Chapter -1
INTRODUCTION AND THEORETICAL
BACKGROUND
1
1.1 INTRODUCTION
HDFC Life, one of India's leading private life insurance companies, offers a range
of individual and group insurance solutions. It is a joint venture between Housing
Development Finance Corporation Limited (HDFC), India's leading housing
finance institution and Standard Life plc (public listed company), the leading
provider of financial services in the United Kingdom.
HDFC Ltd. holds 72.37% and Standard Life (Mauritius Holding) Ltd. holds
26.00% of equity in the joint venture, while the rest is held by others.
The topic for research, ‘A study on Buying behaviour and consumer satisfaction
regarding products and services of HDFC Life,’ mainly aims to find out the factors
that respondents give importance to while going for insurance and also to find out
the satisfaction levels of consumer towards the products and services. Based on the
analysis done my project aims to provide suggestions for increasing the market
share of HDFC Life and also it helps to improve the customer satisfaction levels
towards HDFC Life products and services.
1.2 MARKET OVERVIEW:
The Indian life insurance industry is rapidly evolving. It has emerged as one of the
fastest developing emerging markets for life insurance in the world. The industry
has become fiercely competitive with the entry of private sector companies
including major multinational insurers after sector deregulation.
India’s share of the world life insurance business has doubled within 5 years since
liberalization raising India’s global ranking to 17 in 2006 from 20 in 2000. From
0.5% of the world’s life insurance business in 2000 India today accounts for
2
1.02% of the world’s premium reflecting that the insurance business in India has
more than just doubled within just 5 years.
Nonetheless insurance as a business is growing faster than India’s GDP. Life
insurance premium which accounted for 1.77 % of the country’s GDP in 2000
contributed 2.53% to the GDP for the 2005- 2006 fiscal year. An expert group of
Confederation of Indian Industry (CII) has projected that in 2016 the size of Indian
insurance market will grow to Rs.145000 Crores. This translates into an average
annual growth of 19.6%.
CII expects an annual growth in the pension business which is projected to rise at
29% per annum, effectively translating to an expansion of over 12 times over a
period of a few years by 2016. The premium business from pension schemes is
projected to grow by 22.5% within the same period.
There is a large scope for Indian insurance sector to grow; only 20 lakh advisors
are available for 1.22 Billion Indians. 70% of the population is below the age of
35years. Over 100 crore people in India do not have insurance.
1.3 CUSTOMER SATISFACTION:
Customer satisfaction, a term frequently used in marketing, is a measure of how
products and services supplied by a company meet or surpass customer
expectation. Customer satisfaction is defined as "the number of customers or
percentage of total customers, whose reported experience with a firm, its products,
or its services (ratings) exceeds specified satisfaction goals.
3
1.3.1 Customer satisfaction in 7 steps:
1. Encourage face-to-face dealings:
It is important to meet your customers face to face at least once
or even twice during the course of a project.
2. Respond to messages promptly & keep your clients informed
We all know how annoying it is to wait days for a response to
an email or phone call. It might not always be practical to deal with all
customers’ queries within the space of a few hours, but at least email or call
them back and let them know you’ve received their message and you’ll
contact them about it as soon as possible. Even if you’re not able to solve a
problem right away, let the customer know you’re working on it.
3. Be friendly and approachable: It’s very important to be friendly,
courteous and to make your clients feel like you’re their friend and you’re
there to help them out. There will be times when you want to beat your
clients over the head repeatedly with a blunt object – it happens to all of us.
It’s vital that you keep a clear head, respond to your clients’ wishes as best
you can, and at all times remain polite and courteous.
4. Have a clearly defined customer service policy: a clearly defined
customer service policy is going to save you a lot of time and effort in the
long run. If a customer has a problem, what should they do? If the first
option doesn’t work, then what? Should they contact different people for
billing and technical enquiries? If they’re not satisfied with any aspect of
your customer service, who should they tell?
5. Attention to detail ( also known as The Little Niceties):
4
Have you ever received a Happy Birthday email or card from a company
you were a client of? Have you ever had a personalised sign-up
confirmation email for a service that you could tell was typed from scratch?
These little niceties can be time consuming and aren’t always cost effective,
but remember to do them. Even if it’s as small as sending a Happy Holidays
email to all your customers, it’s something. It shows you care; it shows
there are real people on the other end of that screen or telephone; and most
importantly, it makes the customer feel welcomed, wanted and valued.
6. Anticipate your clients need and go out of your way to help them out:
Sometimes this is easier said than done! However, achieving this supreme
level of understanding with your clients will do wonders for your working
relationship.
7. Honour your promises: The simple message: when you promise
something, deliver it. Never break your promises that will disturb your
relationship with your customers.
1.4 CONSUMER BEHAVIOUR:
Consumer behaviour is the study of when, why, how, and where people
do or do not buy a product. It blends elements from psychology, sociology, social
anthropology and economics. It attempts to understand the buyer decision making
process, both individually and in groups. It studies characteristics of individual
consumers such as demographics and behavioral variables in an attempt to
understand people's wants. It also tries to assess influences on the consumer from
groups such as family, friends, reference groups, and society in general.
1.4.1 COGNITIVE VIEW:
5
It portrays the consumer as a thinking problem solver. Within this
framework, consumers frequently are pictured as either receptive to or actively
searching for products and services that fulfill their needs and enrich their lives.
The cognitive model focuses on the processes by which consumers seek and
evaluate information about selected brands and retail outlets. Within the context of
the cognitive model, consumers are viewed as information processors. Information
processing leads to formation of preferences and ultimately to purchase intention.
1.4.2 INPUT-PROCESS-OUTPUT MODEL
INPUT (external influences)
1. Socio-cultural inputs: Friends, family, informal sources, social classes.
2. Marketing inputs: These inputs to the consumer’s decision making process take
the form of specific marketing mix strategies that consists of:
Product (Brand name, quality )
Promotion (festival offers, discount, bundling)
Price (pricing policy of company)
Channels of distribution (direct company delivery, distributor).
PROCESS
The process component of the model is concerned with how consumers
make decisions. The psychological field represents the internal influences-
motivation, perception, learning, personality and attitudes that affect consumer’s
decision making processes. It consists of the following:
Need recognition
6
The buying process starts when the buyer recognizes a problem or need
trigged by internal or external stimuli. With an internal stimulus, one of the
persons normal needs- hunger, thirst, sex-rises to a level and become a driver; or a
need can be aroused by an external stimulus.
Pre-purchase search
Consumers often search for limited amounts of information. Major
information sources to which consumers fall are:
Personal: family, friends, neighbors, acquaintances.
Commercial: Advertising, web sites, sales persons, dealers, displays.
Public: Mass media, consumer rating organizations.
Experiential: Previous usage.
Evaluation of alternatives:
When evaluating potential alternatives, consumers tend to use two types of
information.
(1) Evoked set: Within the context of consumer decision making, the evoked set
refers to the specific brands a consumer considers in making a purchase within
a particular product category.
(2) The criteria they will use to evaluate each brand. This is where the customer
evaluates products based on chosen criteria such as quality,
durability, warranty, price, after sale services and quality on competitive basis.
This will help to make the brand and product choice.
Expectancy value model:
7
The consumer arrives at attitudes toward various brands through an attribute
evaluation procedure. This model of attitude formation posits that consumer
evaluates products and services by combining their brand beliefs – the positive and
negative attributes according to their importance.
Purchase Decision:
This is where the customer makes the final choice and ends up effectively
purchasing the product. Once the purchase decision is made it cannot be changed.
Here customers may follow non-compensatory model of consumer choice
like conjunctive heuristic, where the customer sets minimum acceptable cut off
level for each attribute and chooses the first alternative that meets the minimum
standard for all attributes. Lexicographic heuristic, where customer chooses the
best brand on the basis of its perceived most important attribute. Elimination –by
aspect heuristic, where the customer compares the brands on an attribute and select
probabilistically.
OUTPUT:
This is the behaviour of the consumer upon consuming the good. Post
purchase behaviour could be of two forms:
Positive post purchase behaviour
This is where the consumer holds a positive feedback about the product and
happy with the product quality. When there is positive post purchase behaviour he
will engage in repeat purchases and spread positive word of mouth about the
product encouraging others people to buy the product.
Negative post purchase behaviour
8
This is where the customer is dissatisfied with the product and holds a
negative feedback about the product. This will result in bad word of mouth about
the product. Organizations should always try to avoid negative post purchase
behaviors.
An important part of post purchase evaluation is the reduction of
uncertainty or doubts that the consumer might have about the selection. As part of
this post purchase analysis, consumers try to reassure themselves that their choice
was a wise one; that is they attempt to reduce post purchase cognitive dissonance.
9
Chapter -2
RESEARCH METHODOLOGY
2.1 Rationale of the project
10
This study intends to help in analyzing the buying behavior and satisfaction
levels of the customers towards HDFC LIFE products and this may also
help the company to come up with better marketing strategies to cater to the
needs of the customers by creating better products and services.
2.2 OBJECTIVES OF THE STUDY:-
2.2.1 Primary objective:
To determine the factors that influence respondents buying behavior
towards HDFC Life products
To determine the factors that influence the satisfaction levels of consumers
towards HDFC Life products and services
2.2.2 Secondary objective:
To find out the post purchase experience of consumers about the HDFC
Life products
2.3 RESEARCH METHODOLOGY:
2.3.1 Type of research
Exploratory research has been done to determine the variables and the impact of
the variables on customer satisfaction and buying behavior. The research was
based on Primary data.
2.3.2 Sampling plan
11
The sampling plan used is Convenient sampling. The population for the sample is
the existing customers and the prospective customers of HDFC Life. The sample
size is limited to 150. The samples are collected from different areas of Bangalore.
2.3.3 Data collection
Structured questionnaire was used to collect data from sources such as HDFC Life
existing customers and non customers of HDFC Life. Separate questionnaire was
used for both the segments of customers.
2.3.4 Data Analysis
The data analysis was done with the help of data collected through questionnaire.
Tool like Mean square, Average, Percentages are used to analyze and software
such as MS – EXCEL was used to interpret the data.
2.3.5 Limitation of Study:
The study was limited to the urban areas of Bangalore
The time taken for the research was sixty working days
12
Chapter -3
INDUSTRY, COMPANY
AND
PRODUCT PROFILE
3.1 INDUSTRY PROFILE
13
The advent of life insurance business in India started in 1818 with the
establishment of the Oriental Life Insurance Company in Calcutta. This Company
however failed in 1834. In 1870 saw the enactment of the British Insurance Act
and in the last three decades of the nineteenth century, the Bombay Mutual (1871),
Oriental (1874) and Empire of India (1897) were started in the Bombay
Residency. This era, however, was dominated by foreign insurance offices,
namely Albert Life Assurance, Royal Insurance, Liverpool and London Globe
Insurance and the Indian offices were up for hard competition from the foreign
companies.
In 1914, the Government of India started publishing returns of Insurance
Companies in India. The Indian Life Assurance Companies Act, 1912 was the first
statutory measure to regulate life business. In 1928, the Indian Insurance
Companies Act was enacted to enable the Government to collect statistical
information about both life and non-life business transacted in India by Indian and
foreign insurers including provident insurance societies. Insurance Act, 1938
amended with comprehensive provisions for effective control over the activities of
insurers.
The Insurance Amendment Act of 1950 abolished Principal Agencies.
However, there were a large number of insurance companies and the level of
competition was high. There were also allegations of unfair trade practices. The
Government of India, therefore, decided to nationalize insurance business.
An Ordinance was issued on 19th January, 1956 nationalizing the Life
Insurance sector and Life Insurance Corporation came into existence in the same
year. The LIC absorbed 154 Indian, 16 non-Indian insurers as also 75 provident
societies—245 Indian and foreign insurers in all. The LIC had monopoly till the
late 90s when the Insurance sector was reopened to the private sector
In 1993, the Government set up a committee under the chairmanship of RN
Malhotra, former Governor of RBI, to propose recommendations for reforms in
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the insurance sector. The committee submitted its report in 1994 wherein, among
other things, it recommended that the private sector be permitted to enter the
insurance industry. They stated that foreign companies are allowed to enter by
floating Indian companies, preferably a joint venture with Indian partners.
In 1999, the Insurance Regulatory and Development Authority (IRDA)
were constituted as an autonomous body to regulate and develop the insurance
industry. The IRDA was incorporated as a statutory body in April, 2000.
The IRDA opened up the market in August 2000 with the invitation for
application for registrations. Foreign companies were allowed ownership of up to
26%. The Authority has the power to frame regulations under Section 114A of the
Insurance Act, 1938 and has from 2000 onwards framed various regulations
ranging from registration of companies for carrying on insurance business to
protection of policyholders’ interests.
Today there are 24 general insurance companies including the ECGC and
Agriculture Insurance Corporation of India and 23 life insurance companies
operating in the country.
The insurance sector is a colossal one and is growing at a speedy rate of 15-
20%. Together with banking services, insurance services add about 7% to the
country’s GDP.
3.2 COMPANY PROFILE
HDFC Life is one of India's leading private life insurance companies, offers a
range of individual and group insurance solutions. It is a joint venture between
Housing Development Finance Corporation Limited (HDFC), India's leading
housing finance institution and Standard Life plc, the leading provider of financial
services in the United Kingdom.
HDFC Ltd. holds 72.43% and Standard Life (Mauritius Holding) Ltd. holds
26.00% of equity in the joint venture, while the rest is held by others.
15
HDFC Life's product portfolio comprises solutions, which meet various customer
needs such as Protection, Pension, Savings, Investment and Health. Customers
have the added advantage of customizing the plans, by adding optional benefits
called riders, at a nominal price. The company currently has 29 retail and 5 group
products in its portfolio, along with five optional rider benefits catering to the
savings, investment, protection and retirement needs of customers.
HDFC Life continues to have one of the widest reaches among new insurance
companies with more than 500branches servicing customer needs in over 700
cities and towns. The company has a strong base of Financial Consultants.
To ensure long-term sustainable growth HDFC LIFE concentrated their focus on
expansion of branch network, organizing an efficient and well trained sales force,
and setting up appropriate systems and processes with optimum use of technology.
As all these areas form the basic infrastructure for establishing the highest possible
customer service standards. HDFC LIFE is the first private player to be registered
with the IRDA and the first to issue a policy on December 12, 2000.
HDFC LIFE is the first private life insurer to break the ice using the idea of self-
respect instead of 'death' to convey their brand proposition (Sar Utha Ke Jiyo).
Today, they are one of the few brands that customers recognize, like and prefer to
do business. Moreover, the brand thought, Sar Utha Ke Jiyo, is the most recalled
campaign in its category.
HDFC Life investment focus is based on the primary objective of protecting and
generating good, consistent, and stable investment returns to match the investor's
long-term objective and return expectations, irrespective of the market condition.
Despite the criticality of life insurance, sales in the industry have been
characterized by over reliance on tax benefits and limited advice-based selling.
Their eight-step structured sales process 'Disha' however, helps customers
understand their latent needs at the first instance itself without focusing on product
features or tax benefits. Need-based selling process, 'Disha', the first of its kinds in
16
the industry, looks at the whole financial picture. Customers see a plan not
piecemeal product selling.
HDFC Life has initiated and implemented many new processes, some of which
were found useful by the IRDA and later made mandatory for the entire industry.
The agents who successfully completed this training only, were authorized by the
company to sell ULIPs. This has now been made compulsory by IRDA for all
insurance companies under the new Unit Linked Guidelines
VISION: 'The most successful and admired life insurance company, which
means that we are the most trusted company, the easiest to deal with, offer the
best value for money, and set the standards in the industry'.
3.3 HDFC LIFE PRODUCTS
3.3.1 Protection plans:-
To safeguard family’s financial independence
Security against uncertainties
Financial cushion in case of an eventuality
Types of protection plans:-
1. HDFC TERM Assurance plan
2. HDFC Premium Guarantee Plan
3. HDFC Loan Cover Term Assurance Plan
3.3.2 Children’s Plans:-
To Fulfill Children’s dreams
Economic support when child needs it most
Types
17
Conventional plans Unit linked insurance plans
HDFC Children’s plan HDFC SL Young Star Super II
HDFC SL Young Star Super Premium
3.3.3 RETIREMENT PLANS:-
Monetary Security
Financial independence even after retirement
To live carefree in golden years.
Types
Type Conventional Plans Unit Linked Insurance
plans
Regular
Premium
HDFC Personal Pension
plan
HDFC Life classic
Pension Insurance Plan
3.3.4 Saving & Investment Plans:
Dual benefit of protection and long term savings
Provide an assured sum for future needs
Inculcate a habit of regular savings.
Type Conventional Plans Unit Linked Insurance Plans
Regular
Premium
1.HDFC SL New Money Back
Plan
2.HDFC Endowment Assurance
1.HDFC SL Pro Growth
Super II
2.HDFC SL Pro Growth
18
Plan
3.HDFC Life Sampoorn Samridhi
Insurance Plan
Flexi
Single
Premium
1.HDFC Single Premium Whole of
Life Insurance Plan
HDFC SL Pro Growth
Maximiser
3.3.5 Health Plans
To secure health costs
Financial independence despite illnesses
Meeting medical expenses effortlessly
Types
HDFC Critical Care Plan
HDFC Surgicare Plan
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Chapter -4
DATA ANALYSIS AND INTERPRETATION
For Non customers of HDFC Life
The following table shows the Age group of the respondents
TABLE - 4.1: Age group of the respondents:
20
CATEGORY FREQUENCY
BELOW 25 21
25 – 40 43
ABOVE 40 11
28%
57%
15%
below 25 25 - 40
above 40
Figure 4.1 – Age group of respondents
Out of 75 respondents 28% are below 25, majority of the respondents that is 57%
are between 25 and 40 and only 15% are above 40.
The following table shows the gender of the respondents
TABLE - 4.2: Gender of the respondents
21
CATEGORY FREQUENCY
Male 51
Female 24
68%
32%
male female
Figure 4.2: Gender of the respondents
Out of 75 respondents majority of them that is 68% are male and 32% of them are
female.
The following table shows the occupation of the respondents.
TABLE - 4.3: Occupation of the respondents:
22
OCCUPATION FREQUENCY
Professional 36
Business person 18
Govt. Employee 21
48%
24%
28%
professional
business person
govt. employee
Figure 4.3: Occupation of the respondents.
Out of 75 respondent’s majority of them that is 48% are professionals, 24% of
them are business person and 28% of them are govt. Employees.
The following table shows the annual income of the respondents
TABLE - 4.4: Annual Income of the respondents:
23
INCOME LEVEL
(yearly)
FREQUENCY
1.5 lakh – 5 lakh 51
5 lakh – 10 lakh 19
Above 10 lakh 5
68%
25%
7%
1.5 lakh - 5 lakh5 lakh - 10 lakh above 10 lakh
Figure 4.4: Annual income of the respondents
Out of 75 respondents 68% of their annual income is in between 1.5lakh – 5 lakh,
25% of them are in between 5 lakh – 10 lakh, and only 7% of them are above 10
lakh
The following table shows the investment schemes that respondents give much
preference
TABLE - 4.5: Preference towards Investment schemes
24
Various schemes Rating (mean square value)
Life Insurance 3.37
Fixed Deposits 3.64
Properties 4.02
Mutual funds 3.25
24%
25%28%
23%
life insurancefixed depositspropertiesmutual funds
Figure 4.5: Preference towards investment schemes
Out of 75 respondents majority of them that is 28% prefer for properties, 25% of
them prefer fixed deposits, 24 % of them prefer Life Insurance and only 23% of
the respondents prefer mutual funds.
The following table shows that the respondents opinion about Life insurance
TABLE - 4.6: Importance of having Life Insurance
25
Attitude Frequency
Most important 18
Important 27
Neutral 23
Least important 4
Not important 3
Most Important important neutral least important not important0%
5%
10%
15%
20%
25%
30%
35%
40%
24%
36%31%
5% 4%
Figure 4.6: Importance of having Life Insurance
24% of the respondents think its most important to have Life insurance, 36% of
them think it is important, 31% of them are in neutral, 5% of them think it is least
important and only 4% of them think it is not important.
The following table shows that the number of respondents having insurance from
any company
TABLE - 4.7: Number of respondents having Life insurance
26
Insurance holder Frequency
Yes 39
No 36
52%48% Yes
No
Figure 4.7: Number of respondents having Life Insurance
Out of 75 respondents 52% of them have taken Insurance from other companies
and 48% of them haven’t taken Insurance from any company.
The following table shows that the important factors that the respondents rated in a
Life Insurance Company
TABLE - 4.8: Important factors in a Life insurance company
27
Factors Rating (mean square value)
Brand name 3.50
Better services 3.90
Innovative Plans 3.17
Accessibility 3.98
Brand name better services innovative plan accessibility0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
70%78%
63%
80%
Figure 4.8: Important factors in a Life Insurance company
Out of 75 respondents 70% of them give importance to brand name, 78% of them
give importance to better services, 63% of the give importance to innovative plans
and majority of them that is 80% of them give importance to accessibility.
The following table shows the important factors that are considered by the
respondents while purchasing a Life Insurance policy
TABLE - 4.9: Important factors when purchasing Life insurance policy
28
Factors Rating (mean square value)
Tax benefit 2.56
Saving 3.4
Protection 3.89
Pension 3.38
Investment 2.57
tax benefit
saving
protection
pension
investment
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
51%
68%
78%
68%
51%
Figure 4.9: Important factor when purchasing a Life insurance policy
Out of 75 respondents 51% of them look for tax benefit, 68% for saving, and
majority of the respondents that is 78% for protection, 68% for pension and 51%
of them for investment. From this we can say that most of them are taking
insurance for protection purpose.
The following table shows that the respondents prefer a policy with premium
spread over
TABLE - 4.10: Preference for premium spread over
29
Premium spread over Frequency
Less than 5 years 13
5 – 10 years 24
10 – 15 years 27
More than 15 years 11
Less than 5 years
5 - 10 years
10 - 15 years
more than 15 years
0% 5% 10% 15% 20% 25% 30% 35% 40%
17%
32%
36%
15%
Figure 4.10: Preference for premium spread over
17% of the respondents prefer a policy with premium spread over less than 5
years, 32% of them prefer for 5-10years, majority of the respondents that is 36%
prefer with a premium spread over for 10-15years, and only 15% of them prefer
more than 15 years.
The following table shows the rating given by the respondents for the services that
they expect from Life insurance providers.
TABLE - 4.11: Rating for services expected by respondents
30
Features Rating (mean square value) Rank
Bonus 4.33 1
Provision in case of dues 4.21 2
Easy access ability to
deposit centre
4.01 3
Time to time premium
collection
3.61 4
easy access ability to deposit centre
time to time premium collection
provision in case of dues bonus 65%
70%
75%
80%
85%
90%
80%
72%
84%
87%
Figure 4.11: Rating for services expected by respondents
From the graph it is seen that 80% of the respondents are expecting easy access
ability to deposit centre, 72% for time to time premium collection, 84% for
provision in case of dues, and a majority of the respondents that is 87% for bonus.
The following table shows that the respondent’s opinion in which areas should
Life Insurance companies should work on
TABLE - 4.12: Rating for the areas where company should work
31
Features Rating (mean square value) Rank
Less complicated procedures 3.97 3
Fewer premiums 3.42 4
More returns 4.46 1
Transparency 4.26 2
Less complicated pro-cedures
fewer premiums more returns transparency0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
3.973.42
4.46 4.26
Figure 4.12: Rating for the areas where company should work
From the table we can conclude that respondents are giving first importance to
more returns, 2nd to Transparency, 3rd to less complicated procedures, and last
preference to fewer premiums.
The following table shows that the numbers of respondents are aware of HDFC
Life products
TABLE - 4.13: Respondent’s awareness towards HDFC Life products
32
Awareness Frequency
Yes 15
No 60
19%
81%
yesno
Figure 4.13: Awareness towards HDFC Life products
Out of 75 respondents only 19% of them are aware of HDFC Life products and
81% of them are not aware of the products.
The following table shows how respondents come to know about the HDFC Life
products.
TABLE - 4.14: Source of awareness towards HDFC Life products
Source Frequency
33
Newspaper 0
Television 0
Internet 7
Reference Group 4
Financial Journals 0
Agents 4
News papers television internet reference group financial journals
agents0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
0% 0%
47%
27%
0%
27%
Figure 4.14: Source of awareness towards HDFC Life products
Out of 15 respondents 47% of them are come to know about the products through
internet, 27% of them come to know through reference group and 27% through
agents.
The following table shows that the numbers of respondents are interested to make
an investment with HDFC Life
TABLE - 4.15: Investment with HDFC Life
Investment with HDFC Life Frequency
34
Yes 11
No 09
Not yet decided 50
15%
12%
73%
yesnoNot decided
Figure 4.15: Investment with HDFC Life
Out of 75 respondents only 15% of them are ready to make an investment with
HDFC Life, and 12% of them are not willing to do investment with HDFC Life.
And a majority of the respondents that is 73% are not yet decided whether to go
for HDFC Life or not.
The following table shows the rating that the respondents gave for HDFC Life
plans
TABLE - 4.16: Respondents preference towards HDFC Life plans
35
Plans Rating (mean square value) Rank
Retirement plans 4.18 2
Health Plans 3.54 4
Savings and investment
plans
3.72 3
Children’s plan 3.27 5
Protection plans 4.45 1
retire
ment p
lans
health
plans
savin
gs an
d inve
stmen
t plan
s
child
ren plan
s
protec
tion plans
00.5
11.5
22.5
33.5
44.5
5
4.183.54 3.72
3.27
4.45
Figure 4.16: Respondents preference towards HDFC Life plans
From the table we can conclude that out of 11 respondents, 1st importance is given
for Protection plans, 2nd for Retirement plans, 3rd for savings and investment plans,
4th for health plans and 5th for children’s plan.
For existing customers of HDFC Life
The following table shows the age group of the respondents.
36
TABLE - 4.17: The age group of respondents
CATEGORY FREQUENCY PERCENT
BELOW 25 7 9%
25 – 40 59 79%
ABOVE 40 9 12%
9%
79%
12%
below 2525 - 40above 40
Figure 4.17: Age group of the respondents
Out of the 75 respondents, only 9% of respondents are of the age group of below
25 years and majority of the respondents, that is 79% are in the age group of 25 –
40 years and 12% of the respondents are of the age group of above 40 years.
The following table shows the Gender of the respondents.
TABLE - 4.18: Gender of the respondents
CATEGORY FREQUENCY PERCENT
37
Male 61 81%
Female 14 19%
81%
19%
male female
Figure 4.18: Gender of the respondents
81% of the respondents are males and 19% of the respondents are females. So we
can say that male population is more exposed to the insurance products.
The following table shows the Occupation of the respondents
TABLE - 4.19: Occupation of the respondents
38
OCCUPATION FREQUENCY PERCENTAGE
Professional 48 64%
Business person 12 16%
Govt. Employee 15 20%
64%
16%
20%
professionalbusiness persongovt.Employee
Figure 4.19: Occupation of the respondents.
Out of 75 respondents majority of the respondents, that is 64% are professionals,
16% are business person and 20% are government employee.
The following table shows the annual Income of the respondents.
TABLE - 4.20: Annual income of the respondents:
39
INCOME LEVEL
(yearly)
FREQUENCY PERCENT
1.5 lakh – 5 lakh 45 60%
5 lakh – 10 lakh 23 31%
Above 10 lakh 7 9%
60%
31%
9%
1.5 lakh - 5 lakh5 lakh - 10 lakhabove 10 lakh
Figure 4.20: Annual Income of the respondents
From the graph we can find that 60% of the respondents are of the income group
of 1.5 lakh – 5 lakh, 31% are of the income group 5 lakh- 10 lakh and only 9% are
of the income group of above 10 lakh.
The following table shows the various sources from which the respondents are
aware about HDFC Life are shown in the table
40
TABLE: 4.21: Source to know about HDFC Life
SOURCE FREQUENCY
News Paper 09
Television 11
Friends and Relatives 21
Direct selling agents 19
Internet 15
Other 0
12%
15%
28%
25%
20%
News paperTelevisionfriends & relativesdirect selling agentsinternet
Figure 4.21: Source of awareness
The various sources by which HDFC Life customers are aware about the products
are 12% by News paper, 15% through television, major part 28% of awareness by
friends and relatives, 25% by direct selling agents and 20% by internet.
The following table shows the various products that the respondents bought from
HDFC Life.
41
TABLE - 4.22: Products those respondents bought from HDFC Life
PRODUCTS FREQUENCY
Retirement Plans 18
Health plans 08
Savings and Investment plans 09
Children plans 11
Protection plans 29
retirement plans health plans savings & investment planschildren plans protection plans0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
24%
11% 12%15%
39%
Figure 4.22: Products that respondents bought from HDFC Life
Out of 75 respondents 24% took retirement plans, 11% of the respondents took
Health plans, 12% of the respondents took Savings and Investment plans, 15% of
the respondents took children’s plan and majority of the respondents that is 39%
took protection plans. From this graph we can say that protection and retirement
plans are fast moving products in HDFC Life.
The following table shows the number of policies that the respondent took from
HDFC Life
TABLE - 4.23: Number of policies
42
NUMBER OF POLICIES FREQUENCY
One 52
Two 16
Three 7
More than three 0
1 policy 2 policies 3 policies >3 policies0%
10%
20%
30%
40%
50%
60%
70%
80%
69%
21%
9%0%
Figure 4.23: Number of Polices
From this graph we can say that majority of the respondents that is 69% had
bought 1 policy, 21% bought 2 policies, 9% bought 3 policies and no one had
taken more than 3policies.
The following table shows that number of years being customers of HDFC Life.
TABLE - 4.24: Number of years being the customers of HDFC Life
43
NUMBER OF YEARS FREQUENCY
Less than 1 year 11
1 – 2 years 24
2 – 5 years 31
More than 5 years 9
< 1 year
1 - 2 years
2 - 5 years
more than 5 years
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
15%
32%
41%
12%
Figure 4.24: Number of years being the customers of HDFC Life
The majority of the respondents that is 41% are between 2-5years, 32% are
between 1-2years, 15% are less than 1year and only 12% are more than 5years.
The following table shows the premium amount that respondents are paying
annually.
TABLE - 4.25: Annual premium payment by respondents
44
PREMIUM FREQUENCY
Less than 10,000 0
10,000 – 20,000 13
20,000-30,000 26
More than 30,000 36
less than 10000
10000-20000
20000-30000
more than 30000
0% 10% 20% 30% 40% 50% 60%
0%
17%
35%
48%
Figure 4.25: Annual premium payment by respondents
From this graph we can say that majority of the respondents that is 48% are paying
more than 30000, 35% of respondents are paying in between 20000-30000, 17%
are paying between 10000-20000 and no one is paying below 10,000.
The following table shows the satisfaction levels of respondents towards their
products.
TABLE - 4.26: Satisfaction levels of the respondents
45
SATISFACTION LEVEL FREQUENCY
Extremely satisfied 12
Slightly satisfied 38
Neutral 21
Dissatisfied 4
Extremely Dissatisfied 0
extremely satisfied slightly satisfied neutral dissatisfied extremely dissatisfied0%
10%
20%
30%
40%
50%
60%
16%
51%
28%
5%0%
Figure 4.26: Satisfaction levels of the respondents
From this graph we can infer that only 16% of the respondents are extremely
satisfied, and a majority that is 51% of the respondents are slightly satisfied, 28%
are in neutral and few respondents are dissatisfied with their product. Finally we
can say about 67% of the respondents are satisfied with the product they own.
The following table shows that whether the respondents got the information about
various polices available at that time when they purchased the policy.
TABLE - 4.27: Information about other policies
46
INFORMATION FREQUENCY
Yes 68
No 7
91%
9%
yesNo
Figure 4.27 Information about other policies
From the above pie chat we can infer that a majority of respondents that is 91%
got information about other policies at the time of their purchase, only a few like
9% didn’t get information about other policies.
The following table shows that the number of the respondents felt that benefits
received by their policy are attractive and preferable.
TABLE - 4.28: Benefits of the policy
47
NUMBER OF RESPONDENTS
YES 53
NO 22
71%
29%
YesNo
Figure 4.28: Benefits of the policy
From the pie chart it is infer that 71% of the respondents said the benefits received
by their policy is attractive and preferable and 29% of respondents says that they
are attractive and preferable.
The following table shows that whether the respondents received any
compensation and reward was it given in time as specified at the time of
purchasing the policy.
48
TABLE - 4.29: Compensation and rewards
IN TIME FREQUENCY
Yes 41
No 34
41
34
yesNo
Figure 4.29: compensation and rewards
41% of the respondents said that they received compensation and reward in time
and rest that is 34% said they didn’t received.
The following table shows the company ability to satisfy customer needs
TABLE - 4.30: Ability to satisfy customer need
Ability to satisfy the need Frequency
49
Strongly Agree 9
Agree 33
Neutral 25
Disagree 8
Strongly Disagree 0
strongly agree
agree
neutral
disagree
strongly disagree
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
12%
44%
33%
11%
0%
Figure 4.30: Ability to satisfy customer need
From the graph it is infer that 12% of the respondents strongly agree that the
customer need is properly judged by the company, majority of respondents that is
44% agree, 33% of the respondents are in neutral, and only 11% of the
respondents disagree. Over all we can say that the company is able to satisfy the
customer need properly.
The following table shows the ability of employees to solve customer queries
TABLE - 4.31: Ability of employees to solve customers’ queries
50
Ability to solve queries Frequency
Excellent 11
Good 31
Average 21
Fair 7
Poor 5
excellent good average fair poor0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
15%
41%
28%
9%7%
Figure 4.31 Ability of employees to solve customers’ queries
Out of 75 respondents 15% of them felt the ability employees is excellent in
solving their queries, 41% felt good, 28% felt average, 9% felt fair, and only 7%
said they are poor to solve their queries.
The following table shows how frequently customers are been contacted by the
company.
TABLE - 4.32: Company contact with customers
51
Frequency Number of respondents
Monthly 15
Quarterly 17
Half-yearly 20
Yearly 23
20%
23%
27%
31%
monthlyquaterlyhalf-yearlyyearly
Figure 4.32: Company contact with customers
20% of respondents are been contacted by the company monthly, 23% are been
contacted quarterly, 27% are contacted half-yearly and majority of the respondents
that is 31% are been contacted yearly.
The following table shows the rating that the customers gave for the type of
service system they prefer.
TABLE - 4.33: Preference of service system
52
Type of system Rating (mean square value)
Personal 4.05
Telephone 2.30
Online Internet 3.73
40%
23%
37%
personal telephone online internet
Figure 4.33: Preference of service system
Majority of respondent that is 40% prefer personal, 37% of the respondents prefer
Online Internet, and 23% of them prefer Telephone.
The following table shows the overall rating given by respondents for the services
of HDFC Life.
TABLE - 4.34: Overall rating for services.
53
Rating Frequency
Poor 7
Average 21
Good 43
Excellent 4
poor average good excellent0%
10%
20%
30%
40%
50%
60%
70%
9%
28%
57%
5%
Figure 4.34: Overall rating for services
Out of 75 respondents 9% of them rate the service system of HDFC Life as poor,
28% of them rate as average, majority of them that is 57% rate it as good and only
5% of them rate it as excellent.
The following table shows that whether the respondents will recommend others to
take the products of HDFC Life
TABLE - 4.35: Recommendation of HDFC Life products to others
54
Recommendation Frequency
Strongly recommend 4
To some extent 53
Not recommend 18
5%
71%
24%
strongly recommendto some extentnot recommend
Figure 4.35 Recommendation of HDFC Life products to others.
Only 5% of the respondents strongly recommend HDFC Life products to other,
majority of 71% recommend to some extent and 18% of them will not
recommend.
55
Chapter- 5
FINDINGS AND CONCLUSION
From the analysis done a number of findings have been made and they are
divided in to two categories.
5.1 Finding from non customers of HDFC Life
56
a) Accessibility and better services are the important factors that 80 % of the
respondents are giving importance to Life insurance companies.
b) Protection and Pension plans are the main consideration that respondents
are looking for while purchasing Life Insurance policy.
c) 87% of the respondents are looking for bonus and 84% of them are
expecting provision in case of dues from Insurance companies.
d) 89% and 85% of the respondents suggesting the company needs to work
upon more returns and transparency.
e) 81% respondents are unaware about HDFC Life products, 13% who are
aware have their main source of awareness from Agents, Internet, and
reference group.
f) 73% of respondents have not yet decided to make investment with HDFC
Life, because they are not aware of the products and benefits that they get
out of them. 15% of respondents who are interested to invest with HDFC
Life prefer protection and retirement plans.
5.2 Finding from existing customers of HDFC Life
g) 39% of the respondent’s bought protection plans and 24% bought
retirement plans.
h) 67% of the respondents who bought products from HDFC Life are satisfied
with their policies, 28% are in neutral and only 5% of the respondents are
dissatisfied that because of lack of knowledge of product on the part of
agents and their ability to explain the same to the customers.
i) Respondents are unhappy with the communication of information on due
dates for paying premiums. Company is informing them 15 days before the
grace period of payment is over.
j) 71% of the respondents agree that the benefits of their policy are attractive
and preferable.
57
k) 40% of the customers prefer personal service system and 37% of them are
for Online internet system.
l) 63% the respondents are happy with the service system provided by the
HDFC Life.
m) 70% of the respondents are willing to recommend the products of HDFC
Life to other. Only 30% are not willing to recommend.
5.3 CONCLUSION:
A customer gives more preference to certain factors before making an investment
in an insurance company. So HDFC Life should focus on these aspects to gain
competitive advantage. Primarily, the firm must identify such factors that are
creating dissatisfaction to the customers and must endeavor to remove these to
compete with other leading firms. Also suggestions from the customers are very
much vital in bringing necessary changes.
58
Chapter- 6
SUGGESTIONS AND RECOMMENDATION
6.1 Recommendations:
Some of the recommendations to the company are:
59
a) HDFC Life should provide better services and accessibility, it may be better
if they recruit a team to monitor and take care of these aspects.
b) It is recommended that the company should come up with new products
that provide better returns and transparency.
c) To improve awareness about the products there should be increase in
advertisements on TV channels and newspapers focusing on the products
and their benefits.
d) The company should go for sponsorship events like reality shows, stage
shows etc., so that people get familiar with the brand.
e) Proper training should be provided to the agents for improving their product
knowledge. This will improve their effectiveness in explaining complete
details about the products, regarding the change of policies and benefits of
the policies.
f) Maintaining relationship between the company and the customers should be
a continuous effort, not only during the payment of premiums but
throughout the years.
g) At least 45 days prior intimation should be given for annual premium
payments.
Bibliography
BOOKS:
Kotler, Philip. Marketing Management. 12th Edition. India: Pearson
Education, Dorling Kindersley Pvt. Ltd, 2007.
60
LG. Schiffman, Leslie Lazar Kanuk. Consumer Behavior. 8th Edition. India:
Asoke K. Ghosh, Prentice-Hall Private Limited, 2006.
Malhotra, Naresh. Marketing Research-:An applied orientation.4th Edition.
New Delhi: Prentice- Hall, 2006.
Nargundkar, Rajendra Marketing Research, 2nded, New Delhi: Tata
McGraw-hill, 2003.
D.C., Shrivastava and S. Shrivastava. Indian Insurance Industry: Transition
and Prospects. New Delhi: New Century Publications, 2001.
Mishra, M.N. Principles and Practices of Insurance. New Delhi: Sultan and
Chand Limited, 2002.
Web Sites
4 jul 2011. http://www.hdfclife.com/AboutUs/AboutUsIntroduction.aspx
5 jul 2011http://www.irda.gov.in/ADMINCMS/cms/NormalData_Layout.aspx?
page=PageNo4&mid=2
10 jul 2011. http://www.irda.gov.in/ADMINCMS/cms/frmGeneral_NoYearList.
aspx?DF=RL&mid=4.2
12 jul 2011. http://www.insuranceinstituteofindia.com/InsuranceInst/Home/ASPX/
Index.aspx
28 jul 2011. http://en.wikipedia.org/wiki/Customer_satisfaction
18 aug 2011. http://www.learnmarketing.net/consumer.htm
Appendix 1
Questionnaire for Non – customers of HDFC Life
61
Which Age group you belongs to?
Below 25
25 – 40
Above 40
Gender: Male Female
Occupation: Professional Business Person Govt. Employee
Any other (please specify)…………………
Annual Income (Rs): 1.5 lakh – 5lakh 5 lakh – 10 lakh
Above 10 lakh
1. Which Investment schemes you prefer (Rate them, 1 being least and 5being
highest)?
Features Rating
1 2 3 4 5
Life Insurance
62
Fixed Deposits
Properties
Mutual funds
Other(specify)
2. Do you think is it essential to have Life Insurance?
Most important
Important
Neutral
Least Important
Not Important
3. Have you taken any Life Insurance from any company?
Yes
No
If yes please specify the
Name of the Company……………….
Plan …………………..
Premium ………………….
4. Rate the factors that you give importance in a Life Insurance company?
Features Rating
1 2 3 4 5
Brand Name
63
Better Services
Innovative Plans
Accessibility
5. Main consideration that you look at while purchasing a Life Insurance policy.
Most
importantImportant Neutral
Least
important
Not
important
Tax benefit
Saving
Protection
Pension
Investment
6. You will prefer a policy with premium spread over.
Less than 5 years
5 – 10 years
10 -15 years
More than 15 years
7. Prioritize the Services you expect from Life Insurance providers (1 being the
lowest and 5 being the highest)?
Features Rating
1 2 3 4 5
64
Easy access ability to
deposit centre
Time to time premium
collection
Provision in case of dues
Bonus and other schemes
8. According to you, in what areas should the Life Insurance companies work upon?(
1 being the lowest and 5 being the highest)
Features Rating
1 2 3 4 5
Less complicated
procedures
Fewer premiums
More returns
Transparency
9. Are you aware of HDFC Life Products?
Yes
No
10. How do you come to know about HDFC Life products?
News Papers
Television
Internet
65
Reference Group
Financial Journals
Any other (specify):
11. Are you willing to make an investment with HDFC Life?
Yes
No
Not yet decided
If No Specify reasons:
12. If yes which of the following plans you prefer to buy from HDFC Life. (1 being
the lowest and 5 being the highest)?
Features Rating
1 2 3 4 5
Retirement Plans
Health Plans
Savings and Investment Plans
Children Plans
Protection Plans
Appendix: 2
Questionnaire for customer satisfaction towards HDFC Life Products and
Services
66
Which Age group you belongs to?
Below 25
25 – 40
Above 40
Gender: Male Female
Occupation: Professional Business Person Govt. Employee
Any other (please specify)…………………
Annual Income (Rs): 1.5 lakh – 5lakh 5 lakh – 10 lakh
Above 10 lakh
1. How do you come to know about HDFC Life?
News Paper
Television
Friends and relatives
Direct selling agents
Internet
Other (please specify) ………………
2. Which of the following products you bought from HDFC Life?
Retirement plans
Health Plans
Savings and Investment Plans
67
Children Plans
Protection Plans
3. How many policies do you have in HDFC Life?
1
2
3
>3
4. For how many years have you been the customers of HDFC Life?
Less than 1 Year
1 – 2 Years
2 – 5 Years
More than 5 Years
5. What is the Premium amount you are paying annually?
Less than 10,000
10,000 – 20,000
20,000 – 30,000
More than 30,000
6. Are you satisfied with the policy you own?
Extremely satisfied
Slightly satisfied
Neutral
Dissatisfied
68
Extremely dissatisfied
7. Were you given information about all the different policies available at the time
you purchased the policy
Yes
No
8. Are the benefits received by your policy attractive and preferable?
Yes
No.
9. If you received any compensation and reward was it given to you in time as
specified at the time of purchasing policy?
Yes
No
10. Do you agree that the customer need is properly judged by the company?
Strongly agree
Agree
Neutral
Disagree
Strongly disagree
11. How do you feel about the ability of the employees to solve your queries?
Excellent
Good
Average
Fair
Poor
69
12. How frequently are you contacted by company?
Monthly
Quarterly
Half-yearly
Yearly
13. What type of service system do you prefer? (Rank them)
Features Rating
1 2 3 4 5
Personal
Telephone
Online internet
14. Are you satisfied with the HDFC Life Products that you own?
Extremely satisfied
Slightly satisfied
Neutral
Dissatisfied
Extremely dissatisfied
70
15. How would you rate the overall services given by HDFC Life?
Poor
Average
Good
Excellent
16. Your opinion about the HDFC Life?
Very good
Good
Average
Bad
Very bad
17. Would you like to recommend HDFC Life products to others?
Strongly recommend
To some extent
Not recommend
18. Suggestions for HDFC Life?
……………………………………………………………………
……………………………………………………………………
71