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A Study of Consumer Behaviour in Relation to Insurance Products in IDBI
Prepared By:Prachi Shastri,PGDM-IMC, Roll No. 50,K.J. Somaiya Institute of Management Studies and Research, Mumbai.
I, Ms. Prachi Shastri, hereby declare that this project report is the record of authentic work carried out by me during the period from 2nd May, 2014 to 30th June, 2014, and has not been submitted to any other University or Institute for the award of any degree / diploma etc.
Name of the student: Prachi Shastri
Roll No. 50
Certificate from Industry Guide
This is to certify that Mr. /Ms. XYZ, a student of the Post-Graduate Diploma in Management/ PGDM-IB/PGDM-RM/PGDM-FS, has worked in our organization on a project assigned by us. To the best of our knowledge, this report is a product of the students own effort on the project conducted under our guidance and supervision.
Certificate from Faculty Guide
This is to certify that Ms. Prachi Shastri, a student of the Post-Graduate Diploma in Management- Integrated Marketing and Communications, has worked under my guidance and supervision. This Summer Project Report has the requisite standard and to the best of our knowledge, no part of it has been reproduced from any other summer project, monograph, report or book.
Organizational Guide: Abha WankhedeDesignationOrganizationAddressDate
Table of Contents
Chapter No. TitlePage No.
1.2 HISTORY OF INSURANCE13
1.4 A BRIEF HISTORY OF INSURANCE SECTOR IN INDIA16
1.5 INSURANCE SECTOR REFORMS18
1.6 INDIAN INSURANCE MARKET19
2.1ABOUT IDBI FEDERAL LIFE INSURANCE23
2.2 ABOUT THE SPONSORS OF IDBI FEDERAL LIFE INSURANCE24
2.3 COMPANYS VISION, MISSION AND VALUES26
2.4 PRODUCTS OFFERED29
2.5HISTORY OF THE ORGANIZATION30
3DESCRIPTION OF BUSINESS PROBLEM32
3.1DESCRIPTION OF WORK ASSIGNED33
3.2DESCRIPTION OF WORK CARRIED OUT36
4CONCLUSION AND RECOMMENDATIONS45
4.1OBSERVATION AND LEARNINGS46
4 | Page
List of Tables(To be written sequentially as they appear in the text)
Table No. TitlePage No.
3.2.12SUGGESTIONS FOR BETTER PRODUCTS43
3.2.13SUGGESTIONS FOR BETTER FUNCTIONING43
List of Charts
Chart No.TitlePage No.
1.6.1LIFE INSURANCE DENSITY19
1.6.2MARKET SHARE OF INSURANCE COMPANIES20
3.2.1GENDER OF RESPONDENT37
3.2.2AGE OF RESPONDENT38
3.2.4SOURCE OF KNOWLEDGE39
3.2.5POSSESSION OF POLICY39
3.2.6REASON FOR NOT POSSESSING POLICY40
3.2.7COMPANY WHOSE PRODUCTS ARE PURCHASED40
3.2.8MOTIVATION TO BUY FROM THAT COMPANY41
3.2.9CUSTOMER OF IDBI FEDERAL41
3.2.10REASON FOR NOT BUYING IDBI FEDERALS PRODUCTS42
3.2.11REASON FOR BUYING IDBI FEDERALS PRODUCTS42
LETTER OF TRANSMITTAL
Mrs. C. ShanthiIDBI Federal Life Insurance
Dear Maam,As discussed in May 2014, Im submitting the report titled A study of Consumer Behaviour in Relation to Insurance Products in IDBI.This report focuses on bringing into light the attitude of current as well as future consumers of IDBI Federal life insurance towards the insurance products offered by the company.I hope you find this report satisfactory.Yours sincerely,Prachi ShastriK.J. Somaiya Institute of Management Studies and Research,Mumbai- 400077.
I would like to take this opportunity to express a deep sense of gratitude to my industry mentors Mrs. Shanthi Yagyanath and Mrs. Jayamala, IDBI Federal Life Insurance, for giving me proper directions from time to time and constant words of advice. I would also like to thank my coordinator Mrs. Sunitha Ravi, IDBI Federal Life Insurance, for her support and guidance during the course of the project.
I would also like to express my thankfulness to my Course Coordinator, Prof. Isaac Jacob, K.J.SIMSR, for his encouragement during the different phases of the project. Also, I would express my gratefulness to Prof. Abha Wankhede, my project guide from K.J.SIMSR, for sharing her thoughts with me regarding the betterment of the project.
CHAPTER 1- INTRODUCTION
Life is full of risk and uncertainties. Since we are social human beings, we have certain responsibilities too. Indian consumers have big influence of emotions and rationality on their buying decisions. They believe in future rather than present and desire to have a better and secured future. In this direction life insurance services have its own value in terms ofminimizing 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 generate the reasons behind holding a policy. An attempt has been made in this report to study the buying behaviour ofconsumers towards life insurance services.Analyzing consumer behaviour is perceived as cornerstone of a successful marketing strategy.Consumer behaviour is a mental and emotional process 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.
1.1 EXECUTIVE SUMMARY
A Study of Consumer Behaviour in Relation to Insurance Products in IDBI
Prachi ShastriK.J. Somaiya Institute of Management Studies and Research, Mumbai- 400077
June 30th, 2014
Influencing the ways that people act in their daily consumption lives is a concern for researchers in a number of disciplinary areas, including consumer behaviour psychology, sociology and marketing.This project is focused on analyzing the Internal and the External factors which aim at determining the customers buying behaviour towards insurance products of IDBI Federal. It is mainly focused in trying to understand the various factors responsible for the buying decision. Understanding these factors is a critical task. The purchase decision in general is prompt by number of factors viz. Psycho graphical, Economical, Socio Political, Legal and Demographical. There are certain other factors which need to be understood while keeping in mind the investment decisions made by customers, such as, Customer Buying Behaviour, Customer Preferences and Perception, Brand Loyalty etc.
1.2 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 the same thing happen to ones neighbour, the other neighbours must come to help. Otherwise, neighbours 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 travelling 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 ofthe 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 werejettisoned 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 whenthey organized guilds called benevolent societies which cared for thefamilies 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 ofcontracts) 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 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 unde