A SURVEY REPORT ON

CONSUMER BUYING
BEHAVIOUR

Submitted To, Submitted by,

Mahesh Bhingarde Abhishek Roy
PGDIM
ROLL NO-9
(NMIMS)
        ACKNOLEDGEMEMT

I am very thankful to ICICI PRUDENTIAL who has given me

this opportunity to make this project.

I am greatly thankful to MR. HARENDRA PANDEY (MANAGER-

MRPL), who has given me direction and support that how to
complete this project.

I would like to give thanks to our fallow classmates and IT

labs.

I would like to thanks to all other who helped me directly or

indirectly towards completion of my project.

Abhishek Roy

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 Content

1. About
Promoters................................................................
4

2. The Company………………………………………………….5

3. MANAGEMENT TEAM & BOARD OF DIRECTOR……….

11

5. Consumer analysis………………………………………….12

6. Competition analysis……………………………………….14

7. PROCESS/METHODOLOGY OF STUDy…………………16

8. DATA COLLECTIONS………………………………………19

9. DATA INTERPRETATION GENERAL CONCLUSION….21

10. CONCLUSIONS…………………………………………….31

14. Recommendation………………………………………….32

15. QUESTIONER………………………………………………35

16. Reference…………………………………………………...37

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1.a. About Promoters

1.a.a. ICICI Bank

ICICI Bank Limited (NYSE:IBN) is India's largest private sector bank

and the second largest bank in the country, with consolidated total
assets of $121 billion as of March 31, 2008. ICICI Bank’s subsidiaries
include India’s leading private sector insurance companies and among
its largest securities brokerage firms, mutual funds and private equity
firms. ICICI Bank’s presence currently spans 19 countries, including
India

1.a.b. Prudential Plc

Established in London in 1848, Prudential plc, through its businesses in

the UK, Europe, US, Asia and the Middle East, provides retail financial
services products and services to more than 20 million customers,
policyholder and unit holders and manages over £267 billion of funds
worldwide (as of December 31, 2007). In Asia, Prudential is the leading
European life insurance company with life operations in China, Hong
Kong, India, Indonesia, Japan, Korea, Malaysia, the Philippines,
Singapore, Taiwan, Thailand, and Vietnam. Prudential is one of the
largest retail fund managers for Asian sourced assets ex-Japan. Its fund
management business has expanded into ten markets, comprising of
China, Hong Kong, India, Japan, Korea, Malaysia, Singapore, Taiwan,
Vietnam and United Arab Emirates.

For the year ended March 31, 2008, the company garnered Retail New
Business Weighted premium of Rs. 6,684 crores, registering a growth
of 68% over the last year and has underwritten nearly 3 million retail
policies during the period. The company has assets held over Rs.
28,500 crore.

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First Year Premium of Life Insurers for the Period Ended
December, 2007

Premium No. of Policies / Schemes

Sl
Insurer
No.
December Upto Upto Dec, December, Upto Dec, Upto
, 07 Dec, 07 06 07 07 Dec, 06
7 ICICI Prudential
Individual Single Premium 34.67 255.39 253.46 5518 40356 38163
Individual Non-Single
Premium 771.74 3968.52 2276.36 288716 1779137 1106798
Group Single Premium 46.04 203.69 150.95 4 134 123
Group Non-Single Premium 81.37 388.33 269.00 7 271 233

PREMIUM UNDERWRITTEN BY LIFE INSURERS IN INDIA

2006-07
(Rs.In Crores)
First
Year
Sl.No Premiu Renewal Single Total
. Insurer m Premium Premium Premium
29886.3 26337.2
1 LIC 5 71599.28 2 127822.84
2 ING Vysya 440.30 239.54 27.36 707.20
3 HDFC Std.Lif 1316.44 1207.01 332.41 2855.87
4 Birla Sunlife 832.31 893.98 50.42 1776.71
5 ICICI Prulife 4370.61 2750.86 791.52 7912.99
6 Kotak Mahin 553.05 356.58 61.89 971.51
7 Tata AIG 567.84 722.36 76.98 1367.18
8 SBI Life 1717.57 364.64 846.27 2928.49
9 Bajaj Allianz 3084.67 1040.20 1185.12 5310.00
10 Max Newyork 750.51 588.17 161.60 1500.28
11 Metlife 329.04 152.27 11.40 492.71
12 Reliance Life 700.37 72.55 231.74 1004.66
13 Aviva 692.11 425.88 29.23 1147.23
14 Sahara 20.47 8.01 22.53 51.00
15 Shriram Life 89.53 3.00 92.62 185.15

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 16 Bharti AXA 7.77 - 0.01 7.78
Private 15472.5
Total 9 8825.06 3921.11 28218.75
45358.9 30258.3
Total 3 80424.34 2 156041.59

2. The Company

ICICI Prudential Life Insurance Company is a joint venture between

ICICI Bank, a premier financial powerhouse, and Prudential plc, a
leading international financial services group headquartered in the
United Kingdom. ICICI Prudential was amongst the first private sector
insurance companies to begin operations in December 2000 after
receiving approval from Insurance Regulatory Development Authority
(IRDA).

ICICI Prudential Life's capital stands at Rs. 42.72 billion (as of June 30,
2008) with ICICI Bank and Prudential plc holding 74% and 26% stake
respectively. For the quarter ended June 30, 2008, the company
garnered Retail Weighted New Business Premium of Rs. 1,174 crores as
against Rs 810 crores for the quarter ended June 30, 2007, thereby
posting a growth of 45% and has underwritten over 6 lakh policies over
this period. The company has assets held over Rs. 30,600 crore as on
August 31, 2008.

ICICI Prudential Life is also the only private life insurer in India to
receive a National Insurer Financial Strength rating of AAA (Ind) from
Fitch ratings. The AAA (Ind) rating is the highest rating, and is a clear
assurance of ICICI Prudential's ability to meet its obligations to
customers at the time of maturity or claims.

For the past seven years, ICICI Prudential Life has retained its
leadership position in the life insurance industry with a wide range of
flexible products that meet the needs of the Indian customer at every
step in life.

Vision & Values

2.a. Our vision:

To be the dominant Life, Health and Pensions player built on trust by
world-class people and service.

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This we hope to achieve by:
Understanding the needs of customers and offering them superior
products and service
Leveraging technology to service customers quickly, efficiently and
conveniently
Developing and implementing superior risk management and
investment strategies to offer sustainable and stable returns to our
policyholders
Providing an enabling environment to foster growth and learning for
our employees
And above all, building transparency in all our dealings

The success of the company will be founded in its unflinching

commitment to 5 core values -- Integrity, Customer First, Boundary
less, Ownership and Passion. Each of the values describes what the
company stands for, the qualities of our people and the way we work.

We do believe that we are on the threshold of an exciting new

opportunity, where we can play a significant role in redefining and
reshaping the sector. Given the quality of our parentage and the
commitment of our team, there are no limits to our growth.

2. b. Our values:

Every member of the ICICI Prudential team is committed to 5 core

values: Integrity, Customer First, Boundary less, Ownership, and
Passion. These values shine forth in all we do, and have become the
keystones of our success

2. c. Distribution
ICICI Prudential Life has one of the largest distribution networks
amongst private life insurers in India. It has a strong presence across
India with over 2000 branches (including 1,095 micro-offices) and an
advisor base of over 261,000 (as on August 31, 2008).

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The company has 20 bancassurance partners having tie-ups with ICICI
Bank, Bank of India, South Indian Bank, Shamrao Vitthal Co-Op Bank,
Jalgaon Peoples Co-op Bank, Ernakulam District Co-op Bank, Idukki
District Co-op Bank, Ratnagiri Sindhudurg Gramin Bank, Solapur
Gramin Bank, Wainganga Kshetriya Gramin Bank, Aryawart Gramin
Bank, Jharkhand Gramin Bank, Narmada Malwa Gramin Bank, Baitarani
Gramya Bank, Ratnagiri District Central Co-op Bank, Seva Vikas Co-op
Bank, Sangli Urban Co-Operative Bank, Baramati Co-operative Bank,
Ballia Kshetriya Co-Operative Bank, The Haryana State Co-Operative
Bank

2. d. Products
Insurance Solutions for Individuals

ICICI Prudential Life Insurance offers a range of innovative, customer-

centric products that meet the needs of customers at every life stage.
Its products can be enhanced with up to 4 riders, to create a
customized solution for each policyholder.

Savings & Wealth Creation Solutions

Save'n'Protect: is a traditional endowment savings plan that offers

life protection along with adequate returns.
CashBak: is an anticipated endowment policy ideal for meeting
milestone expenses like a child's marriage, expenses for a child's
higher education or purchase of an asset. It is available for terms of 15
and 20 years.
LifeTime Gold: is a unit-linked plan that offers customers the
flexibility and control to customize the policy to meet the changing
needs at different life stages. It offers 7 fund options - Preserver,
Protector, Balancer, Flexi Balanced Multiplier, R.I.C.H and Flexi Growth.
LifeStage RP: is unit linked plan that provides you with an option of
lifecycle-based portfolio strategy that continuously re-distributes your
money across various asset classes based on your life stage. This will
help you achieve the right Asset Allocation to meet your desired
financial goals.
LifeLink Super: is a single premium unit linked insurance plan, which
combines life insurance cover with the opportunity to stay invested in
the stock market.
Premier Life Gold: is a limited premium-paying plan specially
structured for long-term wealth creation.
InvestShield Life New: is a unit linked plan that provides premium
guarantee on the invested premiums and ensures that the customer
receives only the benefits of fund appreciation without any of the risks
of depreciation.

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InvestShield Cashbak: is a unit linked plan that provides premium
guarantee on the invested premiums along with flexible liquidity
options.
LifeStage Assure: a unit linked insurance plan that provide upto 450
% of first year premium guarantee on maturity, with the additional
advantage of a lifecycle based portfolio strategy that allocates the
investor’s money across various asset classes based on his life stage
and risk appetite

Protection Solutions

LifeGuard: is a protection plan, which offers life cover at low cost. It is

available in 3 options - level term assurance, level term assurance with
return of premium & single premium.
HomeAssure: is a mortgage reducing term assurance plan designed
specifically to help customers cover their home loans in a simple and
cost-effective manner.

Education Solutions

SmartKid New ULRP: provides guaranteed educational benefits to a

child along with life insurance cover for the parent who purchases the
policy. The policy is designed to provide money at important
milestones in the child's life. SmartKid plans are also available in
traditional form.

Retirement Solutions

ForeverLife: is a traditional retirement product that offers guaranteed

returns for the first 4 years and then declares bonuses annually.
LifeTime Super Pension: is a regular premium unit linked pension
plan that helps one accumulate over the long term and offers 5 annuity
options (life annuity, life annuity with return of purchase price, joint life
last survivor annuity with return of purchase price, life annuity
guaranteed for 5, 10 and 15 years & for life thereafter, joint life, last
survivor annuity without return of purchase price) at the time of
retirement.
LifeStage Pension: is a regular premium unit linked pension plan that
provides you with a unique lifecycle-based strategy that continuously
re-distributes your money across various asset classes based on your
life stage, eventually providing you with a customized retirement
solution.
LifeLink Super Pension: is a single premium unit linked pension
plan.

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Immediate Annuity: is a single premium annuity product that
guarantees income for life at the time of retirement. It offers the
benefit of 5 payout options.
PremierLife Pension: is a unique and convenient retirement solution
with a limited premium paying term of three or five years, to suit
professionals and businessmen, especially those who require more
flexibility and customization while planning their finances.

Health Solutions

Health Assure Plus: Health Assure is a regular premium plan which

provides long term cover against 6 critical illnesses by providing
policyholder with financial assistance, irrespective of the actual
medical expenses. Health Assure Plus offers the added advantage of
an equivalent life insurance cover.
Cancer Care: is a regular premium plan that pays cash benefit on the
diagnosis as well as at different stages in the treatment of various
cancer conditions.
Cancer Care Plus: is a wellness plan that includes all the benefits of
Cancer Care and also provides an additional benefit of free periodical
cancer screenings.
Diabetes Care: Diabetes Care is a unique critical illness product
specially developed for individuals with Type 2 diabetes and pre-
diabetes. It makes payments on diagnosis on any of 6 diabetes related
critical illnesses, and also offers a coordinated care approach to
managing the condition. Diabetes Care Plus also offers life cover.
Diabetes Care Plus: is a unique insurance policy that provides an
additional benefit of life cover for Type 2 diabetics and pre-diabetics
Hospital Care: is a fixed benefit plan covering various stages of
treatment - hospitalization, ICU, procedures & recuperating allowance.
It covers a range of medical conditions (900 surgeries) and has a long
term guaranteed coverage upto 20 years.
Crisis Cover: is a 360-degree product that will provide long-term
coverage against 35 critical illnesses, total and permanent disability,
and death.
MediAssure: is a health insurance policy that provides assured
insurability till age 75 years, assured coverage for accepted pre-
existing illnesses after 2 years and an assured price for 3 years.

Group Insurance Solutions

ICICI Prudential Life also offers Group Insurance Solutions for

companies seeking to enhance benefits to their employees.

• Group Gratuity Plan: ICICI Prudential Life's group gratuity plan

helps employers fund their statutory gratuity obligation in a scientific

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manner and also avail of tax benefits as applicable to approved
gratuity funds.

• Group Superannuation Plan: ICICI Prudential Life offers a flexible

market linked scheme that provides substantial benefits to both
employers and employees. Both defined contribution (DC) and defined
benefit (DB) schemes are offered to optimize returns for members of
the trust and rationalise cost. Members have the option of choosing
from various annuity options or opting for a partial commutation of the
annuity at the time of retirement.

• Group Immediate Annuities: ICICI Prudential Life realises the

importance of prudent retirement planning. With this in mind, we have
developed a suite of annuity products that not only give you an income
for life but also provide you options to match your needs. In addition to
the annuities offered to existing superannuation customers, we offer
immediate annuities to superannuation funds not managed by us.

• Group Term Plan: ICICI Prudential Life's flexible group term solution
helps provide an affordable cover to members of a group. The cover
could be uniform or based on designation/rank or a multiple of salary.
The benefit under the policy is paid to the beneficiary nominated by
the member on his/her death.

Flexible Rider Options

ICICI Prudential Life offers flexible riders, which can be added to the
basic policy at a marginal cost, depending on the specific needs of the
customer.

Accident & disability benefit: If death occurs as the result of an

accident during the term of the policy, the beneficiary receives an
additional amount equal to the rider sum assured under the policy. If
an accident results in total and permanent disability, 10% of rider sum
assured will be paid each year, from the end of the 1st year after the
disability date for the remainder of the base policy term or 10 years,
whichever is lesser. If the death occurs while travelling in an authorized
mass transport vehicle, the beneficiary will be entitled to twice the
sum assured as additional benefit.

Critical Illness Benefit: protects the insured against financial loss in

the event of 9 specified critical illnesses. Benefits are payable to the
insured for medical expenses prior to death.

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Waiver of Premium: In case of total and permanent disability due to
an accident, the future premiums continue to be paid by the company
till the time of maturity. This rider is available with SmartKid, LifeTime
Plus, LifeTime Super and LifeTime Super Pension.

Income benefit rider: In case of death of the life assured during the
term of the policy, 10% of the sum assured is paid annually to the
nominee on each policy anniversary till the maturity of the rider.

3. MANAGEMENT TEAM & BOARD OF DIRECTOR

Shri K.V. Kamath, Chairman

Mr. Mark Tucker
Smt. Lalita D. Gupte
Mr. Danny Bardin
Mrs. Kalpana Morparia
Shri M.P. Modi
Mr. John Caouette
Shri S.P.Subhedar, (Alternate Director to Mr. Danny Bardin)
Mr. Derek Stott, (Alternate Director to Mr. Mark Tucker)
Ms. Shikha Sharma, Managing Director
Mr. Kevin Wright, Executive Vice President - Sales & Distribution
Ms. Madhavi Soman, Chief - Strategic Initiatives
Mr. V. Rajagopalan, Appointed Actuary
Mr. Sandeep Batra, Chief Financial Officer & Company Secretary
Mr. Saugata Gupta, Chief - Marketing & Service

4. S.W.O.T Analysis

4. a. Strengths

The biggest strength of this origination is;

Money power, which makes them ignorant about the gestation period
Brand image, business experience and innovation product
The agents are very selectively chosen have excellent communication
skill
Service quality which is crux of mission
Larger network branches which is help to customer for payment
Their strategy has been to grow the portfolio large enough so that
there is an in built fund hedge and in market where the portfolio has a
large element of saving rather then protection

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Product is price competitive compare with the competition and its
upfront charge has been always lower since from inspection.
Automatic balance the debt and equity component of the portfolio
every quarter and first to come up with health product (diabetics).
Average age of its policyholder is approx 8 year lower than LIC
policyholder.
Strong agent network that bring 60% of the total premium (lower
commission but high volume)

4. b. Weakness

High target for financial advisor and for sales department

Many competitions in the market offer same product by the title
difference in the premium and offering
Sustainable to risk associated with investment in money market
Try to catch middle lower level people also.
High expenses on advertisement
Most of the plans are too complicated in understanding for simple
person so most of person avoids such type of plan
More than 70% people live in rural area but ICICI Prudential is more
centric in urban area.

4. c. Opportunity

Huge market is literally untapped, out of 320 million insurable markets

only 25% of the people insured
Health insurance and pension scheme, an estimated market potential
of approximately $15 billion
ICICI Prudential should give the insurance coverage both to the parents
and children so that their life should be covered in both cases the
customer do not mind paying some premium for that
India is fast growing market and 80 to 85% people are below age of 45
Leverage the customer base of Bancassurance partner
Strong distribution network
Insurance awareness are increasing in India

4. d. Threats

Player like Bajaj and Birla Sun Life with low premium for same plan
Entry of other private company with equal strong experience and
financial strength of partner making the competition difficult and
saturating the urban market.
Current Govt. policies do not encourage in gross domestic saving. If the
tax liabilities of the service rise the customer will have little money to
invest

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LIC has woken up from sleep and is following competitive strategies. Its
huge surplus in life fund gives a capability to lodge price war
Product differentiation is difficult in market (bancassurance)
Competition is getting keener in couple of year
High opportunity expenses will be in future

5. Consumer analysis

We analyze consumers because; this is the basis for all market

strategies like segmenting, targeting, and positioning. Without an
understanding of customer, it would be impossible for the market to
drive the offer. A consumer’s buying behavior is influenced by cultural,
social and personal factor.

5. a. Cultural factor; -

Culture is fundamental determinant of a person’s needs and behavior.

People acquire a set of value, perception and behaviors through his or
her family and other institution. Indian people want achievement and
success, comfortable efficiency and practicality, freedom and
youthfulness. In other word there are multicultural environment in
India.
Indian loves their family and they want to secure their family from
unnatural event. Indian give first preference to his family after than
others. They do not want to take loan and they want to invest their
money in long-term investment for child education and marriage.
When we say about metropolitan city, dependency on old age on son
is decreasing. People want to accumulate some fund for old age so
ICICI Prudential should concentrate on gratuity or pension plan.
Indian people also affected from sub culture. Urban people want to
take more insurance comparison than rural (due to high per capita
income, insurance awareness, social security, investment purpose, tax
saving purpose). Religion also effect on insurance. ICICI Prudential is
using this thing very well. They use sinduor and marriage in their
advertisement and show that when you marriage from someone, her
all liabilities is your liabilities and we will help you in this situation. We
will make relation as like as sindur (here means long term stable
relationship). In other word ICICI Prudential want to say that we will
cover you at every step in life (sorrow or happiness). Consumer
behavior is also affected from reference group. Firstly, people see that
which insurance is bestseller after that they purchase. They also
influence from agent. People do not concentrate on their need due to
agent’s influence. Social class also affect on consumer behavior. Lower

14
class does not want insurance. Upper lower class wants insurance for
saving purpose. Working and middle class want insurance for
protection and saving purpose and lastly, upper class want to purchase
insurance for investment tax benefit and saving purpose.

5. b. Social factor; -

Consumers are also influenced by social factor for example; reference

group, family, and social role and status. Consumer behavior is firstly
influenced from membership group such as family, neighbor and co-
worker. Insurance is such type of product where people awareness is
very low so people do not very much about insurance. They think,
insurance is only tax saving instrument so they fully dependent on
agent for taking insurance. When agent say about any product, that
time they inquiry from neighbor and co-worker about that product. If
any body suggests that, this product and I have also taken this
product. Individual think that, this product also best for him. He does
not concentrate on his need and requirement.
Secondly, he is influenced by information influences. If he goes to
purchase insurance, he makes enquiry about this product from his
personal sources. He study newspaper and search on Internet and
gather all information related product. If he is satisfied from that
information, he decides to buy insurance. People also influence from
opinion leader, this opinion leader may be Mukhiya, or Surpanch in
rural area or this may be any leader, actor or cricket player in urban
area. If opinion leader say or advertise about any product, people are
influenced from opinion leader because opinion leader keep good
position in society.
Family and household pattern also influence consumer behavior. Due
to less security of individual family, people want to purchase insurance,
but in joint family people give less attention in buying insurance. If all
family are well earning, there are given less attention on insurance in
such family. But if earning member is less and dependent is more in
such type of family insurance is very important. Women want more
security so women are taking main role in purchase decision where,
women influence consumer behavior.

5. c. Personal factor; -

A consumer decision is also influenced by personal characteristics for

example the buyer age and stage in life cycle, occupation and
economics circumstances, personality, self-concept, life style and
value.
When we say about age and life, first is bachelor stage. They are
generally young independent and they are in early stage of his carrier
and earning. They mostly think that they have no need of insurance

15
because in that time they have no dependent. However, some people
have some dream and dependent also. They are in such stage where
they can take more risk so they mostly prefer to invest in ULIP.
Second stage is newly married. In that stage people need and buying
decision is influenced from their future plan and earning capability. If
they have to plan for purchase flat that time, they will need term
insurance. There after stage is one or two children after marriage, they
will be influenced from future need. They will accumulate fund for
children marriage and education, they can be plan time-to-time
vacation. In forth stage, they want to accumulate for retirement.
People want to live alone after old age or in peaceful place so they are
ready to start saving for old age.
Attitude also affect consumer behavior positive attitude (about his life)
person will take pension plan because people think that they will live
more. But negative attitude person will take life insurance because
they worry about their life.

6. Competition analysis

6. a. Threat of intense segment rivalry- Due to high stake of ICICI

Prudential position this segment is good for it and second good factor
is it’s brand value. But when we say about competition in this market,
competition is very tough. We can say that market condition is just like
same as oligopoly means a few number of large firm is providing all
service partially different along line of quality, feature or services. Each
competitor may seek leadership in one of that major attribute and
changing a price for that attribute. For example, ICICI Prudential is
specialist on to attract high net worth or urban population but LIC has
large distribution network so it has specialist in rural segments. But
when we say about population growth, economics growth, or
government policies insurance segment is very attractive because only
25% insurable person are insured secondly 80% population are under
age of 45. Aggressive market condition is in market. Main competitor of
ICICI Prudential is
LIC
Bajaj Allianz
HDFC
Birla Sun Life
LIC has many resources and it has above 50-year experience in
insurance field but ICICI Prudential has only 7 to 8 year experience in
market. However, due to Prudential experience and ICICI Bank brand
value, ICICI prudential has made good position in market. So there is

16
threat as mainly by LIC for ICICI Prudential. Due to this reason price
war, advertisement, and new product innovation will be expensive in
future.

6. b. Threat of new entrance- Due to aggressive competition and high

entry exit barrier, this is not attractive segment for new player. For
entering in insurance field, mandatory capital is 100 crores. Secondly,
foreign stake limited with 26%, third Indian company have no
experience in insurance business. Exit barrier are also very high
because, no company can leave market after entering due to loss
because firstly, 100 crores will be lost secondly, their compensation
(customer or other company) will be very high or more than deposited
money. So in long run, company will try to less their business but they
will not leave market. So this is good factor for ICICI Prudential
because, where entry or exit barrier are high, profit potential are also
high.

6. c. Threat of substitute product- this is not attractive market in view

of substitute goods because there is many substitute in market but
only service style is different. Different insurance company provide at
least same product but presentation is different. In case of lower
substitute (means investment purpose) many product in India for
example, share, mutual fund, fixed deposit. Substitute place a limit on
price and on profit. Bajaj Allianz launch same type of product of ICICI
Prudential but in lower price.

6. d. Threat of buyer’s growing power- in India buyer’s growing power

are increasing because they have more concentrated or organized
towards market. Government has established insurance regulator
(IRDA) in India for growing buyer’s barging power. Due to lowest
switching, buyers are very price sensitive and buyers have many
sources for knowing about different company product. Due to
education buyer can analysis that, which product is good for him. So
due to growing buyers power this segment is not good for new player.

6. e. Threat of supplier’s growing power- Due to oligopoly market

condition insurance company cannot raise price but they can increase
their profit from selling more policies in market. In India, supply-
growing power (agent, broker, bancassurance) are growing due to lot
of company availability in India and this is not good for ICICI Prudential.

7. PROCESS/METHODOLOGY OF STUDY

7. a. Procedure:

The procedure that followed enlisted below:

17
Studying the product
Decision on objective needed to be work on.
Developing Survey instruments
Getting questionnaire filled through interacting with different age
groups, sex, monthly income and occupation.
Finally analyzing the data of various areas and trying to study about
various influence factors.

7. b. Process adopted:

Gaining knowledge about the product:

Reading about the product was the first step undertaken. This gave
not only in depth knowledge about what is been offered by the
insurance but also proved useful while developing the questionnaire.

Steps in the Development of the Survey Instruments

The main instruments required for survey was a well-developed

questionnaire. The questionnaire development took place in a series of
steps as described below:

Research objectives been transformed into

Step 1 information objectives.

The appropriate data collection methods been

Step 2 determined

The information required by each objective is being

Step 3 ermined.

Specific Questions/Scale
Question/Scale Measurement
Measurements format is
been evaluated.
Step
Step 45 developed.

Research objectives been transformed into

Step 6 information objectives.
18
Research objectives been transformed into
information objectives.
 The number of information needed is being
Step 7 determined.

The questionnaire and layout been evaluated.

Step 8

Step 9
Revise the questionnaire layout if needed .

The Questionnaire format been finalized.

Step1
0

7. c. Customer Survey:

The survey is important tool as clear perception of people about the

product can be estimated and known. The need levels of the people
regarding the insurance product been observed through survey. It was
very useful in knowing about the requirements of the people.

Referred to brochures and websites of competitors:

To understand the competitors product brochures and websites of

various insurance were referred and a competitive analogy of all the
rates and necessary features of the Insurance policy is been made. The
table is been attached in the Appendix.

7. d. Research Design:

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A two stage Research been conducted:

• Secondary Research:

Collection of data from websites and catalogues to understand the

product and the charges of the different Insurance Company.

• Primary Research:

A Primary Research been conducted:

The questionnaire was prepared for the companies and following areas
covered:
Distribution Channel of Insurance Company
Consumer profile
Satisfaction level with the current Insurance Company on the basis of
return
Reason for the selection of specific insurance policy and company
Desirable features of the product and risk aptitude

7. e. Sampling Plan:

Elements:
The target population of the study included the general population
above the age of 25 yrs
Sampling design and sampling unit are as follows:
Target population: Adults meeting qualifications-over 25 years, working
class, businessman, personnel having children
Sampling frame- Urban class in the Mumbai region
Sample size: 50
Sampling unit: urban class personnel
Through this we would focus on the following area;
To identify critical factor (internal and external) which influence the
buying behavior of individual,
Why people purchase insurance policy.
To know about mindset of people.
To analysis of customer perception of the quality of product, so that to
take steps to maximization of customer satisfaction.

8. DATA COLLECTIONS

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8. a. Data Collection Plan:
The first of Research consisted of secondary data search from the
following sources:

Catalogues
Websites

For the conclusive research, questionnaires been developed on basis of

secondary data to gather information on the research objective.
I conducted a pilot study to test these questionnaires. In this sample
of 10 people picked up from the target population on convenience
basis, as to determine the limitation and deficiencies in the
questionnaires.
The final draft of the questionnaire (see Appendix) was then prepared
on basis of the observations from the pilot study. These then finally
filled by 50 consumers, for the conclusive study.
Finally, the data collected fed into the data analysis software- SPSS, to
be analyzed using statistical techniques: frequencies, means, t-tests,
Chi square distribution, cross tabs and analysis of variance (ANOVA)
etc.

8. b. Types of Primary Data collected:

1) Demographic /Socioeconomic Characteristics:

Demographic and socioeconomic characteristics sometimes called

“states of being” in that they represent the type of people. The factors
on which we are working are age, sex and occupation. Monthly income
is also an important parameter but it is difficult to verify. Although the
amount of money that an individual earns in a month is an absolute,
not a relative quantity but it is a sensitive topic in our society and it is
difficult to determine.

2) Attitudes/Opinions:

Through the questionnaire we have tried to get hold of individual’s

preference, inclination and requirement from the products that the
insurance company delivers to the customer. Attitude is an important
notion in the marketing literature, since generally it is previewed that
the attitudes are relating to the behavior of individual.

3) Awareness/Knowledge:

They are used in marketing research refers to what respondents do or

do not know about the product.

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4) Motivation:

Through questionnaire have tried to find the hidden need or want of an

individual and have tried to find out that why people buy insurance.

5) Behavior:

Behavior concerns what subjects have done or are doing. Through

made questionnaire I have tried to find out the behavior of the
individuals regarding the product and their responses;
What do you think about insurance?
Why do you have taken insurance police?
Your objective to take Insurance cover is for
What is he looking for in an insurance policy?
Thus, it helps to draw a comparison between the Purchase and the
observed behavior of the individuals.

6) Obtaining the Primary Data:

The data collection was primarily through communication.

Communication involves questioning respondents to secure the desired
information, using a data collection instrument called questionnaire.
The questions were in writing and so were the responses.

9. DATA INTERPRETATION GENERAL CONCLUSION

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 reason to purchase insurance

saving investment
10% 12%

tax saving
26%
security
52%

investment tax saving security saving

Finding:-52 % people say that main reason is to purchase insurance is

family security 26 % people purchase insurance for tax saving, 12 %
buy insurance for investment and lastly 10% buy it for discipline
saving. So majority think/buy
insurance for security (52%).

objective behind it

social relaxation
6%
cover liabilities
34%

life stage needs

40%

fear
20%

social relaxation life stage needs fear cover liabilities

Finding:-40% votes has come for life stage need, here people think
that insurance is goods tools for fulfilling time to time need due to
compulsory saving (i.e. Child education), some people invest in
insurance for cover liabilities, means if a individual faces 3D’s (death,

23
deceases, disability) that time who will pay EMI/loan. So 34% votes has
comes for cover liabilities, only 20% people buy insurance due to fear;
means insurance awareness is increasing, In India because approx 74%
people are thinking about life stage need and cover liabilities. Only 6%
people agree that insurance give social relaxation.

criteria of satisfaction on the basis of income

dissatisfied very satisfied

13% 10%

not much satisfied

28%
satisfied
49%

very satisfied satisfied not much satisfied dissatisfied

Finding:-Out of 100% people 10% have very satisfied from the return
of their policy and 49% are only satisfied. On the other hand , 28%
people are not much satisfied from their policy return and 13% people
fell dissatisfaction. So for the attraction of 41% of people, Insurance
Company
have to need to concentrate that, how to give/increase return to the
policy
holder.

24
 criteria for selecting insurance company

100%

2 2 2 2
80%
4
no of people in %

60% 4 2 2
realibility
service
40%
6 2 income

6 5 4 policy scheme
20%
3
0%
25-30 30-35 35-40 40-45 45-60

realibility 2 2
service 2 4 2
income 4 2 2 2
policy scheme 6 6 3 5 4

age

Finding:-Here all age of people give preference to choose insurance

company on the basis of policy scheme firstly, and then second
selection base is income, third chosen criteria is service and last
criteria of chosen of insurance company is reliability and
creditworthiness. So on the basis of this survey we can say that people
mainly give importance of chosen an insurance company is what type
of policy Scheme Company has, means policy fulfill individual need or
not.

25
 investment age/income
100% 0 0 0
1 3 1
90% 3
1 0 1 1
80%
0
70% 6 1
2 0
3
% of people

60%

50% 1
5 4 4
40%
2 0
30% 2
20%
2
1 1 1
10% 5 1
1 1 1
0%
25-30 30-35 35-40 40-45 45-60

other 0 0 1 0 1
equity 1 3 1 3
pension 1 0 0 2 0
insurance 3 6 1 4 1
mutual fund 2 5 4 2 0
gold 1 2 1 1 0
real estate 1 5 1 1 1
age

Finding:-Today mainly insurance company provide facility of insurance

and pension, and in this survey all age group give preference to invest
in insurance and pension due to discipline saving (income-
saving=consumption) and post tax benefit. Then they give preference
to mutual fund due to earn income from market at the low risk then
they give preference to real estate, equity, gold and other. After age of
45 then do not want to invest in equity due to high risk. So we can say
that; due to low risk and stable income instrument, people give to
prefer investment in insurance and pension.

26
 purpose for buying life insurance

for opposite for old age

circumstances saving

23% 23%

for fullfillment of
for family needs
different needs
29%
25%

for old age saving for family needs for fullfillment of different needs for opposite circumstances

Finding:-People invest in insurance due to four reason i.e. old age

saving, family needs, time to time for fulfillment of different need, and
lastly for opposite circumstances. In this survey, people first purpose to
investment in insurance is family need (29%), then second purpose is
fulfillment of different needs (25%), and lastly they give equal
important to old age saving and opposite circumstance (i.e. disability
and deceases).

27
 which type of policy is popular amoung people

45-60
3 1

40-45
7 4 3
w hole life
35-40
6 1 1 1 endow nment
age

ULIP
epuity
30-35
5 6 1

25-30
1 4
0 2 4 6 8 10 12 14 16

no of people

Finding:-Above graph show that majority of people have invested in

whole life insurance plan, after that endowment and ULIP is popular
among people. People are giving last preference to invest in equity.
Means till now in India people take less risk. They firstly give
preference to family and security of money after that return.

28
 which factor is more important

4
no of customer

0
25-30 30-35 35-40 40-45 45-60

brand 2 5 3 3 2

policy scheme 3 5 2 5 2

relationship 1 2 1 2

service 1 1 1 1

age

Finding:-For time of buying insurance policy mainly peoples (all age

group) consider two things equally, first brand and second policy
scheme, after that they give preference to relationship and they think
about service. In another word policy scheme do main role in selection
of insurance company (above mention) and policy scheme.

29
 where people like to purchase policy

Series1

25
24

20

15
14
no of peole

10

5
4

broker agent direct company other channel

distibution channel

Finding: - Out of 42 people, 24 people give preference to purchase

from agent (more than half people), another 14 person give preference
to buy insurance direct from company, and lastly 4 people would like to
buy insurance through broker. With the help of above chart we can say
that agent or tied agency is most popular distribution channel in
insurance field.

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 mode which people prefer to pay premium

100%
90%
80%
70%
% of people

60% monthly

50% half yearly

40%
annually
30%
single
20%
premium
10%
0%
2 to 3 Lakhs 3 to 5 lakhs 5 to 7 lakhs 7 to 10 lakhs abobe 10
p.a p.a p.a p.a lakhs
income

Finding:-When we say about premium mode, all income groups give

preference to pay premium in annual mode, after that half yearly
premium pay mode is their second option, third option is monthly
premium, and lastly very few person (above 10 lakhs) want to pay
premium in single mode.

Insurance buying decision influence by

brand &
advertisment
24%
family
41%

professonal &
trade union
14% friends &
neighbour
21%

family friends & neighbour professonal & trade union brand & advertisment

31
Finding:-In insurance mostly people’s buying decision (41%) influence
by their family, means they take insurance according to their family
needs in another word they insurance is taken because after death of
earning person family don’t feel insecure. After that their buying
decision influence from brand and advertisement (24%), due to
advertisement insurance awareness ratio increase in India. Lastly they
influence from friends & neighbor (21%), and professional & trade
union (14%).

most influence factor in taking insurance

24
25

20

15 13
no of people

10

5 3 3

0
death disabilities diseases all
Series1 13 3 3 24
factor

Finding:-Out of 43 people, 24 people think that 3D’s (death, diseases,

disabilities) do main role in taking insurance, or all 3 factor are most
influence factor in taking insurance. After that 13 people believe that
only death factor is most important influence factor, which does main
role in buying insurance. Only few people think that disabilities and
diseases also influence buying behavior separately.

32
 some factor, which increase attractiveness of insurance

other bonus
15% 12%

return depend
on market
22%
guarenteed
bonus
51%

bonus guarenteed bonus return depend on market other

Finding:-51 % people think that guaranteed bonus could increase

attractiveness of insurance among public, and 49% people think that
bonus and return, which depend on market can also increase
attractiveness insurance among people.

10. CONCLUSIONS

Questionnaire Analysis

The important factor, which has been recognized from the data,
collected analysis regarding the life insurance buying behavior of
individual are that, people give most important to their security, so
other factors (saving, investment and tax saving) increases
attractiveness of insurance among people. Due to security reason,
term insurance is very popular among people.
Insurance give help to fulfill life stage need i.e. child marriage and
education. People think that insurance is good financial tool to face
influence and accumulating fund (due to compulsory saving). Mindset
is changing, now people take insurance according to their need and not
due to their fear, they understand their needs. So due to this reason
now people first concentrate on policy scheme and brand, when they
are going to choose Insurance Company and policy.
Whole life policy is popular due to family need, endowment policy is
popular due to life stage need (money back policy) and ULIP is popular
due to old age saving and fulfill different life stage need. In insurance,

33
relationship and service is also important, so mostly people want to
buy insurance direct from company and agent, because agent and
brand fulfill relationship and service need.
Premium mode also influences buying behavior of customer. Every
income group likes annual and half yearly mode. Insurance buying
decision is mainly influenced by family. Due to brand and
advertisement (aggressive) people are aware about insurance and they
are changing their mindset towards it. Now people know that it is
important for everyone and it gives us protection from 3d’s (death,
disabilities, and diseases), approx 80% people accept this fact. More
than half of the people agree that guarantee bonus will increase the
attractiveness of insurance, because in India people do not take more
risk and more important they want to secure towards safety of their
money.
Network reach and visibility of Insurance is a very important criterion
for the customer while buying an insurance policy. We can also
conclude from our analysis that network reach in terms of Branches is
directly proportional to the market share in case of Private Players.

11. Recommendation

1) Insurance policy gives good return but it cannot compete with

other financial tools (i.e. equity). So this is basic need to increase
return in the field of insurance sector.
2) Due to AIG (it was going to be insolvent) and deflation financial
environment, mostly people think that LIC is better than other
private insurance company (due to Government protection). So
in this time private company needs to know that how to win
people’s belief.
3) There are lot of alternative distribution channel in insurance
industry, but due to less awareness of the people they do not
know/like to buy insurance from such type of alternative channel
i.e. bancassurance, NGO’s. So there is some need to increase
awareness of such type of alternative channel among public.
4) Policy scheme is main factor to choose insurance company. If
insurance companies give more concentration on policy scheme
then they can compete with another financial tool in better way
(i.e. equity and mutual fund).
5) In India people think that insurance is tax saving and protection
tool, and not investment tool. If insurance company increase
awareness among public, that insurance is good alternative

34
 saving and investment tool, this will do work as a value added
service which will increase penetration of India.
6) Now only product knowledge is not sufficient for selling
insurance, some thing should be added up in training program
(age/front liner) i.e. human behavior, CRM, knowledge of another
financial tools, communication program, and especially how to
improve way of delivery.
7) In insurance, process is too much time taking, when we compare
to other financial tools, so process work should be less, effective
and flexible.
8) People are not much aware of alternative policy scheme (health,
diabetics), so there are need to increase awareness of such type
of policies among people.
9) Mostly, people are not satisfied from the post service of
insurance companies due to dependence on agents or no
knowledge about process, so there should be need to increase
awareness about self service and awareness among people by
training and advertisement.
10) Insurance is long term contract and saving tool, after a time
people feel less interested towards it, so time to time motivation
is important that they are doing a good job.

35
\

Survey of life insurance buying behaviors

Name:______________________________________ Age……..

Occupation: 1. Service 2. Business .3 Self employed

4.Retired

Income category: a. 2 to 3Lac /p.a . b. 3 to 5 Lac/p.a

c. 5 to 7Lac/p. a
d. 7 to 10Lac /p.a
e. Above 10Lac /p.a

Q1. What do you think about insurance?

Ans. …………………………………………………………………….

Q2. Why do you have taken insurance police?

a. Investment b. tax saving c. security d. discipline saving

Q3. Your objective to take Insurance cover is for

a. Social relaxation b. life stage needs c. fear d. cover liabilities

Q4. Which criteria do you apply for selecting insurance company?

a. Policy scheme b. income c. service d. reliability

Q5. Are you satisfied with the return on investment, which you are getting
from your policy?
1. 2. 3. 4.

36
Very satisfied satisfied not much satisfied dissatisfied

Q6. Where do you have invested in?

a. real estate b. gold c. mutual fund d. insurance
e. pension g. equity h. other

Q7.which type of insurance policy do you want to entertain with increase in

return?
a. whole life policy (5 to 6 % low risk) b. endowment (9% moderate)
c. ULIP (>15% high risk) d. equity (very high risk)

Q8. What is your purpose for buying insurance policy?

a. for old age saving b. for your family needs
c. time to time for fulfill different need d. for opposite circumstances

Q9. What is the importance of your family in your life?

1. 2. 3. 4. 5.
very important important some what not very not at all
Important important important

Q10. How will you prefer to buy insurance policy?

a. Through broker b. direct from company c. through agent
d. other (bancassurance etc.)

Q11. What will you more attract in insurance?

a. bonus b. guaranteed bonus c. return depend on market
d. other (if other please specify)-………………………………….

Q12. Which will give you preference in buying a insurance policy?

a. brand b. policy scheme c. relationship (agent) d. service

Q13. What mode would you prefer to pay premium?

a. single premium b. annually c. half yearly d. monthly

Q14. In buying insurance policy, your decision is influenced by

a. family b. friends & neighbors
c. professional & trade union group d. brand & advertisement

Q15. Amongst the following which one is most important for which you
would be tempted to secure or take insurance?

37
 a. death b. disability c. diseases d. all

Q16. Your experience with your existence insurance company

Answer………………………………………………………………………
……………………………………………………………………………

Q17. Your suggestion (to improve insurance sector)

Answer………………………………………………………………………
……………………………………………………………………………..

Q18. Would you like to receive a summary report of this survey.

No, thank you
Yes, Send to my email address……………………
Address:______________________________________________________
____

Signature-……………..

38
Reference:
Books; Marketing Research
Marketing and Management
Sales Management
Customer Relationship Management
Class Notes

Web site; www.google.com

www.wikipedia.com
www.iciciprulife.com
www.pgpmiflyhigh.com
www.marketresearch.com
www.irda.org

39