of life insurance must be given. e) A page devoted to ICICIs beginning as a developmental bank started in 1955 must be included in the website to assure potential customers that this is one company that will stick around for a long time to come. f) Exciting contest can be launched for those who visit the website. g) ICICI Prudential has tied up with Citibank, Allahabad Bank, Federal Bank, Lord Krishna Bank, Bank of India hence it must advertise in these websites also. It can also advertise in other financial sections of websites like rediff.com and indiafoline.com. Youth sites like mtvindia.com can also be targeted. h) It should highlight in bold letters (not just a mention) that ICICI Prudential is working for underprivileged sections of the society (e.g. Dhan). 5. According to Abraham Maslows hierarchy of needs the 2ne step of self actualization is the fulfillment of the safety needs. Though people feel the need for security a large number live in an ivory tower oblivious to the uncertainties life could throw up in the distant future. They procrastinate to take decisions regarding this aspect. It is this dormant aspect that ICICI Prudential should awaken in people and bring about a restlessness unfulfilled feeling regarding their and their familys security. The next 99 SURANA PG CENTRE

choice then would be insurance. This could be brought about by an innovative campaign slogan saying, The decision is now. 6. ICICI Prudential must not target people only when they start earning but much before that. To gain the early bird advantage they must organize sessions in schools and colleges giving explanations on life insurance in general and ICICI Prudential in particular. This will make the younger generation more responsible making them go in for insurance in a big way at the earliest thus making ICICI Prudential the ultimate beneficiary to enjoy the income from customers from the very beginning of their service lives. It can also bring about a stronger bran commitment in this manner. 7. ICICI Prudential should consciously try to change the mindset of people from investing in life insurance for the sake of tax exemption to that of worry exemption. India will move into that mode in the future in its journey to being a developed country as is exemplified by the fact that in developed countries insurance policies are bought while in developing countries it is sold. 8. Nuclear families and increase life expectancy are two factors that have left the elderly to fend for themselves. Hence pension is a necessity now than a luxury earlier. Only 6% of the insurable populations are covered by some pension scheme hence ICICI Prudential should tap this existing market and bring about awareness and innovative schemes. 9. Majority of the respondents in all age and income groups of this survey prefer to save in banks over insurance citing the reason that banks give better returns. ICIC Prudential should explode this myth among consumers with the following fact: The consumers believe that investment in life insurance is not desirable as the yield on the premium is very low. It is correct that yield on most of the insurance products is in the range of 7 per cent to 8 per cent only. However, this traditional concept of investment totally ignores the invisible yield on the death-risk coverage. For example, a policyholder aged 30 years for an endowment assurance of 25 years will pay a yearly premium of Rs 4,000 only for a sum assured of Rs 1 lakh. In case he dies after two years, his wife will get Rs 1 lakh in settlement of death claims against Rs 8,000 premia paid for 100 SURANA PG CENTRE

this policy. However, if the same consumer makes investment in the recurring deposit of bank of Rs 4,000 per year, his wife gets only Rs 8000 plus interest after two yeas. Hence the insurance claim amount is much higher than the bank deposits. This applies to other savings as well. Hence investment in insurance has an edge over other savings in the event of the death of the consumers. 10. Leverage information technology to service large numbers of customers efficiently and bring down overheads. Technology can complement or supplement distribution channels cost-effectively. It can also help improve customer. 11. Use data warehousing, management and mining to gauge the profitability and potential of various customer and product segments and ensure effective cross selling. Understanding the customer better will allow insurance companies to design appropriate products, determine pricing correctly and increase profitability. 12. Ensure high levels of training and development not just for staff but for agents and distribution organizations. Existing organizations will have to train staff for better service and flexibility, while all companies will have to train employees to cope with new products and an intensive use of information technology. The importance of alliances and tie-ups means that companies will have to integrate related but separate providers into their systems. 13. Build strong relationships with intermediaries such as agents. The agency force is an important customer interface and companies must partner with this group to reach customers and serve them effectively.

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14. SUGGESTIONS TO APPROACH LARGE INSURABLE POPULATION: Given Indias large population, the number of potential buyers of insurance is certainly attractive. However, too broad an approach can be misleading because it ignores the difficulties of approaching this population. New entrants in other mass industries such as consumer products or retail banking have discovered this to their cost. Much of the demand may not be accessible because of poor distribution, large distance or high costs relative to returns. A better approach may be to examine specific niches where demand can be met or stimulated.In my view new entrants would be best served by a micro-level approach on two fronts: a) First, ICICI Prudential should target specific niches, which are currently served poorly or not at all. For example - - The lack of a comprehensive social security system combined with a willingness to save means that Indian demand for pension products will be large. However, current penetration is poor. By March 1998, LICs pension premium was only Rs. one billion. Making pension products into attractive saving instruments would require o