INTRODUCTION

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INTRODUCTION

Life is full of risk and uncertainties. Since we are the social human being we have certain responsibilities too. Indian consumers have big influence of emotions and rationality on their buying decisions. They believe in future rather than the present and desire to have a better and secured future, in this direction life insurance services have its own value in terms of minimizing risk and uncertainties. Indian economy is developing and having huge middle Class societal status and salaried persons. Their money value for current needs and future desires here the pendulum moves to another side which generate the reasons behind holding a policy. Here the attempt has been made in this research paper to study the buying behavior of consumers towards life insurance services. Analyzing consumer behaviour is perceived as cornerstone of a successful marketing strategy. Consumer behaviour is the mental and emotional processes and the observable behaviour of consumers during searching purchasing and post consumption of a product and service. Similarly consumer behaviour is action and decision process of people who purchase goods and services for personal consumption. Now if these defining criteria are closely observed, it is evident that analyzing consumers decision making process is the foundation of entire notion of consumer behaviour.

History of Insurance

In some sense we can say that insurance appeared simultaneously with appearance of human society. In earlier economies, we can see insurance in the form of people helping each other. For example, if a house is burnt, the members of the community help build a new one. Should

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the same thing happen to ones neighbour, the other neighbors must come to help? Otherwise, neighbors will not receive help in the future. Insurance in the modern sense, started as a methods of transferring or distributing risk were practiced by Chinese and Babylonian traders as long ago as the 3rd and 2nd millennia BC, respectively. Chinese merchants traveling treacherous river rapids would redistribute their cargo across many vessels to limit the loss due to any single vessels capsizing. The Babylonians developed a system which was recorded in the famous Code of Hammurabi, c. 1750 BC, and practiced by early Mediterranean sailing merchants. If a merchant received a loan to fund his shipment, he would pay the lender an additional sum in exchange for the lenders guarantee to cancel the loan should the shipment be stolen. Greek monarchs were the first to insure their people and made it official by registering the insuring process in governmental notary offices. They invented the concept of the general average. Merchants whose goods were being shipped together would pay a proportionally divided premium which would be used to reimburse any merchant whose goods were jettisoned during storm or sinking of the vessel in the sea. The Greeks and Romans introduced the origins of health and life insurance c. 600 AD when they organized guilds called benevolent societies which cared for the families and paid funeral expenses of members upon death. Guilds in the middle Ages served a similar purpose. Before insurance was established in the late 17th century, friendly societies existed in England, in which people donated amounts of money to a general sum that could be used for emergencies. Separate insurance contracts (i.e., insurance policies not bundled with loans or other kinds of contracts) were invented in Greeks rulers in the 14th century, as were insurance pools backed by pledges of landed estates. These new insurance contracts allowed insurance to be

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separated from investment, a separation of roles that first proved useful in marine insurance. Insurance became far more sophisticated in post-Renaissance Europe, and specialized varieties developed. Insurance as we know it today can be traced to the Great Fire of London, which in 1666 A.D devoured 13,200 houses. In the aftermath of this disaster, Nicholas Barbon opened an office to insure buildings. In 1680, he established Englands first fire insurance company, The Fire Office, to insure brick and frame homes. The first insurance company in the United States underwrote fire insurance and was formed in Charles Town (modern-day Charleston), South Carolina, in 1732.

Types of Insurances

Insurance business is divided into four classes: 1. Life Insurance 2. Fire 3. Marine 4. Miscellaneous Insurance.

Life insurers undertake the Life Insurance business; general insurers handle the rest. The Business of insurance essentially means defraying risks attached to an activity (including life) and sharing the risks between various entities, both persons and organizations. Insurance companies are important players in financial markets as they collect and invest large amounts of premium in various investment instruments.

Insurance offers the following benefits:

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1. Protection to investors 2. Accumulation of savings 3. Channeling these savings into sectors needing huge long-term investments.

Insurance companies receive a steady cash stream of premium or contributions to pension plans. Their cash flows are determined on the basis of various actuary studies and models. Since their liabilities are long-term or contingent in nature, their investments are also longterm and they are able to maintain a healthy liquidity position. Since they offer more than the return on savings in the shape of life cover to the investors, the rate of return guaranteed on their insurance policies is relatively low. Consequently, the need to seek high rates of return on their investments is also low. Since the risk factor in the insurance business is quite high, insurance companies usually invest in relatively safer bets such as bonds of GOI, PSUs, state governments, local bodies, corporate houses and mortgages of long-term nature. Lately, insurance companies have

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INDUSTRY PROFILE

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INDUSTRY PROFILE

Introduction of life insurance industry in India

The business of life insurance in India in its existing form started in India in the year 1818 with the establishment of the Oriental Life Insurance Company in Calcutta, which failed in 1834. However, the success of Indian life insurance can be traced back roughly to the second decade of the nineteenth century when the Madras Equitable began transacting life insurance business in the Madras Presidency in 1829. After that, it was a rather dull phase with regard to the growth in life insurance enterprise. This dullness was due to the very critical phase through which the British insurance companies were passing due to mismanagement and inexperience, thus resulting in the failure of several British offices before 1870 and leading to the enactment of the British Insurance Act, 1870. Till the 70s of the nineteenth century, insurance had found no real place in the scheme of things and only certain European companies operating in parts of India did life insurance business on some scale. But Indian enterprise in this sphere later began to expand and in the last three decades of the nineteenth century the following companies were started in the Bombay Presidency: 1. Bombay Mutual (1871) 2. Oriental (1874) 3. Empire of India (1897)

Few other companies were also set up in other parts of India. However, this period was Dominated by foreign insurance offices, which did good business in India, namely Albert Life Assurance, Royal Insurance, Liverpool and London Globe Insurance. The Indian offices that were setup during this period came up the hard way and had to struggle against the

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prevailing prejudice against life insurance and natural ignorance of the people. The recorded history of Insurance business in India, however, began in 1914 when the Government of India started publishing returns of Insurance Companies in India. The Indian Life Assurance Companies Act, 1912 was the first statutory measure to regulate life insurance business. Later in 1928 the Indian Insurance Companies Act was enacted to enable the Government to collect statistical information about both life and non-life insurance business transacted in India by Indian and foreign insurers including provident insurance societies. In 1938, with a view to protecting the interest of insuring public, the earlier legislation was consolidated and amended by the Insurance Act1938 with comprehensive provisions detailed and effective control over the activities of insurers. The Insurance Amendment Act of 1950 abolished Principal Agencies. However, there were legations of unfair trade practices. The Government of India, therefore, decided to nationalize the insurance business. An Ordinance issued on 19th January 1956 nationalized the Life Insurance sector and Life Insurance Corporation of India (LIC) came into existence in the same year. The LIC absorbed 154Indian, 16 nonIndian insurers as also 75 provident societies. Since then LIC was the only player till the late 90s when the Insurance sector was reopened for the private sector.

India's economic development made it a most lucrative Insurance market in the world. Before the year 1999, there was monopoly state run LIC transacting life business and the General Insurance Corporation of India with its four Subsidiaries transacting the rest. In the wake of reform process and passing Insurance Regulatory and Development Authority (IRDA) Act through Indian parliament in 1999, Indian Insurance was opened for private companies.

Liberalization on the Insurance sectors has allowed the foreign players to enter the market with their Indian partners. Most of the foreign Insurers have joined within the local market.

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India offers immense possibilities to foreign Insurers since it is the world's most populous country having over a billion people.

Insurance industry had ten and six entrants in life and non-life sector respectively in the year 2000-2001. The industry again saw two and three entrants in the life and non-life business respectively in the year 2001-2002. One additional entrant was made both in the life and in non-life business in 2004 and 2005 respectively. At present there are fourteen companies each in Life and General Insurance. The Funds earlier generated by the state owned insurers have been diversified with other new insurers. We should wait and see how the new players are going to boost up our economy.

Under the plan of insurance, a large number of people associate themselves by sharing risk, attached to individual. The risk, which can be insured against include fire, the peril of sea, death, incident, & burglary. Any risk contingent upon these may be insured against at a premium commensurate with the risk involved. Insurance is actually a contract between two parties whereby one party called insurer undertakes in exchange for a fixed sum called premium to pay the other party on happening of a certain event. Insurance is a contract whereby, in return for the payment of premium by the insured, the insurers pay the financial losses suffered by the insured as a result of the occurrence of unforeseen events. The Indian insurance market is characterized by the presence of 'young pensioners', as per an article in the 'Times of India'. Young pensioners are typically under 40 individuals who are purchasing retirement plans. The growing Indian economy has created an upwardly mobile, affluent young generation, who believe in going for a planned retirement. As per data from IRDA, 28% of the premiums collected by the Indian Insurance companies are from retirement plans. Life Insurance Corporation (LIC) is India's biggest domestic institutional investor. It is also the largest life insurance company in India. LIC envisages augmenting its equity investment

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by one third in 2008. LIC plans to buy equities worth Rs 450 billion for the year 2008-09. The comparable figure for 2007-08 was Rs 340 billion. Thomas Mathew, LIC Managing Director expects the volatility in the stock markets to continue till October-November. The prime objective of the company is to ensure the safety of the resources invested by the company's shareholders. LIC is slated to buy up bonds worth Rs1.15 trillion in the current fiscal year. LIC expects to earn a gross investment income ranging from Rs 400 billion to Rs 450 billion in the current year, depending upon the prevalent market conditions. LIC manages total assets worth around US$175 billion. According to K N Bhandari, the Secretary General of General Insurance Council, India's general insurance sector is slated to grow at 18% rate in 2008. The comparable figure for 2007 was 13%.As per Mr.Bhandari, the present market value of the Indian general insurance sector is Rs 30,000-crore. The current penetration level of the Indian insurance sector is 0.65 %.The Indian urban sector is a significant contributor to the general insurance market P.Chidambaram, the then Indian Finance Minister, called for the insurance companies in India to make simple products for the Indian masses.

Current scenario of life insurance sector

The insurance sector was opened up for private participation four years ago. For years now, the private players are active in the liberalized environment. The insurance market have witnessed dynamic changes which includes presence of a fairly large number of insurers both life and non-life segment. Most of the private insurance companies have formed joint venture partnering well recognized foreign players across the globe. There are now 29 insurance companies operating in the Indian market 14 private life insurers, nine private non-life insurers and six public sector companies. With many more

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joint ventures in the offing, the insurance industry in India today stands at a crossroads as competition intensifies and companies prepare survival strategies in a detariffed scenario.

There is pressure from both within the country and outside on the Government to increase the foreign direct investment (FDI) limit from the current 26% to 49%, which would help JV partners to bring in funds for expansion.

There are opportunities in the pensions sector where regulations are being framed. Less than 10 % of Indians above the age of 60 receive pensions. The IRDA has issued the first license for a standalone health company in the country as many more players wait to enter. The health insurance sector has tremendous growth potential, and as it matures and new players enter, product innovation and enhancement will increase. The deepening of the health database over time will also allow players to develop and price products for larger segments of society.

State Insurers Continue To Dominate There may be room for many more players in a large underinsured market like India with a population of over one billion. But the reality is that the intense competition in the last five years has made it difficult for new entrants to keep pace with the leaders and thereby failing to make any impact in the market.

Also as the private sector controls over 26.18% of the life insurance market and over 26.53% of the non-life market, the public sector companies still call the shots. The countrys largest life insurer, Life Insurance Corporation of India (LIC), had a share of 74.82% in new business premium income in November 2005. Similarly, the four public-sector non-life insurers New India Assurance, National Insurance, Oriental Insurance and United India Insurance had a combined market share of 73.47% as

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of October 2005. ICICI Prudential Life Insurance Company continues to lead the private sector with a 7.26% market share in terms of fresh premium, whereas ICICI Lombard General Insurance Company is the leader among the private non-life players with a 8.11% market share. ICICI Lombard has focused on growing the market for general insurance products and increasing penetration within existing customers through product innovation and distribution.

Intense Competition In a de-tariff environment, competition will manifest itself in prices, products, underwriting criteria, innovative sales methods and creditworthiness. Insurance companies will vie with each other to capture market share through better pricing and client segmentation.

The battle has so far been fought in the big urban cities, but in the next few years, increased competition will drive insurers to rural and semi-urban markets.

Global Standards While the world is eyeing India for growth and expansion, Indian companies are becoming increasingly world class. Take the case of LIC, which has set its sight on becoming a major global player following a Rs280-crore investment from the Indian government. The company now operates in Mauritius, Fiji, the UK, Sri Lanka, and Nepal and will soon start operations in Saudi Arabia. It also plans to venture into the African and AsiaPacific regions in 2006.

The year 2005 was a testing phase for the general insurance industry with a series of catastrophes hitting the Indian sub-continent.

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Market Share of Indian life Insurance Industry

The introduction of private players in the industry has added value to the industry. The initiatives taken by the private players are very competitive and have given immense competition to the on time monopoly of the market LIC. Since the advent of the private players in the market the industry has seen new and innovative steps taken by the players in this sector. The new players have improved the service quality of the insurance. As a result LIC down the years have seen the declining phase in its career. The market share was distributed among the private players. Though LIC still holds the 75% of the insurance sector but the upcoming natures of these private players are enough to give more competition to LIC in the near future. LIC market share has decreased from 95% (2002-03) to 81 %( 200405).The following companies has the rest of the market share of the insurance industry. Table shows the mane of the player in the market

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Table 1.1 Market shares of various players present in market MARKET SHARE (%) LIFE INSURERS 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. LIC ICICI Prudential Bajaj Allianz HDFC Standard Birla Sun life Tata AIG SBI Life Max New York Aviva Kotak Mahindra Old Mutual ING Vysya IDBI Federal Met Life Sahara Life 76.07 6.91 4.75 2.98 1.72 1.66 1.46 1.28 1.08 0.71 0.54 0.46 0.37 0.03 23.93 76.07 100.00

Private total Public total Grand total

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Role of IRDA in Insurance Sector

IRDA plays an important role in insurance sector giving important guide lines to various companies in the area of insurance. The IRDA's green signal to insurance companies for investments in venture capital funds would provide a boost in growth pertaining to the infrastructure segment. The insurance companies would be allowed to invest about 5% of the total investment in the venture capital funds pertaining to infrastructure based projects. The total aggregate of the assets under the life insurance companies is Rs 699,375 crores. The proposed alterations in the regulations pertaining to investments of the insurance companies were settled by the Insurance Regulatory and Development Authority of India (IRDA), at the board meeting on the 25th of March 2008. Several other alterations were also done with the investment norms. The other important norm is the expansion of the sanctioned investments category, which would also include the mortgaged securities and the initial public offerings unlike previously when these two were not included. The proposal would be submitted to the Insurance Regulatory and Development Authority of India (IRDA) board for approval. The final draft was published in the Gazette of the Central Government at the end of March 2008. The alterations would help in developing the instruments of investment and provide flexibility for insurers. The alterations would provide more margins pertaining to the investments in certificates of deposit issued by the banks and term deposits. At present the insurance companies may invest about 10% of its investment funds to a particular sector. The Insurance Regulatory and Development Authority of India (IRDA) constituted a working group in the year 2006 to probe the existing investment regulations and provide review on the present statutory advices and the trends of investments for insurance companies. According to the Insurance Regulatory and Development Authority (IRDA), the private insurers had collected premium income from new business of about Rs. 18,980 crores, in 2007.

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Role of Private Insurance Companies in Insurance Sector

Private sector also plays important role in this sector and tried to capture maximum shares in this sector. Max New York Life Insurance Company is the leading private life insurance company in India. Max New York Life Insurance Company Ltd. launched 'lifeline' a health insurance product on March 2008, across India. Now, the company can boast of offering complete health and life insurance products across 11 regions in India. This newly launched health insurance product of Max New York Life Insurance Company offers three groups of heath insurance solutions. The director marketing product management and corporate affairs of Max New York Life Insurance said that these three distinct heath insurance products are meant to cover eventualities like hospitalization, surgery and critical illness of the insured and these plans have been structured with features like coverage for a wide range of ailments, no claim discount on revised premium for a healthy life, a fixed premium for a five-year term, free second opinion from the best healthcare institutions of India on detection of illness. Further, it also has provision for a free telephonic medical helpline across India. The hospitalization is covered by "Medicash Plan", which is meant to provide a fixed amount of cash benefit on a day-to-day basis during the entire period of hospitalization of the insured. The Medicash Plan would also cover expenses for admission in ICU, lump sum benefits against an unlimited number of surgeries and recuperation benefits. The second plan of the newly launched health insurance of Max New York Life Insurance is the "Wellness Plan", which is a more attractive one and covers 'critical illness' like cancer, Alzheimers, heart ailments, liver disease, deafness, permanent disability, etc. The Wellness plan covers thirty eight critical illnesses, which is the highest number of illness covered under one insurance plan in India by any insurance company. The third health insurance policy of Max New York Life Insurance is a term plus health protection plan known as "Safety Net". Max New York

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Life Insurance Company is one of the fastest growing life insurance companies in India and is the first life insurance company of India to be awarded with ISO9001:2000 certification.

Modern Marketing Approach

Marketing strategies for insurance in the emerging scenario could be understood in terms of the following steps:

Having done market research and finalizing on segmentation, targeting and positioning the strategy would focus on the marketing mix namely, Product, Price, Place and Promotion. While determining the implementation methodology, the four characteristics viz. Intangibility, Inseparability, Perish ability and Variability gives rise to certain unique requirements that deserve careful attention while formulating the marketing strategy for insurance. After implementation, the insurers should concentrate on the effective control that would enhance their business.

In India Insurance is sold and not bought. The agents / Advisors by using various strategies sell the product by convincing the customers. Moreover, they push Policies with the highest premium to pocket a higher commission. The consultative approach to selling is the modern approach, which helps customers and prospects to buy. A consultant makes calls and sells just like any other sales person. The difference is in their attitude, their approach and their commitment. Here, the customer is seen as a person to be served and not a person to be sold. It helps the purchaser to make an intelligent decision. The four-step process includes:

* Need discovery * Selection of the product * Need satisfaction presentation, and * Serving the sale IMS Dehradun 17

This approach to selling their products requires understanding of concepts and principles borrowed from the fields of psychology, communications, and sociology and needs a lot of personal commitments and self discipline from the seller.

The commitments referred are:

Finding and understanding the needs of the customers. Partnering with the customers. Helping the customers to achieve his business and other objectives by the purchase of the product or service.

Believing that your products / services are a great fit with your customer's needs, and Believing in yourself and your ability to help the customers in solving their problems.

Product Innovations

Insurers are continuously innovating new products based on forward-looking models. They have developed new products addressing the new challenges in society and products to address the hazards from new environmental issues. Companies will need to constantly innovate in terms of product development to meet ever-changing consumer needs. Understanding the customer better will enable Insurance companies to design appropriate products, determine price correctly and to increase profitability. Since a single policy cannot meet all the Insurance objectives, one should have a portfolio of policies covering all the needs. Product development is made possible by integrating actuarial, rating, claims and illustration systems. At present, the Life Insurers are concentrating on the pension schemes and the Non-Life Insurers on many innovative schemes of various realms and thereby enriching their market share. Moreover, with increased commoditization of insurance products, brand building is going to play a vital role.

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Distribution Network

While companies have been successful in product innovation, most of them are still grapping with right mix of Distribution Channels for capturing maximum market share to build brand equity, building strong and effective customer relationships and cost effective customer service. While the traditional channel of tied up advisors or agents would be the chief distribution channel, insurer should innovate and find new methods of delivering the products to customers. Corporate agency, brokerage, Banc assurance, e-insurance, cooperative societies and panchayats are some of the channels, which can be tapped by the insurers to reach the appropriate market segments. Now days, the urban masses are tapped with the new techniques provided by Information Technology through Internet. Rural masses are attracted by the consultative approach adopted by the Insurers. Moreover, they attract the customers through telephone and mobile also.

Customer Education and Services

Insurance is a unique service industry. The key industry drivers are related to life style issues in terms of perceiving insurance as a savings instrument rather than for risk cover, need based selling, quality of service and customers awareness.

In the present competitive scenario, a key differentiator is the professional customer service in terms of quality of advice on product choice along with policy servicing. Servicing focus is on enhancing the customer's experience and maximizing his convenience. This calls the effective CRM system, which eventually creates sustainable competitive advantage and enables to build long lasting relationship.

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What Is Life Insurance?

Life insurance is a contract that pledges payment of an amount to the person assured (or his nominee) on the happening of the event insured against. The contract is valid for payment of the insured amount during: The date of maturity, or Specified dates at periodic intervals, or Unfortunate death, if it occurs earlier.

Functions of Insurance

1. Primary function 2. Secondary function 3. Other functions

The primary functions of insurance include the following:

Provide protection - The primary function of insurance is to provide protection against future risk, accidents and uncertainty. Insurance is actually a protection against economic loss, by sharing the risk with others.

Collective bearing of risk - Insurance is a device to share the financial loss of few among many others. Insurance is a means by which few losses are shared among larger number of people. All the insured contribute the premiums towards a fund and out of which the persons exposed to a particular risk is paid.

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Assessment of risk - Insurance determines the probable volume of risk by evaluating various factors that give rise to risk.

Provide certainty - Insurance is a device, which helps to change from uncertainty to certainty. Insurance is device whereby the uncertain risks may be made more certain.

The secondary functions of insurance include the following:

Prevention of Losses - Insurance cautions individuals and businessmen to adopt suitable device to prevent unfortunate consequences of risk by observing safety instructions and installation of automatic sparkler or alarm systems etc. Prevention of losses causes lesser payment to the assured by the insurer and this will encourage for more savings by way of premium. Reduced rate of premiums stimulate for more business and better protection to the insured.

Small capital to cover larger risks - Insurance relieves the businessmen from security investments, by paying small amount of premium against larger risks and uncertainty. Contributes towards the development of larger industries - Insurance provides development opportunity to those larger industries having more risks in their setting up. Even the financial institutions may be prepared to give credit to sick industrial units which have insured their assets including plant and machinery.

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The other functions of insurance include the following:

Means of savings and investment - Insurance serves as savings and investment. Hence, insurance is a compulsory way of savings and it restricts the unnecessary expenses by the insured's. For the purpose of availing income-tax exemptions people may also invest in insurance. Source of earning foreign exchange - Insurance is an international business. The country can earn foreign exchange by way of issue of marine insurance policies and various other ways.

Risk free trade - Insurance promotes exports insurance, which makes the foreign trade risk free with the help of different types of policies under marine insurance cover.

Retirement - Life insurance makes sure that you have regular income after you retire and helps you maintain your standard of living. It can ensure that your post-retirement years are spent in peace and comfort.

Myths of Insurance: i) Insurance is just meant for saving tax. ii) Insurance does not give good returns iii) Insurance products are not flexible

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Why Life Insurance?

We think twice before taking the plunge into buying insurance. Is buying insurance a necessity now? Spending an extra amount, as premium at regular intervals where we do riot see immediate benefits does riot seem a necessity now may be later. Well we could be wrong. Buying Insurance cannot be compared with any other form of investment. Insurance gives us a life long benefit and the returns will definitely come but only when we need it the most i.e. at the right time. Besides buying insurance early in life is one of the wise decisions we could take. Because the premium we would be paying would be comparatively lower. Insurance is not about how much more it can offer us when the stock market is at its peak. It may not be an attractive investment option. However, weigh the pros and cons and consider how much more it offers at a small price. Most important of all it provides us with that unique sense of security that no other form of investment provides. It gives us a sense of financial support especially during that time of crisis irrespective of the fluctuations in the stock market. Insurance provides for our career goals right from your childhood years. If the earning member of the family is no more our childs educational needs will not suffer. In fact his higher education too will be provided for. We need not spend sleepless nights thinking about how to save for our childs marriage. Life Insurance will take care of that typical once-in-a-life-time spending on marriages. An accident or a disability may be devastating but an insurance policy can be of utmost support for the family during such times too. Besides, it provides for additional benefits such as bonuses. We need not worry about our retirement years. The rising prices, taxes, and our lifestyle will be taken care of easily. In addition, we can relax and spend our old age in comfort and peace. Life insurance today plays a major role in ones life at various stages.

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Considering the benefits it offers one cannot but give a thought to buying an insurance policy at the earliest.

Importance of consumer behavior study

The study of consumers helps firms and organizations improve their marketing strategies by understanding issues such as how the psychology of consumers works, feel, reason, and select between different alternatives (e.g., brands, products); The psychology of how the consumer is influenced by his or her environment (e.g., culture, family, signs, media); The behavior of consumers while shopping or making other marketing decisions; Limitations in consumer knowledge or information processing abilities influence decisions and marketing outcome; How consumer motivation and decision strategies differ between products that differ in their level of importance or interest that they entail for the consumer; and How marketers can adapt and improve their marketing campaigns and marketing strategies to more effectively reach the consumer. 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." Behavior 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. Product use is often of great interest to the marketer, because this may influence how a product is best positioned or how we can encourage increased consumption. Consumer behavior involves services and ideas as well as tangible products.

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Factors Influencing Consumer Behavior

Social factor: Social factor divides the society into a hierarchy of distinct classes. The members of each class have relatively the same status and members of other classes have either more or less status. It includes family, group, celebrity etc.

Cultural factor: It has potent influences that are brought up to follow the beliefs, values and customs of their society and to avoid behavior that is judged acceptable. Beliefs, values and customs set subculture apart from other members of the same society. Thus sub-culture is a distinct cultural group that exists as an identifiable segment, within a larger, more complex society.

Personal factor: It is a very important factor. Personal factors also influence buyers behavior. They include age, income, occupation, life style. They simply direct our outer personality.

Psychology factor: The buying behavior of consumer is influenced by a number of psychological factors which includes motivation, perception, learning, beliefs and attitude and personality.

Applications of consumer behavior:

There are four main applications of consumer behavior:

The most obvious is for marketing strategyi.e., for making better marketing campaigns. For example, by understanding that consumers are more receptive to food advertising when they are hungry, we learn to schedule snack advertisements late in

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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 many subsequent customers brand choices. A second application is public policy. In the 1980s, Acutance, a near miracle cure for acne, was introduced. Unfortunately, Acutance resulted in severe birth defects if taken by pregnant women. Although physicians were instructed to warn their female patients of this, a number still became pregnant while taking the drug. To get consumers attention, the Federal Drug Administration (FDA) took the step of requiring that very graphic pictures of deformed babies be shown on the medicine containers. Social marketing involves getting ideas across to consumers rather than selling something. Marty Fishbein, a marketing professor, went on sabbatical to work for the Centers for Disease Control trying to reduce the incidence of transmission of diseases through illegal drug use. The best solution, obviously, would be if we could get illegal drug users to stop. This, however, was deemed to be infeasible. It was also determined that the practice of sharing needles was too ingrained in the drug culture to be stopped. As a result, using knowledge of consumer attitudes, Dr. Fishbein created a campaign that encouraged the cleaning of needles in bleach before sharing them, a goal that was believed to be more realistic. As a final benefit, studying consumer behavior should make us better consumers. Common sense suggests, for example, that if you buy a 64 liquid ounce bottle of laundry detergent, you should pay less per ounce than if you bought two 32 ounce

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bottles. In practice, however, you often pay a size premium by buying the larger quantity. In other words, in this case, knowing this fact will sensitize you to the need to check the unit cost labels to determine if you are really getting a bargain.

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COMPANY PROFILE

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COMPANY PROFILE

INTRODUCTION TO IDBI FEDERAL LIFE INSURANCE

IDBI Federal Life Insurance Co. Ltd.,(formally IDBI Fortis Life Insurance) is a joint venture between three financial companies development and commercial bank, IDBI Bank, Indias private sector bank, Federal Bank and European insurer Ageas (formerly Fortis), which was formed on March 2008. In this venture, IDBI Bank owns 48% equity while Federal Bank and Ageas own 26% equity each.

History

2006: IDBI Bank, Federal Bank and Belgian-Dutch insurance major Fortis Insurance International NV signed a MoU to start a life insurance company

2008: IDBI Fortis Life Insurance Co. Ltd., which started its operations in March 2008 2008: IDBI Fortis opens its second branch in Andhra Pradesh in Vijayawada 2008: IDBI Fortis Life positive on assured return products 2008: IDBI Fortis launches the Bondsurance Plan 2009: IDBI Fortis announces Rs 250cr capital infusion 2009: Nimbus ropes in IDBI Fortis as title sponsor of IndiaSri Lanka series 2009: 'IDBI Fortis' Boss-Ka-Boss receives PRCI Award 2009: IDBI Fortis launches Retiresurance Pension Plan 2009: IDBI Fortis scores with Goalsurance 2009: IDBI Fortis reaches the banks of Hoogly 2009: IDBI Fortis launches Incomesurance Immediate Annuity

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2009: IDBI Fortis Life Insurance uses an interactive application to help users easily calculate their taxes

2009: IDBI Fortis reaches the City of Eastern Light 2009: IDBI Fortis receives bronze Dragon at 'PMAA 2009' 2009: IDBI Fortis Life Insurance introduces financial inclusion plan in rural Orissa 2009: IDBI Fortis launches Termsurance Protection Plan 2009: IDBI Fortis redefines endowment & money back with Incomesurance 2009: IDBI Fortis to open 65 more branches; raise headcount by 1,000 2010: IDBI Fortis now renamed as IDBI Federal Life Insurance Company

Technology

To monitor and manage its network equipment across 34 sites, IDBI Forties uses Tulip Proactive Managed CE solution. The solution includes device management, proactive troubleshooting and notification support. With the implementation of the solution, IDBI has reported improvement of network performance and availability, with a faster, more effective change and configuration management.

Products

IDBI Forties launched its first set of products across India in March 2008, after receiving the requisite approvals from the Insurance Regulatory and Development Authority (IRDA). IDBI Forties offers services through a nationwide network across the branches of IDBI Bank and Federal Bank in addition to a network of advisors and partners. IDBI Forties has 35 branches across the country.

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Sponsorships, Awards

IDBI Forties Life Insurance Company was selected as the title sponsor for the IndiaSri Lanka Cricket Series 2009, consisting of five One-Day Internationals and a Twenty 20 match. The ODI series will be called the IDBI Forties Wealthsurance Cup. This will be followed by the IDBI Forties Wealthsurance Twenty20.

Wealthsurance Made Easy (WME), a knowledge aid by IDBI Forties for its sales force, won The Bronze Dragon in the category for Best Dealer/Sales Force activity at the Promotion Marketing Awards of Asia (PMAA).

INTODUCTION TO IDBI BANK

The Industrial Development Bank of India Limited, now more popularly known as IDBI Bank, was established as a wholly-owned subsidiary of Reserve Bank of India. The foundation of the bank was laid down under an Act of Parliament, in July1964. The main aim behind the setting up of IDBI was to provide credit and other facilities for the Indian industry, which was still in the initial stages of growth and development. After the transfer of its ownership, IDBI became the main institution, through which the institutes engaged in financing, promoting and developing industry were to be coordinated. In January 1992, IDBI accessed domestic retail debt market for the first time, with innovative Deep Discount Bonds, and registered path-breaking success. The following year, it set up the IDBI Capital Market Services Ltd., as its wholly-owned subsidiary, to offer a broad range of financial services, including Bond Trading, Equity Broking, Client Asset Management and Depository Services .In September 1994, in response to RBI's policy of opening up domestic banking sector to

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private participation, IDBI set up IDBI Bank Ltd., in association with SIDBI. In July 1995, public issue of the bank was taken out, after which the Government's shareholding came down (though it still retains majority of the shareholding in the bank). In September 2003, IDBI took over Tata Home Finance Ltd, renamed IDBI Home finance Limited, thus diversifying its business domain and entering the arena of retail finance sector the year 2005 witnessed the merger of IDBI Bank with the Industrial Development Bank of India Ltd. The new entity continued to its development finance role, while providing an array of wholesale and retail banking products (and does so till date). The following year, IDBI Bank acquired United Western Bank (which, at that time, had 230 branches spread over 47 districts, in 9 states). In the financial year of 2008, IDBI Bank had a net income of Rs 9415.9 crores and total assets of Rs120, 601 crores.

The Present

Today, IDBI Bank is counted amongst the leading public sector banks of India, apart from claiming the distinction of being the 4th largest bank, in overall ratings. It Is presently regarded as the tenth largest development bank in the world, mainly in terms of reach. This is because of its wide network of 509 branches, 900 ATMs and319 centers. Apart from being involved in banking services, IDBI has set up institutions like The National Stock Exchange of India (NSE), The National Securities Depository Services Ltd. (NSDL) and the Stock Holding Corporation of India (SHCIL).

Objectives

The main objectives of IDBI are to serve as the apex institution for term finance for industry in India. Its objectives include

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(1) Co-ordination, regulation and supervision of the working of other financial institutions such as IFCI , ICICI, UTI, LIC, Commercial Banks and SFCs.

(2) Supplementing the resources of other financial institutions and thereby widening the scope of their assistance.

(3) Planning, promotion and development of key industries and diversifications of industrial growth.

(4) Devising and enforcing a system of industrial growth that conforms to national priorities.

Functions

The IDBI has been established to perform the following functions:(1) To grant loans and advances to IFCI, SFCs or any other financial institution by way of refinancing of loans granted by such institutions which are repayable within 25 year. (2) To grant loans and advances to scheduled banks or state co-operative banks by way of refinancing of loans granted by such institutions which are repayable in 15 years. (3) To grant loans and advances to IFCI, SFCs, other institutions, scheduled banks, state co-operative banks by way of refinancing of loans granted by such institution to industrial concerns for exports. (4) To discount or rediscount bills of industrial concerns. (5) To underwrite or to subscribe to shares or debentures of industrial concerns. (6) To subscribe to or purchase stock, shares, bonds and debentures of other financial institutions. (7) To grant line of credit or loans and advances to other financial institutions such as IFCI, SFCs, etc. (8) To grant loans to any industrial concern. (9) To guarantee deferred payment due from any industrial concern. (10) To guarantee loans raised by industrial concerns in the market or from institutions.

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(11) To provide consultancy and merchant banking services in or outside India. (12) To provide technical, legal, marketing and administrative assistance to any industrial concern or person for promotion, management or expansion of any industry. (13) Planning, promoting and developing industries to fill up gaps in the industrial structure in India. (14) To act as trustee for the holders of debentures or other securities.

Subsidiaries

The following are the subsidiaries of IDBI (1) Small Industries Development Bank of India (SIDBI) (2) IDBI Bank Ltd.. (3) IDBI Capital Market Services Ltd. (4) IDBI Investment Management Company

Capital Structure and Operations

As on September 30, 1996, the authorized Capital of IDBI was Rs.2000crores. Issued, subscribed and paid up share capital was Rs.828.76crores.Reserves were Rs.6309 crores. Loan funds were Rs.35450 crores. The total outstanding loans, investments and guarantee of IDBI stood at Rs.39, 221 crore as on 31st March 1996.

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INTRODUCTION TO FEDERAL BANK

Federal Bank Limited is a major Indian commercial bank in the private sector, headquartered at Aluva, Kochi, Kerala. As of 18 August 2012, Federal Bank has 1000 branches spread across 24 states in India and 1058 ATMs around the country(across 108 metro centres, 224 urban centres, 384 semi-urban locations and 87 rural areas). Federal Bank opened its 1000th branch at Muthoor, Thiruvalla in Kerala on 17 August 2012,and is planning to hire 2000 professionals by September 2012.The Bank would be the first Bank from Kerala to cross the milestone of 1000 branch network.

History

In the year 1931, Travancore Federal Bank was inaugurated at Vengal Varuttisseril at Nedumpuram, near Tiruvalla, Kerala. The 14 founders included Sri Vengal Varuttisseril Oommen Varghese, his brothers Oommen Chacko, Oommen Kurian, Oommen George and also another person from Tiiruvalla, Kavumbhagam Mundapallil Lukose, and others. Oommen Varghese was the Chairman and Oommen Chacko the Manager. After it had functioned for nearly 10 years, the bank's day to day transaction had to be stopped due to the ill-health of the Manager. Understanding this situation, a lawyer from Perumbavoor named Sri K.P.Hormis and his acquaintances joined together, bought the bank and took over the management. In 1945, they moved the bank's registered office to Aluva and Hormis became the Managing Director. In 1947,the bank's name was shortened from Travancore Federal Bank to Federal Bank.[4] In 1970, the bank became a Scheduled Commercial Bank. Recently, it opened a representative office in Dubai.

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Acquisitions and Mergers

In 1964, the bank embarked on a series of acquisitions that would substantially increase its size. It acquired the Chalakudy Public Bank in Chalakudy, the Cochin Union Bank inThrissur, and the Alleppey Bank in Alappuzha.

In 1965, it acquired the St.George Union Bank in Puthenpally. In 1968, it acquired the Marthandom Commercial Bank in Thiruvananthapuram. In 2006, Federal Bank acquired Ganesh Bank of Kurundwad after the Reserve Bank of India suspended the bank. Established in 1920, Ganesh Bank had its headquarters at Kurundwad, Maharashtra. The bank had a network of 32 branches and its operations were concentrated in Sangli and Kolhapur in Maharashatra and Belgaum in Karnataka. Prior to the merger, Federal Bank had 20 branches in Maharashtra.

In March 2008, Federal Bank entered into a joint venture with IDBI Bank and Fortis Insurance International to form IDBI Fortis Life Insurance, of which Federal Bank owns 26 percent. The company ended the year with over 300 Cr in premiums as on 31 March 2009.

On 24 August 2010, IDBI Fortis, rejuvenated as IDBI Federal Life Insurance with Aegas of Belgium.

INTRODUCTION TO AGEAS
Ageas N.V./S.A. is a Belgium-Dutch multinational insurance company co-headquartered in Brussels, Belgium and Utrecht, Netherlands. Ageas is Belgium's largest insurer and operates in 14 countries worldwide. The company was renamed from Fortis Holding in April

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2010 and consists of those insurance activities remaining after the breakup and sale of the financial services group Fortis during the financial crisis of 2007-2010. It is listed on the Euronext Brussels, Euronext Amsterdam, and Luxembourg stock exchanges and forms part of the blue-chip BEL20 stock market index. The company's roots reach back to the 1824 foundation of the Belgian life insurer Assurances Gnrales (now AG Insurance).[2] In 1990 AG merged with the Netherlandsbased bancassurer AMEV/VSB to form Fortis. AMEV/VSB had itself been formed earlier that year by the combination of savings bank VSB (Verenigde Spaarbank) and insurer AMEV, which took advantage of the recent relaxation of Dutch legislation preventing mergers between banks and insurers. AMEV had originally been founded in Utrecht in 1920 as Algemeene Maatschappij tot Exploitatie van Verzekeringsmaatschappijen (English: General Society for Operation of Insurance). After its creation in 1990, Fortis expanded its offerings to include private and investment banking and asset management, establishing subsidiaries around the world, and by 2007 it had become the 20th largest business in the world by revenue. That year Fortis agreed to jointly purchase ABN AMRO with Banco Santander and Royal Bank of Scotland Group, but the onset of the crisis exacerbated problems with financing its part of the large acquisition and prompted fears of impending insolvency. Considered "too big to fail", Fortis received an 11.2 billion bailout from the Benelux governments and saw its retail banking operations in Belgium sold to BNP Paribas and its insurance and banking subsidiaries in the Netherlands nationalised. The remaining assets of the company, consisting principally of insurance operations but also including some distressed assets, were rebranded Fortis Holding. In April 2010 its shareholders agreed a formal change of name to Ageas N.V./S.A., with ownership of the Fortis brand passing to BNP Paribas.

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Objectives: 1) To know about the reason for investment in life insurance. 2) To develop and standardize a measure to evaluate investment pattern in life insurance services 3) To evaluate the factors underlying consumer perception towards investment in life insurance policies 4) To compare the differences in consumer perception of male and female consumers 5) To open new vistas for further researches. . Scope: The scope of the study lies in finding out the perception of customers in Dehradun city through responses taken by 90 customers and highlighting the key areas which require some concern on part of insurance companies and improving upon which the company may strengthen its customer base. The present study, analysis, findings and suggestions proposed by the present researcher will be of immense use for future researcher with similar studies in insurance market.

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SCOPE OF THE WORK

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Customer satisfaction, a business term, is a measure of how products and services supplied by a company meet or surpass customer expectation. It is seen as a key performance indicator within business and is part of the four perspectives of a Balanced Scorecard.

In a competitive marketplace where businesses compete for customers, customer satisfaction is seen as a key differentiator and increasingly has become a key element of business strategy. There is a substantial body of empirical literature that establishes the benefits of customer satisfaction for firms.

Organizations are increasingly interested in retaining existing customers while targeting noncustomers; measuring customer satisfaction provides an indication of how successful the organization is at providing products and/or services to the marketplace.

Customer satisfaction is an ambiguous and abstract concept and the actual manifestation of the state of satisfaction will vary from person to person and product/service to product/service. The state of satisfaction depends on a number of both psychological and physical variables which correlate with satisfaction behaviors such as return and recommend rate. The level of satisfaction can also vary depending on other options the customer may have and other products against which the customer can compare the organization's products.

Because satisfaction is basically a psychological state, care should be taken in the effort of quantitative measurement, although a large quantity of research in this area has recently been developed. Work done by Berry (Bart Allen) and Brodeur between 1990 and 1998 defined ten 'Quality Values' which influence satisfaction behavior, further expanded by Berry in 2002 and known as the ten domains of satisfaction. These ten domains of satisfaction include: Quality, Value, Timeliness, Efficiency, Ease of Access, Environment, Inter-departmental Teamwork, Front line Service Behaviors, Commitment to the Customer and Innovation.

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These factors are emphasized for continuous improvement and organizational change measurement and are most often utilized to develop the architecture for satisfaction measurement as an integrated model. Work done by Parasuraman, Zeithaml and Berry (Leonard L) between 1985 and 1988 provides the basis for the measurement of customer satisfaction with a service by using the gap between the customer's expectation of performance and their perceived experience of performance. This provides the measurer with a satisfaction "gap" which is objective and quantitative in nature. Work done by Cronin and Taylor propose the "confirmation/disconfirmation" theory of combining the "gap" described by Parasuraman, Zeithaml and Berry as two different measures (perception and expectation of performance) into a single measurement of performance according to expectation. According to Garbrand, customer satisfaction equals perception of performance divided by expectation of performance.

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OBJECTIVE OF THE STUDY

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OBJECTIVES OF THE STUDY

Primary Objectives

To analysis the satisfaction level of the customers toward IDBI Federal Life Insurance.

Secondary Objectives

To analyze the customers view toward the plans of IDBI Federal Life Insurance. To identify the insurance needs of the customer. To study about the insurance policy. To study about the customer perception towards IDBI Federal Life Insurance. To study how insurance policy affects customer perception. To analysis about the various schemes provided by the IDBI Federal Life Insurance.

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RESEARCH METHDOLOGY

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RESEARCH METHODOLOGY

Research Design: The study was exploratory in nature with survey method being used to complete the study. The research is divided into two parts. The first part helps us to understand the consumers satisfaction, service quality, problems faced and the investors motive of investment, the second part deals with extracting important findings from this information and analyzing the measures required to correct problems if any.

Sample Design: Population includes investors in Dehradun city. Most of the sample will be generated by personal contacts as the research requires those samples who are investing in insurance or who had invested in past. List of all the contacts was formed from them all the possible prospects were chosen out who are most favored one. In next step these prospects were approached they were briefed about the questions and their responses were recorded.

Sample size: Sample size is taken as 90 respondents.

Tool used for data collection: Self designed questionnaire was used for the evaluation of factors affecting Customers satisfaction towards IDBI Federal Life Insurance. In this questionnaire the responses of the customers are recorded on the basis of four point scale i.e if the customers are highly satisfied it would be rated as excellent & for highly dissatisfied it is bad.

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Types of data collection PRIMARY DATA:

The primary data was collected by asking the customers who come to the IDBI Federal Life Insurance circle office at NCR Plaza, New Cantt. Road, Dehradun for renewing their life insurance policies. In the duration of 2 months of summer internship; I have asked 90 respondents to fill up the questionnaires by me. It is a very important part of the project as it is only through the properly filled up questionnaires that I can reach to any conclusion from the data which I got from the questionnaires.

SECONDARY DATA:

Secondary data are the information which is attained indirectly. They are the data collected by someone else and which has already passed through statistical process

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REVIEW OF LITERATURE

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REVIEW OF LITERATURE

Mehr and Cammack (1976) agrees that Insurance is usually thought of as a product that spreads the risk of serious, but low-probability, losses among a group of individuals, thus providing some financial protection to each in dividable. Kunreuther, (1979) said that his product makes good sense, particularly when the protection is purchased against potential losses so large as to be catastrophic, such as total destruction of one's home, large accident liability judgment, or death of primary family breadwinner. However, it has long been recognized that this sensible product is difficult to sell.

Kotler, (1973) considers insurance to been the category of "unsought goods, along with products such as preventive dental services and burial plots. He notes that unsought goods pose special challenges to the marketer. Slavic, Fischhoff, Lichtenstein, Corrigan, and Combs (1977) found that subjects were more likely to buy insurance against small, highprobabilityosses than insurance against large, low probability losses, Hershey and Schoemaker (1980) reported the opposite result. Kunreuther (1979) It is not the magnitude of a potential loss that inspires people to buy insurance voluntarily it is the frequency with which a loss is likely to occur.Kahneman & Tversky, (1979) reported a risk-averse individual, therefore, should Avoid nearly all types of risk. Empirical evidence, however, suggests most people are risk averse for gains and risk seeking for losses. Kahneman & Tversky, (1984) stated indeed, repeated demonstrations have shown most people lack an adequate understanding of probability and risk concepts Dhar, (1997) Greenleaf and Lehmann, (1995) Tversky and Shafir,(1992) have shown that offering more options can generate decision conflict and preference uncertainty, leading to decision deferral.

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Michael L. Smith (1982) said that atypical life insurance contract provides a package of options or rights to the policy owner that is not precisely duplicated by any other combination of commonly available contracts. Viewed from this perspective, life insurance enjoys a unique position in the field of investments and should be judged in

this light. The paper shows that an options viewpoint provides a more complete explanation of policy owner behavior towards life insurance than the conventional savings-and-protection view.

Michael L. Walden (1985) told that the options package view of the whole life insurance policy suggests that a whole life policy is a package of options, each of which has value and is expected to influence the price of the policy. This viewpoint implies the general hypothesis that price differences between whole life policies can be explained by differences in policy contract provisions and differences in selected company characteristics. The option's package theory was empirically investigated using regression analysis on data from as ample of policies marketed in North Carolina. The results suggest support for the options package theory.

Kirchler and Angela-Christian Hubert (1999) found that the present study aims at describing spouses relative dominance in decisions concerning different forms of investment. As determinants of spouses dominance, partnership characteristics, such as partnership role attitudes, marital satisfaction and individual expertise in relation to different investments, were considered. A questionnaire on spouses dominance in making decisions various investments, on the characteristics of particular investments and on partnership characteristics

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was completed by 142 Austrian couples. Basically, wives appeared to adapt to the dominance exerted by their husbands in savings and investment decisions. Wives dominance was highest in egalitarian partnerships, where autonomic and wife-dominated decisions were reported more frequently than in traditional partnerships. Additionally, spouses relative expertise in relation to the investments in question showed strong effects on dominance distribution: Spouses with higher expertise than their partners exerted more dominance indecision-making processes.

Amy Wong, (2004) empirically examined the role of emotional satisfaction in service encounters. Specifically, this study seeks to: investigate the relationship between emotional satisfaction and key concepts, such as service quality, customer loyalty, and

relationship quality, and clarify the role of emotional satisfaction in predicting customer loyalty and relationship quality. In doing so, this study used the relationship between emotional satisfaction, service quality, customer loyalty, and relationship quality as a context, as well as data from a sample survey of 1,261 Australian retail customers concerning their evaluation of their shopping experiences to address this issue. The results show that service quality is positively associated with emotional satisfaction, which is positively associated with both customer loyalty and relationship quality. Further investigations showed that customers' feelings of enjoyment serve as the best predictor of customer loyalty, while feelings of happiness serve as the best predictor of relationship quality. The findings imply the need for a service firm to strategically leverage on the key antecedents of customer loyalty and relationship quality in its pursuit of customer retention and long term profitability.

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Stephen Diacon (2004) presents the results of a detailed comparison of the perceptions by individual consumers and expert financial advisers of the investment risk involved in various UK personal financial services' products. Factor similarity tests show that there are significant differences between expert and lay investors in the way financial risks are perceived. Financial experts are likely to be less loss averse than lay investors, but are prone to affiliation bias (trusting providers and salesmen more than lay investors do), believe that the products are less complex, and are less cynical and distrustful about the protection provided by the regulators. The traditional response to the finding that experts and nonexperts have different perceptions and understandings about risk is to institute risk communication programmes designed tore-educate consumers. However, this approach is unlikely to be successful in an environment where individual consumers distrust regulators and other experts.

Helmut Grndl, Thomas Post, RomanSchulze, (2005) found that demographic risk, i.e., the risk that life tables change in a nondeterministic way, is a serious threat to the financial stability of an insurance company having underwritten life insurance and annuity business. The inverse influence of changes in mortality laws on the market value of life insurance and annuity liabilities creates natural hedging opportunities.

Evan Mills, Ph.D. (1999) Studied the insurance industry is rarely thought of as having much concern about energy issues. However, the historical involvement by insurers and allied industries in the development and deployment of familiar technologies such as automobile airbags, fire prevention/suppression systems, and anti-theft devices, shows that this industry has a long history of utilizing technology to improve safety and otherwise reduce the likelihood of losses for which they would otherwise have to pay. We have identified nearly

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80examples of energy-efficient and renewable energy technologies that offer lossprevention benefits, and have mapped these opportunities onto the appropriate segments of the very diverse insurance sector (life, health, property, liability, business interruption, etc.).Some insurers and risk managers are beginning to recognize these previously "hidden" benefits.

Roger. A. Formisano (1981) examined, via consumer interviews, the impact of the National Association of Insurance Commissioners Model Life Insurance Solicitation Regulation as implemented in New Jersey. A substantial portion of the insurance buyers sampled did not become aware of the provisions of the regulation aimed to improve their buying ability. Further, many life insurance buyers were not well informed concerning the nature and operation of life insurance contracts, and in particular, the life insurance policies that they had purchased.

Mike Armstrong (2002) the authors found no differences in the number of life insurance policies purchased or coverage levels between women in the study kindred and those from the general population. The public generally believes that life insurance companies would use genetic information to deny coverage or charge higher rates. Individuals who learned that they were at a genetically increased risk of a serious illness would be more likely to buy all forms of insurance, but especially health and disability insurance the likelihood of purchasing all forms of insurance on learning of a genetically increased risk is strongly correlated with age, with younger individuals most likely to be purchasers.

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Retention of the Customers is the essence of Insurance business, Imtiyaz.H, Insurance Times, Feb 2007: Retaining a customer is four times cheaper than acquiring a new one. The retention of the customers is of utmost importance in the insurance industry in specification. Insurance business is of the relationship building process. Were one customer leads to the building of other one. A satisfied customer is like a word of mouth advertisement for the company. The needs of the existing customers should be identified and satisfied well rather than only concentrating at the new accounts. All possible measures needs to taken to retain the customers as it is lesser costlier as well as provides stability to the business

Dr. Binod Kumar Singh, Alphia Institute of Business Management (ICFAI), (2009) with increase in population and income there is a wide scope in insurance sector. Insurance sector provides some security to the consumer for any type of mishappening. In this sector, IRDA plays an important role and time to time gives important guide lines to various companies. Still, LIC plays an important role and has maximum share in this sector. There are various factors that affect the consumer buying decision and also influence consumer thinking when they are planning to invest in insurance scheme .Major respondents generally prefer insurance term cover insurance, medical/health insurance and they also prefer sum assured of life insurance less than Rs 10 lakh. Most of the respondents show their interest in life insurance having higher risk coverage and also for tax saving purpose.

Gaurav Jaiswal Lecturer, Prestige Institute of Management and Research, Gwalior (2009) The consumers perception towards Life Insurance Policies is positive. It developed a positive mind sets for their investment pattern, in insurance policies. Still some actions are needed for developing insurance market. The major factors playing the role in developing consumers perception towards Life Insurance Policies are Consumer Loyalty, Service

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Quality, Ease of Procedures, Satisfaction Level, Company Image, and Company-Client Relationship. Insurance industry has to go ahead. A lot of opportunities are still waiting. This research will help in developing the market share, loyalty and further development in insurance sector.

Trends in Life Insurance BusinessUnit Linked Insurance Plans, IRDA annual report 200708: It wasnt too long back when the good old endowment plan was the preferred way to insure oneself against an eventuality and to set aside some savings to meet ones financial objectives. The traditional endowment policies were investing funds mainly in fixed interest Government securities and other safe investments to ensure the safety of capital. Thus the traditional emphasis was always on security of capital rather than yield. However, with the inflationary trend witnessed all over the world, it was observed that savings through life insurance were becoming unattractive and not meeting the aspirations of the policyholders. The policyholder found that the sum assured guaranteed on maturity had really depreciated in real value because of the depreciation in the value of money. The investor was no longer content with the so called security of capital provided under a policy of life insurance and started showing a preference for higher rate of return on his investments as also for capital appreciation. It was, therefore found necessary for the insurance companies to think of a method whereby the expectation of the policyholders could be satisfied. The object was to provide a hedge against the inflation through a contract of insurance. Decline of assured return endowment plans and opening of the insurance sector saw the advent of ULIPs on the domestic insurance horizon. Today, the Indian life insurance market is riding high on the unit linked insurance plans.

Retention of the Customers is the essence of Insurance business, Imtiyaz.H.Feb 2007:-

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Retaining a customer is four time cheaper than acquiring a new one. The retention of the customers is of utmost importance in the insurance industry in specification. Insurance business is of the relationship building process. were one customer leads to the building of other one. A satisfied customer is like a word of mouth advertisement for the company. The needs of the existing customers should be identified and satisfied well rather than only concentrating at the new accounts. All possible measures needs to taken to retain the customers as it is lesser costlier as well as provides stability to the business

Samuel B Sekar, Research associate, Academic wing, The ICFAI University, Customer driven innovation in insurance products, July 2006:- Insurance is one product which is not demanded by a customer, but supplied to him by massive education and drive marketing. Insurance ought to be bought not sold. The new concept of demand side innovation focuses more on customers social and economic reality striving to deliver maximum value to the customer at an affordable price. Therefore, when the customer becomes the primary focus including him in the invention process becomes mandatory. But, there are certain areas of insurance innovations where the customers cannot be involved. A case in point is the recent insurance product invention called Telematic Auto Insurance. Its a product by the Progressive Auto Insurance, which monitors the driving behavior of its auto insurance policyholder. The new machine grabs information and automatically transmits it to the insurer. This information received is regularly analyzed to judicially conclude the intensity of risk the person is exposed and the corresponding premium he is eligible to pay. This is an example of supply side innovation, where it is strictly not possible to include the customer in the innovation process. Though, there are instances where the customer is involved in the testing phase, his inclusion in the conception phase makes an innovation demand-driven.

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Sampada Kapse & D.G Kodwani, Insurance as an investment option, , May2003 At national as at individual level the excess of income after consumption level savings as finds for investment. Surplus funds can be invested in either real asset or in financial assets. Purpose of investment is to protect ones wealth against erosion of value due to inflation and to earn risk adjusted return. There are three motives which drive people to purchase insurance products in India. Desire to cover risk Tax benefit Saving motives It is argued that in this paper that in the changing scenario for the insurance sector there is going to be a good opportunities for insurance sector to expand its market base. For this purpose there is need to improve the features of the insurance products to make them more liquid or short term schemes could be increased. It is shown that although rewards implied by the insurance products particularly by the tax benefits are quite close to those observed in banks and small saving scheme of the governments. The performance of mutual funds which come in many different types is found to be reasonable compared to the risk involved. The survey indicates that it may not be very difficult to win over the confidence of small investors towards insurance policies if good marketing techniques are adopted to educate the targeted population about the uses of insurance policies from investment point of view.

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DATA ANALYSIS AND INTERPRETATION

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1. What type of product are you using of IDBI Federal Life Insurance?

Table No. 1

Termsurance Plans Lifesurance Plans Senior Citizen Plans Incomesurance & Money Back Plans Childsurance Plans

18 18 9 30 15

35 30 25 20 15 10 5 0 Term Plans Life Plans Sr. Ctzn Plans Income Plans Child Plans

CHART 1

Interpretation: It has been found that majority of respondents are using Incomesurance & Money Back Plan of IDBI Federal Life Insurance. IMS Dehradun 58

2. Are you satisfied with the Products provided by IDBI Federal Life Insurance?

Table No. 2 Option a) Yes b) No Total No. of Respondents 73 17 90 Percentage 84 16 100

percentage

90 80 70 No. of Respondents 60 50 40 30 20 10 0 a) yes options b) No

CHART 2 Interpretation: Mostly all customers are satisfied with the products of IDBI Federal life insurance. Study shows that out of 90 respondents 73 are satisfied with the products that constitute near about 84% of the total respondents. Remaining people are not satisfied with the products of the IDBI Federal life insurance.

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3. How will you rate the Products of IDBI Federal Life Insurance?

Table No. 3 Option a)Excellent b) Very Good c) Good d) Bad Total No. of Respondents 9 30 45 6 90 Percentage 10 33 50 7 100

a)Excellent b) Very Good c) Good d) Bad

CHART 3

Interpretation: 10% of respondents feel that the Products provided by IDBI Federal Life Insurance are Excellent where as 33% thinks that they are very good, 50% respondents think that it is good & only 7% think that their products are bad.

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4. What are the responses of the agents?

Table No.4 Option a)Excellent b) Very Good c) Good d) Bad Total No. of Respondents 12 24 54 0 90 Percentage 13% 27% 60% 0% 100%

20 18 16 14 12 10 8 6 4 2 0

18 4 a)Excellent 8 0 b) Very Good c) Good d) Bad No of respondents

CHART 4

Interpretation: 13% of respondents found that the responses are excellent & 27% of the respondents found it very good, 60% of the respondents are good. No one is with the opinion that the products are of bad quality.

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5. What do you think regarding the personal attention paid by the agents of IDBI Federal Life Insurance towards the customers?

Table No. 5

Option a)Excellent b) Very Good c) Good d) Bad Total

No. of Respondents 27 21 42 0 90

Percentage 30% 23% 47% 0% 100%

0 27 42
a)Excellent b) Very Good c) Good d) Bad

21

CHART 5

Interpretation: 30% of respondents found the personal attention by the agents of IDBI Federal Life Insurance towards customers are excellent & 23% of the respondents found it very good, 47% of the respondents found are good.

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6. What do you think about the returns of different plans of IDBI Federal Life Insurance?

Table No.6

Option a)Excellent b) Very Good c) Good d) Bad Total

No. of Respondents 36 29 19 6 90

Percentage 40% 32% 21% 7% 100%

40 35 30 25 20 15 10 5 0

36 29

19 No. of Respondents 6

a)Excellent b)Very Good

c)Good

d)Bad

CHART 6 Interpretation: 36% of respondents found the returns of different plans of IDBI Federal Life Insurance are excellent & 29% of the respondents found it very good, 19% of the respondents found that the returns of different plans of IDBI Federal Life Insurance is good & 6% of the respondents are not satisfied with returns.

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7. How will you rate the after sales facilities provided by the IDBI Federal Life Insurance?

Table No.7

Option a)Excellent b) Very Good c) Good d) Bad Total

No. of Respondents 24 36 14 16 90

Percentage 26% 40% 16% 18% 100%

40 35 30 25 No. of Respondents 20 15 10 5 0 a)Excellent b) Very Good c) Good d) Bad

No. of Respondents

Options

CHART 7

Interpretation: 26% of respondents found the after sale facilities provided by the IDBI Federal Life Insurance are excellent & 40% of the respondents found it very good, 16% of the respondents found it to be good & 18% found it to be the bad.

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8. Are you satisfied with the IDBI Federal Life Insurance agency/dealer?

Table No.8 Option a)Yes b) No Total No. of Respondents 66 24 90 Percentage 73% 27% 100%

70 60 50 40 No of Respondents 30 20 10 0 Yes Options NO

CHART 8 Interpretation: 73% respondents are satisfied & 27% respondents are dissatisfied with the IDBI Federal Life Insurance agency/dealer. .

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9. Are you satisfied with the different plans of IDBI Federal Life Insurance?

Table No.9 Option a)Yes b) No Total No. of Respondents 69 21 90 Percentage 77% 23% 100%

70 60 50 No of Respondents 40 30 20 10 0 Yes Options NO

CHART 9 Interpretation: 77% respondents are satisfied with the different plans of IDBI Federal Life Insurance where as 23% are not satisfied.

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10. How will you rate the overall Products of IDBI Federal Life Insurance?

Table No.10

Option a)Excellent b) Very Good c) Good d) Bad Total

No. of Respondents 27 21 28 14 90

Percentage 30% 23% 31% 16% 100%

30 25 20 No of Respondents 15 10 5 0 Excellent Options Very Good

CHART 10 Interpretation: 30% of respondents found the rate the overall Products of IDBI Fedearl Life Insurance are excellent & 23% of the respondents found it very good, 31% of the respondents found that the returns are good & 14% thinks it to be bad.

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11. Do you think that IDBI Federal Life Insurance is preferred because of its returns?

Table No.11 Option a)Yes b) No Total No. of Respondents 78 12 90 Percentage 87% 13% 100%

80

No of Respondents 70
60 50 40 30 20 10 0

Yes Options

NO

CHART 11 Interpretation: 87% respondents think that IDBI Federal Life Insurance is preferred because of its returns & only 13% respondents dont think so.

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OBSERVATIONS & FINDINGS

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OBSERVATIONS & FINDINGS

The major observations supports in the favour that customers are satisfied with the overall services of the IDBI Federal Life Insurance. Through the above analysis & Interpretation it is clearly stated that customers are happy with the services of the IDBI Federal Life Insurance.

The main findings are as follows: It has been observed that majority of the respondents are using incomesurance & money back plans of the IDBI Federal Life Insurance. Majority of the customers are satisfied with the various products provided by the IDBI Federal Life Insurance. 73% of the total respondents responded that they are satisfied with the products of IDBI Federal Life Insurance. 45% of total respondents have rated the products of IDBI Federal Life Insurance as Good. Various agents/advisors who are working for the IDBI Federal Life Insurance also give the favourable responses in favour of the services of the IDBI Federal. The personal attention paid by the agents/advisors of IDBI Federal Life Insurance is good. They are able to handle the queries of the customers well & able to satisfied their needs & wants properly. When it comes to Returns; Respondents rated the returns of the IDBI Federal Life Insurance to be Excellent. Majority respondents are very much satisfied with the different plans of IDBI Federal Life Insurance. 77% of total respondents are satisfied with the different plans of the IDBI Federal Life Insurance.

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Majority respondents rate the overall products of the IDBI Federal Life Insurance as good.

Maximum people think that IDBI Federal Life Insurance is preferred for its returns.

So these are the some of the main findings that is been collected through the various questions asked from the various respondents.

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CONCLUSION & SUGGESTIONS

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CONCLUSIONS
Customer satisfaction is a measure of how products and Products supplied by a company meet or surpass customer expectation. It is seen as a key performance indicator within business and is part of the four perspectives of a Balanced Scorecard.

In a competitive marketplace where businesses compete for customers, customer satisfaction is seen as a key differentiator and increasingly has become a key element of business strategy. For this we have done project on customer satisfaction of IDBI Federal Life Insurance. It is found that majority of respondent have use Savings & Investment Plans Products from IDBI Federal Life Insurance. 87% respondents think that IDBI Federal Life Insurance is preferred because of its returns. So finally both below the hypothesis are proved:

It has been found that majority of respondents are using Incomesurance & Money Back Plans from IDBI Federal Life Insurance. 84% of respondents satisfied with the Products provided by IDBI Federal Life Insurance. 10% of respondents feel that the Products provided by IDBI Federal Life Insurance are Excellent where as 33% thinks that they are very good, 50% respondents think that it is good & only 7% of them rated the products Bad. 13% of respondents found that the responses are excellent & 27% of the respondents found it very good, 60% of the respondents is good. 30% of respondents found the personal attention by the agents of IDBI Federal Life Insurance towards customers are excellent & 23% of the respondents found it very good, 47% of the respondents found it to be good. 40% of respondents found the returns of different plans of IDBI Federal Life Insurance are excellent & 32% of the respondents found it very good, 21% of the respondents found that the returns of different plans of IDBI Federal Life Insurance are good. 26% of respondents found the rate

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after sale facilities provided by the IDBI Federal Life Insurance are excellent & 40% of the respondents found it very good, 16% of the respondents found it to be good.

73% respondents are satisfied with IDBI Federal Life Insurance agency/dealer. 77% respondents are satisfied with the different plans of IDBI Federal Life Insurance where as 21% are not satisfied. 30% of respondents rate the overall Products of IDBI Federal Life Insurance to be excellent, 23% of the respondents found it very good, 31% of the respondents found it to be good, only 16% are not satisfied with the overall products of the IDBI Federal Life Insurance. IDBI Federal Life Insurance is preferred because of its returns. 87% of the customers are satisfied with IDBI Federal Life Insurance.

SUGGESTIONS

On the basis of extensive study and research, here are some recommendation and suggestion which may help the company to market the product and service more profitability and increase its share in the insurance market.

PROMOTIONAL ACTIVITIES

The company expands the budget allocation for promotional campaign in center Bhopal. It has affected the sale service brand image of kotak insurance especially in Bhopal. Low supports in promotion have lead to fluctuation in sale.

There may be some useful tools which can be summed as follows:IMS Dehradun 74

Advertising: Advertising should have a clear objective and message, which has not been found in recent ads. Insurance is a faster growing provider service in each state .every offers and schemes they should show with proper message for benefit to the customer. In busy life customer do not remembered any offers and which service we can provided for the customer therefore they should by force showing advertisement in growing market and among customer. Customers want continuously exposure in Cable and Local newspapers.

Persuasive Advertising: Now there is a need of persuasive advertising for Reliance service which can be moved into the category of comparative advertising. It will help the company to establish the superiority of its brand service through specific comparison of one or more attributes and features.

Technical Expertise: The advertisement should show the companys expertise, experience and pride in market the product service sale.

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LIMITATIONS OF THE STUDY

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Limitation of the study

In this research, researcher may under take some sort of preliminary survey. It could not do in this study. The time devoted in the reviewing of research already on related problem. Studies on related problem are useful for indicating the type of difficulties that may be in countered in the present study as also the possible analytical short coming. At time such study may also suggest useful and even new line of approach to the present problem. After the receiving the questionnaire, the researcher think that some point must be incorporated in this study. What effect is on their business, and what effect on the social status and how much growth is generated in their economy? Time factor save by the consumer. How they spent their time which they have save and what way they utilized. Such type of finding may be asked in the questionnaire.

In spite of every care taken on the part of the researcher there were certain limitations which could not be overcome and are as follows: Some of the persons were not so responsive. Possibility of error in data collection because many of investors may have not given the actual answers of my questionnaire. Sample size is limited to 90 people only. The sample size may not adequately represent the whole market. Some respondents were reluctant to divulge personal information which can hinder the validity of all responses. The research study was confined to Dehradun city only.

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BIBLIOGRAPHY

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REFERENCES & BIBLIOGRAPHY

- Published Sources

Aaker (1991) Building Strong Brands; New York: Free Press C.R. Kothari (1985) Methods of Data Collection: Research Methodology Methods & Techniques, pp 95-96. C.R. Kothari (1985), Research Design: Research Methodology Methods & Techniques, pp 31-32. Chatterjee, Jauchius, Kaas and Satpathy no. 1, (2002): 'Revving up auto branding', McKinsey Quarterly. David. A. Aaker, V.Kumar & George S. Day, (2001) Descriptive Research: Marketing Research, Seventh Edition, pp 17 David. A. Aaker, V. Kumar & George S. Day, (2001) Sampling fundamentals : Marketing Research, pp 379 Donald S. Tull & Del I. Hawkins, (2004) Sampling & Data analysis : Marketing Research Measurement & Method, pp 537 Fink, Arlene (2002). How to sample in surveys, Vol. 7. Thousand Oaks, CA: Sage Publications.

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ANNEXURE
QUESTIONNAIRE

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Questionnaire
I am a final year student of M.B.A. management, I would like to measure the satisfaction level of customers of KOTAK LIFE INSURANCE,. This being a part of my academic requirement. Please answer the following. Your name and details will be kept confidential.

Personal Details: NAME : AGE : SEX :

QUESTIONS

1) What type of IDBI Federal Life Insurance Products have you purchase? Termsurance Plans Lifesurance Plans Incomesurance & Money Back Plans Senior Citizen Plans Childsurance Plans

2) Are you satisfied with these Products? Yes

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3) How will you rate the Products of IDBI Federal Life Insurance?

Excellent Good

Very Good Bad

4) What is the responses of the agents? Excellent Good

Very Good Bad

5) What do you think regarding the personal attention by the by the agents of IDBI Federal Life Insurance towards the customers?

Excellent Good

Very Good Bad

6) What do you think about the returns of different plans of IDBI Federal Life Insurance? Excellent Good Very Good Bad

7) How will you rate the after sale facilities provided by the IDBI Federal Life Insurance? Excellent Good Very Good Bad

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8) Are you satisfied with the IDBI Federal Life Insurance agency/dealer? Yes No

9) Are you satisfied with the different plans of IDBI Federal Life Insurance? Yes No

10) How will you rate the overall plans of IDBI Federal Life Insurance? Excellent Good Very Good Bad

11) Do you think that IDBI Federal Life Insurance is preferred because of its returns? Yes No

THANKYOU

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