Subjects Covered Pages

Objective of the project

Methodology

Sampling

Limitations

Definition of insurance

Functions of insurance

Indian insurance industry

Changing perception of customers

Insurance and economy

Questioner

Conclusions and findings

Recommendations
 Objective of the project
Main objective of the project is to find out the buying and non buying behavior of
client and evaluate them in current scenario. Project is about the study of behavior
of client. Conclusion of this project can give an idea of strategies of different
companies which may be helpful to the company. Now days all the insurance
companies in India are trying to establish themselves in the market. They are
introducing innovative marketing strategies to survive in the market. Many other
private companies are looking to enter in the Indian insurance market .so it is very
essential to a company to understand the client’s needs, wants and expectations
towards the company and so they have to take these steps
• Recruiting their advisors to spread awareness among peoples
• To make their advisors active
• Well educated and capable employee in the agency
• Targeting the right and potential customers
• Differentiating from other companies
This study consists of to find out the several things in buying and non
buying behavior of a client like-awareness regarding the policy, reasons of
purchasing a policy, what are their centers of influence while purchasing a
policy, impact of market in insurance industry. And this study helps ICICI-
PRUDENTIAL to know the behavior of a customer and customers opinion
about ICICI PRUDENTIAL.

Methodology
Research is totally based on primary data. Secondary data can be used only for the
reference. Research has been done by primary data collection, and primary data
has been collected by meeting with the several peoples. Data collection has been
done through by giving structured questioner. Research has been done after 15
people’s opinion. This study will be based on judgment sampling and this research
is skewed to organization level. This is an exploratory type of research. And this
research needs further study also Research is a kind of pilot study.

Sampling

Sample size has been taken by judgment sampling. Judgment sampling is a process
in which the selection of a unit, from the population is based on the pre judgment.
This research requires the survey of different peoples in AGRA city. So the
selection of unit for this research has been judged by the researcher. Sample size
for this research is 15.

Limitations
• Time limitation
• Research has been done only in Agra.
• Possibility of Error in data collection.
• Possibility of Error in analysis of data due to small sample size

2. Introduction
The story of insurance is probably as old as the story of mankind. Tendency of a
human being to secure themselves against loss and disaster has been from the
starting of world. They sought to avert the evil consequences of fire and flood and
loss of life and were willing to make some sort of sacrifice in order to achieve
security. Though the concept of insurance is largely a development of the recent
past, particularly after the industrial era – past few centuries – yet its beginnings
date back almost 6000 years as per records.
Insurance business is divided into four classes:
• Life Insurance
• Fire
• Marine
• Miscellaneous Insurance.

Insurance provides:
• Protection to investor.
• Accumulation of savings.
• Channeling these savings into sectors needing huge long term investment.

Functions of insurance
• Provide protection: The primary function of insurance is to provide protection
against future risk, accidents and uncertainty. Insurance cannot check the
happening of the risk, but can certainly provide for the losses of risk. Insurance
is actually a protection against economic loss, by sharing the risk with others.

• Collective bearing of risk: Insurance is an instrument to share the financial

loss of few among many others. Insurance is a mean 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.

• Assessment of risk: Insurance determines the probable volume of risk by

evaluating various factors that give rise to risk. Risk is the basis for determining
the premium rate also.

• 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.

• Small capital to cover larger risk: Insurance relieves the businessmen from
security investments, by paying small amount of premium against larger risks
and uncertainty.

• Contributes towards the development of 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.

• Means of savings and investment: Insurance serves as savings and

investment, 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 also, people 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.

INTRODUCTION TO THE INDUSTRY

THE HISTORY OF INDIAN INSURANCE INDUSTRY

Life Insurance

In 1818 the British established the first insurance company in India in Calcutta, the

Oriental Life Insurance Company. First attempts at regulation of the industry were

made with the introduction of the Indian Life Assurance Companies Act in 1912. A

number of amendments to this Act were made until the Insurance Act was drawn

up in 1938. In 1956, the market contained 154 Indian and 16 foreign life insurance

companies. Business was heavily concentrated in urban areas and targeted the

higher echelons of society. “Unethical practices adopted by some of the players

against the interests of the consumers” then led the Indian government to

nationalize the industry. In September 1956, nationalization was completed,

merging all these companies into the so-called Life Insurance Corporation (LIC). It
was felt that “nationalization has lent the industry fairness, solidity, growth and

reach.”

Some of the important milestones in the life

insurance business in India are:

1912: The Indian Life Assurance Companies Act enacted as the first statute to

regulate the life insurance business.

1938: Earlier legislation consolidated and amended to by the Insurance Act with

the objective of protecting the interests of the insuring public.

1956: The market contained 154 Indian and 16 foreign life insurance companies.

1994: insurance sector invited private participation to induce a spirit of

competition among the various insurers and to provide a choice to consumer

1997: insurance regulatory and development authority (IRDA) was set up as the

felt the need that provides greater, autonomy to insurance companies to improve

their performance

2000: IRDA starts giving license to private insurers like—ICICI PRUDENTIAL,

HDFC STANDARD.

2007: first insurance portal www.insurancemall.in set up by an Indian insurance

broker, Bonsai insurance broking pvt ltd.

General Insurance
The General Insurance industry in India dates back to the Industrial Revolution and

the subsequent increase in trade across the oceans in the 17th century. As for Life

Insurance, the British brought General Insurance to India, and a similar path was

followed in the development of this industry. A number of private companies were

in existence for years and years until, in 1971, the Indian Government decided that

the public interest would be served by nationalizing the industry, merging all the

107 companies into four companies, depending on the sort of business transacted

(Marine, Fire, Miscellaneous). These were the National Insurance Company Ltd.,

the Oriental Insurance Company Ltd., the New India Assurance Company Ltd., and

the United India Insurance Company Ltd. located in Calcutta, New Delhi, Bombay

and Madras respectively. The General Insurance Corporation (GIC) was set up in

1972 as a ‘holding’ company, having these four companies as its subsidiaries.

Some of the important milestones in the general insurance business in India

are:
1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact

all classes of general insurance business.

1957: General Insurance Council, a wing of the Insurance Association of India,

frames a code of conduct for ensuring fair conduct and sound business practices.

1968: The Insurance Act amended to regulate investments and set minimum

solvency margins and the Tariff Advisory Committee set up.

1972: The General Insurance Business (Nationalization) Act, 1972 nationalize the

general insurance business in India with effect from 1st January 1973. 107 insurers

amalgamated and grouped into four companies viz. the National Insurance

Company Ltd., the New India Assurance Company Ltd., the Oriental

Insurance Company Ltd. and the United India Insurance Company Ltd. GIC

incorporated as a company.

MAJOR PLAYERS IN THE INSURANCE

INDUSTRY IN INDIA

• Life Insurance Corporation of India (LIC)

 • General Insurance Corporation of India (GIC)

BANK OWNED INSURERS

ICICI prudential-
HDFC Standard life
ING Vysya
MetLife
OM Kotak

INDEPENDENT INSURERS
Aviva
Birla sun life
Bajaj Allianz
Max New York life
Tata AIG.
Major international insurers are- Prudential and Standard
life from UK, Sun life of Canada, AIG, MetLife and New York life of the U.S.

CONSUMER BEHAVIOR BEFORE

2000
Before 2000 there was only one company who deals in insurace and that one
is LIC, because that was the only player and the goverment opperated company.
People only know about LIC and there were no option in front of public.and in
before 2000 people were not so aware about insurance,whatever was said by the
agent of LIC people belived on that. Indian consumers were at receiving end.
Insurance Product was underwritten and was practically forced onto consumers on
a “Take-it-As-it-basis”.before 2000 consumer were followed this behavior
1.due to the reason of monopoly people buy only LIC’s product.
2. because people were not so aware about insurance they think that insurance is
only for rich persons,thats why very few persons were having insurance
3. private insurance companieswas not in the market therefore,consumer was
not aware of competitiveness of market.
4. advertising tools were not so much popular at that time.
5. due the reason of monopoly of LIC people were loyal to the company.

CHANGING BEHAVIOR OF
CONSUMER

As insurance sector is becoming more and more competitive the consumer

are changing their trends according to the situation.
This survey reveals the main trends in consumers buying or non buying
behavior.
The profile of typical insurance customer is taking new and definite shape
and one another thing is also clear in this scenario that now the customer is
becoming more and more aware about the insurance, consumer can gets any
information about insurance/insurance policy/insurance company through
several sources like- internet, television and insurance agents.
 From all the information about insurance, client is becoming more price
sensitive, bargainer, self sufficient and less loyal. From the following
pictorial presentation we can understand the changing behavior of consumer
(data is from my survey).

According to this graph following things comes in front. And these are

1).87% consumer’s wants less formality in paper work and in other things
they want to do work fastly.

2).78% customers’ wants that company should become more active on their
problems, means company should show their priority towards the client.

3).69% clients are price sensitive, means they think prices are plays
important role while purchasing insurance products

4).52% clients’ thinks that loyalty towards company is not important.

Whatever company provides them better solutions they show their faith in
that one.

5).92% consumers get information about insurance products from several

sources except insurance companies and agents, because before investing
they want satisfaction for that product.

In historic day’s customers looking at insurance products as a life cover

which can provide security against any unacceptable events, but now customers
look at insurance products as an investment as well as life cover. So today’s
customers wants good return from the insurance companies. The Indian customer’s
forms the pivot of each company’s strategy.

Investment of Indian household savings (as a % in

different sector)

Source: - www. Aviva

India. Coms

IMPACT OF INSURANCE INDUSTRY IN

MARKET
• Indian economy is growing in reference to global market. Business of
insurance with its unique features has a special place in Indian economy.
• It is a highly specialized technical business and customer is the most concern
people in this business, therefore this business is able to spur the growth of
infrastructure and act as a catalyst in the overall development of Indian
economy.
• The high volumes in the insurance business help spread risk wider, allowing
a lowering of the rates of the premium to be charged and in turn, raising
profits. When there is a bigger base, the probabilities become more
predictable, and with system wide risks balanced out, profits improve. This
 explains the current scenario of mergers, acquisitions, and globalization of
insurance.
• Insurance is a type of savings. Insurance is not only important for tax
benefits, but also for savings and for providing security. It can be serving as
an essential service which a welfare state must make available to its people.

IMPACT OF CURRENT MARKET IN INSURANCE

INDUSTRY
Now the whole economy of world is in crisis India is also suffering with this,
then how it can be possible that insurance industry will not be affected by this. For
the first nine months of 2008, there is a forecasting an 8% decline in the industry’s
capital base due to investment write-downs and underwriting losses. While
declining capital may precipitate a few downgrades of individual companies, we
don't think it’s likely that a property/casualty insurer will fail, unless there is a
further deterioration in the value of investments or a major catastrophic event in
the fourth quarter.
Overall, the insurance industry is strong and well capitalized; thus far, it
seems to be weathering the storm. But the landscape may look quite different
when the storm is over. The crisis is affecting both the liability and the asset sides
of company balance sheets, but the degree of impact varies significantly by
industry sector and individual company. Companies that entered directly into credit
guarantees of one form or another will be hardest hit by the subprime crisis.
Companies may also face write-downs and losses on their investments in failed
financial institutions. However, since insurers generally do a good job of
diversifying their investments, these losses are not likely to threaten any individual
company’s solvency.
 DATA ANALYSIS
AND
INTERPRETATION
➢ DATA GIVES OPINION OF RESPONDENTS ABOUT INSURANCE COMPANIES

NO.OF
COMPANY’S NAME SHARE (%)
RESPONDENT

LIC 6 40
ICICI
4 26.8
PRUDENTIAL/LOMBARD
HDFC 3 20
RELIANCE LIFE
1 6.6
INSURANCE
BIRLA SUN LIFE 0 0
MAX NEW YORK LIFE
1 6.6
INSURANCE
TOTAL 15 100

Interpretation- 1).from this dig ram it shows that LIC is chosen by 40% people as most
reliable company.
2).ICICI-PRUDENTIAL is most chosen company among all the private companies. It’s share is
26.8%

➢ DATA SHOWS PEOPLES HAVING INSURANCE

RESPONSE NO. OF SHARE (%)

RESPONDENTS
Yes 12 80
No 3 20
INTERPRETATION: 1).This data shows that out of 15 people 12 people have policies. It
means 80% people have policies.

2).20% people don’t has policies on their own names they have their policies on their spouses or their
children names.

➢ DATA PROVIDES NUMBER OF INSURANCE POLICY TYPE RESPONDENTS

POLICY TYPE NO. OF SHARE (%)

RESPONDENTS
LIFE POLICY 9 60
NON LIFE POLICY 6 40
BOTH 8 53.3

INTERPRETATION: 1).60% of people has life insurance policy. They have their policies either
in their names or in their family member’s name.

2). 40% people have non life policies but most of them policies are on vehicles.

3).out of 15, 8 persons has both policies means they are having life or non life both policies.

➢ DATA GIVES BENEFITS OF INSURANCE PERCEIVED BY RESPONDENTS

BENEFITS SHARE (%)

Cover Future Uncertainty 25

Tax Deductions 40

Future Investment 30

Other 5
INTERPRETATION:- 1). 40% people purchase insurance for tax deduction, mostly

those people gave this option who are having their own buisness.
2). 30% people buying insurance as a future investment , mostly service men gave
this option.
➢ DATA PROVIDES FEATURES OF INSURANCE POLICY THAT ATTRACTED
RESPONDENTS

FEATURE SHARE (%)

Money Back Guarantee 25

Larger Risk Coverance 23

Easy Access to Agents 2

Low Premium 34

Company’s Reputation 15

Any other 1

INTERPRETATIONS:-1). 15% peoples purchase policy as per company’s

reputation.
2).34% people purchase policy where they have to pay less premium and they get
maximum future benefit.
3).25% people invest their money where they have assurance that their money will
be returned and they also get profit.

➢ DATA SHOWS BUYING PROCESS OF THE PEOPLE

BUYING PROCESS SHARE (%)

Agent 24
 Bank 32

Direct marketing 19

internet 25

INTERPRETATION: 1). Mostly people purchase their policy means 32% buys
from bank. It shows that mostly bank who are involved in insurance business sell
their policy to their clients.
2).25% people purchase through internet, it means public is aware about new tools
of purchasing policies.

➢ DATA SHOWS INFLUENCE BEHIND FOR PURCHASING

INSURANCE

INFLUENCE SHARE (%)

Relatives 12

Neighbours 13

Internet/Television 65

others 10

INTERPRETATION:- 1)
➢ DATA SHOWS SATISFACTION OF RESPONDENTS WITH RESPECT
TO POLICY/INSURANCE COMPANY
RESPONSE SHARE (%)

Satisfied 64

Not satisfied 36

INTERPRETATION:-1).

CONCLUSION
Our exhaustive research in the field of Life Insurance threw up some intresting

trends which can be seen in the above analysis. A general impression that we

gathered during Data collection was the immense awareness and knowledge among

people about various companies and their insurance products. People are beginning

to look beyond LIC for their insurance needs and are willing to trust private players

with their hard earned money.

People in general have been impression by the marketing and advertising

campaigns of insurance companies. A high penetration of print, radio and Television

ad campaigns over the years is beginning to have its impact now.

Another heartening trend was in terms of people viewing insurance as a tax saving

and investment instrument as much as a protective one. A very high number of

respondents have opted for insurance for such purposes and it shows how

insurance companies have been successful to attract public money in recent times.

BIBLIOGRAPHY

1. BOOKS/MAGAZINES REFFERED:
➢ Books published by INSURANCE INSTITUTE OF INDIA
➢ LIFE-INSURANCE, by Mc GILL
➢ INSURANCEWATCH.
➢ MONEYOUTLOOK.
2. WEBSITES REFFERED:

➢ WWW.ICICI PRUDENTIAL.COM

➢ WWW.CIFAINSURANCE.COM
➢ WWW.INSURANCE.IND.COM
3. REPORTS/ARTICLES REFFERED:

REPORT: ISSUES & CHALLENGES FACING THE INSURANCE INDUSTRY….

Dec2007.

REPORT: IMPACT OF MARKET:DEC 2008

 QUESTIONARE

Name-

Age-

Occupation-

Contact no.-

The following questionnaire is for the purpose of our research

project as a part. It is assured from us that any information given
by the individual will not be disclosed by any means. With this
assurance I expect accurate data from individual to help me for
my project.
______________________________________________________________________________

1). ARE YOU EMPLOYED?

YES NO

If YES, only then proceed

2).WHICH INSURANCE COMPANY YOU THINK IS MOST RELIABLE AND CAN BE

BENIFICIARY FOR YOU? (any one)

 A. LIC

B. ICICI-PRUDENTIAL/LOMBARD

C. HDFC STANDARD LIFE INSURANCE

D. RELIANCE LIFE INSURANCE

E. BIRLA SUN LIFE INSURANCE

F. MAX NEW YORK LIFE INSURANCE

3). DO YOU HAVE ANY INSURANCE POLICY

YES NO

If YES, mention the name of company

4).WHICH KIND OF INSURANCE POLICY DO YOU HAVE?

A). LIFE POLICY B).NONLIFE POLICY

C).BOTH

5). FOR HOW MANY YEARS DO YOU HAVE INSURANCE POLICY?

(Please Tick)

a) <5Yrs b) 5-10 Yrs c) 10-15 Yrs d) Any Other______

6).ACCORDING TO YOU WHAT ARE THE BENEFITS OF INSURANCE

POLICY? (Rank them)

A) COVER FUTURE UNCERTAINITY

B) TAX DEDUCTIONS
C) FUTURE INVESTMENT
D) ANY OTHER
7).WHAT PARAMETERS YOU WATCH WHILE PURCHASING A INSURANCE
POLICY?

A) LOW PREMIUM
B) LARGER RISK COVERANCE
C) MONEY BACK GUARNTEE

D) REPUTATION OF COMPANY

E) EASY ACCESS TO AGENTS

F) ANY OTHER

8).FROM WHERE YOU PURCHASE A INSURANCE POLICY?

A).AGENT
B).BANK

C).DIRECT MARKETING

D).INTERNET

9).DO YOU REALLY THINK INSURANCE POLICY COVER IN TODAY’S SCENARIO

IS NOT ESSENTIAL?

10).ARE YOU SATISFIED WITH YOUR INSURANCE POLICY/INSURANCE

COMPANY

11).WITH WHOM’S INFLUENCE YOU PURCHASE YOUR POLICY

A).RELATIVES

B).NEIGHBOURS

C).INTERNET/TELEVISION

D).OTHER
12).DO YOU PAY YOUR PREMIUMS ON TIME?
A).YES B).NO

13).WHAT IS THE BEST TOOL TO INVEST YOUR MONEY?

a) FIXED ASSETS

b) BANK DEPOSITS

c) JEWELLERY

d) SECURITIES, i.e. Bonds, MFs

e) SHARES

f) INSURANCE

THANKYOU