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A Study on Satisfaction of Motor Insurance claim settlement
Procedure among policyholders' with special reference to
Bajaj Allianz General Insurance Co. Ltd.,
A project report submitted in partial fulfillment for the award of the degree of
Master of Business Administration of Pondicherry University
By
SRINIVAS PERUMALLA
Register Number: 12395033
Under the Guidance of
Dr. S.A. Senthil KumarM.B.A., M Phil, Ph.D.
Associate professor
Department of Management
Pondicherry University.
Karaikal Campus
Karaikal609 605
DEPARTMENT OF MANAGEMENT
PONDICHERRY UNIVERSITY
KARAIKAL 609605
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MAY JULY, 2013
CERTIFICATE
This is to certify that Mr. SRINIVAS PERUMALLA, Reg. No.12395033 has completed a
summer project titled A Study on Satisfaction of Motor Insurance claim settlementProcedure among policyholders' with special reference to Bajaj Allianz General
Insurance Co. Ltd., in partial fulfillment of the requirements for the award of MBA Degreein Insurance Management of Pondicherry University, Karaikal Campus during the academic
year 2012-2014 under my supervision and guidance.
(Prof. Lalitha Ramakrishnan) (Dr. S.A. Senthil Kumar)
Head of the Department Faculty guide
Mr. SRINIVAS PERUMALLA
Register number: 12395033
Department of Management
Pondicherry University
Karaikal 609605
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DECLARATION
I hereby declare that the project entitled A Study on Satisfaction of Motor Insurance claim
settlement Procedure among policyholders' with special reference to Bajaj Allianz
General Insurance Co. Ltd. is carried out Pondicherry University in partial fulfillment of the
requirements for the award of the degree of Master of Business Administration in Insurance
Management carried out under the guidance of Dr. S.A. Senthil Kumar,Associate Professor
Department of Management from 13THMAY to08THJULY, is my original work and that no part
of it has been submitted for any degree, diploma or any other similar title.
Date: O8.07.2013
Place: Karaikal Mr. SRINIVAS PERUMALLA
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CERTIFICATE
Submitted for viva-voce examination held at Pondicherry University on
Internal Examiner External Examiner
1.
2.
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ACKNOWLEDGEMENT
I take this opportunity to express my sincere gratitude to everyone who directly or
indirectly helped me to complete this placement training within the prescribed time.
I would like to express my deep sense of gratitude to my faculty guide Dr.S.A.Senthil
Kumar for providing this opportunity and his valuable guidance and supervision from
time to time. I would express my gratitude to Prof. Lalitha Ramakrishnan for
providing this opportunity.
My special thanks to Mr. P. KISHORE (Branch ManagerKakinada Office), for giving
the permission to carry out the project work.
Finally, I would like to thank my parents and friends, who gave me moral support.
SRINIVAS PERUMALLA
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CONTENTS
CHAPTER No. INDEX PAGENo.
I INTRODUCTIONIndustry profile
Company profile
Product
II RESEARCH METHODOLOGY
Need of the study
Objectives of the study
Scope of the study
Research design
Data collection
Sample size
Sample techniques
Data Analysis tools
Limitations of the study
III DATA ANALYSIS AND INTERPRETATION
Tabular and Graphical representation
Statistical inference
IV RESULTS AND RECOMMENDATION
Findings
Suggestions
Conclusion
Bibliography
Appendix
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CHAPTER - I
INTRODUCTION AND DESIGN OF THE
STUDY
INTRODUCTION
Motor insurance is a contract between the vehicle owner and the motor insurance company,
where the latter agrees to indemnify any loss that may have been incurred by the person dueto involvement of his vehicle on road accidents, thefts, or damages etc. Motor Insurance
Covers a legal liability that a person may incur arising out of the use of a motor vehicle. Types
of policies include Comprehensive cover and Third Party only.
Its primary use is to provide financial protection against physical damage and/or bodily
injury resulting from traffic collisions and against liability that could also arise there from.The
Tariff Advisory Committee administers all tariffs relating to General Insurance. TAC is a
statutory body established under the Insurance Act 1938 (amended in 1968) to regulate the
rates, terms advantages and conditions relating to General Insurance business. Motor
Insurance in India is also governed by the India Motor Tariffs formulated by the TAC. This
tariff has undergone several revisions, the latest revision being effective from 1.7.2002. It
accounts for a major portion of insurance industry. More than 45% of premium is generated
from motor business only. It is a part of miscellaneous class of insurance. For the purpose of
insurance, motor vehicles are classified into three broad categories:
A. Private CarB. Motorcycle and ScooterC. Commercial Vehicles
i. Goods Carrying Vehiclesii. Passenger Carrying Vehicles
D. Miscellaneous Vehicles: Ambulances Publicity Van Dispensaries, etc.
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Types of Losses can be arising in respect of motor vehicles are:
Loss or damage to the vehicles
Third party liability
Insured Declared Value (IDV)
A. Insured Declared Value is the maximum Sum Assured fixed by the insurer. Basically, IDV is
the current market value of the vehicle. Prior to revision, in case of Total Loss of the insured
vehicle, the Motor Policies indemnified the insured either the Insureds Estimated Value (IEV)
or the Market Value whichever is less. Invariable, at the time of loss, the market value of thevehicle, being the depreciated value, would be less than the IEV whereas the Insured would
have paid the premium for the IEV at the inception of the policy. The insured, naturally, would
prefer to be indemnified the full sum insured at the time of settlement of claim and not a
lesser value than for which the vehicle had been insured. With the introduction of the
concept of IDV, the sum insured no longer depends upon the vagaries of the market. Thus the
insured knows beforehand the sum insured which will be indemnified to him in case of total
loss or constructive total loss of the vehicle.
(a)In case of vehicle not exceeding 5 years of age the IDV has to be arrived at by applying thepercentage of depreciation specified in the tariff on the showroom price of the particular
make and model of the vehicle.
(b)In case of vehicles exceeding 5 years of age and Obsolete models (manufacture of thosevehicles which have been stopped by the manufacturers) they have to be insured for the
prevailing market value of the same as agreed to between the insurer and the insured.
B.Proposal form is required to be submitted by the insured to the insurer compulsorily incase of any material alteration.
C. The liability only Policy covers Third Party Liability for bodily injury or death and Property
Damage. A new Compulsory Personal Accident Cover for Owner-Driver is included.
D.No claim Bonus (NCB): A common NCB table has been introduced to apply to all classes of
vehicle except vehicles under Motor Trade Policies, road Transit Policies and Policies which
offer limited covers.
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20% discount on OD Premium No claim made or pending during the preceding full year of insurance
25% discount on OD Premium No claim made or pending during the preceding 2 consecutive years of
insurance
35% discount on OD Premium No claim made or pending during the preceding 3 consecutive years of
insurance
45% discount on OD Premium No claim made or pending during the preceding 4 consecutive years of
insurance
50% discount on OD Premium No claim made or pending during the preceding 5 consecutive years of
insurance
E. Vehicles fitted with Anti-Theft Device (other than those covered under the Motor trade
Policies) are eligible for discount.
F.Long term policies hereto issued under the Two Wheeler section of the tariff is abolished.
G. Introduction of uniform codification based on the category of vehicle, zone where it isregistered, age of the vehicle and the risks covered.
H.New Regulation for vehicles fitted with Bi-fuel system such as Petrol/Diesel and CNG/LPG
provided.
I. Common table of depreciation for partial loss claims in respect of all categories of
vehicles/accessories.
1.1 Motor Vehicle insurance
Vehicle insurance (also known as Auto insurance, Car insurance or motor insurance) is
insurance Purchased for cars, trucks, motorcycles and other road vehicles. Its primary use to
provide financial protection against physical damage and/ or bodily injury resulting from
traffic collisions and against liability that could also arise there from.
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Motor insurance is a contract between two parties the car owner and the motor insurance
company, where the latter agrees to indemnify any loss that may have been incurred due to
involvement of owners car in road accidents, thefts, or damages etc.
1.2 Types of Motor Insurance Cover
Broadly there are two types of insurances policies that offer motor insurance cover:
Liability Only Policy (Statutory requirement) Package Policy (Liability Only Policy + Damage to owners Vehicle)
Package Policy - Section I
Section(OwnDamage)ofPackage Policy:
Section I of package policy covers loss or damage to the vehicle and / or accessories due to
Accidental external means Fire Self ignition lightning Burglary house breaking or theft Terrorist activity Riot Strike and Malicious Damage Earthquake Flood cyclone and Inundation etc While in transit by rail road air elevator lift or inland waterways Landslide or work slide
None of the above perils can be excluded from the scope of a policy.
Loss or damage to accessories by burglary/house breaking/theft:
For private car it is covered In case of Motorized Two Wheelers this can be covered on payment of an additional
premium at 3% of the IDV of such accessories.
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Loss or damage to Lamp Tires mudguard and / or Bonner side parts bumpers etc. canbe covered on payment of additional premium. This is applicable only to Commercial
Vehicles.
If the vehicle is disabled in an accident cover is provided for the reasonable cost of the
following:
Its removal to nearest repairers The cost of reasonable repairs immediately necessary subject to the limit provided for.
Package Policy - Section II
Section II ((Liability) of Package Policy :
Liability to third parties bodily injury and or death and property damage Personal accident cover for the owner driver for a specified sum insured.
The following are payable under Section II of the Package Policy subject to the limit of liability
laid down in the Motor Vehicles Act:
The insured's legal liability for death / disability of third party Loss or damage to third party property Claimant's cost as decided by the court All costs and expenses incurred with company's written consent In case of death of an Insured person entitled to indemnity for a liability incurred under this
policy his legal representative will be indemnified in place of insured if he observed all
conditions as the insured himself.
Contractual liability. War perils nuclear perils and drunken driving Consequential loss Depreciation Wear and tear mechanical or electrical break down Damage suffered due to driving the vehicle under the influence of intoxicating liquor or
drugs
Claims arising outside the geographical area specified in the policy Claims arising whilst the vehicle is used in contravention of the limitations as to use Claims arising when the vehicle is driven by a person without valid driving license.
Liability only policy:
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Liability to third parties bodily injury and or death and property damage Personal accident cover for the owner driver for a specified sum insured
The following are payable under Section II of the Package Policy subject to the limit of
liability laid down in the Motor Vehicles Act:
The insured's legal liability for death / disability of third party Loss or damage to third party property Claimant's cost as decided by the court All costs and expenses incurred with company's written consent In case of death of an Insured person entitled to indemnity for a liability incurred under this
policy his legal representative will be indemnified in place of insured if he observed all
conditions as the insured himself.
Exclusions
Contractual liability. War perils nuclear perils and drunken driving Consequential loss Depreciation Wear and tear mechanical or electrical break down Damage suffered due to driving the vehicle under the influence of intoxicating liquor or
drugs
Claims arising outside the geographical area specified in the policy Claims arising whilst the vehicle is used in contravention of the limitations as to use Claims arising when the vehicle is driven by a person without valid driving licence.
1.3 NEED OF THE STUDY
We the members of the society, individually can afford to buy a motor vehicle of any
description for our use, but most of us cannot afford the luxury of meeting all the liabilities by
way of legal damage payable to third parties towards loss of or damage to third party
properties, personal injuries and /or death arising out of the use of such a vehicle in a public
place. The natures of these liabilities are TORTIOUS. It has to be borne in mind that the
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driver of the motor vehicle has no intention to cause death, injuries to third party persons or
damage to a third party property unless the contrary can be proved.
The act of motor vehicle drivers a wrongful act in an accident which in turn results in
legal damages to the affected other persons and thus gives rise to a legal remedy in the form
of an action for damages. Thus the liabilities on the part of a driver of a motor vehicle are
tortuous. Thus in such cases the driver is liable to compensate the third parties affected in
Motor vehicle are tortuous. Thus in such cases the driver is liable to compensate the third
parties affected in the motor vehicle accident. If the driver of the motor vehicle is not the
owner , then the owner is vicariously liable for such damages, i.e; an employer is liable for the
tortious acts of his employee in course of such employee carrying on his duty for his employer
stands to gain the fruits of discharge of duty by his employee. All motor insurance policies
seek to indemnify the owners of insured motor vehicles of liabilities arising out of use of such
duly insured motor vehicles.
Motor Vehicles Act 1988, one of the social welfare pieces of legislation thus has come
into being as a matter of necessity like some other statues such as the Workmens
Compensation Act 1923 etc. The Motor Vehicles Act 1988 thus makes it a statutory obligation
on the part of owners of all motor vehicles to insure their motor vehicles at least against the
Liability Only cover as provided for in the act.
1.4 OBJECTIVES OF THE STUDY
To study the awareness level of motor insurance products (TP & OD) To study the claim settlement procedure in Bajaj Allianz General Insurance Co. Ltd. To analyze the customer satisfaction towards motor insurance policies offered by Bajaj
Allianz General Insurance Co. Ltd.
To identify the problems faced by the policy holders during lodging and getting claim To study the awareness level of No Claim Bonus (NCB) on motor insurance
customers
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1.7Limitations of the Study
Limited sample size had been considered for the study and therefore, the conclusions drawn
based on this may not be a reflection of the entire population. Since the study was aimed to
collect the data related to motor insurance from existing motor insurance policyholders,
response bias might have occurred in primary data collection.Some of the respondents were
reluctant to give their responses.
1.8 Claim Process
Notice of accident should be filed with the insurers. If damage is a major one, the accident may be reported before the vehicle is removed
from the spot so that the insurers can arrange for spot inspection of damage.
The vehicle may then be moved to a workshop, preferably to authorized workshop, forestimation of repair charges.
On receipt of completed claim form and estimate of repairs the insurers will arrangedetailed inspection of damage and cost of repairs will be ascertained.
The insurers will ensure that a person duly licensed drove the vehicle at the time ofaccident, they will verify the Registration Certificate and the Driving license of thedriver who drove at the time of the accident.
Upon completion of the above procedure, the repairers will be authorized to carry outrepairs. The insurer may undertake to settle the repair bills directly with the garage or
reimburse the insured.
Insurers would like to collect the damaged parts for which replacements have beenallowed, as salvage.
In case of theft of the car or its accessories, it has to be reported to the police and finalreport should be submitted.
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1.9 RESEARCH METHODOLOGY
Research Design :- Descriptive research Sampling Design :- Non Probability sampling Sampling Techniques :- Convenient sampling Sample size:-The sample size of the survey is 70
1.10 Methods of Data Collection
Data collected:
Data includes facts which are required to be collected to achieve the objectives of the
project. In order to determine the present position and claim satisfaction level of
customers.The main source of information for this study is based on the data collection. Data
collected are both primary and secondary in nature.
Primary Data:
Primary data have been directly collected from insured through well-structured Interview
Schedule.
Secondary Data:
The secondary data was collected from the websites of IRDA & III, books, magazines, journals
and daily newspapers.
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1.11 Sampling Technique and Sample Size
Sampling Technique used:
This report is based on convenient samplingtechnique because it is fast, inexpensive, easy
and the subjects are readily available.
Sample Size:
Sample size is the total number of samples selected for the study from the population Sample
was 70.
Data Collection Area
The survey was done at East Godavari District in Andhra Pradesh
Tools for Analysis
The main statistical tools used for the collection and analyses of data in this project are:
Simple Percentage Chi Square Test
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CHAPTER - II
PROFILE OF THE INDUSTRY AND THECOMPANY
INDUSTRY PROFILE
(i) Indian insurance sectorThe purpose of insurance is to protect the unfortunate few who have suffered a loss
through the help of those who have not suffered a loss but were exposed to the same risks.
Section 1.02 In insurance, the insured makes payments called "premiums" to an insurer, andin return is able to claim a payment from the insurer if the insured suffers a defined type of
loss.This relationship is usually drawn up in a formal legalcontract.
Section 1.03 In one classic example of insurance, a ship-owner insures a ship andreceives payment if the ship is damaged or destroyed. This example is one of the earliest uses
and developments of concepts like insurance. Interestingly, ships are now more often insured
through risk pooling and spreading organizations such asLloyd's of London because the loss
of a large ship going down is too great for one insurer to accept As applied to insurance, this
means that the greater the number of similar risks, the greater accuracy with which insurers
can estimate the overall risk.
2.2 History of insurance
Insurance has been an institution of human society for thousands of years, having been
practiced by Babylonian traders as long ago as the 2ndmillenniumBCE. Eventually it was
given legal mention in theCode of Hammurabi,and practiced by earlyMediterranean sailing
merchants. The Greeks and Romans had "benevolent societies" which acted to care for thefamilies and funeral expenses of members upon death. Guilds in the middle Ages served a
similar purpose. Insurance became much more sophisticated in post-RenaissanceEurope,and
specialized varieties developed. In America,BenjaminFranklin helped to popularize and make
standard the practice of insurance, particularly against fire. The19thcentury saw a rise in the
government regulation of insurance, and the 20thcentury saw further specialization and, in
the United States, a bit of deregulation that allowed other financial institutions, such as banks,
to offer insurance. The ever-increasing ability of science to predict catastrophes of any
measure or variety continues to affect the way insurance is conducted.
The insurance sector in India has come a full circle from being an open competitive
market to nationalization and back to a liberalized market again. Tracing the developments in
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the Indian insurance sector reveals the 360 degree turn witnessed over a period of almost two
centuries.
Types of insurance
There are a number of different types of insurance:
Automobileinsurance also known as autoinsurance, carinsurance and in the UK as
motorinsurance, is probably the most common form of insurance and may cover both legal
liability claims against the driver and loss of or damage to the vehicle itself.
Property insurance provides protection against risks to property, such as fire, theft or
weather damage. This includes specialized forms of insurance such as fire insurance, flood
insurance,earthquakeinsurance,homeinsurance orboiler insurance.
Casualty insurance insures against accidents, not necessarily tied to any specific piece
of property.
Liability insurance covers legal claims against the insured. For example, a doctor may
purchase insurance to cover any legal claims against him if he were to make a mistake in
treating a patient.
Financial loss insurance protects individuals and companies against various financial
risks. For example, a business might purchase cover to protect it from loss of sales if a fire in a
factory prevented it from carrying out its business for a time. Insurance might also cover
failure of a creditor to pay money it owes to the insured. Fidelity bonds and surety bonds are
included in this category.
Title insurance provides a guarantee on research done on public records affecting title
to real property, usually in conjunction with a search done at the time of a real estate
transaction, such as a sale, or amortgage.
Healthinsurance covers medical bills incurred because of sickness or accidents. Life
insurance provides a benefit to a decedent's family or other designated beneficiary, usually to
make up for their loss of his or herincome.
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Annuities provide a stream of payments and are generally classified as insurance
because they are issued by insurance companies and regulated as insurance. Annuities and
pensions that pay a benefit for life are sometimes regarded as insurance against the
possibility that a retiree will outlive his or her financial resources. In that sense, they are the
opposite of life insurance.
Credit insurance pays some or all of a loan back when certain things happen to the borrower
like unemployment, disability, or death.
Political risk insurance can be taken out by businesses with operations in countries in
which there is a risk that revolution or other political conditions will result in a loss
Types of insurance companies
Insurance companies may be classified as
Life insurance companies, who sell life insurance, annuities and pensions products. Non-lifeorgeneralinsurance companies, who sell other types of insurance.
Reinsurancecompanies sell insurance cover to other insurance companies. This helpsinsurance companies to spread their risks, and protects them from very large losses. A
few very large companies, with huge reserves, dominate the reinsurance market.
History of General Insurance in India
The General insurance business in India, can trace its roots to the Triton
Insurance Company Ltd., the first general insurance company established in the
Year 1850 in Calcutta by the British.
Some of the important milestones in the general insurance business in
India are:
1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all
classes of general insurance business.
1957: General Insurance Council, a wing of the Insurance Association of India, frames a code
of conduct for ensuring fair conduct and sound business practices.
1968: The Insurance Act amended to regulate investments and set minimum
solvency margins and the Tariff Advisory Committee set up.
1972: The General Insurance Business (Nationalization) Act, 1972 nationalized the
General insurance business in India.
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January 1973. 107 insurers amalgamated and grouped into four companies:
The National Insurance Company Ltd., The New India Assurance Company Ltd., The Oriental Insurance Company Ltd. And The United India Insurance Company Ltd
Features of Indian general insurance market
Low market penetration. Ever-growing middle class component in population.
Growth of consumer movement with an increasing demand for better insuranceproducts.
Inadequate application of information technology for business. Adequate fillip from the Government in the form of tax incentives to the insured, etc. India is one of the least insured countries but the potential for further growth is
phenomenal.
Rates of claim settlement were earlier in India the highest in the world, 70 per cent ingeneral insurance, compared to around 40 per cent internationally.
Non-life premium has a 0.71 per cent share of GDP.
Mission of Insurance Regulatory and Development Authority Act
To protect the interests of the policyholders, to regulate, promote and ensure orderly
growth of the insurance industry and for matters connected therewith or incidental thereto.
Composition of Authority under IRDA Act, 1999
As per the section 4 of IRDA Act' 1999, Insurance Regulatory and Development
Authority (IRDA, which was constituted by an act of parliament) specify the composition of
Authority
The Authority is a ten-member team consisting of
(a) A Chairman;
(b) Five whole-time members;
(c) Four part-time members;(All appointed by the Government of India)
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Likely changes in the insurance sector
The general insurance industry is one of the strongholds of the Government has beenunder State monopoly for the last four decades. This sector is now on the threshold of being
thrown open. To the Indian private sector and international players. Prodded more by the
pressure of international lending agencies, the government has at last realized that the
performance of State-owned insurance companies has been dismal in terms of the corporate,
social and financial objectives.
It has been felt over the year that the totally protected industry insurance business has
failed to provide any information to the management to keep abreast of the development witha view to formulation polices and measures rapid growth consistent with customer
satisfaction.
Dependence on premium:
The annual premium income of general insurance corporation (GIC) and life insurance
corporation (LIC), the two public sector behemoths which straddle the insurance sector,
exceeds Rs.3, 500 crores and Rs.8, 000 crores respectively. The overwhelming dependence of
GIC on its premium income prevents formulation of innovative and coast effective schemes.
The Indian Insurance market as it stands today is a regulated one with a host of tariff
rates, market agreements, rules and regulations. But, since there is growing competition in
several sections of the financial market, particularly in the banking sector, mutual funds and
merchant banking, it would be advisable to make the insurance sector more competitive by
permitting the private sector also to enter into the general insurance business.
Major Weakness:
The major weakness noticeable in the business development so far has been
overwhelming depending upon the secondary or the manufacturing sector of the economy
which accounts for less than a third of the gross balance in the business portfolio, is amply
illustrated by the fact that personal risk cover accounts for less than 20 percent of the
premium income in India as compared to over 75 percent across the developed world.
Similarly, the rural sector which accounts for over a third of the national income provides only
3 percent of the GICs annual premium income.
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At the present, the general insurance industry is likely to generate and annual
premium of Rs.11, 000 crores. Service nearly 100 million policy holders annually and pay
nearly 10 million claims involving an outgo of about Rs.7, 000 crores per annual. The life
insurance business is also showing a tremendous growth.
The LIC and GIC are areas of tremendous growth potential. On opening up the policy
holders will not only get a range of new products but also improved services. It is also agreed
that premium rates will come down if more players are allowed into the insurance market
due to competitiveness.
Currently, GIC and LIC have to invest about 80 percent of their money in law-yieldinggovernment securities. Experts feel this should be brought down to a level of 25 percent in
order to generate a larger population of non-premium income which alone can make the risk
protection regime more cost effective.
The corporate sector is in favor of privatization of insurance companies. Bodies like the
India merchants chamber (IMC) have demanded off loading of 50 percent of Government
holding in GIC. When all other sections are thrown open by the government the IMC feels the
insurance sector not only be keep under Government control.
The major shot-coming of nationalization functioning is the fear of job insecurity
amongst the employees resulting in low efficiency and poor customer service.
Other View:
Introduction of new players in the field may not necessarily lead to efficiency and
reduced premium. What is needed is to have a look at the existing legal framework relating to
insurance and the supervisory mechanism. At the same time there is the need to grant
insurance companies more operational flexibility and the freedom to take investment
decisions.
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Now withstanding the pressure of international agencies, experts feel that a lot needs
to be improved in the insurance sector and the stepping stone should be privatization and
new competition.
A number of foreign companies like sun Insurance Corporation, royal insurance andthe American insurance group are waiting in the wings. Several companies in Indian are also
interested in entering this new area.
Privatization of Insurance
When the cloud of privatization is enveloping almost every government holding, there
was one area which was left untouched in the current financial overhaul, i.e. the insurance
industry, at last, the government is on the threshold of throwing open the sector, which is one
of he last vestiges of state monopoly. Prodded more by the pressure of international lending
agencies, the government has at last realized that the performance of the state owned
insurance companies had been dismal. This was basically due to the protected regularity
frame works under which the insurance companies were operating. This kept them away
from keeping abreast of the new resulting in stagnation of growth and inconsistent of
customer satisfaction.
One of the main reasons for the present state of insurance companies in India is their
heavy dependence on premiums. The annual premium of general Insurance Corporation is
Rs.8000 cores, and depends vastly on this premium products and better service standards.
Basically arising due to the low return on FGICs annual investments in low yielding
government securities as it invests around 80 percent of its money in these kinds of securities.
Experts feels that it should be brought down to 25% in order to generate a larger proportion
on non-premium income to be cost effective in this area of heavy competition.
The other major weakness noticeable in the insurance business in India is its
overwhelming dependence on the manufacturing sector. This is because manufacturing sector
of Indian Economy amounts to less than a third of Indias gross domestic product. Thus the
personal risk coverage sector has totally been ignored. This imbalance in the business
portfolio is far from favorable for the industry. The premium generated from the personal risk
coverage in India is just 20% as compared to over 75% the world over. Similarly the rural
sector which accounts for over a third of the national income has only 3 percent of its share inthe annual premium generated by GIC. The enormity of the potential of this particular market
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can be easily visualizes, since Indias prosperous professional classes along practically equal
the population of the European community or the United States.
This potential in the insurance sector has generated the interest of a lot of private
Indian and International players. Indian companies like HDFC, Reliance, ITC and Tatas arealready looking at the business, foreign insurances including American Insurance group the
first foreign insurance being allowed to operate in China and sun life PIC which has a tie-up
with LIC in the UK, have suffering around the edges of the insurance market in India.
This spurt of interest puzzles some observers. But with the western insurance market
in its worst slump over, foreign insurers are obviously on the lookout for newer markets. Over
100 insurers in US have closed down in recent times. Thus it is not surprising that the US
government has been exerting a little super 301 muscle to open up this sector in India. Thiscan be helped little because industry sources way that, the percentage of premium income in
India relative to the gross domestic product is only 0.58 percent as compared to 3.37 and 4.45
percent in the US and UK markets respectively.
This does not mean that the insurance industry is free of any criticism from the public
in India. Both the insurance corporation, LIC and GIC are already overstaffed. A large number
of agents final to meet their annual quotas mainly because they are poorly qualified and badly
trained, resulting in their termination leaving policy holders orphaned. Although computerhas been introduced according to officers, they remain grossly underutilized. Poor customer
service due to such factors is clearly evident.
Apart from his, insurance official plead that they are hamstrung by the bureaucratic
controls open them like CAG Audits, Vigilance committees, strong unions and government
committees. If they do not settle a claim soon, the customer service cells active themselves,
and if a claim is settled soon, the vigilance department is upon them.
More than new products, flexibility is required and the industry has been long asking
for a system of merit rating, where companys loss prevention practices and l ower claims
ratio are rewarded with discounts. Providing discounts would encourage companies to adopt
a better risk management technique which ultimately is beneficial for the insurer too.
But, if the insurance industry opens up the is still one question i.e. how will the existing
insures are in the face of the competition/According to analysts, they are fairly strong. And
they could pick up the benefits of technology and modernization themselves. In fact tie up
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with a foreign company would make great sense. With the reach, knowledge of the market
and financial backing of the existing corporations and the technology and innovations of the
foreign companies, any joint venture should be marriage made in heaven.
Reforms into the insurance industry
Jaibharat Reddy Committee which was framed to look into the need for reforms serves as
a backgrounder for the recently commissioned R.N. Malhotra Committee. The terms of
reference of the committee which first met in Bombay recently are to:
Examine the structure of the insurance industry and recommend ways to make itefficient.
Suggested ways to improve the functioning of General Insurance Corporation and theLife Insurance Corporation.
Review existing regulations of Insurance companies. Suggest changes in the legislation.
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COMPANY PROFILE
Bajaj Allianz General Insurance Co. Ltd
Bajaj Allianz General Insurance Company Limited is a joint venture between Bajaj Auto
Limited and Allianz AG of Germany. Both enjoy a reputation of expertise, stability and
strength. Bajaj Allianz General Insurance received the Insurance Regulatory and Development
Authority (IRDA) certificate of Registration (R3) on May 2nd, 2001 to conduct General
Insurance business (including Health Insurance business) in India. The Company has an
authorized and paid up capital of Rs 110 crores. Bajaj Finserv Limited holds 74% and the
remaining 26% is held by Allianz, SE.
As on 31st March 2009, Bajaj Allianz General Insurance maintained its premier position in the
industry by achieving growth as well as profitability. The company garnered a premium
income of Rs. 2866 crore, achieving a growth of 11 % over the last year. Bajaj Allianz has
made a profit before tax of Rs. 149.8 crore and has become the only private insurer to cross
the Rs.100 crore marks in profit before tax in the last three years. The profit after tax was
Rs.95 crores, which is also the highest by any private insurer.
Bajaj Allianz today has a countrywide network connected through the latest technology for
quick communication and response in over 200 towns spread across the length and breadth
of the country. From Surat to Siliguri and Jammu to Thiruvananthapuram, all the offices are
interconnected with the Head Office at Pune.
Vision
To be the first choice insurer for customers
To be the preferred employer for staff in the insurance industry.
To be the number one insurer for creating shareholder value
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Visit Bajaj Auto's Website www.bajajauto.com
Allianz AG, Germany
Allianz AG is in the business of General (Property & Casualty) Insurance; Life & healthinsurance and Asset Management and has been in operation for over 110 years. Allianz is one
of the largest global composite insurers with operations in over 70 countries. Further, the
Group provides Risk Management and Loss Prevention Services. Allianz has insured most of
the world's largest infrastructure projects (including Hong Kong Airport and Channel Tunnel
between UK and France), further Allianz insures the majority of the fortune 500 companies,
besides being a large industrial insurer, Allianz has a substantial portfolio in the commercial
and personal lines sector, using a wide variety of innovative distribution channels.
Allianz AG has the following to offer Bajaj Allianz General Insurance Company Ltd.:
Set up and running of General insurance operations
New and improved international products
One ofthe world's leading insurance companies
More than 700 subsidiaries and 2 lac employees in over 70 countries worldwide
Provides insurance to almost half the Fortune 500 companies
Technology
Why Bajaj
Business strategy aligned to clients' needs and trends in Indian and global economy
industry
internationally experienced core team, majority with local background
Fast, decentralized decision making
Long-term commitment to market and clients
Trust
At Bajaj Allianz, we realize that you seek an insurer whom you can trust. Bajaj Auto Limited is
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trusted name for over 55 years in the Indian market and Allianz AG has over 110 years of
global experience in financial services. Together we are committed to provide you with time
tested and trusted financial solutions that provide you all the security you need for your
investments. And more..
Underwriting Philosophy
Our underwriting philosophy focuses on:
Understanding the customer's needs Underwriting what we understand Meeting the customer's requirements Ensuring optimal coverage at lowest cost
Claims Philosophy
The Bajaj Allianz team follows a service that aims at taking the anxiety out of claims
processing. We pride ourselves on a friendly and open approach. We are focused towards
providing you a hassle free and speedy claims processing.
Our claims philosophy is to:
Be flexible and settle fast
Ensure no claim file to be seen by more than 3 people
Check processes regularly against the global Allianz OPEX(Operational Excellence) methodologysold over 1 million since inception.
Customer Orientation
At Bajaj Allianz, our guiding principles are customer service and client satisfaction. All ourefforts are directed towards understanding the culture, social environment and individual
insurance requirements - so that we can cater to all your varied needs.
Experienced and Expert Servicing Team
We are driven by a team of experienced people who understand Indian risks and are
supported by the necessary international expertise required to analyze and assess them.
Service engineers located in every major city
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Superior Technology
In order to ensure speedy and accurate processing of your needs, we have establishedworld class technology, with renowned insurance software, which networks all our
offices and intermediaries
Using the Web, policies can be issued from any office across the country for retailproducts
Unique, user friendly software developed to make the process of issue of policies andclaims settlement simpler (e.g. online insurance of marine policy certificate)
Unique Forms of Risk Cover
Special PA cover for AmaranthYatris Film insurance Event management cover Sports & Entertainment Insurance Package
Risk Management- Our Expertise
Our service methodology is tried, tested and Proven the world over and involves:
Risk identification: Inspections Risk analysis: Portfolio review and gap analysis Risk retention Risk Transfer: To an insurer as well as reinsurer (as required) Creation of need based products Ongoing dialogue and proactively
Kakinada branch
The BAJAJ ALLIANZ branch in Kakinada was a very successful one. The scope of this
branch is from Rajahmundry to Vishakhapatnamthere are about fifty employees and ninetyagents working in this branch. It is closing about twelve hundred to thirteen hundred policies
per month and is generating a premium of about two crores per monthand the sum assured is
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about three hundred to three fifty crores.
Geographical coverage of Kakinada branch office
VIJAYAWADA ANAKAPALLI SRIKAKULAM VIJAYANAGARAM RAJAHMUNDRY VISHAKHAPATNAM BHIMAVARAM ELURU GUNTUR ONGOLE
Customers
HINDUSTAN ZINC EIPL SHIPYARD DREDGING CORPORATION STEEL AUTHORITY OF INDIA LIMITED COROMANDEL PAINTS COROMANDEL FERTILIZERS
Top Management of Bajaj Allianz
The top management of Bajaj Allianz General Insurance consists of people having
Domain knowledge of insurance as well as specialists in their respective field.
KameshGoyal is the CEO of Bajaj Allianz General Insurance Company Limited,
Sam Ghosh, who was the CEO of Bajaj Allianz earlier, has taken over as Country
Manager and is also the CEO of Bajaj Allianz Life Insurance Company Limited.
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Data Analysis & Interpretation
Research design : Descriptive Research Sampling technique : Convenience sampling .
technique
Sample size : 70 Sample respondents : Policy holders who lodged claim
on motor vehicle insurance
Research instrument : Interview Schedule Tools used : Percentage analysis
and Chi-square test
1. Gender of the respondents
INTERPRETATION
From the above table it is found that majority of the respondents are male with 82.9%
very few respondents are female with 17.1%.
GENDER No of Respondents Percentage
MALE 58 82.1 %
FEMALE 12 17.9 %
TOTAL 70 100 %
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2. Age of the respondents
AGE No of Respondents Percentage
21 30 7 10%
31 40 14 20%
41 50 33 47.1%
51 above 16 22.9%
Total 70 100%
INTERPRETATION
From the above table it is found that majority of the respondents are under the age
group of 41 - 50 with 47.1% and very few respondents belong to the age group above
21 - 30 with 10.0%.
3. Education of the respondents
Education Number Respondents
Post Graduate 12 17.1%
Under Graduate 30 42.9%
12th 16 22.9%
10th 8 11.4%
Below 10th 4 5.7%
Total 70 100%
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INTERPRETATION
From the above table it is inferred that majority of the respondents have the Under
Graduates as their educational qualification with 42.9% .
4. Occupation of the respondentsOccupation Number Percentage
Govt. Employee 9 12.9%
Corporate Employee 20 28.6%
Self-Employee 31 44.3%
Others 10 14.3%
Total 70 100%
INTERPRETATION
From the above table it is found that majority of the respondents are business people
or self-employed with 44.3% and least number of respondents are others with 14.3%
5. Product Purchased
Product Frequency Percentage
OD 56 80.0
Third Party 14 20.0
Total 70 100.0
INTERPRETATION
From the above table it is found that most (80.0%) of the respondents are purchased OD
insurance and the remaining 20.0% of the respondents purchased Third party Liability
insurance .
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INTERPRETATION
Based on the table value it is found that most of the respondents opine that delay in settling
the claim with 15.7%.
9. Awareness on No Claim BonusAwareness (NCB) Frequency Percent
Yes 21 30.0
No 49 70.0
Total 70 100.0
INTERPRETATION
From the above table it is found majority of the respondents are not having sufficient
knowledge about No Claim Bonus with 70.0% in motor insurance contract.
Chi square test
1. Hypothesis to study the awareness level of motor insurance products (TP & OD)
Ho: There is no significant difference between Gender and awareness level of motorinsurance products (TP & OD)
H1: There is a significant difference between Gender and awareness level of motorinsurance products (TP & OD)
Ho: There is no significant difference between age and awareness level of motorinsurance products (TP & OD)
H1: There is a significant difference between age and awareness level of motorinsurance products (TP & OD)
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Ho: There is no significant difference between Occupation and awareness level ofmotor insurance products (TP & OD)
H1: There is a significant difference between Occupation and awareness level of motorinsurance products (TP & OD)
Ho: There is no significant difference between Education Qualification and awarenesslevel of motor insurance products (TP & OD)
nH1: There is a significant difference between Education Qualification and awarenesslevel of motor insurance products (TP & OD)
awareness
level of
motor
insurance
products
(TP & OD)
Tests Chi
square
Value
df P-value Significant/
Not
significant
Ho
Acceptability
Gender Pearson
Chi-Square
0.949 1 0.004 Significant Rejected
Likelihood
Ratio
0.950 1 0.004
Age Pearson
Chi-Square
5.997 3 0.112 Not significant Accepted
Likelihood
Ratio
6.592 3 0.186
Occupation Pearson
Chi-Square
4.599 3 0.207
Not significant Accepted
Likelihood
Ratio
4.853 3 0.183
Educational
qualification
Pearson
Chi-Square
17.814 4 0.001
Significant Rejected
Likelihood
Ratio
17.141 4 0.002
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INFERENCE
Since the P value of Gender 0.004 is less than 0.05 and it is Significant. Hence, there isa significant difference between Gender and awareness level of motor insurance
products.
Since the P value of Gender 0.112 is greater than 0.05 and it is not significant. Hence,there is no significant difference between age and awareness level of motor insurance
products.
Since the P value of Gender 0.207 is greater than 0.05 and it is not significant. Hence,there is no significant difference between education and awareness level of motor
insurance products.
Since the P value of Gender 0.001 is less than 0.05 and it is Significant. Hence, there isa significant difference between educationalqualification and awareness level of motor
insurance products.
2. Hypothesis to identify the problem faced by the policy holders during lodging
and getting claim
Ho: There is no significant difference between Gender and problem faced by the policyholders during lodging and getting claim
H1: There is a significant difference between Gender and problem faced by the policyholders during lodging and getting claim
Ho: There is no significant difference between Age and problem faced by the policyholders during lodging and getting claim
H1: There is a significant difference between Age and problem faced by the policyholders during lodging and getting claim
Ho: There is no significant difference between Occupation and problem faced by thepolicy holders during lodging and getting claim
H1: There is a significant difference between Occupation and problem faced by thepolicy holders during lodging and getting claim
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Ho: There is no significant difference between Educational Qualification and problemfaced by the policy holders during lodging and getting claim
H1: There is a significant difference between Educational Qualification and problemfaced by the policy holders during lodging and getting claim
awareness
level of
motor
insuranceproducts
(TP & OD)
Tests Chi
square
Value
Df P-value Significant/
Not
significant
Ho
Acceptability
Gender Pearson
Chi-Square
3.523 1 0.041 Significant Rejected
Likelihood
Ratio
3.116 1 0.048
Age Pearson
Chi-Square
4.099 3 0.251 Not significant Accepted
Likelihood
Ratio
4.529 3 0.210
Occupation Pearson
Chi-Square
1.349 3 0.718
Not significant Accepted
Likelihood
Ratio
1.305 3 0.728
Educational
qualification
Pearson
Chi-Square
8.131 4 0.087
Not significant Accepted
Likelihood
Ratio
8.018 4 0.091
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INFERENCE
Since the P value of Gender 0.041 is less than 0.05 and it is Significant. Hence, There isa significant difference between gender and problem faced by the policy holders
during lodging and getting claim
Since the P value of Gender 0.251 is greater than 0.05 and it is not significant. Hence,There is no significant difference between age and problem faced by the policy holders
during lodging and getting claim
Since the P value of Gender 0.718 is greater than 0.05 and it is not significant. Hence,There is no significant difference between occupation and problem faced by the policy
holders during lodging and getting claim
Since the P value of Gender 0.087 is greater than 0.05 and it is not significant. Hence,There is no significant difference between educational qualification and problem faced
by the policy holders during lodging and getting claim
3. Hypothesis to analyze the customer satisfaction towards motor insurance policies
offered by Bajaj Allianz General Insurance Co. Ltd.
Ho: There is no significant difference between Gender and customer satisfaction H1: There is a significant difference between Gender and customer satisfaction
Ho: There is no significant difference between Age and customer satisfaction H1: There is a significant difference between Age and customer satisfaction
Ho: There is no significant difference between Occupation and customer satisfaction H1: There is a significant difference between Occupation and customer satisfaction
Ho: There is no significant difference between Educational Qualification and customersatisfaction
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H1: There is a significant difference between Educational Qualification and customersatisfaction
awareness
level ofmotor
insurance
products
(TP & OD)
Tests Chi
squareValue
Df P-value Significant/
Not significant
Ho
Acceptability
Gender Pearson
Chi-
Square
1.756 3 0.625 Not significant Accepted
Likelihood
Ratio
1.767 3 0.622
Age Pearson
Chi-
Square
11.612 9 0.236 Not significant Accepted
Likelihood
Ratio
7.899 9 0.544
Occupation Pearson
Chi-
Square
3.669 9 0.932
Not significant Accepted
Likelihood
Ratio
4.775 9 0.854
Educational
qualification
Pearson
Chi-
Square
13.364 12 0.343
Not significant Accepted
Likelihood
Ratio
13.587 12 0.328
INFERENCE
Since the P value of Gender 0.625 is greater than 0.05 and it is not significant. Hence,There is no significant difference between gender and customer satisfaction
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Since the P value of Gender 0.236 is greater than 0.05 and it is not significant. Hence,There is no significant difference between age and customer satisfaction
Since the P value of Gender 0.932 is greater than 0.05 and it is not significant. Hence,There is no significant difference between occupation and customer satisfaction
Since the P value of Gender 0.625 is greater than 0.05 and it is not significant. Hence,There is no significant difference between educational qualification and customer
satisfaction
4. Hypothesis to study the awareness level of No Claim Bonus (NCB) on motor
insurance customers
Ho: There is no significant difference between Gender and awareness level of NoClaim Bonus (NCB)
H1: There is a significant difference between Gender and awareness level of No ClaimBonus (NCB)
Ho: There is no significant difference between Age and awareness level of No ClaimBonus (NCB)
H1: There is a significant difference between Age and awareness level of No ClaimBonus (NCB)
Ho: There is no significant difference between Occupation and awareness level of NoClaim Bonus (NCB)
H1: There is a significant difference between Occupation and awareness level of NoClaim Bonus (NCB)
Ho: There is no significant difference between Educational Qualification andawareness level of No Claim Bonus (NCB)
H1: There is significant difference between Educational Qualification and awarenesslevel of No Claim Bonus (NCB)
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awarenesslevel of
motor
insurance
products
(TP & OD)
Tests Chisquare
Value
Df P-value Significant/Not
significant
HoAcceptability
Gender Pearson
Chi-Square
0.040 1 0.841 Not
significant
Accepted
Likelihood
Ratio
0.000 1 0.841
Age Pearson
Chi-Square
11.802 3 0.008 Significant Rejected
Likelihood
Ratio
12.557 3 0.006
Occupation Pearson
Chi-Square
14.218 3 0.003
Significant Rejected
Likelihood
Ratio
15.078 3 0.002
Educational
qualification
Pearson
Chi-Square
23.053 4 0.000
Significant RejectedLikelihood
Ratio
28.869 4 0.000
INFERENCE
Since the P value of Gender 0.841 is greater than 0.05 and it is not significant. Hence,There is no significant difference between Gender and awareness level of No Claim
Bonus (NCB)
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Since the P value of Gender 0.008 is less than 0.05 and it is significant. Hence, There is asignificant difference between age and awareness level of No Claim Bonus (NCB)
Since the P value of Gender 0.003 is less than 0.05 and it is significant. Hence, There is asignificant difference between occupation and awareness level of No Claim Bonus
(NCB)
Since the P value of Gender 0.000 is less than 0.05 and it is significant. Hence, There is asignificant difference between educational qualification and awareness level of No
Claim Bonus (NCB)
CHAPTER - V
FINDINGS, SUGGESTIONS AND
CONCLUSIONS
5.1 FINDINGS
Research finding proved that out of 70 respondents most of them (82.9%) are maleand rest of (17.1%) are female.
The Female Respondents are having lack of awareness of motor insurance policies.
Most number of the respondents are having Own Damage insurance (i.e. 80.0%)
Here we can find that 60 percentage are well educated and remaining are belowHigher Secondary
Majority of the respondents are satisfied with the services of Bajaj Allianz GeneralInsurance Co. Ltd with 62.9% and some of respondents are dissatisfied with the
service of the company with 27.1%.
Most of the respondents opine that delay in settling the claim with 15.7% Here 37.1% respondents faced difficulties during the claim settlement procedure..
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The Gender of the respondents have relation with the awareness level of motorinsurance products (TP & OD) and problem faced by them.
Majority of the respondents are not having sufficient knowledge about the No ClaimBonus with 70.0% in the motor insurance contract.
The demographic profile like age, occupation and educational qualification influencesthe awareness level of No Claim Bonus (NCB).
There is a significant difference between Gender , Educational Qualification andawareness level of motor insurance products (TP & OD)
There is no significant difference between Demographic factors such as Age,Occupation, Educational Qualification and problem faced by the policy holders during
lodging and getting claim
There is no significant difference between Demographic factors such as Age, Gender,Occupation, Educational Qualification and customer satisfaction
5.2 SUGGESTIONS AND IMPLICATIOS
The company or the customer care executive may create awareness on intimation ofthe claim on time at the time of taking the motor insurance policy.
The Company should take necessary action to settle the claims as quick as possible toincrease the satisfaction level among the customers.
All the customers should be treated equally. create awareness on No Claim Bonus and its benefits among the policy holders Increase the no claim bonus percentage to retain the existing policy holders and it
avoids small claims.
The finding of the study expected to help the management to understand the basicproblems in claim settlement and the result of the study enable the management of
insurance company to do up their strategy and to redraft their policy regarding the
claims settlement.
The identification of claim settlement problems and internal steps to improve mayhelp the insurance company decision making authorities to think the general insurance
management concepts to have a model shift in their approach.
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Insurance watch
Insurance world
QUESTIONNAIRE
SECTION - I
DEMOGRAPHIC
1. Name :__________________________________________________________________2. Gender
Male Female
3. AgeBelow 20 20-30 31-40
41-50 51 and above
4. OccupationGovt. employee Corporate employee Self employee
Others
5. Educational QualificationPost graduate Under Graduate 12th 10thBelow 10th
SECTION-2
CUSTOMER AWARENESS
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6. Are you aware of motor insurance products of Bajaj Allianz General InsuranceCompany?
Yes No
7. If yes, what is the source of awareness?Company Internet Television
Newspapers Others, Specify__________________
8. Which product have you purchased from Bajaj Allianz General Insurance Co. Ltd?OD Insurance Third Party Insurance only
9. Why you have chosen the product of Bajaj Allianz General Insurance. Co. Ltd?Brand Value ReputationNear By Area
Others (Specify).
10.How are the services offered by Bajaj Allianz General Insurance Co. Ltd?
Excellent Good Poor
11.Have you ever made a claim more than one time on motor insurance?Yes No
12.Within how many days has claim been settled by Bajaj Allianz General InsuranceCo. Ltd?
30 days
13.Are you satisfied with motor insurance claim settlement done by Bajaj AllianzGeneral Insurance Co. Ltd?
8/13/2019 Report Project Srini
50/50
Highly satisfy eSatisfied NS/NDS Dis Satisfied
Highly dissatisfied
14.Will you being continue as customer after made claim in Bajaj Allianz generalinsurance company Ltd.?
Yes No
15.Have faced any problems during lodging and getting claim?
Yes No
16.If YES,(Please specify)_________________________________________________________________________
____________________________________________________________________________________________________
____________________________________________________________________________________________________
____________________________________________________________________________________________________
____________________________________________________________________________________________
17.Any suggestions for claim settlement process?