A STUDY ON CHALLENGES AND OPPORTUNITIES

IN LIFE INSURANCE SECTOR - A COMPARATIVE

STUDY OF PUBLIC AND PRIVATE SECTOR

Synopsis submitted to Madurai Kamaraj University

for the Award of the Degree of

DOCTOR OF PHILOSOPHY IN COMMERCE

Researcher
G. GEETHA KALYANI
Register No: P3772

Research Supervisor

Dr. S. VENKATESWARAN, M.Com., M.Phil., PGDCA., Ph.D.,

PG DEPARTMENT OF COMMERCE AND RESEARCH CENTRE

MANNAR THIRUMALAI NAICKER COLLEGE (AUTONOMOUS)
PASUMALAI, MADURAI – 625 004
TAMIL NADU

OCTOBER 2019
A STUDY ON CHALLENGES AND OPPORTUNITIES IN
LIFE INSURANCE SECTOR - A COMPARATIVE
STUDY OF PUBLIC AND PRIVATE SECTOR

SYNOPSIS

INTRODUCTION

Man is exposed to risk and uncertainties. For Instance, the time of death
of a person is not certain and in case of his premature death, a man’s
dependents may find themselves deprived of all means of existence. Similary
the property of a person is open to all risks of being destroyed by fire. Every
man will carefully consider how best he can prevent such risks or minimize or
provide against its effects. It is difficult for an individual even a large business
enterprise to invest millions of rupees in huge factory building and equipment
or ships unless the arrangement for covering the risk is possible. This
arrangement is made possible by insurance.

Insurance is a means of protection from financial loss. It is a form of risk

management, primarily used to hedge against the risk of a contingent or
uncertain loss. It is a generally acknowledged phenomenon that there are
enormous risks in every sphere of life.

Insurance is a contract between two parties. One party is the insurer and
the other party is the insured. That is, the person whose risks are insured is
called the insured and the person who insures the risk of the insured is called
the insurer. Thus Insurance is a contract between the insurer and the insured in

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which the insurer undertakes to compensate the insured for the loss arising
from the risk insured against.

STATEMENT OF THE PROBLEM

In an era marked by the challenges of global competition, rapidly

changing technology and varied customer tastes and preferences have
developed strategic marketing skills and have become very essential for the
companies to survive. Despite the urgent and pressing need for market
orientation of the insurance industry, there is a need for much greater research
efforts in this area of market orientation for the insurance industry so as to cope
with the market dynamics. These inputs will help the industry to become
competitive both nationally and internationally, since success will depend on
the ability to perceive and understand the markets in all its complexities. It is
also an investigation to measure the extent of customer satisfaction delivered
by the organizations.

The present study “Challenges and Opportunities in Life Insurance

Sector of India -“A comparative study of public and private sector”,includes
impact of privatization on public sector. Many attempts have been made to
explore this area, but no systematic research has been specifically conducted on
“Challenges and Opportunities in Life Insurance sector of India -A
Comparative study of Public and Private Sector”. Due to non availability of
sufficient data, this field has remained untouched by the researchers. Hence,
there is a need and justification for a comprehensive study to evaluate it. The
present study aims to bridge such a gap and hence the present study has been
taken up.

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OBJECTIVES OF THE STUDY

The following are the important objectives of the study.

1. To compare and analyze the performance of both public and private life
insurance companies.

2. To study the socio-economic profile of the policy holders and their

awareness towards services of public and private life insurance
companies.

3. To analyze the service quality measures towards the life insurance

sectors.

4. To find out the level of satisfaction of policy holders

5. To offer suggestions and recommendations for improvements in private

and public life insurance sector.

HYPOTHESIS

Based on the above objectives, the following hypothesis were

formulated and they were tested.

1. There is no significant difference in the opinion score towards

awareness level among the group of respondents based on age,
gender, educational qualification, occupation, Income and marital
status.

2. There is no significant difference in the opinion score towards

service quality among the group of respondents based on age,

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 gender, educational qualification, occupation, Income and marital
status.

3. There is no significant difference in the opinion score towards

satisfaction among the group of respondents based on age, gender,
educational qualification, occupation, Income and marital status.

METHODOLGY

The present study is based on both primary data and secondary data.
For collection of primary data, the researcher has used the interview schedule
and also through well-structured comprehensive questionnaire. The secondary
data has been collected from various sources namely books, newspapers,
Insurance Journals, IRDA Journals, LIC annual reports, government library and
information centre and various insurance related websites etc.,

SAMPLING DESIGN

In this research studies, data collection had been done through the use of
a questionnaire. There are one public and twenty two private life insurance
companies. Among this, the researcher has selected one public and top 10
private life insurance companies for this study.

In the process of sample selection, the researcher has considered the

total number of policy holders in each branches of public and private life
insurance companies situated in Madurai district.

Totally 500 respondents were selected as sample size and convenience

sampling was adopted for this study. Among the 500 respondents, the opinions

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of 250 respondents from public insurance company (LIC) and 250 respondents
from private life insurance companies were considered.

Since LIC is the largest public sector life insurance company, a vast
majority (250 respondents) was selected and 25 respondents were selected in
each selected (10 companies) private life insurance companies.

FRAMEWORK OF ANALYSIS

Field work for this study was carried out using the interview schedule
for collecting data from sample respondents. A copy of the interview schedule
is appended vide Appendix – A. The survey was conducted during the study
period.

In order to analyze and interpret the study area, the researcher has
decided to adopt the following necessary statistical tools for the study.

Reliability Analysis

Simple percentage analysis

Arithmetic mean

Standard deviation

Co-efficient of variation

Kruskal Wallis test has been used for data analysis.

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SCOPE OF THE STUDY

The scope of present study is confined only to analyzing public and

private sector insurance companies in Madurai district only.

PERIOD OF THE STUDY

The researcher, with a view to analyzing the performance of Life

insurance Industry towards the premium collection, market share etc., has
collected relevant data. This study covers the period of ten years from 2004-
2005 to 2014 - 2015.

CHAPTERIZATION

The study comprises of six chapters.

The First Chapter deals with the Introduction and Design of the Study.
The contents of the chapter are Introduction, Statement of the problem, Review
of Literature, Objectives of the study, Hypothesis, Methodology, Sampling
design, Frame work of analysis, Scope of the study, Period of the study and
Chapterization.

The Second Chapter Covers the Profile and Performance of Public and
Private Life Insurance Companies.

The Third Chapter discusses socio – economic profile of policyholders

and their awareness towards the services of Life Insurance Companies.

The Fourth Chapter deals with the measurement of Service Quality for
improving the Challengers and Opportunities of Life Insurance Companies

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 The Fifth Chapter Presents the Level of Satisfaction of the policy
holders of public and private life insurance companies and its impact on
challenges and opportunities towards the overall satisfaction.

The Sixth Chapter Presents the Summary of Findings, Suggestions and

Conclusion of the study.