A

Synopsis
ON
“IMPORTANCE OF INSURANCE TO CONSUMERS”
AT
“ICICI PRUDENTIAL LIFE INSURANCE”
Submitted in partial fulfillment of the requirement for the award of
the degree of
"MASTER OF BUSINESS ADMINISTRATION",
BY
AISHWARYA WALIA
Roll No: 1251-20-672-219

Under the guidance of

----------------------------

Wesley Post Graduate College

(Affiliated to Osmania University)
SECUNDERABAD, Hyderabad.
2020-2022
1.1 INTRODUCTION

Insurance is a cooperative device to spread the loss caused by a particular risk over a number
of persons who are expressed to it and who agree to ensure themselves against that risk. It is
also a social device that accumulates funds to meet the uncertain losses arising through a
certain risk to a person insured against the risk.

The processor insurance has been evolved to safeguard the interests of people from
uncertainty by providing certainty of payment at a given contingency. The insurance
principle comes to be more and more used and useful in modern affairs. Not only does it
serve the ends of individuals, or of special groups of individuals, it tends to pervade and
to transform modern social order, too.

The origin of insurance is lost in antiquity. The earliest traces of insurances in the ancient
world are found in the form of marine trade loans or carriers’ contracts which: included an
element of insurance. The evidence is on record that arrangements embodying the idea of
insurance were made in Babylonia and India at quite an early period. After marine insurance,
fire insurance developed in present form. It had been originated in Germany inthe beginning
of the sixteenth century. The fire insurance got momentum in England after the great fire in
1666when the fire losses were tremendous. Next, Life insurance made its first appearance in
England in sixteenth century, the first recorded evidence in England being the policy on life
of Williams Gybbons in 1653. Other miscellaneous Insurance took the present shape at the
later part of nineteenth century with the industrial revolution in England. Accident insurance,
fidelity insurance, liability insurance and theft insurance were the\ important form of
insurance at that time. Now, general insurance is increasing with the advancement of society,
Mishra, M.N., and Mishra, S.B. (2014).

The insurance has become a part of human life. It is not restricted to life, marine or fire only,
but has spread overto almost every sphere of human activity. For example, a singer can insure
his or her throat, a dancer her legsand an actress her nails etc. So the scope of insurance is
unlimited. The significance of the insurance is not only limited to an individual or to a family
alone but it has spread over the entire nervous system of a business or say
the country as a whole.
Insurance is a basic form of risk management which provides protection against possible loss
to life or physical assets. All assets have some economic value attached to them. There is also
a possibility that these assets may get damaged / destroyed or become non-operational due to
risks like breakdowns, fire, floods, earthquake etc. Different assets are exposed to different
types of risks like a car has a risk of theft or meeting an accident, a house is exposed to risk of
catching fire, a human is exposed to risk of death/accident. Insurance provides a financial
security to the person who is insured from the unforeseen situations. The insurance
companies charge certain amount called premium for the asset/ life being insured. The
insurance not only provides financial security for the lives and assets, but also it helps the
economy by pumping the savings in to the market, which helps in establishment of new
companies, increased employment, contribution to the economic development in the form of
tax payments from business profits.

Life insurance (or life assurance, especially in the Commonwealth of Nations) is a contract

between an insurance policy holder and an insurer or assurer, where the insurer promises to
pay a designated beneficiary a sum of money (the benefit) in exchange for a premium, upon
the death of an insured person (often the policy holder). Depending on the contract, other
events such as terminal illness or critical illness can also trigger payment. The policy holder
typically pays a premium, either regularly or as one lump sum. Other expenses, such as
funeral expenses, can also be included in the benefits.

Life policies are legal contracts and the terms of the contract describe the limitations of the
insured events. Specific exclusions are often written into the contract to limit the liability of
the insurer; common examples are claims relating to suicide, fraud, war, riot, and civil
commotion.

Modern life insurance bears some similarity to the asset management industry and life

insurers have diversified their products into retirement products such as annuities.

Life-based contracts tend to fall into two major categories:

 Protection policies – designed to provide a benefit, typically a lump sum payment, in

the event of a specified occurrence. A common form—more common in years past—of a
protection policy design is term insurance.
 Investment policies – the main objective of these policies is to facilitate the growth
of capital by regular or single premiums. Common forms (in the U.S.) are whole
life, universal life, and variable life policies.
Insurance is a basic form of risk management which provides protection against possible loss
to life or physical assets. All assets have some economic value attached to them. There is also
a possibility that these assets may get damaged / destroyed or become non-operational due to
risks like breakdowns, fire, floods, earthquake etc. Different assets are exposed to different
types of risks like a car has a risk of theft or meeting an accident, a house is exposed to risk of
catching fire, a human is exposed to risk of death/accident. Insurance provides a financial
security to the person who is insured from the unforeseen situations. The insurance
companies charge certain amount called premium for the asset/ life being insured. The
insurance not only provides financial security for the lives and assets, but also it helps the
economy by pumping the savings in to the market, which helps in establishment of new
companies, increased employment, contribution to the economic development in the form of
tax payments from business profits.

1.1.1 HISTORY OF LIFE INSURANCE

In India, insurance has a deep-rooted history. It finds mention in the writings of Manu
(Manusmrithi), Yagnavalkya (Dharmasastra) and Kautilya (Arthasastra). The writings talk
in terms of pooling of resources that could be re-distributed in times of calamities such as
fire, floods, epidemics and famine. This was probably a pre-cursor to modern day insurance.
Ancient Indian history has preserved the earliest traces of insurance in the form of marine
trade loans and carriers’ contracts. Insurance in India has evolved over time heavily drawing
from other countries, England in particular.
 
1818 saw the advent of life insurance business in India with the establishment of the
Oriental Life Insurance Company in Calcutta. This Company however failed in 1834. In
1829, the Madras Equitable had begun transacting life insurance business in the Madras
Presidency. 1870 saw the enactment of the British Insurance Act and in the last three decades
of the nineteenth century, the Bombay Mutual (1871), Oriental (1874) and Empire of India
(1897) were started in the Bombay Residency.
This era, however, was dominated by foreign insurance offices which did good business in
India, namely Albert Life Assurance, Royal Insurance, Liverpool and London Globe
Insurance and the Indian offices were up for hard competition from the foreign companies.
 
In 1914, the Government of India started publishing returns of Insurance Companies in India.
The Indian Life Assurance Companies Act, 1912 was the first statutory measure to regulate
life business. In 1928, the Indian Insurance Companies Act was enacted to enable the
Government to collect statistical information about both life and non-life business transacted
in India by Indian and foreign insurers including provident insurance societies. In 1938, with
a view to protecting the interest of the Insurance public, the earlier legislation was
consolidated and amended by the Insurance Act, 1938 with comprehensive provisions for
effective control over the activities of insurers.
1.2 NEED FOR THE STUDY
 The main reason for people to go for insurance policy is revealed to be safety of
investment. Nowadays, there are many avenues for investing money. Although, there
are many avenues, the safety of investment for the people is a prime concern. So
insurance is considered as one of the safest avenue.
 Consumer markets and consumer buying behaviour can be understood before sound
product and marketing plans are developed
 This study will help companies to customize the service and product ,according to the
consumer’s need.
 This study will also help the companies to understand the experience and expectations
of the existing customers.

1.3 SCOPE OF THE STUDY

This study is limited to the consumers within the limit of Hyderabad and Secunderabad city.
The study will be able to reveal the preferences, needs, perception of the customers regarding
the life insurance products, It also helps the insurance companies to know whether the
existing products are really satisfying the customer’s needs .

1.4 OBJECTIVE OF THE STUDY

 Ascertain the profile and characteristics of potential buyers.
 To know the reason for investing in insurance.
 To know the insurance company in which they have invested.
 To know the insurance products in which they have invested.
 To assess the degree of satisfaction of the consumers with their current brand of
Insurance products.
1.5 RESEARCH METHODOLOGY

The study titled ‘Study on perception of investors investing in life insurance ’ was organised

in the the twin Cities of Hyderabad and Secunderabad. The Research Methodology of the

study is as follows.

Data : The study makes use of both primary and secondary data.

1.5.1 Types of research : Survey

1.5.2 Area of Research : Twin cities of Hyderabad and Secunderabad.

1.5.3 DATA COLLECTION:

The researcher has wide varieties of methods to consider either single or in combination they
were grouped first according to whether this use secondary or primary sources of data.

Primary data: The main analysis is based on primary data. Primary data is first-hand
information. The primary data is gathered by a questionnaire from 100 consumers in twin

cities.

Secondary data : Secondary data means data that are already available i.e. they refer to

the data which have been collected and analysed by someone and can save both money and

time of the researcher. Secondary data may be available in the form of company records,

trade publications, libraries etc. Secondary data sources are as follows: Company Reports

Daily Newspaper Standard Textbook Various Websites.

1.5.4 Research Instrument: Questionnaire - One questionnaire is administered for

consumers. The structural questionnaire with multiple choices.
 The data collected from the survey has been tabulated and analyzed. The data is
represented graphically by using column charts for easy understand ability.

Research Technique: Survey

. 1.5.5 Questionnaire Design:

A questionnaire is a sheet of paper containing questions relating to

contain specific aspect, regarding which the researcher collects the
data.Because of their flexibility the questionnaire method is by far the most
common instrument to collect primary data. The questionnaire is given to the
respondent to be filled up.

1.5.6 Sample procedure : The methodology used for this purpose is Survey and
Questionnaire Method. It is a time consuming and expensive method and requires more
administrative planning and supervision. It is also subjective to interviewer bias or distortion.

.Sampling Unit: Businessmen, Government Servant, Retired Individuals

1.5.7 Sample Size: 100 consumers

1.5.8Statistical Tools :MS-excel and pie and bar diagrams are used to analyze the data.

1.5.9 PERIOD OF STUDY

 A Project Of 45 Days

Data Analysis Technique : Simple Percentages and Graphs

Time of Study: May/June 2020.

Pre-Testing Or Pilot
In this chapter, we detail the possibilities and pitfalls presented by pretesting, the methods of
validating the survey instrument and its measurements, and pilot testing, the “dress
rehearsal” of survey administration and procedures Pretesting and pilot testing are
invaluable components of survey research, affording researchers a valuable opportunity for
reflection and revision of their project before the costs of errors begin to multiply later on.
We begin this chapter with a discussion of the goals of and guidelines for pretesting followed
by a summary checklist to help you make the most of this procedure. Then we provide an
elaboration of the broader process of pilot testing the entire project from start to finish.

1.5.10 LIMITATIONS OF THE STUDY

Although the study was carried out with extreme enthusiasm and careful planning thereare
several limitations, which handicapped the research viz.
 Time Constraints:
The time stipulated for the project to be completed is less and thus there are chances
that some information might have been left out, however due care is taken to include
all the relevant information needed.
 Sample size: Due to time constraints the sample size was relatively small and
would definitely have been more representative if I had collected information from
more respondents.
 Accuracy:
It is difficult to know if all the respondents gave accurate information; some
respondents tend to give misleading information.