International Conference on Technology and Business Management

March 28-30, 2011

Service Quality Perception and Customer Satisfaction in Life Insurance Companies in India
Deepika Upadhyaya deepikaupadhyaya@gmail.com MDS University, Ajmer Manish Badlani manish.f45@gmail.com Government Engineering College, Ajmer
Customer service is an integral part of life insurance organization. It is necessary to identify the key success factors in life insurance industry, in terms of customer satisfaction so as to survive in intense competition and increase the market share. The study is based on 206 insurance customers from four major cities of India. This study emphasizes the role of technology to improve quality and hence customer satisfaction. The study intends to promote a better theoretical understanding and recognition of the complexities to service quality and its measurement with respect to life insurance.

1. Introduction
This section includes introduction to the financial service industry and also establish the need of customer service and perception in financial services in life insurance service in particular. Companies involved in the insurance industry offer a wide variety of products and supplementary services that consumers in need of insurance coverage could readily infer as being insurance related. The financial service industry has not been immune from, or ignored, the quality revolution. Insurance in India has been spurred by product innovation, streamlining of sales and distribution channels along with targeted advertising and marketing campaigns. With increased globalization and presence of a large number of players in the market place, the very definition of customer relationship and satisfaction is in danger of being proved incomplete. Firms use technology as a key tool to enhance the information flow within their various business units, helping their employees better understand the ever changing and increasing needs and wants of their customers. From a company value perspective, fulfilling customer needs are a key source of income to an organization and achieving complete customer satisfaction is the only key for the company to succeed.

2. Service Quality
Gronroos (2001) offer a comprehensive definition of services as an activity or series of activities of a more or less intangible nature than normal, but not necessarily, take place in the interaction between the customer and service employee and/or physical resources or goods and/or system of service provider which are provided as solution to customers problems. Measuring Service Quality Unlike the quality of tangible goods, such as computers, the intangible nature of services makes their quality difficult to measure. Service cannot be subjected to objective quality control tests before it is provided to the general marketplace; it is only with experience that we know how consumers perceive the quality of the services they receive. In our study, we utilized a recently-developed measure of service quality: SERVQUAL. The SERVQUAL model was developed by Parasuraman, Zeithaml, and Berry (Gounaris, 2005). The aim of the authors was to provide a generic instrument for measuring service quality across a broad range of service categories and disciplines.

3. Review of Literature
Customer service has become a distinct component of both product and service sectors and with the developments in information technology many businesses find demanding and knowledgeable customers. The worldwide trend toward service quality was initiated in the 1880s when businesses realized that a quality product, in itself, is not guaranteed to maintain competitive advantage (van der Wal et al., 2002). Many researchers recognize that service quality can bring an organization a lasting competitive advantage (Moore and Lewis). Quality of services can be the difference between success and failure in both service and manufacturing firms. Service quality, customer satisfaction and customer value have become the main concern of both 1011

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manufacturing and service organizations in the increasingly intensified competition for customers in today's customer-centered era (Wang et al., 2004). As a result, many organizations are paying increasing attention to improve service quality. In some manufacturing industries "service quality" is considered a more important order winner than "product quality" (Ghobadian et al., 1994). Service quality improvements will lead to customer satisfaction and cost management that result in improved profits (Stevenson, 2002). Contemporary service sector firms are compelled by their nature to provide excellent service in order to prosper in increasingly competitive domestic and global marketplaces (Sultan and Simpson, 2000). As service firms find themselves in an increasingly competitive and complex business environment, they are inevitably driven to examine their service delivery processes critically. The focus of such internal analysis is ultimately about customer satisfaction, and how bottom-line results can be actualized through delivering quality services to customers via flawless interface platforms. This is not only the case in the private sector, but it also is increasingly so in the public sector. Public sector firms are trying to make administration more efficient and more citizen-oriented (Scharitzer and Korunka, 2000).

4. Research Methodology
Need for Research The insurance industry affects money, capital markets and the real sectors in an economy, making insurance facility necessary to ensure the completeness of a market. It is an industry with strategic importance for any country as it contributes to the financial sector (and hence the GDP) as well as confers social benefits on the society. At the micro-level, an insurance policy protects the buyer against financial loss arising from a specified set of risks at some cost. It thus reduces anxiety and promotes financial stability by providing a much needed social security net, especially in times of crumbling family ties and nuclear households in developing countries. The role of life insurance is undergoing a phenomenal change today as is evident from the service bouquet and the product advertisements. The emphasis lies on insuring oneself and one's close family members for self-reliance more-so because nuclear families are the emerging trend in India. To meet the varying needs of various individuals, the life insurance players have a vast foray of products and services in their bouquet. Besides this, almost all companies offer the flexibility to customers to choose the most suitable product for themselves by combining features of a number of products and services together. Thus life insurance companies have to customize the services to improve the quality of service to suit the customer as per their needs. Most of the studies in the review literature presented above have been done with a very limited purpose of probing in to some of the facets of service quality and its perception by life insurance customer. On the basis of the review of the studies, it can be deducted that service quality management is playing a very significant role in the development of the economy in India. But as we have seen that lot of research is done in manufacturing sector to improve the service quality but research on service quality of financial service sector is very scare and scattered with very few in depth studies on life insurance of a very limited nature. There is a wide scope for research on the perception of service quality of life insurance companies operating in India. The present study is pioneering work, because this is the first time an attempt is being made to study the service quality assessment of life insurance companies operating in states of Rajasthan and Maharashtra. The review of literature gives an overall view of the researches conducted at international level to facilitate identification and understanding the areas covered as far for the purpose of the research. It also paves the way for future research. Empirical studies have not focused much on the service quality perception by the life insurance customer in developing countries like India. There is no available literature on service quality perception of life insurance Company by customers in Rajasthan and Maharashtra. It is in this study the Service Quality Perception and Customer Satisfaction in Life Insurance Companies in India with special reference to state of Rajasthan and Maharashtra. Reason for Investigating Service Quality in Life Insurance Industry The insurance industry forms an integral part of the Indian financial market, with insurance companies being significant institutional investors. In recent decades, the insurance sector, like other financial services, has grown in economic importance. This growth can be attributed to a number of factors including rising income and demand for insurance, rising insurance sector employment, and increasing financial intermediary services for policy holders. A sound national insurance market is an essential characteristic of economic growth. This is not surprising as the insurance industry forms a major component of an economy by virtue of the amount of premiums it collects, the scale of its investment, and, more fundamentally, the essential social and economic role it plays by covering personal and business risks. By encouraging these factors that promote insurance demand and aid financial development, policymakers possess a strong tool to stimulate economic growth. 1012

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A number of foreign insurance companies have set up representative offices in India and have also tied up with various Life Insurance companies. The business environment is constantly changing and demand for adaptability among the organizations tends to increase. Demands from customers, technological development, change of value and globalization are the factors that drive the need to change and develop an organization. It is hard to get advantages by quickly adapting technology to product or service in an efficient manner. The ability to handle organizations intangible assets such as service is of great importance to reach success, then the ability to invest and manage tangible assets. Research Gap The quality of the service is a pre-requisite for financial institution market performance and subsequently, economic performance .The companies that offer the best technologies and great quality in every service and that have trained and motivated its employees in order to provide an efficient service are creating adequate framework for the success of a relationship marketing orientation. Most of the researchers are dealing with identification of attributes of service quality. Some work has been done in the area of identification of factor related to service quality in the banking industry. Financial sector as such is broad and has a wide scope and includes Banks, Insurance companies and Brokerage Firms. The researcher has not come across any study specifically dealing with service quality attributes of Life Insurance Sector in India. There is gap in the field of investigation specifically in the area of life insurance, what the researcher wants to study and get inside into the quality aspect of life insurance service. Research Design The research design chosen for this study is descriptive research design. The main objective is to see the factor affecting service quality which ultimately leads to customer satisfaction of life insurance customer in India. A selected number of life insurance companies operating in state of Rajasthan and Maharashtra were chosen for the study. The study is restricted to major city and districts of Rajasthan and Maharashtra that are Mumbai, Pune, Jaipur and Ajmer. The present study has been undertaken to study the customers perception of service quality offered by the life insurance companies. More specifically, this study attempt to access the factors which affect the service quality perception of life insurance customer those are in line with the objectives of the study. Research Objective The broad objective of the study is to study the customers perception of service quality offered by the life insurance companies operating in the state of Rajasthan and Maharashtra (India). The specific objectives of the study are as follows: To identify the factors of Customer Satisfaction in retail life Insurance in India. To study the importance of technology in fulfilling Customer Satisfaction. Variables used for the Study The following variables are used for collection of data: The demographic variable in the study include age, sex, educational qualification, marital status, profession, income. SERVQUAL dimensions Tangibles, Reliability, Responsiveness, Assurance, and Empathy. Variables associated with Improvement of Service Delivery- Word of Mouth, Hygiene and Motivational factors, Agency Channel Development factors, Advertising and Technology.

5. Database and Methodology

The study is based on both primary data and secondary data. Primary Data: The primary data were collected using a questionnaire. The researcher than approached the respondents and explained to them the questionnaire in detail (including its purpose, the meaning of the items and what was expected of the respondents). The respondents were asked to give their perception of the level of service quality delivered by the insurance companies. Secondary Data: The secondary information was collected from the internet, government agencies and publications. Sample Selection The questionnaire was administered through mail and in person to 300 respondents. The researcher got reply from 206 respondents (68.7%). Respondents included were from a balanced mix of various demographic factors (age, gender, marital status, education levels, and employment status and income group). The respondents 1013

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consisted of Insurance customers of the ten public and private sector life insurance companies from major cities of Rajasthan and Maharashtra state in India. The data was collected by using the convenience sampling technique. Statements related to service quality dimensions were based on past literature. The respondents were asked to rate each statement on the Likert scale of 1 to 3 (1 = Disagree, 3 = Agree). Schedule Design A structured Questionnaire was designed to collect the primary data. The interview schedule was kept respondent friendly to make a quality of questionnaire. The questionnaire was developed by identifying the variables based on literature review and the objective of the study. The help of experts, professionals, and trainers in the field of life insurance was taken so as to ensure the content validity. Further to prepare questionnaire ten Public and Private Sector Life Insurance Company customers were chosen for in depth interview. On behalf of that, a questionnaire was prepared. The logical structure of questionnaire followed the order of service quality dimensions. For understanding the importance and satisfaction of each service quality dimension a three point Likert scale was used (1= Disagree, 2= Neutral, 3= Agree). In order to gain objective views and guard against faulty assumptions and detect flaws in the questionnaire, consultation with the experts was done. The questionnaire developed was reviewed by professionals, experts and trained personnel in order to increase the validity and reliability of questionnaire and response. Further the questionnaire developed by the researcher was pre tested on 30 respondents. Few minor modifications were made based on their feedback regarding the clarity of some items. No major adverse comments were raised and thus the instrument was deemed ready for actual respondents. The questions were designed on interval scale for effective analyzing the data. The open ended questions sought respondents opinion about the quality of service provided by their life insurance company.

6. Results and Interpretation

After collecting all the data the process of analysis begins. To summarize and rearrange the data several interrelated procedures are performed during the data analysis stage Statistical tools of Microsoft Excel and SPSS are used for data input and analysis. The statistics results were presented in graphical and tabular form with detail description. A Brief Description of the Sample Profile Out of 206 respondents living mostly in Rajasthan and Maharashtra, 64% are male and 34% are females. 99% of the respondents are financially independent. Marital Status of the respondents tells that 138 are married and 68 are unmarried. Distribution of the sample taking age, profession, academic qualification and monthly income of respondents respectively. The Life Insurance Company and the percentage of respondents associated with each company are detailed in Table (I) Researcher did not observe any significant difference between male and female respondents in their Life Insurance Policy buying behavior.
Table I Life Insurance Companies In India Life Insurance Corporation of India SBI Life Insurance Company ICICI Prudential Life Insurance Company Birla Sunlife Insurance Company Bajaj Allianz Life Insurance Company Reliance Life Insurance Company HDFC Standard Life Insurance Company Max New York Life Insurance Company Kotak Mahindra Old Mutual Life Insurance Company Tata AIG Insurance Company Total No. of Respondents 68 24 37 8 19 16 12 8 6 8 206 Percentage 33% 11% 18% 4% 9% 8% 6% 4% 3% 4% 100%

Demographic Profile of the Respondents The profile of the respondents is shown in the Fig. The profile focus on the demographics of respondents. It shows that out of 206 respondents, 64% of the respondents are male and 36% are males. Most of the respondents are married (67%) and in the age group 25-35 year (48%). This range shows that married 1014

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group always feels the importance of insurance policy to complement with their life and families. The highest education level attained by most of the respondents was degree level (52%), followed by masters (46%) and under graduation (2%). It shows that majority of respondents were educated with high qualifications. The occupations of respondents were varied. The majority of the respondents were working in private sector (62%) and included manager, executives, engineers, followed by government officers (31%) and other white collar jobs, businessman and skilled or semiskilled workers (7%). In term of household income, almost half of the respondents earned less than Rs.50,000 (per month). Customer Usage of Insurance Counter This study elaborates respondents as customers in using services offered by insurance counter. The focuses on the duration of last visited insurance counter, category of service, availability of service facility and problems at the time and last visit. Majority of the respondents have visited insurance service counter every quarter (61.65%). In term of category of service, 29.13% of the activities are process of payment, 18.45% respondents enquired about claim process, service facilities and renewal policy. About 16.50% of the respondents wanted to know about the new insurance product offerings and 35.92% of the respondents preferred services through agent/advisors for responsive replies to questions of cost, benefits, and adequacy of coverage; availability of agents locally to address insurance claims issues; and quick return of phone calls and fast turn-around times on requests for information. The result showed that the majority of the respondents visited service counter in Life Insurance Corporation of India (33%), followed by I.C.I.C.I Prudential Life Insurance Company (18%), S.B.I. Life Insurance Company (11%), Bajaj Allianz Life Insurance Company (9%), Reliance Life Insurance Company (8%), HDFC Standard Life Insurance Company (6%), Birla Sunlife Insurance Company (4%),Tata AIG Life Insurance Company (4%), Max New York Life Insurance Company (4%), Kotak Mahindra Old Mutual Life Insurance Company (3%). The Descriptive Statistics The descriptive statistics have been used to find out the mean and standard deviation of each of each SERVQUAL statement.
Table 1 SERVQUAL Measures Variables Overall I am satisfied with the service of the Insurance Company Tangibles Physical appearance of the staff is professional Physical appearance and surrounding of the branch office influence customer I am sure that Insurance Company uses latest technology in providing services Information is easily available through Product & Service Brochures, leaflets, letters Company is having a memorable advertisement Reliability Staff provides error free services Staff is committed to fulfill promises in timely manner Company is having competitive pricing compared to others Insurance company performs the service right in first instance Customer can fully depend and rely on employee Company provides accurate records such as payment record or any to customer Company provides guarantee/warranty of the service performed Responsiveness Employees are in a position to inform the customer about the time it will take for compliance of the service demanded Employees of company provide prompt service to their customer Employees give their customers shorter waiting time or fast service turnaround 2.31 2.26 2.17 0.78 0.71 0.73 2.27 2.41 2.32 2.36 2.00 2.56 2.22 0.73 0.72 0.75 0.70 0.84 0.69 0.78 2.43 2.36 2.47 2.50 2.41 0.66 0.70 0.72 0.70 0.73 2.33 0.73 Mean Std. Dev.

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Employees in company are willing to help their customers Assurance Employees are trustworthy and honest Employees in company have knowledge and competence to solve customers problem Employees in company are very experienced in solving or diagnosing the customers problem In case of complications managers are helpful by making prompt decisions Privacy of customers information is maintained You are assured about the agent/advisor who deliver the service Company is widely known Company is well liked Company is unique compared to others Empathy Customer gets individual attention Do you think that Managers of company understands their customer specific needs Company keep customers informed about service that have been performed and price charged Insurer has their customer best interest in heart Company have convenient Business Hours Staff calls customers by name I trust staff of Insurance Company Agents/advisors have concern and understanding of customers problem Does company serve you during extended hour

2.39 2.45 2.44 2.32 2.28 2.49 2.28 2.58 2.57 2.42 2.12 2.15 2.27 2.11 2.52 2.17 2.32 2.23 1.88

0.73 0.71 0.70 0.70 0.76 0.68 0.80 0.74 0.70 0.73 0.76 0.77 0.83 0.65 0.65 0.74 0.70 0.84 0.77

It is revealed from the above (Table 1) that Life Insurance Companies are good at Tangibles and Assurance features of Life Insurance Service when compared to Reliability, Responsiveness and Empathy Features of Life Insurance Services. These Features are based on standard SERVQUAL dimensions. Cronbachs Coefficient Alphas for SERVQUAL Dimensions
Table 2 Cronbachs Coefficient Alphas Factor and Items Overall (Cronbachs Alpha = 0.912) I am satisfied with the service of the Insurance Company Tangibles (Cronbachs Alpha = 0.551) Physical appearance of staff is professional Physical appearance and surrounding of the branch office influence customer I am sure that Insurance Company uses latest technology in providing services Information is easily available through Product & Service Brochures, leaflets, letters Company is having memorable advertisement Reliability (Cronbachs Alpha =0.701) Staff provides error free services Staff is committed to fulfill promises in timely manner Company is having competitive pricing compared to others Insurance company performs the service right in first instance Customer can fully depend and rely on employee Company provides accurate records such as payment record or any to customer Company provides guarantee/warranty of the service performed Responsiveness (Cronbachs Alpha = 0.733) Employees are in a position to inform the customer about the time it will take for compliance of the service demanded

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Employees of company provide prompt service to their customer Employees give their customers shorter waiting time or fast service turnaround Employees in company are willing to help their customers Assurance (Cronbachs Alpha = 0.742) Employees are trustworthy and honest Employees in company have knowledge and competence to solve customers problem Employees in company are very experienced in solving or diagnosing the customers problem In case of complications managers are helpful by making prompt decisions Privacy of customers information is maintained You are assured about the agent/advisor who deliver the service Company is widely known Company is well liked Company is unique compared to others Empathy (Cronbachs Alpha = 0.802) Customer gets individual attention Do you think that Managers of company understands their customer specific needs Company keep customers informed about service that have been performed and price charged Insurer has their customer best interest in heart Company have convenient Business Hours Staff calls customers by name I trust staff of Insurance Company Agents/advisors have concern and understanding of customers problem Does company serve you during extended hour

Kaiser-Meyer-Olkin Measure and Bartlett's Test

Table 3 KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy. Approx. Chi-Square Bartlett's Test of Sphericity df Sig. .779 3.194E3 561 .000

Communalities of Perceived Variables

Table 4 Communalities Initial T1 T2 T3 T4 T5 R1 R2 R3 R4 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 Extraction .662 .670 .567 .545 .527 .667 .619 .627 .559

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R5 R6 R7 P1 P2 P3 P4 A1 A2 A3 A4 A5 A6 A7 A8 A9 E1 E2 E3 E4 E5 E6 E7 E8 E9

1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000

.656 .604 .489 .665 .679 .772 .598 .712 .720 .785 .661 .720 .736 .449 .498 .665 .634 .632 .645 .686 .599 .600 .611 .741 .521

Extraction Method Principal Component Analysis

Total Variance Explained

Table 5 Extraction Method: Principal Component Analysis Initial Eigenvalues Component Total 1 2 3 4 5 6 7 8 9 10 9.144 2.418 1.943 1.652 1.538 1.308 1.280 1.155 1.082 .995 Extraction Sums of Squared Loadings % of Variance 26.893 7.112 5.713 4.859 4.525 3.846 3.764 3.398 3.183 Rotation Sums of Squared Loadings % of Variance 9.197 8.258 8.079 7.533 6.739 6.312 5.989 5.617 5.570 Cumulative % 9.197 17.455 25.535 33.067 39.806 46.118 52.107 57.723 63.294

% of Cumulative Total Variance % 26.893 7.112 5.713 4.859 4.525 3.846 3.764 3.398 3.183 2.927 26.893 34.005 39.718 44.577 49.102 52.948 56.712 60.110 63.294 66.220 9.144 2.418 1.943 1.652 1.538 1.308 1.280 1.155 1.082

Cumulative Total % 26.893 34.005 39.718 44.577 49.102 52.948 56.712 60.110 63.294 3.127 2.808 2.747 2.561 2.291 2.146 2.036 1.910 1.894

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11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34

.975 .914 .866 .808 .775 .762 .725 .597 .560 .509 .473 .424 .421 .394 .357 .338 .299 .261 .242 .206 .192 .144 .140 .102

2.869 2.688 2.548 2.375 2.281 2.242 2.131 1.755 1.647 1.498 1.391 1.247 1.239 1.158 1.051 .994 .879 .767 .712 .606 .564 .425 .411 .301

69.089 71.778 74.325 76.701 78.981 81.223 83.355 85.110 86.757 88.255 89.646 90.893 92.131 93.289 94.340 95.334 96.213 96.981 97.693 98.299 98.863 99.288 99.699 100.000 Table 6 Rotated Component Matrixa Component

1 T1 T2 T3 T4 T5 R1 R2 R3 R4 R5 R6 R7 P1 P2 P3 -.063 .221 -.127 -.110 .152 .060 -.005 .615 .351 .723 .199 .157 .079 .007 .037

2 .125 .084 .257 .008 .146 .599 .583 .111 .312 .085 -.036 .114 .140 .210 .078

3 -.012 .172 .111 .292 .066 -.051 .239 .022 .340 -.044 .186 .154 .025 .268 .221

4 -.004 -.002 .288 .175 .126 .406 .283 .072 .338 .269 .188 .084 .263 .693 .768

5 .755 .748 .587 .005 -.044 .103 .215 .169 .168 -.101 -.037 -.099 .233 .060 .103

6 .060 .078 -.017 .255 .065 .004 -.040 -.088 -.008 .133 .224 -.016 .431 .133 .289

7 .132 -.066 .157 .187 .076 .288 .213 .376 .150 .138 .042 .475 .123 -.052 .099

8 .224 -.065 -.018 .557 .669 .172 .103 .197 .239 .019 .227 .298 .215 .181 .093

9 -.004 .106 -.143 .086 .058 -.114 .193 -.120 -.038 .056 -.624 .310 .518 .159 -.119

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P4 A1 A2 A3 A4 A5 A6 A7 A8 A9 E1 E2 E3 E4 E5 E6 E7 E8 E9

.216 .228 .021 .154 .152 -.046 .569 .262 .505 .722 .220 .269 .164 .411 -.039 .129 .305 .372 .201

.168 .307 .772 .835 .125 .082 .091 -.037 -.102 .094 .136 .382 .168 .091 .154 -.206 .052 .146 .197

.021 .333 .162 .049 .698 .728 .275 .097 .240 .086 .362 .265 .603 .474 .229 .016 .046 .226

.430 .075 -.020 .084 .164 .090 .032 -.042 .100 -.232 .101 .052 .283 .439 .093 -.029 .342 .158

.484 .099 .189 .073 .040 .156 .061 .179 .150 .010 .276 .188 .016 .253 .101 .194 -.012 -.060

.181 .603 .222 .137 .301 .293 .093 -.012 .174 .128 .133 .355 -.131 .017 .635 .229 .606 .135

.155 .061 -.081 -.103 .095 .101 -.064 -.060 -.065 .208 .561 .390 .230 .092 .117 .668 .157 .186

-.053 -.123 .053 -.026 .088 .231 .046 .560 .309 .093 .134 -.096 .195 -.042 .269 .052 .063 .120 -.268

.210 -.238 .047 .139 -.019 -.009 .556 -.137 .112 .069 .006 .136 .195 .126 .117 .018 .007 .659 -.031

.239 .276 -.123 .061 .465 Extraction Method Principal Component Analysis Rotation Method Varimax with Kaiser Normalization Rotation Converged in 12 iterations Table 7 Component Transformation Matrixa

Component 1 2 3 4 5 6 7 8 9

1 .398 .684 -.243 .224 -.309 .014 .262 -.316 .012

2 .373 -.469 -.492 -.207 -.251 .078 .440 .299

3 .437 -.008 .317 -.202 .100 -.174 -.087 -.061

4 .389 -.256 .194 -.279 -.150 .453 -.310 -.490

5 .276 -.374 -.170 .746 .351 -.111 -.095 -.231

6 .327 -.043 .256 -.105 -.124 -.756 -.045 .116

7 .307 .175 .080 .266 -.164 .299 -.463 .682

8 .236 .130 .400 -.021 .553 .279 .543 .187 .230

9 .163 .239 -.547 -.386 .581 -.088 -.336 .024 .096

-.054 -.785 .323 -.005 .461 .044 Extraction Method Principal Component Analysis Rotation Method Varimax with Kaiser Normalization

Factor Analysis to Determine the Factors which Customers keep in Mind while purchasing Life Insurance Policy from Life Insurance Companies Trimming a large number of variables to reach at few factors to explain the original data more economically and efficiently Factor Analysis, a widely used multivariate technique in research, reduces data complexity. Researcher find that what exactly makes a customer buy the service and try to figure out what really drives buyer behavior from large number of possible purchasing criteria. Factor Analysis is an important tool for resolving this confusion and identifying factors from an array of seemingly important variables. In the present study Factor Analysis exhibits the rotated factor loading for the statements (Variables) of Quality of Service rendered by Life Insurance Companies in India. It is clear from the (Table 5) that all the 34 statements have been extracted into nine critical factors namely F1, F2, F3, F4, F5, F6, F7, F8, F9. The factors Identified with new names which influence the Quality of Service are given below in table. 1020

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Adequacy of the data is tested on the basis of results the Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy and Bartletts test of sphericity (homogeneity of Variance) provided. The KMO measure of sampling adequacy is 0.779, which indicates the present data suitable for factor analysis. This is a goodness fit coefficient whose value varies between 0 and 1 and we take values over 0.5 to represent good factor analysis (i.e., data reduction is effective). Similarly, Bartletts test of sphericity is significant (p < 0.001); that explains existence of sufficient correlation between variables to proceed with the analysis (Table 3). The Bartletts test statistic is approximately distributed and it may be accepted when it is significant at p < 0.05. Most of the extracted Communalities are acceptable and all variables are fit for the factor solution as their extraction values are large (Table 4). The first nine components (factors) in the initial solution have an Eigenvalues over 1 and they account for maximum observed variation in the consumers behavior about the purchase of Life Insurance policies from the Life Insurance Companies in Rajasthan and Maharashtra. According to Kaiser Criterion, only first nine factors should be used because subsequent eigenvalues are less than 1. Cartells Scree test involves plotting each of the eigenvalues of the factors and inspecting the plot to find a point at which the shape of the curve changes direction and becomes horizontal. This test recommends retaining all factors above the elbow or break in the plot as these factors contribute the most to the explanation of the variance of the data set. Factor Loading are used to measure correlation between variables and the factors. A loading close to 1 indicates strong correlation between variable and the factor, while a loading closer to zero indicates weak correlation. Unrooted solutions of factor loading are not suitable for interpretation purpose since the variables generally tend to load on multiple factors. The factor are rotated with Varimax with Kaiser Normalization rotation method ( Table 7).Research scholar used Principal Component Analysis (PCA) method for factor extraction taking those factors only whose values are greater than 0.5 for the purpose of interpretation. After Analyzing the Total Variance Explained (Table 5) it can be found that 34 statements can be grouped under 9 Factor Groups of questions. The Factor Analysis made so far using SPSS version 16 helps extract nine factors, viz., Pricing, Employee Competence, Product & Service, Technology, Physical Appearances, Trust, Service Delivery, Advertising and Service Management from variables and these factors contributed variation in consumer behavior in purchase of Life Insurance Policy from any Life Insurance Company existing in India. Interpretation of Results So the rank of the factors according to importance the consumer reckon can be written in the descending order as Pricing > Employee Competence > Product & Service > Technology > Physical Appearances > Trust > Service Delivery > Advertising >Service Management. It implies that customers go for better priced life insurance policy. Pricing with Quality of Service was Ranked the Highest in Terms of Participant Satisfaction with Life Insurer While the natural tendency of many Life Insurance Companies to better price the product and services so as to increase the market share. More specifically the Service Cost was found to lead to the policy of Efficiency pricing. Regarding the pricing behavior of companies operating in different service industries, insurance companies are mainly endeavoring to offer unique services in their market. Moreover, they are bound to place an emphasis on their broader social and political environment due to their social character and the high regulation. They are also endeavoring to incorporate their pricing strategy into their overall marketing strategy and, thus, formulate a cohesive marketing strategy. This might be attributed to the fact that most life insurance companies operating in India have established well-organized marketing departments. It is also interesting that, while they use some standard list prices, they are also negotiating their prices individually with some key customer. When combined with the findings that are related to the service and organizational characteristics, it seems that "the cost of the service" along with "competitors' prices" are the two most important characteristics that trigger pricing decisions. These findings are consistent with those put forward by in the literature review section. Other important characteristics are the "service quality", the "market strategy", the "customer orientation", the "intensity of competition among the existing companies" and the "type of the service", which indicate that the companies in our sample tend to place their emphasis on service and organizational rather than environmental characteristics when they set their prices. 1021

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Employee Competence with Quality of Service for Customer Satisfaction was ranked the Second Highest in Terms of Participant Satisfaction with Life Insurer Researcher examines satisfaction at the encounter level rather than overall satisfaction, primarily because overall satisfaction is a cumulative evaluation resulting from multiple experiences over time. When customers are processing the encounter at the peripheral level, they rely on peripheral cues to evaluate the encounter. Customer satisfaction, then, may be the result of things not remotely connected to the service encounter, such as pre-encounter stimuli (e.g., audio, visual). When a more central processing cognitive evaluation is tapped, however, customers may focus on evaluating the service based less upon fuzzy and possibly irrelevant criteria and more on the core, technical elements of the service employee, dismissing peripheral cues as unimportant. Thus, we expect to see that perceived service quality will explain more of the customer's satisfaction with the encounter for socialized and competent employees. Products with Quality of Service for Customer Satisfaction was ranked the Third Highest in Terms of Participant Satisfaction with Life Insurer Once it is recognized that competition takes place between companies' offerings and not the companies themselves, it becomes apparent that a "market" focus is appropriate. As most life insurance companies would recognize, the offering, which is presented to potential customers through the market, is the primary focus of competitive strategy. While accepting that the resources and reputation of a company may add value to an offering, this does not alter the fact that customers choose between offerings. Although the twoway split works well for product offerings and some service offerings, for many financial services the advice and assistance are core parts of the service and are in many cases indistinguishable from the "product" being offered. However, the distinction remains useful in that it highlights the fact that both product features and advice and assistance provide options for differentiation. These options are developed by introducing the concepts of content or image differentiation for merchandise or personalized differentiation for support. Technology with Quality of Service for Customer Satisfaction was Ranked the Fourth Highest in Terms of Participant Satisfaction with Life Insurer The most prominent contribution of this discussion is proposing a way to the role of Sales force automation (SFA) technology in contributing to customer satisfaction. Technology integration allows improvement in interpersonal interactions and enhances personal relationships, which is especially critical in high level financial services. In fully integrated SFA systems, customers might not even think about the technology at all, because it becomes simply a routine part of their interpersonal interaction. This is critical, as is the need for the salesperson him/herself to play an important role in this integration. SFA integration, then, is about salespeople using SFA to enhance relationships with customers, not about using technology to replace the salesperson's role in the customer interaction. Physical Appearances with Quality of Service for Customer Satisfaction was ranked the Fifth Highest in Terms of Participant Satisfaction with Life Insurer This empirical study has shown that there is a positive relationship between the level of tangible components like Physical appearance of branch office and staff in a service industry and the importance of the other tangible dimension. Although intangibility is certainly a key characteristic of services, tangibility performs an important role, particularly in service industries which have high tangible components. A certain degree of tangibility and intangibility exists in both service process and service output. Even in service industries involving less prominent tangible elements, tangibility cannot be completely ignored. In particular, the more a service has tangible components, the more important are these tangible dimensions in service quality. During the service process, if there are tangible actions physically involving people, security and reliability are perceived as being more important than in those services which predominantly involve intangible actions directed at people's minds. In addition, if tangible actions directed at goods and other physical possessions are involved, customers perceive tangible dimension as being more important. Finally, with respect to service output, if a service involves the making of a tangible product, or providing added value to a tangible product, the importance of perceived value increases. Trust with Quality of Service for Customer Satisfaction was ranked the Sixth Highest in Terms of Participant Satisfaction with Life Insurer Quality of Service increases customers' satisfaction with the encounter, their trust in the service provider and anticipation of future interaction. Researcher found that the customers' overall satisfaction, trust and anticipation of future interaction seem to decline as they are socialized toward their role in the service production process - in 1022

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other words, as customers are provided with information about the service provider's expectations of them (the customer), customer perceptions of service outcomes may initially decline. The findings suggest that caution is necessary when attempting to increase the customer's involvement in the production of the service. This is not necessarily negative, if for no other reason than the sentiments are much more enduring. It does, however, make it more critical that the service provider become more adept at delivering service quality as customers becomes more socialized and knowledgeable about their role in service provision. Service Delivery with Quality of Service for Customer Satisfaction was ranked the Seventh Highest in Terms of Participant Satisfaction with Life Insurer The processes, procedures, systems and technology that would make a service a seamless one. Customers would always like and expect the service delivery processes to be perfectly standardized, streamlined, and simplified so that they could receive the service without any hassles, hiccups or undesired/inordinate questioning by the service providers. Advertising with Quality of Service for Customer Satisfaction was ranked the Eight Highest in Terms of Participant Satisfaction with Life Insurer Consumers buy a certain brand because it is preferable to competing brands; they have implicitly or explicitly anticipated that the selected brand will yield more satisfaction than the other brands and that it will respond more appropriately to the relevant set of felt needs. Hence, the amount of satisfaction consumers anticipate they will receive from a certain brand constitutes the expectations raised by the selected brand. Service Management with Quality of Service for Customer Satisfaction was ranked the Ninth Highest in Terms of Participant Satisfaction with Life Insurer It is only recently that Service Quality Management has begun to receive substantial attention from Human Resource Management.

7. Conclusion
A major contribution of this study is the provision of an approach for the managers to identify the factors of service quality and customer satisfaction in retail life Insurance in India. Although the satisfaction levels are on the higher side, yet there remains a lot to be done by the management of the retail life Insurance companies to maximize their customers satisfaction and improve the quality of service. The satisfaction of the customer with the services of Life Insurance Companies is linked with the performance of the service. Further, many customers who are strongly familiar with interpersonal services may never be satisfied with purely technology-based services. This is probably even more important in the relationship-based cultures of India. Customers seem to want technology to be integrated into interpersonal relationships, not to replace them, regardless of their own personal technology readiness. The perception of customers is that salespeople can use technology to solve their problems, helping to develop a sense of trust and satisfaction that is likely to extend their relationship. The salespeople are the critical element in the interaction and relationship, and technology's role is a support element that helps them develop their relationships.

8. References
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