Vaibhav Idbi Final

Factors Determining Buying Behavior of Consumers While Purchasing Life Insurance
TABLE OF CONTENTS
SL. NO. Particulars

1 2 2.1 2.2 3 3.1 3.2 3.3 3.4 3.5 4 4.1 4.2 4.3 4.4 4.5 5 5.1 5.2 6 6.1 6.2 7 8 9 10 11 12 12.1 13 Executive Summary Introduction Literature Review Buying Behavior Industry Overview Structure of the Industry Why do we take Insurance policy What is Life and General Insurance Insurance Industry in India Global Scenario Company Overview About IDBI Life Insurance Co Ltd Product Profile Vision, Mission and Values S.W.O.T Analysis Organizational Chart Project Profile Objectives of Study Methodology Analysis Sample Distribution Factor Analysis Findings Recommendation Conclusion Learning Outcome Limitations Annexure Questionnaire References TABLE AND CHARTS Table No. 1 2 3 4 Particulars Structure of the Company Market Share Organizational Chart Sample Distribution (Pie Charts)
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2 3 3 5 9 9 10 11 14 25 31 31 34 36 37 39 42 42 42 44 44 49 55 57 59 61 62 63 63 68
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EXECUTIVE SUMMARY
Our Internship in IDBI Federal Insurance Co Ltd. Kick started on 23rd April 2011.We started our training session on 25th April. The training was imparted to give us in depth knowledge regarding the product, Incomesurance and the different sales techniques to pitch for our prospective clients.
The work assigned to me was to achieve a sales target of 1.5 lakhs in terms of premium amount collected. I managed to make total sales of 1.15 lakhs. While making these sales I got a chance to meet many different people from diverse backgrounds and occupations to discuss on insurance related topics. Along with this I prepared my report titled Factors determining Buying Behavior of consumers while purchasing Life Insurance. Buying behavior is a vast and important marketing subject. The primary objective of my project is to identify the key factors which influence a prospective consumer of life insurance the most when considering the purchase of an insurance product. A questionnaire was prepared with the help of my company guide and I surveyed 100 respondents. The analysis was done using an SPSS technique called factor analysis.
From the study and analysis done is this report, we can conclude that there are 5 major factors which influence a consumer of life insurance. They are Customer service, Transactions options, Favorable compatibility, corporate image and Safety.
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INTRODUCTION
PURPOSE OF THIS REPORT: Literature Review:
Consumer behavior is the study of how individuals, groups, and organizations select, buy, use and dispose of goods, services, ideas, or experiences to satisfy their needs and wants. With respect to financial products from an insurance company the consumer behavior is not clearly defined. Consumer behavior for services generally vary from that of products, however when it comes to financial products the available literature on buying behavior falls short. The aim of this project is to identify all possible factors which influence consumers one way or the other with respect to Life Insurance financial products.
In todays corporate and competitive world, I find that insurance sector has the maximum growth and potential as compared to the other sectors. Insurance has the maximum growth rate of 70-80%.According to the report by Market research firm RNCOS, analyzing the Indian Insurance Market. Life insurance is a sector which is largely driven by propensity of people to save. Thus, life insurance products which provide higher elements of saving as compared to protection will be more popular with customers. In India unit linked insurance products (ULIPS) account more than half of the insurance sales. Ulips provide package of benefits in a single product which include risk cover, investment and tax saving facility.
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With largest number of life insurance policies in force in the world, Insurance happens to be a mega opportunity in India. It's a business growing at the rate of 15-20 per cent annually and presently is of the order of Rs 450 billion. Together with banking services, it adds about 7 per cent to the country's GDP. Gross premium collection is nearly 2 per cent of GDP and funds available with LIC for investments are 8 per cent of GDP.
Yet, nearly 80 per cent of Indian population is without life insurance cover while health insurance and non-life insurance continues to be below international standards. And this part of the population is also subject to weak social security and pension systems with hardly any old age income security. This it is an indicator that growth potential for the insurance sector is immense.
In the introduction stage of the Product Life Cycle, a firm seeks to build awareness and develop a market for the product, and IDBI Federal Life Insurance Co Ltd is in its introduction stage of its PLC.
So this report will help me recommend to IDBI Federal Life Insurance Co Ltd , those crucial factors which influence a prospective Life insurance customer the most when they go ahead in purchasing a life insurance product, so that they can attract maximum customers by concentrating on these crucial factors and thus develop a market for their product.
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BUYING BEHAVIOR
Consumer behavior is the study of how individuals, groups, and organizations select, buy, use and dispose of goods, services, ideas, or experiences to satisfy their needs and wants.
Five Stages to the Consumer Buying Decision Process (For complex decisions). Actual purchasing is only one stage of the process. Not all decision processes lead to a purchase. All consumer decisions do not always include all 6 stages, determined by the degree of complexity.
The 5 stages are: Problem Recognition Information Search Evaluation of alternatives Purchase Decision Post purchase Behavior
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The four type of consumer buying behavior are:
Routine Response/Programmed Behavior--buying low involvement frequently purchased low cost items; need very little search and decision effort; purchased almost automatically. Examples include soft drinks, snack foods, milk etc.
Limited Decision Making--buying product occasionally. When you need to obtain information about unfamiliar brand in a familiar product category, perhaps. Requires a moderate amount of time for information gathering. Examples include Clothes--know product class but not the brand.
Extensive Decision Making/Complex high involvement, unfamiliar, expensive and/or infrequently bought products. High degree of
economic/performance/psychological risk. Examples include cars, homes, computers, education. Spend a lot of time seeking information and deciding. Information from the companies MM; friends and relatives, store personnel etc. Go through all six stages of the buying process.
Impulse buying, no conscious planning.
Categories that Affect the Consumer Buying Decision Process

A consumer, making a purchase decision will be affected by the following three factors: 1. Personal 2. Psychological 3. Social The marketer must be aware of these factors in order to develop an appropriate MM for its target market.
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HOW DO WE FIND OUT BUYING BEHAVIOR WHEN IT COMES TO LIFE INSURANCE FINANCIAL??
1.
Historically the factors affecting consumer behavior have been broadly
classified as: Cultural Factors Social Factors Personal Factors
For financial products however we cant use this framework, we can say that buying of insurance can be attributed to Personal Factors, but these also include the concepts of PERSONALITY and SELF-CONCEPT which do not explain the buying behavior of insurance.
2. are:
The motivational theories of consumer behavior which have been formulated FREUDS Theory MASLOWS Theory HERZBERGS Theory
However, none of these theories give valuable insight when it comes to motivation for buying financial products.
3.
The Five-Stage Buying Decision Model is widely accepted as a basic framework
for the consumer behavior: Problem Recognition Information Search Evaluation of alternatives Purchase Decision Post purchase Behavior It is known that consumers do not always pass through all five stages in buying a product; they might skip or reverse some. Keeping this in mind we can say this model is helpful to get a basic idea of how consumers buy financial products. The information sources are vital in educating the consumers and this can be done through Personal, Commercial and Public Sources. The evaluation of alternatives however
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cant be explained for financial products. There is no information available as to how people filter out alternatives when it comes to deciding on a particular financial product offering.
4. Elaboration Likelihood Model Richard Petty and John Cacioppos model of attitude formation and change, describes how consumers make evaluations in both low- and high- involvement circumstances. They describe the Central Route where attitude formation is based on diligent, rational consideration of the most important product information; and the Peripheral Route where attitude formation is due to association with some positive or negative peripheral cues which include celebrity endorsement as well as insurance agents. This particular model gives a basic idea as to how people may develop attitudes towards insurance products. The central route will not differ as the products offered in this industry are tailored to suit the needs of the consumer. The peripheral cues are the most important as the brand name; advertisements, agents etc. play an important role in attitude formation for the consumer. It would thus be helpful to understand all these cues in order to create favorable attitude towards IDBI Federal Financial Products. 5. Low-Involvement Marketing Strategies
One type of Low-Involvement Marketing Strategy is to design advertising to trigger strong emotions related to personal values or ego-defense. This can be observed in the insurance industry as most advertisements are designed in order to trigger feelings of uncertainty which can be quelled by purchase of an insurance product.
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INDUSTRY OVERVIEW
STRUCTURE OF THE INDUSTRY
In India, the Ministry of Finance is responsible for enacting and implementing legislations for the insurance sector with the Insurance Regulatory and Development Authority (IRDA) entitled with the regulatory and developmental role. The government also owns the majority share in some major companies in both life and non-life insurance segments. Both the life and non-life insurance sectors in India, which were nationalized in the 1950s and 1960s, respectively, were liberalized in the 1990s. Since the formation of IRDA and the opening up of the insurance sector to private players in 2000, the Indian insurance sector has witnessed rapid growth.
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Why do we take insurance policies? Most of us may think that insurance is for those who have married and have a family. But let us check why do we take insurance and what are the benefits or insurance policies. Now the insurance companies are mushrooming with so many insurance products and try to attract more customers by putting old wines in new fancy bottles. At this scenario we may think that these policies are only for making money for insurance companies. But there are so many advantages for insurance policies. Let us discuss some of them. The insurance policies can be classified into life insurance and other insurance policies. The life insurance policies secure our family or dependents when the policy holders death or disability occurs due to any reason. Other insurance policies protect the financial loss due to any special circumstances such as accident, theft, illness, natural calamities etc. etc. The main benefit of life insurance policies is when the death or disability of the policy holder occurs they will provide an amount as per the terms of life insurance to the dependents of the policy holder and it will be a relief for them. Through insurance policy one can secure the future of his/her children by providing financial help for higher education or for marriage etc. The person can avail tax benefit according to the law of the land from the insurance policy and from the premium amount he/she is paying. You can take an immediate loan from insurance companies with the help of policy you are holding as per the terms of the policy you have joined. When you get back the maturity value of insurance policy you can satisfy any financial needs such as buying property, higher education of children, paying off any existing loan etc.
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What is INSURANCE? Insurance is a risk management technique primarily used to hedge against the risk of a contingent, uncertain loss that may be suffered by those individuals or entities that have an insurable interest in scarce resources, by transferring the possibility of this loss from one interested person, persons, or entity to another. The scarce resources referred to here fall into three divisions: human resources, financial resources, and capital, or tangible resources.
What is LIFE INSURANCE?
Human life is subject to risks of death and disability due to natural and accidental causes. When human life is lost or a person is disabled permanently or temporarily, there is a loss of income to the household. The family is put to hardship. Sometimes, survival itself is at stake for the dependants. Risks are unpredictable. Death/disability may occur when one least expects it. An individual can protect himself or herself against such contingencies through life insurance.
Life insurance is insurance on human beings. Though Human life cannot be valued, a monetary sum could be determined which is based on loss of income in future years. Hence in life insurance, the Sum Assured (or the amount guaranteed to be paid in the event of a loss) is by way of a benefit in the case of life insurance. Life insurance products provide a definite amount of money to the dependants of the insured in case the life insured dies during his active income earning period or becomes disabled on account of an accident causing reduction/complete loss in his income earnings.
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An individual can also protect his old age when he ceases to earn and has no other means of income by purchasing an annuity product. There are a number of life insurance products which offer protection and also coupled with savings.
A term insurance product provides a fixed amount of money on death during the period of contract.
A whole life insurance product provides a fixed amount of money on death.
An Endowment Assurance product provided a fixed amount of money either on death during the period of contract or at the expiry of contract if life assured is alive.
A money back assurance product provides not only fixed amounts which are payable on specified dates during the period of contract, but also the full amount of money assured on death during the period of contract.
An annuity product provides a series of monthly payments on stipulated dates provided that the life assured is alive on the stipulated dates. A linked product provides not only a fixed amount of money on death but also sums of money which are linked with the underlying value of assets on the desired dates.
There are a variety of life insurance products to suit to the needs of various categories of peoplechildren, youth, women, middle-aged persons, old people; and also rural people, film actors and unorganized labourers.
Life insurance products could be purchased from registered life insurers notified by the IRDA. Insurers appoint insurance agents to sell their products. Public who are interested to buy life insurance products should receive proper advice from insurance
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agents/insurer so that a right product could be chosen to suit particular financial needs.
Thus life insurance policies offer protection and security to families and provide happiness to society.
What is GENERAL INSURANCE? Insurance other than Life Insurance falls under the category of General Insurance. General Insurance comprises of insurance of property against fire, burglary etc, personal insurance such as Accident and Health Insurance, and liability insurance which covers legal liabilities. There are also other covers such as Errors and Omissions insurance for professionals, credit insurance etc.
Non-life insurance companies have products that cover property against Fire and allied perils, flood storm and inundation, earthquake and so on. There are products that cover property against burglary, theft etc. The non-life companies also offer policies covering machinery against breakdown, there are policies that cover the hull of ships and so on. A Marine Cargo policy covers goods in transit including by sea, air and road. Further, insurance of motor vehicles against damages and theft forms a major chunk of non-life insurance business.
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Insurance Industry in India:

Indian insurance is a flourishing industry, with several national and international players competing and growing at rapid rates. Thanks to reforms and the easing of policy regulations, the Indian insurance sector been allowed to flourish, and as Indians become more familiar with different insurance products, this growth can only increase, with the period from 2010 - 2015 projected to be the 'Golden Age' for the Indian insurance industry.
The insurance sector in India has started from being an open competitive market to nationalization and back to a liberalized market again. Tracing the developments in the Indian insurance sector reveals the 360-degree turn witnessed over a period of almost two centuries.
Indian insurance companies offer a comprehensive range of insurance plans, a range that is growing as the economy matures and the wealth of the middle classes increases. The most common types include: term life policies, endowment policies, joint life policies, whole life policies, loan cover term assurance policies, unit-linked insurance plans, group insurance policies, pension plans, and annuities. General insurance plans are also available to cover motor insurance, home insurance, travel insurance and health insurance.
Due to the growing demand for insurance, more and more insurance companies are now emerging in the Indian insurance sector. With the opening up of the economy, several international leaders in the insurance sector are trying to venture into the India insurance industry.
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A brief history of the Insurance sector: The history of the Indian insurance sector dates back to 1818, when the Oriental Life Insurance Company was formed in Kolkata. A new era began in the India insurance sector, with the passing of the Life Insurance Act of 1912.
The Indian Insurance Companies Act was passed in 1928. This act empowered the government of India to gather necessary information about the life insurance and nonlife insurance organizations operating in the Indian financial markets.
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.
1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses.
1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public.
1956: 245 Indian and foreign insurers and provident societies were taken over by the central government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India. The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British.
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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 nationalised 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.
INDIAN INSURANCE MARKET HISTORY
Insurance has had a very long history in India, life insurance was introduced in India with the starting of Oriental life insurance Company in Kolkata in the year 1818.General insurance came a quite later, and it started its operations with the onset of Triton Insurance Company which had a base in Kolkata. History of insurance can be further divided in three areas a) pre-nationalization, b) nationalization and c) post Nationalization. Life insurance was first nationalized in 1956, followed by general insurance in 1973.General insurance corporation of India was set as controlling body, all this was initiated against the economic reforms of 1991.This was followed by many such acts and amendments including insurance regulatory development act
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(IRDA) passes in 1999.Private players were encouraged in the insurance sector and they effectively started operations from 2001.
INSURANCE MARKET-PRESENT Insurance sector was opened for private players with the starting of the 20 th century. After economic reforms in 1991, economy was liberalized. Since then there has a rampant and dynamic growth in the field of insurance. Most of private players have entered this sector with joint collaborations 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. The insurance sector has intensified and companies are formulating survival strategies due to immense competition in a de-tariff 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 this sector to expand.
Indian Insurance: Sector Reforms:
In 1993, Malhotra Committee headed by former Finance Secretary and RBI Governor R.N. Malhotra was formed to evaluate the Indian insurance industry and recommend its future direction. The aim of the Malhotra Committee was to assess the functionality of the Indian insurance sector. This committee was also in charge of recommending the future path of insurance in India.
The Malhotra committee was set up with the objective of complementing the reforms initiated in the financial sector. The reforms were aimed at "creating a more efficient and competitive financial system suitable for the requirements of the economy keeping in mind the structural changes currently underway and recognizing that
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insurance is an important part of the overall financial system where it was necessary to address the need for similar reforms"
In 1994, the committee submitted the report and some of the key recommendations included: 1) Structure
Government stake in the insurance Companies were to be brought down to 50%. Government should take over the holdings of GIC and its subsidiaries so that these subsidiaries can act as independent corporations. All the insurance companies should be given greater freedom to operate.
2) Competition
Private Companies with a minimum paid up capital of Rs.1bn should be allowed to enter the industry. No Company should deal in both Life and General Insurance through a single entity. Foreign companies may be allowed to enter the industry in collaboration with the domestic companies. Postal Life Insurance should be allowed to operate in the rural market. Only One State Level Life Insurance Company should be allowed to operate in each state.
3) Regulatory Body
The Insurance Act should be changed. An Insurance Regulatory body should be set up. Controller of Insurance (Currently a part from the Finance Ministry) should be made independent.
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4) Investments
Mandatory Investments of LIC Life Fund in government securities to be reduced from 75% to 50%. GIC and its subsidiaries are not to hold more than 5% in any company (There current holdings to be brought down to this level over a period of time).
5) Customer Service
LIC should pay interest on delays in payments beyond 30 days. Insurance companies must be encouraged to set up unit linked pension plans. Computerization of operations and updating of technology to be carried out in the insurance industry The committee emphasized that in order to improve the customer services and increase the coverage of the insurance industry should be opened up to competition.
But at the same time, the committee felt the need to exercise caution as any failure on the part of new players could ruin the public confidence in the industry. Hence, it was decided to allow competition in a limited way by stipulating the minimum capital requirement of Rs.100 crores. The committee felt the need to provide greater autonomy to insurance companies in order to improve their performance and enable them to act as independent companies with economic motives. For this purpose, it had proposed setting up an independent regulatory body.
The Insurance Regulatory and Development Authority Act of 1999 brought about several crucial policy changes in the insurance sector of India. It led to the formation of the Insurance Regulatory and Development Authority (IRDA) in 2000.
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The goals of the IRDA are to safeguard the interests of insurance policyholders, as well as to initiate different policy measures to help sustain growth in the Indian insurance sector. The Authority has notified 27 Regulations on various issues which include Registration of Insurers, Regulation on insurance agents, Solvency Margin, Reinsurance, Obligation of Insurers to Rural and Social sector, Investment and Accounting Procedure, Protection of policy holders' interest etc. Applications were invited by the Authority with effect from 15th August, 2000 for issue of the Certificate of Registration to both life and non-life insurers. The Authority has its Head Quarter at Hyderabad.
Major Policy Changes
Insurance sector has been opened up for competition from Indian private insurance companies with the enactment of Insurance Regulatory and Development Authority Act, 1999 (IRDA Act). As per the provisions of IRDA Act, 1999, Insurance Regulatory and Development Authority (IRDA) was established on 19th April 2000 to protect the interests of holder of insurance policy and to regulate, promote and ensure orderly growth of the insurance industry. IRDA Act 1999 paved the way for the entry of private players into the insurance market which was hitherto the exclusive privilege of public sector insurance companies/ corporations. Under the new dispensation Indian insurance companies in private sector were permitted to operate in India with the following conditions:
Company is formed and registered under the Companies Act, 1956;
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The aggregate holdings of equity shares by a foreign company, either by itself or through its subsidiary companies or its nominees, do not exceed 26%, paid up equity capital of such Indian insurance company;
The company's sole purpose is to carry on life insurance business or general insurance business or reinsurance business.
The minimum paid up equity capital for life or general insurance business is Rs.100 crores.
The minimum paid up equity capital for carrying on reinsurance business has been prescribed as Rs.200 crores.
The Authority has notified 27 Regulations on various issues which include Registration of Insurers, Regulation on insurance agents, Solvency Margin, Reinsurance, Obligation of Insurers to Rural and Social sector, Investment and Accounting Procedure, Protection of policy holders' interest etc. Applications were invited by the Authority with effect from 15th August, 2000 for issue of the Certificate of Registration to both life and non-life insurers. The Authority has its Head Quarter at Hyderabad. Insurance companies:
IRDA has so far granted registration to 12 private life insurance companies and 9 general insurance companies. If the existing public sector insurance companies are included, there are currently 13 insurance companies in the life side and 13 companies operating in general insurance business. General Insurance Corporation has been approved as the "Indian reinsurer" for underwriting only reinsurance business.
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Protection of the interest of policy holders:
IRDA has the responsibility of protecting the interest of insurance policyholders. Towards achieving this objective, the Authority has taken the following steps:
IRDA has notified Protection of Policyholders Interest Regulations 2001 to provide for: policy proposal documents in easily understandable language; claims procedure in both life and non-life; setting up of grievance redressal machinery; speedy settlement of claims; and policyholders' servicing. The Regulation also provides for payment of interest by insurers for the delay in settlement of claim.
The insurers are required to maintain solvency margins so that they are in a position to meet their obligations towards policyholders with regard to payment of claims.
It is obligatory on the part of the insurance companies to disclose clearly the benefits, terms and conditions under the policy. The advertisements issued by the insurers should not mislead the insuring public.
All insurers are required to set up proper grievance redress machinery in their head office and at their other offices. The Authority takes up with the insurers any complaint received from the policyholders in connection with services provided by them under the insurance contract.
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MAJOR PLAYERS IN THE INSURANCE SECTOR:
Govt. Regulated
Postal Life Insurance. LIC.
Pvt. Players

Bajaj Allianz Life Insurance Co. Ltd Birla Sun Life Insurance Co. Ltd HDFC Standard Life Insurance Co. Ltd. ICICI Prudential Life Insurance Co. Ltd. ING VYSYA Life Insurance Co. Ltd. MAX New York Life Insurance Co. Ltd. Met Life India Insurance Co, Pvt. Ltd. Kotak Mahindra Old Mutual Life Insurance Co. Ltd. SBI Life Insurance Co. Ltd. TATA AIG Life Insurance Co. Ltd. Reliance Life Insurance. Aviva Life Insurance Co. Pvt. Ltd. Sahara India Life Insurance Co. Ltd IDBI FEDERAL Life Insurance Co. Lt
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NAME OF THE PLAYER MARKET SHARE (%)

Market share (%) 68.7 6.25 6.01 3.23 2.75 0.40 12.66
Name of the Player LIFE INSURANCE CORPORATION OF INDIA ICICI PRUDENTIAL SBI LIFE INSURANCE HDFC life Bajaj Allianz IDBI Federal others
http://blog.bharatbuysell.com/news/1537/lic-wins-race-in-market-shareprivate-insurers-gloomed
http://www.capitalmarket.com/cmedit/story25-0.asp?SNo=465376
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GLOBAL SCENERIO OF INSURANCE COMPANIES

Life insurance not plays an important role in national economy but also in international economy. Marine cargo insurance provides risk coverage for shipper sand the banks, which finance international trades. This role becomes all the more important in the context of an active government policy to encourage exports. Indian life insurers operates in more than 30 countries through agencies, branches, associates companies. These operations earn foreign exchange. The global insurance industry is one of the largest sectors of finance. It ranges from consumer to corporate and industrial insurance, and even reinsurance, or insurance of insurance. The major insurance markets of the world are obviously the US, Europe, Japan, and South Korea. Emerging markets are found throughout Asia, specifically in India and China, and are also in Latin America.
Given the evolving and growing socio-economic conditions worldwide, insurance companies are increasingly reaching out across borders and are offering more competitive and customized products than ever before. With the internet and other forms of high-speed communication, companies and individuals are now able to purchase insurance and related financial products from almost anywhere in the world. Increasing affluence, especially in developing countries, and a rising understanding of the need to protect wealth and human capital has led to significant growth in the insurance industry. Given the evolving and growing socio-economic conditions worldwide, insurance companies are increasingly reaching out across borders and are offering more competitive and customized products than ever before. Some of the foreign insurance companies are mentioned below: 1. Prudential plc. , Est. in London in 1848, through its business in the US and Asia, the UK and Europe, provides retail financial services and products to more than 16 million customers, policy holder and unit holders worldwide. Prudential has
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brought to market an integrated range of financial services products that now includes life assurance, pensions, mutual funds, banking, investment management and general insurance. In Asia, Prudential is the leading European life insurance company with a vast network of 23 life and mutual fund operations in twelve countries China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand and Vietnam.
2. American International Group, Inc. (AIG) is a major American insurance corporation based at the American International Building in New York City. The British headquarters are located on Fenchurch Street in London, continental Europe operations are based in La Defense, Paris, and its Asian HQ is in Hong Kong. According to the 2008 Forbes Global 2000 list, AIG was the 18th-largest company in the world. American International Group, Inc. is the leading U.S. based and financial services and international insurance organization and the largest underwriter of commercial and industrial insurance in the United States. Its member companies write a wide range of commercial and personal insurance products through a variety of distribution channels in over 130 countries and jurisdictions throughout the world. AIG's Life Insurance operations comprise of the most extensive worldwide network of any life insurer. AIG's global businesses also include financial services and asset management, including aircraft leasing, financial products, trading and market making, consumer finance, savings products.
3. AXA The insurance world revolves around this AXA. The company, which started as a sleepy collection of mutual insurance companies, is today one of the world's largest insurers and a financial management powerhouse. In the US, AXA owns AXA Financial, which controls life insurance firm AXA Equitable and investment manager Alliance Bernstein. The company also has major subsidiaries in the UK (AXA UK), Japan (AXA Life), Germany (AXA Konzern), Australia (AXA Asia Pacific), and Belgium (AXA Belgium). The companies offer life
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insurance, personal and commercial property and financial services, casualty insurance, and asset management services. It has about E1 trillion (or $1.45 trillion) in assets under management.
4. Allianz SE Allianz SE offers a range of insurance products and services -including life, health, and property/casualty coverage for individuals and businesses -- through some 100 subsidiaries and affiliates operating all over the globe (though its key markets are France, Germany, Italy, and the US) is one of the world's biggest insurers,. In addition to selling insurance, Allianz provides private equity investment through Allianz Capital Partners, institutional asset management and retail services through Allianz Global Investors, and banking services through Allianz Bank. Allianz operates as a Societas Europaea, a joint stock company that is ruled by European Union standards.
5. ING Grope N.V., a financial services company, provides banking, investment, life insurance, and retirement services worldwide. The company offers wealth accumulation, savings, and mortgage products and services to individuals, and small-and medium-sized businesses, as well as a range of banking products through independent banking agents; and credit products through agents, brokers, and vendors. It provides current account services and payments systems, such as savings accounts, mortgage loans, consumer loans, credit card services, investment products, and life and non-life insurance products, as well as asset management services. The company also provides wealth management services to high net worth individuals. In addition, it offers various financial products, such as mutual funds, e-brokerage, payment accounts, and pensions; and lending, payments and cash management, structured finance, leasing and commercial finance, and financial markets products and services. Further, the company offers life insurance, investments, and retirement services for retail customers; a range of traditional, unit-linked, and variable annuity policies written for individual and group customers; mandatory and voluntary pension funds; fire, motor, disability,
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transport, and third party liability insurance for individual and commercial/group clients; and disability insurance products and complementary services for employers and self-employed professionals, such as dentists, general practitioners, and lawyers, as well as manages equity, fixed income, and structured investments for institutional investors and private label investment funds. As of December 31, 2009, ING Group N.V. had approximately 250 retail banking branches in the Netherlands; 800 in Belgium; 430 in Poland/central Europe; and 460 in Asia. The company was founded in 1991 and is based in Amsterdam, the Netherlands.
6. New York Life New York Life is the largest mutual life insurance company in the United States and one amongst the largest life insurers in the world. The company's clients include The NY Bar Association, the Air Line Pilots Association, American College of Surgeons, and The American Institute of Architects. The company has also insured many U.S. Presidents, entertainers and professional athletes. On the side of investments New York Life's affiliates provide institutional asset management and trust services and, NYLIFE Securities LLC, a subsidiary, provide an array of securities products and services such as institutional and retail mutual funds, including 401(k) products. The company was founded in 1845 as Nautilus Insurance and became New York Life in 1849. The company is mutually held, not publicly-traded. New York Life has 10,000 sales agents across the U.S. and offices in Argentina, China, Hong Kong, India, Mexico, South Korea, Taiwan, and Thailand. In 2009, the company reported total revenues of $14.4 billion. Insurance sales were almost $2.7 billion. The company had total assets of $286.7 billion under management in 2009.
7. Aviva plc.is engaged in the provision of financial products and services, fund management and general insurance and health, focused on long-term insurance and savings business. The Company's business is managed on a geographic basis
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through a regional management structure based on four regions: Europe, United Kingdom, North America and Asia Pacific. The four regions function as six operating segments as both the United Kingdom and Europe regions are split into two operating segments. United Kingdom region it is split into the UK Life and UK General Insurance segments, which undertake long-term insurance and savings business and general insurance respectively. In Europe, Delta Lloyd is managed separately from the other European businesses; therefore the region is split into Aviva Europe and Delta Lloyd operating segments. General insurance and health insurance together accounted for 20% of its total sales during the year ended December 31, 2009.
8. Lombard Canada Ltd. (LCL) is responsible for the insurance management services for all of the Lombard group's commercial and personal insurance companies. LCL also provides insurance management services for external clients including the Tokyo Marine & Nichido Fire Insurance Co., Ltd. LCL and the member entities of the Lombard companies that it manages, are wholly owned subsidiaries of Northbridge Financial Corporation. Lombard General Insurance Company (Canada) is an underwriter of commercial lines business through select brokers across the country. Lombard General brokers have access to one of the industry's most powerful underwriting tools: Business Choice , a specialized point of sale software developed by Lombard Canada. Beyond providing small and medium sized businesses with the specialized insurance coverage they require, Lombard General also offers custom marketing services and specialized coverage designed to meet the needs of businesses across the country. Lombard Insurance Company is an underwriting insurance provider of personal lines committed to providing Canadians with the most innovative personal lines insurance solutions. Lombard Insurance was well ahead of the competition when
Page 29
it introduced its packaged homeowner and automobile product Personal Choice - a package that remains popular today.
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COMPANY PROFILE
IDBI Federal Life Insurance Co Ltd is a joint-venture of IDBI Bank, Indias premier development and commercial bank, Federal Bank, one of Indias leading private sector banks and AGEAS, a multinational insurance giant based out of Europe. In this venture, IDBI Bank owns 48% equity while Federal Bank and Ageas own 26% equity each. At IDBI Federal, we endeavor to deliver products that provide value and convenience to the customer. Through a continuous process of innovation in product and service delivery we intend to deliver world-class wealth management, protection and retirement solutions to Indian customers. Having started in March 2008, in just five months of inception we became one of the fastest growing new insurance companies to garner Rs 100 Cr in premiums. The company offers its services through a vast nationwide network across the branches of IDBI Bank and Federal Bank in addition to a sizeable network of advisors and partners. As on January 31st 2011, the company has issued over 2.68 lakh policies with over Rs 14, 230 Cr in Sum Assured.
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SPONSORS OF IDBI LIFE INSURANCE CO. LTD IDBI Bank Ltd. continues to be, since its inception, Indias premier industrial development bank. Created in 1956 to support Indias industrial backbone, IDBI Bank has since evolved into a powerhouse of industrial and retail finance. Today, it is amongst Indias foremost commercial banks, with a wide range of innovative products and services, serving retail and corporate customers in all corners of the country from over 700 branches and more than 1180 ATMs. The Bank offers its customers an extensive range of diversified services including project financing, term lending, working capital facilities, lease finance, venture capital, loan syndication, corporate advisory services and legal and technical advisory services to its corporate clients as well as mortgages and personal loans to its retail clients. As part of its development activities, IDBI Bank has been instrumental in sponsoring the development of key institutions involved in Indias financial sector such as the Securities and Exchange Board of India (SEBI), National Stock Exchange of India Limited (NSE) and National Securities Depository Ltd.
Federal Bank is one of Indias leading private sector banks, with a dominant presence in the state of Kerala. It has a strong network of over 660 branches and 690 ATMs spread across India. The bank provides over four million retail customers with a wide variety of financial products. Federal Bank is one of the first large Indian banks to have an entirely automated and interconnected branch network. In addition to interconnected branches and ATMs, the Bank has a wide range of services like Internet Banking, Mobile Banking, Tele Banking, Anywhere Banking, debit cards, online bill payment and call centre facilities to offer round the clock banking convenience to its customers. The Bank has been a pioneer in providing innovative technological solutions to its customers and the Bank has won several awards and recommendations.
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AGEAS is an international insurance company with a heritage spanning more than 180 years. Ranked among the top 20 insurance companies in Europe, Ageas has chosen to concentrate its business activities in Europe and Asia, which together make up the largest share of the global insurance market. These are grouped around four segments: Belgium, United Kingdom, Continental Europe and Asia and served through a combination of wholly owned subsidiaries and partnerships with strong financial institutions and key distributors around the world. Ageas operates successful partnerships in Belgium, UK, Luxembourg, Italy, Portugal, China, Malaysia, India and Thailand and has subsidiaries in France, Germany, Hong Kong and UK. It is the market leader in Belgium for individual life and employee benefits, as well as a leading non-life player, through AG Insurance, and in the UK, it has a strong presence as the second largest player in private car insurance and the over 50s market. It employs more than 13,000 people.
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PRODUCT PROFILE
WEALTHSURANCE:
The
Wealthsurance Milestone
Plan
enables
the
policyholder to save and build wealth to meet their financial goals. This Plan comes with a wide range of 13 investment options and 7 insurance benefits - all packaged with a low charge structure and unmatched flexibility.
HOMESURANCE: IDBI Federal Homesurance Protection Plan provides full insurance cover for properties even under construction, thus ensuring that the beneficiary gets the full sanctioned amount in case of any unfortunate event. It also has an innovative fixed period cover for those who would aim to prepay their loans early.
BONDSURANCE: Bondsurance is designed for customers looking for guaranteed returns which will not get affected by financial market conditions. It offers guaranteed return on investment along with life insurance cover.
MICROSURANCE: IDBI Federal Microsurance Plan is a one of its kind insurance plan which can be very useful for various Micro Financial Institutions and NGOs, wherein not only the members but even the members family gets an insurance cover.
TERMSURANCE: IDBI Federal Termsurance Protection Plan offers the unique Increasing Cover option that automatically increases the cover every year without increasing the premium.
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INCOMESURANCE: Knowing the customer helped us to combine the Endowment & Money Back plans into a single plan. It linked the returns to the G-Sec rates, transparently declared by the government. Also, the Guaranteed Annual Payout and other benefits upon death are tax-free under Sec 10(10D).
HEALTHSURANCE: This new insurance plan offers a host of features and benefits that are designed to help manage the extra financial burden that comes with hospitalization.
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Vision and VALUES

We maintain integrity through our values. Our Vision To be the leading provider of wealth management, protection and retirement solutions that meets the needs of our customers and adds value to their lives.
Our Mission To continually strive to enhance customer experience through innovative product offerings, dedicated relationship management and superior service delivery while striving to interact with our customers in the most convenient and cost effective manner. To be transparent in the way we deal with our customers and to act with integrity. To invest in quality human capital and build it in order to achieve our mission.
Our Values
Transparency: Crystal Clear communication to our partners and stakeholders. Value to Customers: A product and service offering in which
customers perceive value.
Rock Solid and Delivery on Promise: This translates into being financially strong, operationally robust and having clarity in claims.
Customer-friendly: Advice and support in working with customers and partners.
Profit to Stakeholders: Balance the interests of customers, partners, employees, shareholders and the community at large.
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SWOT ANALYSIS
STRENGTH
Superior customer service vs. competitors. Products have required accreditations. Good place to work. Lower response time with efficient and effective service. Dedicated workforce aiming at making a long term career in the field. Large pool of technically skilled manpower with in depth knowledge and under Standing of the market.
WEAKNESSES
Customer service staff needs training. Some gaps in range for certain sectors. Sectorial growth is constrained by low unemployment levels and competition
for Staff. Low customer confidence on the private players.
OPPORTUNITIES
Insurable population: According to IRDA only 10% of the population is insured
which represent around 30% of the insurable population. This suggests more than 300m people, with the potential to buy insurance, remain uninsured. market International companies will help in building world class expertise in local by introducing the best global practice.
Page 37
An applied research center to create opportunities for developing techniques to
provide value-added services. Fast-track career development opportunities on an industry-wide basis.
THREATS
Big public sector insurance companies like Life Insurance Corporation (LIC) of
India, National Insurance Company Limited, Oriental Insurance Limited, New India Assurance Company Limited and United India Insurance Company Limited. People trust and go to them more.
Very high competition prevailing in the industry. Vulnerable to reactive attack by major competitors. Lack of infrastructure in rural areas could constrain investment.
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IDBI FEDERAL LIFE INSURANCE LIMITED ORGANIZATIONAL CHART CHIEF EXECUTIVE OFFICER Mr. Nageshwara Rao
COUNTRY HEAD Mr. Murali
HUMAN RESOURCES HEAD Mrs. RadhikaVenkatraman
MARKETING HEAD Mr. AmitTripathi
TRAINING HEAD Mrs. Vaishali
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ZONAL-WISE ORGANIZATIONAL STRUCTURE
COUNTRY HEAD Mr.Murali
NORTH ZONAL HEAD
EAST ZONAL HEAD
WEST ZONAL HEAD
SOUTH ZONAL HEAD Mr.Balaji
MUMBAI LUCKNOW
COIMBATORE
BENGALURU
AREA HEAD Mr. Vijay Kumar
AREA HEAD
HYDERABAD AREA HEAD
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AREA WISE ORGANIZATIONAL STRUCTURE

COIMBATORE AREA HEAD Mr. Vijay Kumar
BRANCH HEAD CHIEF MANAGER Mrs.ShanthiYagyanath DEPUTY MANAGER SENIOR EXECUTIVE BAND 1 BA ND 2 BA ND 3
BAND 1
BAND 2
BAND 3
BAND 1
BAND 2
BAND 3
AGENCY
BANKS
DISTRIBUTION CENTER
MANAGEMENT TRAINEES
CORPORATE CHANNELS
Source: IDBI Federal Life Insurance Co Ltd
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PROJECT PROFILE
OBJECTIVES OF THE STUDY:
Primary Objective
To identify the key factors which influence consumers the most when they purchase a life insurance product.
Secondary Objectives
To understand the most common purpose behind taking a life insurance policy. To find out the best option of people when it comes to making an investment. To spread awareness of IDBI Federal and its Incomesurance product.
METHODOLOGY:
Research Design: Causal Research Data sources:

Primary data and Secondary data.
Research instrument: Questionnaire. (Close Ended) Analysis has been done using SPSS by Factor Analysis.
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Data collection:
Primary Data:
Responses collected in the survey by the use of questionnaire.
Secondary Data:

Newspapers. Articles. Product Brochures. Internet.
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ANALYSIS
AGE DISTRIBUTION OF THE SAMPLE:
44% of the sample is between the age group of 18-30 years. 31% of the sample is between the age group of 30-40 years. 17% of the sample is between the age group of 40-50 years. 8% of the sample is between the age group of 50+.
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OCCUPATION DISTRIBUTION:
37% of the sample is doing service. 17% of the sample does business. 27% of the sample consists of professionals. 19% of the sample is self-employed.
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INCOME DISTRIBUTUON:
7% of the sample has income up to 1.8 lakhs per annum. 52% of the sample has income between 1.8 and 5 lakhs per annum. 22% of the sample has income between 5 and 8 lakhs per annum. 19% of the sample has income above 8 lakhs.
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BEST INVESTMENT OPTION ACCORDING TO THE SAMPLE.
21% of the sample chose Shares as the best option for investment. 9% of the sample chose Bank deposits as the best option for investment. 16% of the sample chose Mutual funds as the best option for investment. 20% of the sample chose Real estate as the best option for investment. 5% of the sample chose Post office savings as the best option for investment. 22% of the sample chose Gold as the best option for investment. 7% of the sample chose Insurance as the best option for investment.
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PURPOSE FOR HAVE TAKEN OR FOR TAKING AN LIFE INSURANCE PRODUCT:
25% of the sample said Future Security. 18% of the sample said Childs marriage. 6% of the sample said Childs education. 30% of the sample said Tax benefits. 21% of the sample said Savings tool.
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FACTOR ANALYSIS
The analysis regarding the project was done using SPSS, where FACTOR ANALYSIS was used to find out the degree of correlation between the variables and reduce them into factors. The 11 factors in the analysis are Rate of return, Company goodwill, Advertising effectiveness, Flexible Premium payment options, Flexible payout option, Approval and conviction of the insurance agent, After sale reminders and updates, Tax benefits, Simplicity of insurance plan, Friend/Relative referral, Government stake, KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. Bartlett's Test of Sphericity Approx. Chi-Square df Sig. .501 128.421 55 .000
The KMO and Bartletts Test measures the sampling Adequacy. KMO value is .501 which means that the data is appropriate for factor analysis. Bartlett's Test of Sphericity it is significant as the value is .000 which is less than .005.
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Communalities
Initial 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 Extraction .733 .751 .707 .481 .709 .572 .716 .531 .660 .697
Rate of return comp goodwill adv_effectiveness flexible_premium_paym nt_opt flexible_payout_opt appr_conviction_of_ins _agnt after_sale_remndrs_up dates tax_benefits simplicity_of_ins_plan frnds_rlativ_referral govt_stake
1.000 .788 Extraction Method: Principal Component Analysis.
The table of communalities depicts how much of the variance in the variables has been accounted for by the extracted factors. For example 73.3% of variance in RATE OF RETURN has been accounted for by the extracted factors.
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Total Variance Explained

Initial Eigenvalues Component 1 2 3 4 5 6 7 8 9 10 11 Total 1.858 1.586 1.464 1.351 1.084 .885 .786 .574 .550 .439 .421 % of Variance 16.895 14.422 13.308 12.286 9.855 8.048 7.145 5.219 5.003 3.991 3.827 Cumulative % 16.895 31.317 44.625 56.911 66.766 74.815 81.959 87.179 92.182 96.173 100.000 Extraction Sums of Squared Loadings Total 1.858 1.586 1.464 1.351 1.084 % of Variance 16.895 14.422 13.308 12.286 9.855 Cumulative % 16.895 31.317 44.625 56.911 66.766
Extraction Method: Principal Component Analysis.
The total variance table shows the factor extractable from the analysis along with their Eigen values and % of variance attributed to each factor. Based on the Eigen values 5 factors have been identified. Theses 5 factors have been identified as their Eigen values are above 1. In this case the first factor accounts for 16.89% of variance, the second factor accounts for 14.42% of variance and the 3rd 4th and 5th factor account for 13.3% 12.28% and 9.8% respectively.
These 5 factors together explain 66.76 % of total variance.
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Component Matrix
Component 1 after_sale_remndrs_up dates appr_conviction_of_ins _agnt flexible_payout_opt flexible_premium_paym nt_opt frnds_rlativ_referral Rateofreturn tax_benefits comp_goodwill adv_effectiveness simplicity_of_ins_plan govt_stake Extraction Method: Principal Component Analysis. 5 components extracted. .469 .411 .435 -.751 -.697 .605 .562 .531 -.529 -.425 .663 .600 -.497 .572 .415 .522 .641 .408 .344 .363 -.478 .311 -.404 .403 2 3 4 5
The above table shows the loading of the variables on 5 factors extracted. The higher the absolute value of loading, the more the factor contributes to the variable.
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Rotated Component Matrix

Component 1 after_sale_remndrs_up dates Rateofreturn appr_conviction_of_ins _agnt flexible_payout_opt flexible_premium_paym nt_opt tax_benefits frnds_rlativ_referral simplicity_of_ins_plan comp_goodwill adv_effectiveness govt_stake Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. Rotation converged in 7 iterations. .831 -.751 .616 .801 .684 -.521 .771 .755 .854 .622 .547 .877 -.333 .366 -.348 -.430 2 3 4 5
The values in this panel of the table represent the distribution of the variance after the Varimax rotation. Varimax rotation tries to maximize the variance of each of the factors, so the total amount of variance accounted for is redistributed over the extracted factors. A varimax solution yields results which make it as easy as possible to identify each variable with a single factor. This is the most common rotation option. The rotated component matrix clearly shows the five factors which influence consumers most when comes to purchasing an insurance product.
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COMPONENT MATRIX
COMPONENT 1 AFTER SALES REMINDERS AND UPDATES APPROACH AND CONVICTION OF AGENT FLEXIBLE PREMIUM PAYMENT OPTIONS SIMPLICITY OF THE INSURANCE PLAN ADVERTISING EFFECTIVENESS COMPONENT 2 FLEXIBLE PAYOUT OPTION COMPONENT 3 FRIENDS/RELATIVE REFERRAL COMPONENT 4 COMPANYS GOODWILL COMPONENT 5 GOVERNMENT STAKE
FACTORS
CUSTOMER SERVICE
TRANSACTIONS OPTIONS
FAVOURABLE COMPATIBILITY
CORPORATE IMAGE
SAFETY
Page 54
FINDINGS
5 factors have been found to influence a prospective life insurance customer when they are to buy product:
1. 2. 3. 4. 5.
Customer service Transactions options Favorable compatibility Corporate image Safety
These factors have their respective variables inside them.
Customer service includes Approach and conviction of insurance agent and after sales reminders and updates. Transaction options include Flexible payout option and Flexible premium payment options. Favorable compatibility includes Simplicity of the insurance plan and Friends/relative referral. Corporate image includes Company goodwill and Advertising effectiveness. Safety includes government stake.
With regard to the reports Secondary objectives, following are the findings. Regarding best investment option, findings were:
21% of the sample chose Shares as the best option for investment. 9% of the sample chose Bank deposits as the best option for investment. 16% of the sample chose Mutual funds as the best option for investment. 20% of the sample chose Real estate as the best option for investment.
Page 55
5% of the sample chose Post office savings as the best option for investment. 22% of the sample chose Gold as the best option for investment. 7% of the sample chose Insurance as the best option for investment.
Thus we see that Shares, Gold and Real estate were considered best my majority, best being Shares.
Purpose for taking a life insurance policy, findings were:
25% of the sample said Future Security. 18% of the sample said Childs marriage. 6% of the sample said Childs education. 30% of the sample said Tax benefits. 21% of the sample said Savings tool.
Tax benefits and Future security were found to be the major purpose.
Page 56
RECOMMENDATIONS
Approach and conviction of insurance agents is very important and so the best effort should be made to recruit and train agents to handle their clients. After sales reminders and updates are very important when it comes to insurance products. It should be kept in mind to make these reminders helpful and not annoying.
The transaction options should be flexible. There should be easy and various ways to make premium payment and to withdraw or take payouts for the customer.
Simplicity of the insurance plan is very important. In the race to provide more benefits, simplicity of the plan should not be compromised.
Since friends/relative referral is considered as an influencing and important factor for a prospective life insurance customer, every step to keep existing customers fully satisfied must be taken.
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Since advertising effectiveness is a key for insurance companies, one type of Low-Involvement Marketing Strategy is to design advertising to trigger strong emotions related to personal values or ego-defense. This can be observed in the insurance industry as most advertisements are designed in order to trigger feelings of uncertainty which can be quelled by purchase of an insurance product. So continuous effort to make them more effective should always be in practice.
Since life insurance is taken keeping in mind uncertainties and as we have seen that future security was chosen to be main purpose of taking life insurance, investing customer premiums in government securities make customers feel secure and feel positive.
Page 58
CONCLUSION
The life insurance industry in India has immense potential with nearly 80 per cent of Indian population without life insurance cover. Life insurance is a sector which is largely driven by propensity of people to save, and unlike the west, Indians have a higher propensity to save than to spend.
Consumer behavior is the study of how individuals, groups, and organizations select, buy, use and dispose of goods, services, ideas, or experiences to satisfy their needs and wants.
Historically the factors affecting consumer behavior have been broadly classified as: Cultural Factors Social Factors Personal Factors
For financial products however we cant use this framework, we can say that buying of insurance can be attributed to Personal Factors, but these also include the concepts of PERSONALITY and SELF-CONCEPT which do not explain the buying behavior of insurance.
The two ways which we can see that actually makes difference to a prospective life insurance consumer are
1. Elaboration Likelihood Model
They describe the Central Route where attitude formation is based on diligent, rational consideration of the most important product information; and the Peripheral Route where attitude formation is due to association with some positive or negative peripheral cues which include celebrity endorsement as well as insurance agents. This
Page 59
particular model gives a basic idea as to how people may develop attitudes towards insurance products. The central route will not differ as the products offered in this industry are tailored to suit the needs of the consumer. The peripheral cues are the most important as the brand name; advertisements, agents etc. play an important role in attitude formation for the consumer.
2. Low-Involvement Marketing Strategies
One type of Low-Involvement Marketing Strategy is to design advertising to trigger strong emotions related to personal values or ego-defense. This can be observed in the insurance industry as most advertisements are designed in order to trigger feelings of uncertainty which can be quelled by purchase of an insurance product.
From the study and analysis done is this report, we can conclude that there are 5 major factors which influence a consumer of life insurance. They are Customer service, Transactions options, Favorable compatibility, corporate image and Safety.
With special care to make these factors present in a product of life insurance, that is by showing them in advertisements and then actually delivering them will make IDBI Federal Life Insurance develop their market and increase sales.
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LEARNING OUTCOME
I worked for 14 weeks with IDBI Federal and my profile was of Marketing Research and Sales. I got acclimatized to the corporate culture. How things work in an organization? What kind of hierarchy is followed in an organization? Such an understanding is very essential because it would make us Industry ready and would serve as a platform when we join an organization Full-time after completion of MBA.
As I was carrying out my sales part I realized how tough it was to approach, explain and convince a consumer. Time management is a very important tool. To achieve sales targets one should be clear as to how many customers to meet and how much time to spend with each customer. Selling of Life Insurance indeed in a very difficult art and there are no short cuts is what I have learnt. One can, only by experience and meeting maximum numbers of clients achieve success.
I got valuable knowledge about Insurance sector. I got to know about the different Insurance plans available in the market, the different companies dealing in this industry.
Another important learning is that a consumer is not interested in what you think about your product, the consumer has to be told how the product will meet his/her needs better than other similar products in the market.
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LIMITATIONS
LIMITATIONS OF THE STUDY
People refrain from giving personal details.
People feel hesitant and hence sometimes misrepresent data.
It is difficult to extract all required information from people.
The study is confined only to a small segment of the entire population.
The scope of the project is limited as there much more that can be analyzed
under buying behavior but since buying behavior of financial products especially insurance products is very tough to study and because of my hectic sales target I hope I have done justice.
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ANNEXURE
QUESTIONNAIRE
I am Vaibhav Joshi pursuing my MBA from Alliance University. This research, titled FACTORS DETERMINING BUYING BEHAVIOUR OF CONSUMERS WHILE PURCHASING INSURANCE is part of my internship program. Your feedback will be strictly confidential. This information will be used only for academic purpose and will be very important for my project.
1. NAME ________________________________________________
2. AGE 18 30 ____ 30 40 ____ 40 50 ____ 50 + ____
3. GENDER - _____________
Page 63
4. OCCUPATION a) Service b) Business c) Professional d) Self employed ____ ____ ____ ____
5. INCOME a) Up to 1,80,000 P.A _____ _____ _____ _____ b) 1,80,000 5,00,000 P.A c) 5,00,000 8,00,000 P.A d) Above 8,00,000 P.A
6. E MAIL ______________________________________________________ _____
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7. DO YOU HAVE AN INSURANCE POLICY? IF YES, ARE YOU THE PERSON INSURED OR YOUR DEPENDANT?
YES - _____ NO - _____
SELF -
_____
DEPENDANT - _____
8. DOES THE POLICY GIVE YOU A LUMP SUM AT MATURITY ______ OR GAURANTEED ANNUAL PAYOUTS _______
9. WHICH IS THE BEST INVESTMENT OPTION TO YOU? a) Shares b) Bank deposits c) Mutual funds d) Real estate ______ ______ ______ ______
e) Post office savings ______ f) Gold g) Insurance ______ ______
Page 65
10. YOUR PURPOSE OF TAKING A POLICY a) Future security b) Childs marriage c) Childs education d) Tax benefit e) Savings tool ______ ______ ______ ______ ______
11. RATE EACH FACTOR FROM 1 5 GIVEN BELOW ACCORDING TO HOW MUCH IT INFLUENCES YOU WHEN CONSIDERING THE PURCHASE OF A LIFE INSURANCE PRODUCT. (1 - No difference / 2 - least influential / 3 influences a little / 4 influences a lot / 5 - influences the most)
a) Rate of return b) Companies name (goodwill) c) Advertisement effectiveness d) Flexible premium payment options e) Flexible pay-outs (withdrawal) options f) Approach and conviction of the insurance agent g) After sale reminders and updates h) Tax benefits i) Simplicity of the insurance plan j) Friends/relative referral
- ____ - ____ - ____ - ____ - ____ - ____ - ____ - ____ - ____ - ____
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k) Government stake in the company
- ____
12. DO YOU KNOW ABOUT THE INCOMESURANCE PRODUCT OF IDBI? CAN I EXPLAIN IT TO YOU IF YOU HAVE NOT?
I DO
- _____
I DONT AND NO - _____ I DONT AND YES - _____
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REFERENCES
www.idbifederal.com www.licindia.co.in http://www.acadjournal.com/2008/V22/part7/p2/

http://en.wikipedia.org/wiki/IDBI_Federal_Life_Insurance http://www.eindiainsurance.com/insurance/insurance-articles.asp
http://articles.timesofindia.indiatimes.com/2011-04-30/mumbai/29490561_1_publicsector-insurance-insurance-companies-insurance-firms
www.economictimes.com www.businesstoday.com www.businessworld.com
BOOK REFERENCE Dr.C.R.kothari, Research Methodology, New Age International Publishers, second revised edition, 2006. Pg.191. Kotler Philip, Marketing Management, 8 th edition, June, 1995, Pg.142-165. Robert A. Krueger, Business Forecasting: A Practical, Comprehensive Resource for Managers and Practitioners. BookSurge Publishing, 2008. Pg. 130.
Page 68

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Factors Determining Buying Behavior of Consumers While Purchasing Life Insurance

SL. NO. Particulars

Factors Determining Buying Behavior of Consumers While Purchasing Life Insurance

Factors Determining Buying Behavior of Consumers While Purchasing Life Insurance

Factors Determining Buying Behavior of Consumers While Purchasing Life Insurance

Factors Determining Buying Behavior of Consumers While Purchasing Life Insurance

Factors Determining Buying Behavior of Consumers While Purchasing Life Insurance

The four type of consumer buying behavior are:

Impulse buying, no conscious planning.

Categories that Affect the Consumer Buying Decision Process

Factors Determining Buying Behavior of Consumers While Purchasing Life Insurance

Historically the factors affecting consumer behavior have been broadly

classified as: Cultural Factors Social Factors Personal Factors

The Five-Stage Buying Decision Model is widely accepted as a basic framework

Factors Determining Buying Behavior of Consumers While Purchasing Life Insurance

Factors Determining Buying Behavior of Consumers While Purchasing Life Insurance

STRUCTURE OF THE INDUSTRY

Factors Determining Buying Behavior of Consumers While Purchasing Life Insurance

Factors Determining Buying Behavior of Consumers While Purchasing Life Insurance

What is LIFE INSURANCE?

Factors Determining Buying Behavior of Consumers While Purchasing Life Insurance

A whole life insurance product provides a fixed amount of money on death.

Factors Determining Buying Behavior of Consumers While Purchasing Life Insurance

Factors Determining Buying Behavior of Consumers While Purchasing Life Insurance

Insurance Industry in India:

Factors Determining Buying Behavior of Consumers While Purchasing Life Insurance

Factors Determining Buying Behavior of Consumers While Purchasing Life Insurance

INDIAN INSURANCE MARKET HISTORY

Factors Determining Buying Behavior of Consumers While Purchasing Life Insurance

Indian Insurance: Sector Reforms:

Factors Determining Buying Behavior of Consumers While Purchasing Life Insurance

Factors Determining Buying Behavior of Consumers While Purchasing Life Insurance

Factors Determining Buying Behavior of Consumers While Purchasing Life Insurance

Major Policy Changes

Company is formed and registered under the Companies Act, 1956;

Factors Determining Buying Behavior of Consumers While Purchasing Life Insurance

Factors Determining Buying Behavior of Consumers While Purchasing Life Insurance

Protection of the interest of policy holders:

Factors Determining Buying Behavior of Consumers While Purchasing Life Insurance

MAJOR PLAYERS IN THE INSURANCE SECTOR:

Postal Life Insurance. LIC.

Factors Determining Buying Behavior of Consumers While Purchasing Life Insurance

NAME OF THE PLAYER MARKET SHARE (%)

Factors Determining Buying Behavior of Consumers While Purchasing Life Insurance

GLOBAL SCENERIO OF INSURANCE COMPANIES

Factors Determining Buying Behavior of Consumers While Purchasing Life Insurance

Factors Determining Buying Behavior of Consumers While Purchasing Life Insurance

Factors Determining Buying Behavior of Consumers While Purchasing Life Insurance

Factors Determining Buying Behavior of Consumers While Purchasing Life Insurance

Factors Determining Buying Behavior of Consumers While Purchasing Life Insurance

Factors Determining Buying Behavior of Consumers While Purchasing Life Insurance

Factors Determining Buying Behavior of Consumers While Purchasing Life Insurance

Factors Determining Buying Behavior of Consumers While Purchasing Life Insurance

Factors Determining Buying Behavior of Consumers While Purchasing Life Insurance

Factors Determining Buying Behavior of Consumers While Purchasing Life Insurance

Factors Determining Buying Behavior of Consumers While Purchasing Life Insurance

Vision and VALUES

customers perceive value.

Customer-friendly: Advice and support in working with customers and partners.

Factors Determining Buying Behavior of Consumers While Purchasing Life Insurance

for Staff. Low customer confidence on the private players.

Insurable population: According to IRDA only 10% of the population is insured

Factors Determining Buying Behavior of Consumers While Purchasing Life Insurance

2. AGE 18 30 30 40 40 50 50 +

6. E MAIL __________________________________________________ _

YES - _ NO - _

e) Post office savings f) Gold g) Insurance __

I DONT AND NO - _ I DONT AND YES - _