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PROJECT REPORT ON
CUSTOMER ATTITUDE TOWARDS
LIC OF INDIA’S PRODUCTS
A moment comes, but rarely in history, when we step out from the
old to the new, when an age ends and when the soul of the nation a, long
suppressed, finds utterance. It is bitting at this solemn moment we take
the pledge of dedication to the service of India and her people and to the
still larger cause of humanity.
As a sequel to this pledge of dedication to the service of our
country and cause of humanity the Life Insurance Corporation of India
The Indian subcontinent is now a major player in the globalization
process, not only as an industrial base and a provider of services but also
as a huge market. India is changing. And in complete alignment with the
changing face of India, LIC, the premier life insurer is changing
incredibly, prospering rapidly, transforming at a faster pace. The business
growth has bettered as the competition grows stronger.
LIC has a glorious past of 50 years. But the rules of game are
changing with every new day and the pace of change will accelerate
further. Combining innovativeness with total focus on systems, re-
engineering business processes and information management, it has to
build a future that is brighter than its glorious past.
LIC of India sponsored the first pension fund company of the country.
Forting policy holden of market plus have an option to convened to LIC’s
market plus- ! fnce of cost. Within 90 days from 17.06.08.
BRIEF HISTORY OF INSURANCE
The story of insurance is probably as old as the story of mankind.
The same instinct that prompts modern businessmen today to secure
themselves against loss and disaster existed in primitive men also. The
too sought to avert the evil consequences of fire and flood and loss of life
and were willing to make some sort of sacrifice in order to achieve
security. Though the concept of insurance is largely a development of the
recent past, particularly after the industrial era-past few centuries-yet its
beginning date back almost 6000 years.
Life Insurance in its modern form came to India from England in
the year 1818. Oriental Life Insurance Company started by Europeans in
Calcutta was the first life insurance company on Indian soil. All the
insurance companies established during that period were brought up with
the purpose of looking after the needs of European community and these
companies were not insuring Indian natives. However, later with the
efforts of eminent people like Babu Muttylal Seal, the foreign life
insurance companies started insuring Indian lives. But Indian lives were
being treated as sub-standard lives and heavy extra premiums were being
charged on them. Bombay Mutual Life Insurance Society heralded the
birth of first Indian Life Insurance Company in the year 1870, and
covered Indian lives at normal rates. Starting as Indian enterprise with
highly patriotic motives, insurance companies came into existence to
carry the message of insurance and social security through insurance to
various sectors of society. Bharat Insurance Company (1896) was also
one of such companies inspired by nationalism. The Swadeshi Movement
of 1905-07 gave rise to more insurance in Calcutta and the cooperative
Assurance at Lahore were established in 1906. In 1907, Hindustan
cooperative insurance Company took its birth in one of the rooms of
Jorasanko, house of the great pet Rabindranath Tagore, in Calcutta. In the
Indian Mercantile, General Assurance and Swadeshi Life (later Bombay
Life) were some of the companies established during the same period.
Prior to 1912, India had no legislation to regulate insurance business. In
the year 1912, the Life Insurance Companies Act, 1912 made it necessary
should be certified by an actuary. But the Act discriminated between
foreign and Indian companies on many accounts, putting the Indian
companies at a disadvantage.
The first two decades of the twentieth century saw lot of growth in
insurance business. From 44 companies with total business-in-force as
Rs. 22.24 crore, it rose to 176 companies with total business-in-force as
Rs. 298 crore in 1938. During the mushrooming of insurance companies
many financially unsound concerns were also floated which failed
miserably. The Insurance Act, 1938 was the first legislation governing
not only life insurance but also non-life insurance to provide strict state
control over insurance business. The demand for nationalisation of life
insurance industry was made repeatedly in the past but it gathered
momentum in 1944 when a bill to amend the Life Insurance Act, 1938
was introduced in the Legislative Assembly. However, it was much later
on the 19th of January 1956 that Life Insurance of India was nationalised.
About 154 Indian Insurance Companies, 16 non-Indian companies and 75
provident were operating in India at the time of nationalisation.
Nationalisation was accomplished in two stages; initially the management
of the companies was taken over by means of an Ordinance and later, the
ownership too by means of a comprehensive bill. The Parliament of India
passed the Life Insurance Corporation Act on the 19th of June 1956, and
the Life Insurance Corporation of India was created on 1st September
1956 with the objective of spreading Life Insurance much more widely
and in particular to the rural areas with a view to reach all insurable
persons in the country, providing them adequate financial cover at a
LIC had 5 zonal offices, 33 divisional offices and 212 branch
offices, apart from its corporate office in the year 1956. Since life
insurance contracts are long term contracts and during the currency of the
policy it requires a variety of services need was felt in the later years to
expand the operations and place a branch office at each district
headquarter, re-organisation of LIC took place and large numbers of new
branch offices were opened. As a result of re-organisation servicing
functions were transferred to the branches, and branches were made
accounting units. It worked wonders with the performance of the
corporation. It may be seen that from about 200.00 crores of New
business in 1957 the corporation crossed 1000.00 crores only in the year
1969-70 and it took another 10 years for LIC to cross 2000.00 crore mark
of new business. But with re-organisation happening in the early eighties
by 1985-86. LIC had already crossed 7000.00 crore Sum Assured on new
Today LIC functions with 2048 fully computerised branch offices,
100 divisional offices, 7 zonal offices and the corporate office. LIC’s
Wide Area Network covers 100 divisional offices and connects all the
branches through a Metro Area Network. LIC has tied up with some
Banks and Service Providers to offer on-line premium collection of
acility in selected cities. LIC’s ECS and ATM premium payment facility
is an addition to customer convenience. Apart from on-line Kiosks and
IVRS, Info Centres have been commissioned at Mumbai, Ahmedabad,
Bangalore, Chennai, Hyderabad, Kolkota, New Delhi, Pune and many
other cities. With a vision of providing easy access to its policyholders,
LIC has launched its SATELLITE SAMPARK offices. The sagellite
offices are smaller, leaner and closer to the customer. The digitalized
records of the satellite offices will facilitate anywhere servicing and many
other conveniences in the future.
LIC continues to be the dominant life insurer even in the
liberalized scenario of Indian insurance and is moving fast on a new
growth trajectory surpassing its own past records. LIC has issued over
one crore policies during the current year. It has crossed the milestone of
issuing 1,01,32,955 new policies by 15th October 2005, posting a healthy
growth rate of 16.67% over the corresponding period in the previous
From then to now, LIC has crossed many milestones and has set
unprecedented performance records in various aspects of life insurance
business. The same motives which inspired our forefathers to bring
insurance into existence in this country inspire us at LIC to take this
message of protection on light the lamps of security in as many as homes
as possible and to help the people in providing security to their families.
Revolutionary changes have taken place in the service sector,
comprising banking, insurance, finance, and telecom and hospitality
segments to satisfy the expectations of consumers and to achieve their
ultimate business goal. LIC of India is one such a service sector, which
has playing a crucial role in strengthening the financial and social fabric
of our nation.
LIC has a vital role to play the economic and social life of the
country it due to the importance of LIC that the Government of India
decided to nationalise it through promulgation of the Ordinance in 1956.
As a result it come into existence by taking over 245 companies and
forming a single corporation named as Life Insurance Corporation of
India and an event of great significance for the economic life of the
country. On the eves of the LIC’s birth Nehuru, the then Prime Minister
of India said.
“Life Insurance becomes one of them then measure state
undertaking in India. Its objective will be to save the individual as well as
the state. The profit motive goes out of it and the service motive become
much more dominant…”
Ever since its formation, the organisation busy in fulfiling one of
its most important objectives – to spread the message of Life Insurance
much more widely and in particular, to the rural areas and to the socially
and economically backward classes, and to maximise mobilisation of
people’s shaving for nation building activity Life Insurance Corporation
of India concern form the security and prosperity of the people is
reflected in the tremendous growth of Life Insurance business in the
country during the last 45 years.
Need for the study
As we all know the need for any research survey lies in its ability to
bring out certain facts, which can aid in decision-making. Any marketing
manager in order to take decisions regarding the marketing mix of their
products require factful and unbiased information about the existing and
potential market, their competitor’s strategies about the customer’s perceptions
for their product and those of the substitutes.
The main purpose of the study is to know about the marketing strategies
of LIC – particularly ‘Marketing of products’ of better service opportunities to
their customers and to what extent they are gaining customers’ satisfaction
towards their rendered products.
Objectives of the study
The main objectives of the study are to find out the marketing
orientation and level of satisfaction of customers towards the products provided
by LIC of India (Life Insurance Corporation of India).
Other objectives are:
1. To know the customers’ satisfaction level, perception and attitudes
regarding the products by LIC of India.
2. To measure the “effectiveness of efforts made by the LIC in providing
innovative products to the changing needs of its customers.”
3. To measure the LIC staffs personal relationship with their clients.
4. To find out the customer’s awareness about the products and their
quality in comparison to earlier sears.
Scope of the study
As growth of insurance business rests on products provided by the
company and policyholders satisfaction level. So the present study is concerned
with ‘Marketing Orientation and the Level of Satisfaction of Customers
towards the Products provided by LIC (w.s.r. LIC)”. By doing proper
marketing research, it enables marketers to predict how consumer would react
in the market place and to understand the reason they made the purchase
decision. The present study, analysis, findings and suggestions proposed by the
present researcher will be of immense use for future researcher with similar
studies in insurance market.
The purpose of methodology section is to describe the research
procedure. This includes the sampling procedure and the data collection. The
research methodology consists of the following aspects:
Sources of data
After the objective of the study has been clearly stated the next step
informal research project into determine the sources of data from which the
data is required to be collected for the purpose of achieving data efficiency.
The information considered of two kinds of data.
Primary data were collected from the customers of LIC to know their
behaviour and satisfaction level towards insurance policy by putting
questionnaire to the customers. The questionnaire comprises of:
1. Multiple questions
2. Ranking questions
3. Open end questions
4. Suggestion questions
5. Scoring questions
Secondary data was collected from various bibliographical sources.
These data were collected from books, records, articles in the magazines,
various reports and booklets of the company, monthly and annual journals of
The sampling universes for the survey are the policyholders of LIC in
Berhampur city. The people who have different educational level, income
group, age are constituted the target sample in the study. And the sample size is
Tools and techniques
To analyse the sample data collected from the sample holder of LIC
policy and to make a comment on the total population out of which the sample
is done, different tools are to be applied for sample responses. Graphs like Bar,
Pie, Cone etc. are applied for analysis.
Problem of the study
The study has been undertaken in order to find out the behaviour of
consumer taking place in insurance sector among insurance buyers in
Berhampur city. It observes consumers buying behaviour and their changing
preferences. It takes into account various problems of customers and a
suggested strategy for Life Insurance Corporation of India. Under this study an
attempt is made by management trainee to strengthen brand awareness among
insurance buyers in Berhampur city.
Limitations of the study
During the course of the study the researcher faced with the following
1. Firstly, the short span of time could not permit me to have an in-depth
study regarding consumer behaviour.
2. The research study was carried out only at Berhampur. Therefore the
result may not applicable to national or state level.
3. It is difficult to generate the main findings since the sample size is small.
4. Some policyholders also hesitate to give data or ever hesitate to answer
5. Contradictory responses of name customers were a limitation to drawn
The above are some of the aspects which posed real problems in the way
of completion of the research work but the majority of respondents were co-
operative and my gratitude are due to them.
As customer’s satisfaction is the only source of growth and
survival of the institution realising the significance LIC could take more
initiative to improve customers servicing through various product. Before
introducing various types of policies, conduct of market research and
study of customers is inevitable. The LIC should direct all its efforts to
satisfy the customers as far as practicable, instead of laying much priority
to the growth of business. It should also emphasize to satisfy the existing
customers. The rules relating to lapsation should be made more flexible to
make the customer satisfied. Finally as per the customer’s suggestion the
following measures should be taken to improve the goodwill and make
the institution more reliable to the customers.
Both the office and field staff should be more cordial in behaviour towards the
customers. Realizing that customers servicing is not an option but an
obligation. All sorts of co-operation should be extended to the customers. The
gentle behaviour and servicing motive will ultimately pay a rich dividend to the
growth of the organisation.
LIC policies through service scheme should be implemented.
Periodic information about the policies, which customers hold, is
Easy and timely payment of money back policies.
Clear account on deposits and dues should be made.
It should provide better service with the premium.
There should be a congenial working environment and well-behaved
personnel to render prompt service.
There should be minimum bank interest of fixed deposit and more
Sympathetic attitude and speedy settlement of claims must be noticed
with dealing with clients.
LIC should introduce new product with low rate of premium.
Life Insurance already opened to private player. It is now become more
challenging for the LIC to market its policies. Taking this into consideration
the LIC of India has to be more and more customer oriented.
The recommendation given by the policyholders may be adopted by LIC
to provide satisfaction to the customers and for maintaining long-term
relationships with the customers to gain organisational profit and goodwill.
It should continue its similar service and produce various type of product to
face competition wit other private insurance companies.
In any field of marketing, the new mantra today is “Customer Care”,
“Customer Protection”, and “Customer Retention”. Customer remains the
prime focus area for marketing activity. It is the customer who determines the
market; so listening to the customer is the best way to achieve success. That’s
why to acquire the organsiational objectives smoothly, the marketers started
impressing the customers in a more meaningful way.
In service organisations, customer satisfaction and customer care is
more emphasized in order to render better quality of service, in order to retain
customers and maintain a lifetime relation with them. The LIC of India had
tried best to provide the best of services to the customers but still the customers
have lot of dissatisfaction. . LIC’s position is at stake at present. Hence LIC of
India has to think seriously, restructure are itself and act to provide the best of
marketing of services to its customers for its survival in this competitive
market.LIC’s provides various type of product to the customer, Because in the
society various type of classes people are living, so these products of LIc is
suitable all of them.
The acquisition of fund for various development activities plays a very
significant role in Indian economy, especially in developing nation like India.
The economic development rests on rapid industrilisation and proper utilisation
of idle resources. To serve the purpose the investment institution are the only
means that can enable the nation to achieve self-sufficiency and growths.
The Life Insurance Corporation as a major investment institution plays a
very significant role in industrial development. It contributes a lot to national
economy by mobilizing saving through insurance.
Dear Sir / Madam
I, …………………………………… an interviewer conducting
survey in the ………………. town to write a report for partial fulfillment
of ………………. Degree on the topic “Study of Customer Attitude
towards LIC of India’s Products”. Would you please spend a few
minutes to answer the same. I assure you that your answers will be kept
completely confidential and will be used only for academic purpose.
5. Are you a insurance policyholder of LIC?
6. If No, do you want to buy LIC Policy?
7. How do you come to know about the policy?
Friend Newspaper Adv. TV Adv. Recommended by any agent
Any other sources
8. What influenced you to buy an insurance policy?
Best way to invest money Tax saving device To cover risk of life Long-term financial gains Having all above benefits. Death benefits
Any other 9. Which of the different forms of policies you have purchased?
Endowment type plan Moneyback type plan Whole life plan Whole life moneyback and endowment
10. How many times had insurance agents come to you for interaction
while you purchase the policy?
11. Could you please tell what problems you find of LIC.
Lack of cooperation from LIC Agents
Lot of tedious paper work Lot of official formalities Delayed claims settlement
12. Are you satisfied by the supporting services provided by LIC office?
Not satisfied Somewhat satisfied Satisfied Fully satisfied
13. Would you please tell what improvements you suggest for a better
5-9 years 10-14 years 15-19 years 20-24 years 25 and above
14. Gender :
Male 15. Marital status
16. What about the LIC policy premium ?
Low rate High Rate Moderate Manageable
17. What is the number of policy you have done?
Only one Exactly one More than one
19. Monthly income
20. Do you like any assistance from LIC?
21. Response from Organisation?
Excellent Good Manageable
22. Are you satisfied with the policy servicing?
23. Your suggestion
About product ________
About agents and D.O. ________
About office staff ________
24. Which product of LIC do you like most?
New Bima Gold
25. Which product of LIC has the more competitive advantage against the
other insurance companies ?
New Bima Gold
Thank you for your cooperation
Marketing Management - By Philip Kotler
The Essence of Services Marketing – By Advian Payne
Consumer Behaviour – By L.G. Schifman
Marketing Services – By Harsh V. Verma.
Financial Services – By M.Y. Khan
LIC Magazines : Yogakshema
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