RIJM Volume 2, Issue 3 (March 2013) ISSN: 2250 – 3986

A Journal of Radix International Educational and

Research Consortium

RIJM
RADIX INTERNATIONAL JOURNAL OF
RESERCH IN MARKETING

A COMPARATIVE STUDY OF CUSTOMER BEHAVIOR BETWEEN PUBLIC AND

PRIVATE INSURANCE COMPANIES
(WITH SPECIAL REFERENCE TO UDAIPUR CITY)

DHARMESH MOTWANI
Asst. Professor, Pacific Business School, Udaipur

DR. KIRAN ANCHLIA

Asst. Professor, India International College, Udaipur

ABSTRACT

In the present world of uncertainty insurance has become one of the basic needs of common
people too. For years LIC had been the sole authority to fulfill insurance needs of people but
with liberalization & globalization many private insurance companies emerged & it was
expected that monopoly of LIC will shatter with it. This paper attempts to identify the
performance efficiency of Public Insurance companies as compared to Private Insurance
companies. The paper is based on descriptive research design. Close ended questionnaire
has been used to collect the primary data from customers of various Insurance companies.
Conclusions of paper also reveal the impact of customers’ demography on their choice
between Public & Private Insurance companies.

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RIJM Volume 2, Issue 3 (March 2013) ISSN: 2250 – 3986

KEY WORDS – : Consumer behavior, LIC, Private Insurance companies, Customer satisfaction.

INTRODUCTION

Insurance is security against risk. It is not in the form of guarantee against danger but it is in
the form of monetary compensations. The concept evolved with the basic notion of sharing
of risk. It is assumed that all people in a group do not face risk simultaneously, hence the
money collected by their contribution can be used to help sufferer for the time being.
Underlying the same idea LIC was the first insurance company started in India.

For many years LIC was the only insurance company providing insurance covers but later on
after various relaxations provided by government & permission to private sector to enter
into this field various private sector insurance companies flooded in.
Here is a brief sketch of some of such companies:-

LIFE INSURANCE COMPANY (LIC)

Life Insurance Company is a public owned organization and is the biggest insurer in the
country. It is one of the prestigious entities in India as it is the single largest investor
institution acting as the major contributor in the economic development of the country.
The main goal of the company is to promote welfare of the society. Further, it meets and
boosts the quality of life of people by providing various insurance products and other
financial investment instruments such as ULIPs. Its offerings include life insurance products
for non-resident Indians as well as senior citizens. The other products offered by Life
Insurance Company include pension plans, children plans, term plans, health plans and
various group insurance plans.

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RIJM Volume 2, Issue 3 (March 2013) ISSN: 2250 – 3986

SBI LIFE INSURANCE COMPANY

SBI Life Insurance Company Limited is a joint venture between the State Bank of India and
BNP Paribas Assurance. SBI enjoys the multi-distribution model encompassing vibrant
Bancassurance, Retail Agency, Institutional Alliances and Corporate Solutions distribution
channels. It provides a huge range of products like ULIP`s, Pension plans, Pure protection
product, children`s policies which secure their future and various traditional plans like
money back, whole life and endowment. It has its focus in the rural areas and offers
products for micro insurance.

ICICI PRUDENTIAL LIFE INSURANCE COMPANY

It is a joint venture between ICICI Bank, one of the foremost financial services companies of
India and Prudential plc, one of the leading international financial services group
headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector
life insurance companies to begin operations in December 2000 after receiving approval
from Insurance Regulatory Development Authority (IRDA). ICICI Prudential Life's capital
stands at Rs. 4,780 crores (as of September 30, 2010) with ICICI Bank and Prudential plc
holding 74% and 26% stake respectively. ICICI Prudential's life insurance products may be
loosely categorized under four forms- Life Plans (further categorized into Term Plans and
Wealth Plans), Child Plans, Retirement Plans and Health Plans.

BIRLA SUN LIFE INSURANCE COMPANY LIMITED (BSLI)

Birla Sun Life Insurance Company Limited (BSLI) is a joint venture between the Aditya Birla
Group, a well known Indian conglomerate and Sun Life Financial Inc, one of the leading

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RIJM Volume 2, Issue 3 (March 2013) ISSN: 2250 – 3986
international financial services organizations from Canada. With an experience of over a
decade, BSLI has contributed to the growth and development of the Indian life insurance
industry and currently is one of the leading life insurance companies in the country.
All these companies provide a comprehensive whole of insurance plans catering to needs of
individual customers. Some of the commonly talked insurance products are discussed
under

GROWTH PLAN (ULIP)

A mix of insurance and investment – ULIPs (Unit linked Insurance Plans) provide flexibility
by way of making choice in terms of investment proportions. One can choose to invest
certain percentage in equity whereas balance in debt funds. Or else one can invest in 100%
equity or 100% debt funds. Choice to depend on one’s risk profile.

RETIREMENT PLAN (PENSION)

All of us have to retire one day. With plenty of investment avenues available today it is not
at all difficult to plan for a peaceful retirement. Some pension plans in our investment
portfolio not only take care of our retirement but also mid –life career shift. Pension plans
are important today as they will be source of regular income in our retirement phase.
Pension Plans are Individual Plans that gaze into one’s future and foresee financial
stability during your old age. These policies are most suited for senior citizens and those
planning a secure future, so that you never give up on the best things in life.

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SAVINGS PLAN (ENDOWMENT)

This is a plan which has a saving element in it along with insurance. Here the sum assured is
paid either on death or on maturity when the term ends. In Endowment plans the bonus is
declared every year which is added to the sum assured however bonus is non-guaranteed
and depends on the profits booked by the company in that year. Policy holder can select
term while taking the policy.

CHILDREN’S PLAN

Our children are our pride and joy both and we want to provide them with the best but
sometimes that becomes difficult to fulfill our dreams in want of funds. Nowadays not only
school education but higher education has become very expensive and is bound to rise
further with passing years. What to say of marriages of future we plan for there future well
in advance with investing in proper investment avenues so that our hands are not tied
when the need arises.

PROTECTION PLAN (TERM)

All of us should be concerned about well being of our family in the event of our death. Thus
insurance becomes necessary thus an important component in our portfolio. Protection
plans purpose is pure protection and one should not look for investments here.
It is any time advisable to sacrifice small sums today for the future of our family members
tomorrow in case of any untoward incident.

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HEALTH POLICY

It can be defined as the decisions, plans, and actions that are undertaken to achieve specific
health care goals within a society

OBJECTIVES

The purposes of this research paper are as follow:-

 To study the preferences towards types of insurance provided by the public and private
sector Insurance companies.
 To identify the significant difference between the satisfaction levels of customers of
Public and Private Insurance companies in Udaipur City.
 To study the association between various demographic variables and the choice of
Insurance policy between public & private sector.

RESEARCH METHODOLOGY

 Research Design: - To serve the purpose of research paper descriptive research design
was used. Primary data was collected with the help of close ended questionnaire.
 Sample Design: - Our target population involves the 120 users of Insurance out of which
60 respondents are holder of LIC policy, whereas rest 60 are Private company’s
Insurance holders The respondents were selected through convenience sampling from
Udaipur.
 Analysis: - The data collected was analyzed with the help of various statistical tools like
Chi-square test, ANOVA (F-test) etc.

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ANALYSIS & INTERPRETATIONS

a) Demographics of Respondents
Descriptive statistics are illustrated in Table 1, which indicates demographic distribution of
respondents. 57% respondents are male & majority of customers are graduate (43%).
Major number of respondents belongs to the age group of 25 to 35 (35%). Percentage of
Private employees is maximum (23%) & 30% of respondents are having monthly income
between Rs. 20,001 to 30,000.

TABLE-1: DEMOGRAPHICS OF RESPONDENTS

Cumulative Cumulative
Particulars Frequency Percent Particulars Frequency Percent
Percent Percent

Gender Monthly Income

Less Than Rs.

Male 68 57 57 10 8 8
10,000

Rs. 10,001 - Rs.

Female 52 43 100 20 17 25
20,000

Rs. 20,001 - Rs.

Total 120 100 36 30 55
30,000

Rs. 30,001 - Rs.

Education 42 26 80
40,000

More Than Rs.

Intermediate 14 12 12 16 13 100
40,000

Graduate 52 43 55 Total 120 100

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Post
30 25 80 Profession / Occupation
Graduate

Professional 24 20 100 Govt. Employee 18 15 15

Total 120 100 Pvt. Employee 28 23 38

Age Group Professional 20 13 55

Below 25 22 18 18 Businessman 18 15 66

25-35 42 35 53 Student 16 13 79

36-50 38 32 85 Retired 6 5 84

51-60 18 15 100 Other 18 16 100

Total 120 100 Total 120 100

b) Types of Insurance

Table 2 exhibits the details of the types of Insurance policy of the respondents. Data shows
that majority of customers have Life Insurance policy (45%) followed by Child Plan (18%).
Few customers have Endowment Plan (15%), ULIP (12%) & some other policies (10%).

TABLE-2: TYPES OF INSURANCE

Cumulative
Particulars Frequency Percent Percent
Life Insurance 54 45 45
Endowment Plan 18 15 60
ULIP 14 12 72
Child Plan 22 18 90
Other 12 10 100
Total 160 100

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c) Hypothesis Testing

H01 = There is no significant difference between the satisfaction levels of Public and private
sector Insurance customers of Udaipur City

TABLE-3: SATISFACTION LEVEL OF CONSUMERS

ANOVA (F-ratio)
Degree of
Calculated Value Level of Significance Tabulated Value
Freedom

7.381 (4,5) 5% 5.19

The analysis provides enough evidence to reject the null Hypothesis. In other words there is
a significant difference between the satisfaction levels of Public & Private Insurance
customers of Udaipur City

H02 = There is no association between Gender of respondents and their choice of Insurance
company between public & private.
TABLE-4

Chi – Square Test

Degree of
Calculated Value Level of Significance Tabulated Value
Freedom
2.43 2 5% 5.991

The analysis provides enough evidence to accept the null Hypothesis. In other words
gender of respondents don’t effect their selection of insurance policy

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H03 = There is no association between Age of respondents and their choice of Insurance
company between public & private.

TABLE-5

Chi – Square Test

Degree of
Calculated Value Level of Significance Tabulated Value
Freedom
5.93 2 5% 5.991

The result of the study shows that the null-hypothesis holds to be valid thus there is no
association between Age of respondents and their choice of Insurance Company between
public & private.

H04 = There is no association between Income of respondents and their choice of Insurance
company between public & private.

TABLE-6

Chi – Square Test

Degree of
Calculated Value Level of Significance Tabulated Value
Freedom
9.31 2 5% 5.991

The analysis doesn’t support the null-hypothesis that shows selection between insurance
companies varies with the income of respondents.

H05 = There is no association between Educational Level of respondents and their choice of
Insurance company between public & private.

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RIJM Volume 2, Issue 3 (March 2013) ISSN: 2250 – 3986

TABLE-7

Chi – Square Test

Degree of
Calculated Value Level of Significance Tabulated Value
Freedom
21.32 6 5% 5.991

The result of the study shows that the null-hypothesis holds to be invalid, so it can be
clearly stated that education of respondents affect their choice of Insurance.

CONCLUSIONS

 Majority of customers are holding the life insurance policy. Child plans are ranked on
second position on usage scale.
 There is a significant difference between the satisfaction levels of Public & Private
Insurance customers of Udaipur City.
 The choice of Insurance is affected by Income & Educational level of customers. While
age & gender does not cast significant impact on it.

REFERENCES

 http://www.liconlineindia.com/company
 www.life-insurance-india.gen.in/SBI-life
 www.scribd.com/doc/124135550/fd-n
 insurance.birlasunlife.com/Pages/Individual/.../Company-Profile.aspx

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