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PROJECT REPORT ON

CUSTOMER ATTITUDE TOWARDS

LIC OF INDIA’S PRODUCTS


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ABSTRACT

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

was born.

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.


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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


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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


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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

reasonable cost.

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

policies.

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,


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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

year.

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.


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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.


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RESEARCH METHODOLOGY

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


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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.

Methodology

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

Secondary data

Primary 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


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Secondary data

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

LIC.

Sample size

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

100.

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

limitations.

1. Firstly, the short span of time could not permit me to have an in-depth

study regarding consumer behaviour.


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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

questionnaire.

5. Contradictory responses of name customers were a limitation to drawn

necessary conclusion.

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.

SUGGESTIONS

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


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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

required.

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

financial gain.

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.


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CONCLUSION

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.


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QUESTIONNAIRE

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.

1. Name

2. Age

3. Gender

4. Address

5. Are you a insurance policyholder of LIC?

Yes No

6. If No, do you want to buy LIC Policy?

Yes No

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


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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

Pension plan

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

policy servicing?

Name :_____________________

Address:____________________

Age:_______________________

5-9 years 10-14 years 15-19 years 20-24 years 25 and above

14. Gender :

Female


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Male 15. Marital status

Married Unmarried

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

18. Occupation

19. Monthly income

20. Do you like any assistance from LIC?

Yes No

21. Response from Organisation?

Excellent Good Manageable

22. Are you satisfied with the policy servicing?

Yes No

23. Your suggestion

About product ________

About agents and D.O. ________

About office staff ________

24. Which product of LIC do you like most?

Komal Jeevan


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Jeevan Tarang

Jeevan Anand

Jeevan Sathi

New Bima Gold

25. Which product of LIC has the more competitive advantage against the

other insurance companies ?

Komal Jeevan

Jeevan Tarang

Jeevan Anand

Jeevan Sathi

New Bima Gold

Signature

Thank you for your cooperation


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BIBLIOGRAPHY

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

Business Today

Business World

Economic Times.

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