Summary of Findings, Suggestions

and Conclusion

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 CHAPTER V

SUMMARY OF FINDINGS, SUGGESTIONS AND CONCLUSION

The final chapter aims to sum up the details provided in the earlier section.

It takes a quick look at the key findings from the interviews conducted, which have

generated exceptionally interesting results with the help of the literature review and has

further provided a large room for future studies and research.

5.1 Summary

Every human being has the tendency to save, as protection against risks, losses or

future events. Insurance is one form of saving and also a means for protecting individual

risk. With the increasing demands of customer, insurance sector has become competitive.

Customers are becoming increasingly aware of their expectations, and demand higher

standards of services, as technology is enabling them to make comparisons quickly and

accurately. Their perceptions and expectations are continually evolving, making it

difficult for service providers to measure and manage services effectively. This empirical

research work aims to analyse policyholders‘ (customers‘) perceptions and satisfaction

towards various services offered by the public and selected private life insurance

companies operating in India. The study is focused on Policyholders residing in

Coimbatore district.

Based on the concept discussed above the following objectives were constructed

for the effective conduct of the study: to study the socio-economic stature of the life

insurance policyholders (Customers) in the study region and their level of awareness

towards insurance policy, to evaluate the reasons stated by the policyholders for purchase

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 of life insurance policy, to analyze customers‘ perception towards life insurance policy

and the service quality dimensions of the insurer and to measure life insurance

customers‘ level of satisfaction towards services offered by the insurer. The study is

focused on Coimbatore district.

Coimbatore district has eight taluks. Out of the eight regions, four regions were

chosen as researchable area for sample data collection by taking into account time and

cost. Field survey was carried out at service counter of sample insurance companies, and

study the cover people living in the sample regions. The study population comprised the

insurance policyholders who have got experience in using the services provided by the

sample insurance companies. It has been observed that in total of 580800 policyholders

of the major seven life insurance companies are there in Coimbatore city. Of which, a

sample of 0.30 per cent of policyholders from one public sector and six private sector

insurance companies were chosen. The proportion of sample subjects were distributed as:

LIC (887), Bajaj Allianz (138), ICICI Prudential (163), HDFC Standard (87), Birla Sun

Life (96), SBI life (128) and Reliance Life (243). In total 1742 sample subjects were

surveyed for the effective conduct of the study, of which nearly 42 interview schedules

were considered problematic due to not knowing answers by the respondents and

response biases. Thus, those 42 schedules were deducted from actual sample size and the

sample subjects were restricted to 1700.

5.2.Findings

Major findings of the study are summarized in this section.

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 I. Demographic and Socio-Economic Profile

 From the empirical data analysis it has been observed that 64.90 per cent of the sample

subjects surveyed is men and the remaining 35.10 per cent of sample subjects are

women and 32.80 per cent of the respondents are professionally qualified. Further, it

has been found that 64.90 per cent of the respondents are married.

 It has been found that 56.80 per cent of the respondents were employed in private

sector and 58.40 per cent of the respondents have an income of below `. 1 lakh.

Further it has been found that 61.80 per cent of sample subjects have wealth valued

less than`.5 lakh. It has also been inferred that 49.40 per cent of the respondents

have 4 to 6 members in their family.

II. Awareness Level

 From the research study it has been clearly determined that in terms of longevity

50.80 per cent of the respondents are aware of the life insurance policy for the past

5 years or less. Further, 27.94 per cent of the respondents are aware of the money

back policy.

 It has been observed that, out of 1700 respondents surveyed the majority i.e.,

50.59 per cent of respondents are aware of Life Insurance Corporation of India.

III. Insurance Policy Buying Behaviour

 From the experimental study it has been understood that 79.35 per cent of the

respondents have acquired the knowledge of life insurance policies through agents.

Additionally, it has also been observed that55.60 per cent of the respondents have

taken their first life insurance under five years.

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  It has been witnessed that, 45.47 per cent of the respondents have preferred to

purchase money back policy in life insurance companies. To proceed, it has been

also identified that, 50.59 per cent of the respondents‘ have purchased their policies

in Life Insurance Corporation of India.

 It has been found that, out of the total respondents surveyed, 64.80 per cent of the

respondents own an insurance policy worth `.50000 to `.100000 and 52.80 per cent of

the policyholders pay their premium amount in quarterly payments. It is also observed

that 41.40 per cent of the respondents pay their premium amount by themselves.

 It has been predicted that 70.60 per cent of the respondents are used to pay their

premium amount below`.5000. To ensure that, the majority i.e., an average of

6.32 of the respondents have procured the life insurance policy because of the

Coverage of Risk.

 With the conduct of ANOVA test, it has been recognized that the gender of the

individuals greatly influences their decisions for owning a life insurance policy and

it is also identified that age of the individuals greatly influences their decisions for

owning a life insurance policy but there is an exception in the case of easy

accessibility and coverage of risk.

 With the help of ANOVA test it is identified that the marital status of the

individuals greatly influences their decisions for owning a life insurance policy

except in the case where the recommendation by agents or friends is considered,

savings motive and self interest in buying insurance policy.

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  From the calculated ANOVA test values, it is concluded that, the educational status

of the individuals greatly influences their decisions for owning a life insurance

policy except in the case of tax purpose, where the policy holding preferences

differences based on the job and income class of individuals.

 With reference to the ANOVA test it is also known that the occupational status of

the individuals greatly influences their decisions for owning a life insurance policy

and the test also indicates that an income of the individuals greatly influences their

decisions for owning a life insurance policy.

 It has been clearly observed that 63.20 per cent of the respondents have availed

insurance policy voluntarily. Further, it has been inferred that majority i.e., average

of 3.78 of the respondents have procured insurance policy, because of the threat of

high risks in their life.

 From the statistical data it is understood that majority of the respondents i.e. 71.04,

have obtained the life policy because of the compulsion of the agents. It has also

been observed that the product of the life insurance corporation is comparatively

better than the private life insurance companies.

 With the conduct of paired‘ test, it has been found that the policyholders adhere

rational behaviour in comparing the LIC with private insurance companies except in

the case of Response to enquiry at office, Customer treatment and Claim settlement.

 Based on the result of Cronbach‘s Reliability Analysis and F-test values there exists

reliability of rational behaviour in comparing LIC with private insurance companies.

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 IV. Policyholders’ Perception about Life Insurance

 From the research study, it has been predicted that the majority of customers‘

opinion is that owning life insurance gives protection and it is ranked in first place

with the highest mean score of 5.15.

 The results of multiple regression tests indicate that out of eight variables tested five

were found to be significantly influencing factors, they are: Protection, Peace of

mind, Care and Concern, Desire and aspiration and Wellwisher-cum-friend. Thus it

is concluded that there exists significant association between nature of policy

owned by the policyholders and their level of perception about life insurance.

 On an average, 69-74 per cent of surveyed customers have expressed appreciation

towards the service quality dimension of both public and private life insurers, the

respondents have rated the following variables as: Physical appearance and

surrounding of the branch office (70.40 per cent), Staff commitment to fulfill

promises in time (69.20 per cent), Employees are in a position to inform the customer

about the time it will take for compliance of the service demanded (72.60 per cent),

Privacy maintained –customers‘ information (73.20 per cent) and individual attention

to customer (74 per cent).

 It has been inferred that majority of the respondents are influenced by the physical

appearance and surrounding of the branch office and it is ranked in first position with

an average of 3.52. Further, it is also observed that most of the respondents have

opined that the staffs of the life insurance provider fulfill the promises in time, and it

is ranked in first place with an average of 3.46.

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  The data analysis indicates that on an average of 3.63 respondents have said that the

employees are in a position to inform the customer about the time it will take for

compliance of the service demanded, and it is ranked in first position. It has also

been inferred that majority of the respondents have said that the service providers

are confidential about customers information, and it is ranked in first position.

 It has been found that on an average of 3.70 respondents opine that the service

provider gives individual attention to the customers; and it is ranked in first

position.

V. Satisfaction about the Services

 From the data analysis, it has been clear that the level of satisfaction between the

policyholders is high i.e., an average of 3.62; in case of motivation given by the

agents and development officer to buy the policy.

 The result of ANOVA test has identified that the customers‘ satisfaction towards

service product is determined by name of the company and test also reveals that

the customers‘ satisfaction towards service product is determined the by name of

the company.

 With the inference of ANOVA test it is clearly noted that the customers‘

satisfaction towards service product is determined by period of customer

relationship.

 With the conduct of ANOVA test it is concluded that the customers‘ satisfaction

towards service product is determined by nature of policy taken except in the case

of Motivation given by the agents, development officer to buy the policy.

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  The results of ANOVA test indicates that the customers‘ satisfaction towards

service product is determined by sum assured.

 With the conduct of reliability statistics in the case of level of satisfaction towards

the service providers, it is identified that there exists reliability between the

variables tested.

VI. Renewal and Claims

 From the empirical study it has been determined that, the majority i.e., 81.60 per

cent of the respondents are renewing their policies regularly by paying the

premium amount. Further it has been identified that 51.92 per cent of the

respondents have not renewed their policy regularly because of their financial

constraints.

 It has been observed that, among the policyholders surveyed, 33.21 per cent of them

have renewed their policy regularly because they look at insurance as a must.

 As a result of study process it has been observed that 82.47 per cent of the

respondents have not yet made any claims for their policies and 47.32 per cent of

the respondents have made only one claim on behalf of their insurance policies.

 It has been propounded that 76.82 per cent of the respondents have said that their

claims were accepted and 62.94 per cent of the respondents have said that their

claims were rejected because of the risks not being covered. Further, it has been

found that 68.53 per cent of the respondents have not said that they face

difficulties in the settlement of their claims.

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  From the statistics it has been observed that 34.58 per cent of the respondents

have faced the difficulties because of belated settlement of their policies. It has

also been inferred that 33.53 per cent of the respondents have got their settlements

with some delay because of different response from the company and it is also

found that 50.53 per cent of the respondents have received only a part of the

settlement on their policies.

VII. After-Sales Services (Post-purchase service offered by Life Insurance Companies)

 From the detailed research study, it has been found that majority i.e., average of

3.75 of the respondents feel good about issuing the renewal policy.

 With the conduct of Chi-Square test, it has been observed that the after-sales

service of life insurance companies does not differ from one to another.

 As a result of factor analysis test it has been propounded that the results of the

test establish consistency in the opinion of respondents towards the after sales

services of life insurance companies.

 With the inference of Cronbach‘s Reliability Analysis and F-test value, it has

been found that the after-sales service of life insurance companies differs from

one to another.

VIII. Personal Selling of Policies

 From the research study it has been propounded that 71.90 per cent of the

respondents have said that the development officer/ agent gives full details

about the schemes and also 51.10 per cent of the respondents have no idea to

purchase the policy before the development officer/ agent approached them.

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  It has been clearly inferred that 62.60 per cent of the respondents‘ have

procured one policy through the canvassing of development officer/ agents.

It has also been inferred that 55.10 per cent of the respondents have

recommended to others to buy the insurance policies.

 From the data analysis it has been found that 64.70 per cent of them have an

interest to buy new policy through the same development officer/ agent.

IX. Problems

 From the empirical study it has been identified that the majority i.e., average of

2.72 of the respondents have stated that the staff are indifferent at the time of

claiming settlements.

 With the conduct of Chi-Square test, it has been concluded that the problems

faced by policyholders while utilizing the services differ from one insurance

company to other.

 From the research study it has been inferred that 71.90 per cent of the

respondents have said that they did not feel any changes in the service provided

by the companies.

5.3 Suggestions

Some of the implications of the study proposed by the researcher are:

 It is very clear from the empirical discussions that insurers have to shed a lot of old

ideas, bring changes in practices, and adopt a distinct approach to meet the

challenges of the emerging situation ahead. Hence it is desirable for insurance

companies to develop a customer-centric approach for future survival and growth.

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  Based on the empirical findings it has been suggested to both public and private life

insurance companies that providing quality after-sales services, in particular, can

lead to very positive results through customer loyalty, repetitive sales and cross-

selling of major policies to current customers.

 The life insurance policyholders have primarily defined assurance in terms of well

trained and informed agents, who understand intimately specific needs, approach

from customer‘s point of view, show clarity in explaining policy‘s terms and

conditions and thereby inspire trust and confidence. Therefore, it is imperative for

the service providers to provide adequate training to their agents to improve their

customer interaction skills and knowledge.

 Customers of life insurance policies seek personalized services and constant support

in financial planning e.g. flexible payment schedule, flexible product solution,

provisions for convertibility of products and supplementary services etc. So, service

providers should encourage the agents to assume wider roles, that of financial

consultants.

 It has been strongly suggested that life insurance service providers and managers

should also be aware that customer satisfaction is primarily based on service

quality. They should consider the relative value (contribution) to customer

satisfaction of each dimensions of the service quality and consequently allocate

different levels of resources according to this hierarchy.

 Moreover, the service providers should have a clear concept of what constitutes

customer satisfaction before they can attempt to measure it and its relationship with

service quality dimensions. Thus quality improvements by management should not

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 just focus on improving customer satisfaction but also target on improving the

customers‘ perception of service quality. In other words, the service providers

should try to continuously improve both service quality and customer satisfaction.

 The researcher also likes to emphasis the fact that major players in the market

especially LIC have to concentrate on retaining existing customers, which could

offer huge business potential. The service providers have to work and concentrate

on Time-based competition, quality, product range, timely advertisement, follow

up, prompt and error-free services which are the key ingredients for the better

service and it will boost up the sales.

 From the detailed empirical data analysis it has been inferred that 18.40 per cent of

the policyholders are not used to renew their policy. Delay in renewal of policy

usually leads to lapse of policy in due course of time. Jagendra Kumar (2009) in his

study titled ―Lapsation of a Life insurance policy‖ had mentioned that Life

Insurance Corporation‘s Lapsation ratio was around 25 per cent, while it was

around 40 per cent for private insurers during the last 3 years. One of the major

causes for the growing Lapsation ratio is forced selling by agents to achieve their

targets. Agents also sell policies without taking customers‘ needs into account.

In most of the cases the agents just ensure that the customer pays premium for the

first year, for the later years they do not remind policyholders to pay their

subsequent premiums as the commission was not attractive. Thus, it is suggested

that the agents or intermediaries of life insurance companies either public or private

sector should sell policies only after clearly understanding the policy buyer‘s need

and his or her wilingness in paying the regular premiums. In this case the insurance

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 companies must also strategically plan to follow the business of their agents and

should initiate to provide a marginal commission to the agents to motivate them for

the timely collection of premium amount.

5.4 Conclusion

The entry of private sector insurance companies into the Indian insurance sector

triggered off a series of changes in the industry. Even with the stiff competition in the

market place, it is evident from the study that the public sector giant LIC dominates the

Indian insurance industry. In today‘s competitive world, customer satisfaction has

become an important aspect to retain the customers, not only to grow but also to serve.

Increased competition, wide range of product offerings and multiple distribution channels

cause companies to value satisfied and highly profitable customers.

From the elaborate data analysis it is observed that majority of the policyholders

(64.90 per cent of the sample subjects surveyed) were men, 34.90 per cent of the sample

population are aged above 35 years and are married. Further 56.80 per cent of the

respondents are private sector employees who are anxious about their future. Similarly,

61.40 per cent of respondents are middle-class people owning assets worth `.5 lakhs or

less than it. Further, the study reveals that most of the respondents are aware of Life

Insurance Corporation of India and have acquired more knowledge about the money back

policies. Most of the respondents have purchased life policies on their voluntary interest

as they have a feeling of insecurity and it is also found that owning life policies makes

the respondents feel secured. This statement is complemented by the empirical findings

that concluded that policyholders‘ are influenced to purchase life policies to mitigate the

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 life risk and also due to the feel good factors like security against financial losses. Further

it has been also found that the sample policyholders have brought the life insurance

policy as they were motivated by the insurance agents.

On an average,69-74 per cent of surveyed customers have expressed appreciation

towards the service quality dimension of both public and private life insurers, the

respondents have rated the following variables as: Physical appearance and surrounding

of the branch office (70.40 per cent), Staff commitment to fulfill promises in time

(69.20 per cent), Employees are in a position to inform the customer about the time it will

take for compliance of the service demanded (72.60 per cent), Privacy maintained customers‘

information (73.20 per cent) and individual attention to customer (74 per cent).

Further, it was observed that 81.60 per cent of respondents pay their premium

amount in regular intervals as they have recognized the importance of life policies.

The empirical data analysis reveals that majority i.e., average of 54 per cent of the

respondents have stated that the insurance officers behave indifferently at the time of

claiming settlements. However, the study concluded with the positive note that 71.90 per cent

of policyholders possess good opinion towards the insurance companies and are willing

to own new policies in future.

Customer service is the critical success factor in a company and providing top

notch customer service differentiates great customer service from indifferent customer

service. In the fast-paced environment that surrounds industries today, companies find

themselves faced with the pressure to discover foolproof ways to manage their

businesses. Insurance industry in India is no exception and it is undergoing revolutionary

changes. Competition has been central to the agenda of companies and it has become one

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 of the enduring themes of our time. The insurance industry today is experiencing intense

competition and the major players, including LIC have come under pressure. In lieu of

this, it could be suggested to the life insurance companies retaining a Customer is cheaper

than finding new Customers.

5.5 Scope for Future Research

The implied limitation of this study provided a wide scope for the future

researchers to pursue their research work in the field of consumer behaviour with

reference to purchase of life insurance products. In future the researchers can attempt

their study in comparing the life insurance product buying behaviour in the north and

south India, since no researcher made an attempt in this concept. Further the researcher

scholars can attempt in comparing the service qualities of public and private insurers,

which paves a wide scope for future research.

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