‘A CASE ANALYSIS ON PERCEPTION OF INVESTORS TOWARDS ...
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‘A CASE ANALYSIS ON PERCEPTION OF INVESTORS TOWARDS INVESTING
IN LIFE INSURANCE PRODUCTS OF SHRIRAM LIFE COMPANY LTD’
1Pawan Pandey &
2Prof. Purnima Sarkar
1Student, Amity Global Business School, Bhubaneshwar
2Asst. Prof. - Finance, Amity Global Business School, Bhubaneshwar
ABSTRACT
Perception is a conscious or unconscious state of awareness or understanding of one's
surroundings that exists within the mind and formed through sensory signals stimulated by
current conditions, expectations and past memories. The confluence of complex sensory
inputs often times creates a perception that is unreliable or unverifiable. In other words, it
may not be based in reality.
Investor Perceptions is a leading provider of authoritative and considered investor feedback.
IP delivers an independent perspective into how shareholders and the key underweight
institutions view a company, its management and its prospects
Insurance is a contract providing for payment of sum of money to the person assured or
failing him to the person entitled to receive the same on the happening of certain event.
Uncertainty of death is inherent in human life. It is this risk, which gives rise to the necessity
for some form of protection against the financial loss arising from death. Insurance
substitutes this uncertainty by certainty
Keywords: life insurance, financial loss, indemnity
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INTRODUCTION OF THE STUDY
“The business of insurance is related to the protection of the economic values of the assets”.
Every human being has the tendency to save to protect him from risks or events of future.
Insurance is one form of savings where in people try to assure themselves against risks or
uncertainty of future. It assurance against risks or events or losses. People can save their
earnings either in form gold, fixed assets like property or in banking and insurances. All the
savings if the country account for gross domestic savings. In India, all those savings rate is
high but people prefer to invest either in gold or fixed assets so they can make money out of
it. Hence insurance sector each still untapped in India.
An investor; an individual who commits money to investment products with the expectation
of financial return. Generally, the primary concern of an investor is to minimize risk while
maximizing return, as opposed to a speculator, who is willing to accept a higher level of risk
in the hopes of collecting higher-than-average profits. Investors‟ behaviour is the study of
how individuals make decision to spend their available resources (time, money and efforts)
on investment related items. it helps the marketers to understand what, why, where, when and
how an investor behaves with respect to products and services. Knowing answer to this
question let marketers to design their marketing strategies accordingly.
Perception: A conscious or unconscious state of awareness or understanding of one's
surroundings that exists within the mind and formed through sensory signals stimulated by
current conditions, expectations and past memories. The confluence of complex sensory
inputs often times creates a perception that is unreliable or unverifiable. In other words, it
may not be based in reality.
Investors Perception: Investor Perceptions is a leading provider of authoritative and
considered investor feedback. IP delivers an independent perspective into how shareholders
and the key underweight institutions view a company, its management and its prospects. We
analyse in depth the key factors that collectively define a company's investment proposition
and ultimately determine the valuation the market places on the shares. Being aware of the
opinions and views of investors assists companies to improve their communication with the
market and to ensure the investment proposition is properly understood and is reflected in the
valuation of the shares, which in turn will influence its cost of capital.
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INSURANCE
Insurance is a contract providing for payment of sum of money to the person assured or
failing him to the person entitled to receive the same on the happening of certain event.
Uncertainty of death is inherent in human life. It is this risk, which gives rise to the necessity
for some form of protection against the financial loss arising from death. Insurance
substitutes this uncertainty by certainty. The objective of insurance is normally to provide:
1. Family protection
2. Provision for old age
3. Protection against risks
• Insurance cover is essential because it provides the following benefit:
• A lump sum payment to the nominees in the time of the death of the policy holder.
• A regular payment to the nominees in the event of the death of the policy holder. Tax
benefit, as premiums paid reduce the liability of tax.
• Relieves economic hardships in the family on the uneventful death of the sole income
holder.
• Inculcates the habit of savings.
Need for Life Insurance
Today there is no shortage of investment options for a person to choose from. Modern day
investments includes gold, property, fixed income instruments, mutual funds and of course
life insurance. Given the plethora of choices, it becomes imperative to make the right choice
when investing your hard earned money. Life insurance is a unique investment that helps you
to meet you deals needs savings for life’s important goals and protecting your assets.
Life insurance is the only investment option that offers specific products tailor made for
different life stages. It thus ensures that benefits offered to the customer reflect the needs of
the customer at that particular life stage.
OBJECTIVES OF THE STUDY
1. To know the customer behavior towards the products.
2. To know investment pattern of customer.
3. Study of financial behavior of investors regarding Life insurance.
4. To find out the risk and return of Life Insurance plan
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5. To find out the relevant advantages and disadvantages of both the insurance plan.
SCOPE OF THE STUDY
• The result of this research would help the company to have a better understanding
about the consumer’s perceptions towards Life Insurance.
• The study helps the company by creating awareness about the consumers of different
ages and income levels.
• The study also enables the company to focus the consumer’s preferences and
expectations on the product which they offer.
LITERATURE REVIEW
This chapter presents the review of literature to identify and understand the implications of
different issues related to consumer perception and satisfaction towards public and private
life insurances companies in India. The literature on life insurance industry in India includes
books, compendia, theses, dissertations, study reports and articles published by academicians
and researchers in different periodicals. The review of this literature gives an idea to
concentrate on the unexplored area and to make the present study more distinct from other
studies. The literature available is presented below:
Baal N. and Sandhog H. S. (August 2011), a study on Life Insurance Corporation of India
(LIC) the capital demanding business, supplies the most important financial instruments to
customers directed at safety as well as long term savings. The present study by examines the
parts affecting agent’s perception towards Life Insurance Corporation of India. Moreover,
analysis of one way arrangement has also been performed to test the important results to
show that no important differences exist among various groups of respondent regarding to
their apprehension towards Life Insurance Corporation of India.
Baal N. and Sandhog H. S. et al (August 2011), with the access of so many players in the
field and the consistent competitive activism, the choate area of the service sector is
observing a multi-dimensional, purposeful, consumer-friendly approach, shedding off the
apathy that had come to be affiliated with the sector. The findings of the study imply that the
gap scores do not amalgamate into five dimensions of service quality rather, than the
perception scores merge into three dimensions.
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Meera C. and Eswari M. (November 2011), in modern aggressive environment services are
ameliorate accumulating more denotation. Nowadays, greater absorption is paid to all the
bank customer touch points, address to optimise the reciprocal and user friendly services. The
aim of the study by is to crumb the customers bliss towards cross selling of insurance
products and other services accomplished by private sector banks.
Singh H. and Loll M (December 2011), states that life insurance is one of the fastest
growing and emerging markets in India. Insurance diffusion in rural area – the insurance
industry has an acceptation grant in socio-economic development. Objective of the present
study is to appraise the opportunities for insurers in the rural market and what would be new
action to tap the highly underinsured rural area.
Friar F. and Khanbashi M. et al (December 2011), this study is one of the most conscious
actions taken in alluring and gratifying needs of customers is chattering a charismatic
information mechanism and feedback process between organisation and customers. The aim
of this study by, is finding of the variation between anticipation of the employees and
customers towards service quality in insurance industry of Iran. The study revealed that there
is cogent difference between the anticipation of staff and customers towards the tangibles
dimension while the anticipation of both the groups towards the other dimensions is
homogenous.
RESEARCH METHODOLOGY
Methodology is a systematic way of solving a problem it includes the research method for
solving a problem it includes the research method for solving the problems.
Type of Research: Descriptive research
SAMPLE DESIGN
The target population of the study consists of various respondents of various places. This
survey was done by collecting the data from the respondents.
SAMPLE SIZE
After due consultation with the company supervisor as well as with the college guide, also
keeping in mind the requirements of the company for the research ,the sample size that was
found to be appropriate for the study was 50.
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SAMPLING TECHNIQUE
The sampling technique that adapted to conduct the survey was convenient sampling and the
area of the research was concentrated in the city of Bhubaneswar only. The survey was
conducted by visiting different places like colleges, corporate offices, respondent’s home,
railway stations etc.
DATA SOURCE
The task of data collection begins after a research problem has been defined. In this study
data was collected through both primary and secondary data source.
A. PRIMARY DATA
A primary data is data which is collected for gathering information first time and to
analyse the problem. In this study the primary data was collected among the
consumers offer using questionnaire.
B. SECONDARY DATA
Secondary data consists of information that already exists somewhere, having been
collected for some other proposes. In this study secondary data was collected from
company website, magazines and brochures.
SWOT ANALYSIS OF SRIRAM LIFE INSURANCE
• Strengths:
1. Insurance policies for all strata’s of society
2. Policies with consideration for social Impact
3. International expertise of Sanlam group
4. Spread of 750 offices across India
5. More than 75,000 loyal and dedicated agents and has a customer base of 30 lacs
chit subscribers and investors
• Weakness:
1. Low key I.T infrastructure as compared to big brands
2. Low Marketing and brand presence as compared to other competitors
3. Insurance companies have a poor image when it comes to payment of dues
• Opportunities:
1. Growing rural market
2. Earning Urban Youth looking for investments
3. Cross selling through financial services such as banking.
• Threats:
1. Stringent Economic measures by Government and RBI
2. Entry of new NBFCs in the sector.
2.
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DATA ANALYSIS
Demographic Profile of Responde
The above figure defines the annual income of respondents. Out of 50 respondents 45% are
under the income range of below one lakh where as only 4% of respondents are earning more
than 5 lakhs. A percentage of 22% are within th
29% are within 1.01 lakh to 3 lakh.
The above figure shows out of 50 respondents 81% of persons are savings less than 15% of
their salary. Only a least of 4% of persons are saving more than 25% of their salary. 15%
ANNUAL INCOME LEVEL
below Rs 1 lakh
15%
WHAT % OF SALARY DO YOU USUALLY
DATA ANALYSIS & INTERPRETATION
Demographic Profile of Respondents
FIGURE 1
figure defines the annual income of respondents. Out of 50 respondents 45% are
under the income range of below one lakh where as only 4% of respondents are earning more
than 5 lakhs. A percentage of 22% are within the income range of 3.01 lakh to 5
29% are within 1.01 lakh to 3 lakh.
FIGURE 2
The above figure shows out of 50 respondents 81% of persons are savings less than 15% of
their salary. Only a least of 4% of persons are saving more than 25% of their salary. 15%
45%
29%
22%
4%
ANNUAL INCOME LEVEL
below Rs 1 lakh rs 1 - 3 lakh Rs 3 - 5 lakh above 5 lakh
81%
0% 4%
WHAT % OF SALARY DO YOU USUALLY
SAVE?
less than 15%
15-20%
20-25
more than 25%
figure defines the annual income of respondents. Out of 50 respondents 45% are
under the income range of below one lakh where as only 4% of respondents are earning more
e income range of 3.01 lakh to 5 lakh and
The above figure shows out of 50 respondents 81% of persons are savings less than 15% of
their salary. Only a least of 4% of persons are saving more than 25% of their salary. 15%
less than 15%
more than 25%
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numbers of persons are savings within the range of 15
salary.
Majority of 53% of respondents out of 50 prefer to investment in short term. 31% of
respondents prefer to investment in long term. Rest 16% of persons prefer to investment in
both long and short term to meet varied group of requirements.
The above figure signifies that out of 50 respondents 90% of respondents have life insurance
policy and rest 8% of persons have not purchased a single life insurance policy on their
tells that Indians are not fully aware about life insurance protection.
WHAT KIND OF INVESTMENT DO YOU PREFER?
DO YOU HAVE LIFE INSURANCE POLICY?
savings within the range of 15-20% and 0% on 20-
FIGURE 3
Majority of 53% of respondents out of 50 prefer to investment in short term. 31% of
respondents prefer to investment in long term. Rest 16% of persons prefer to investment in
both long and short term to meet varied group of requirements.
FIGURE 4
The above figure signifies that out of 50 respondents 90% of respondents have life insurance
policy and rest 8% of persons have not purchased a single life insurance policy on their
tells that Indians are not fully aware about life insurance protection.
53%31%
16%
WHAT KIND OF INVESTMENT DO YOU PREFER?
short term27 long term both
90%
8%2%
DO YOU HAVE LIFE INSURANCE POLICY?
yes no maybe
-25% of their
Majority of 53% of respondents out of 50 prefer to investment in short term. 31% of
respondents prefer to investment in long term. Rest 16% of persons prefer to investment in
The above figure signifies that out of 50 respondents 90% of respondents have life insurance
policy and rest 8% of persons have not purchased a single life insurance policy on their life. It
DO YOU HAVE LIFE INSURANCE POLICY?
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Out of 50 respondents 59% have insurance policy/s in LIC of India and 18% are in
possession of life insurance policies
in ICICI PRUDENTIAL and only 2% respondent have policy in other companies.
The above figure shows that out of fifty respondents 28 numbers (55%) desire to buy a new
life insurance policy in Shriram Life I
in buying life insurance policy.
18%
19%
IF YES THEN WHICH INSURANCE COMPANY
POLICY DO YOU PREFER?
22%
23%
DO YOU WANT TO BUY A NEW POLICY
WOULD YOU LIKE TO INVEST IN SHRIRAM
FIGURE 5
Out of 50 respondents 59% have insurance policy/s in LIC of India and 18% are in
session of life insurance policies in BAJAJ ALLIANZ, 19% of respondents have p
in ICICI PRUDENTIAL and only 2% respondent have policy in other companies.
FIGURE 6
The above figure shows that out of fifty respondents 28 numbers (55%) desire to buy a new
surance policy in Shriram Life Insurance company and rest 11 (22%) are not interested
59%
19%
2%2%
IF YES THEN WHICH INSURANCE COMPANY
POLICY DO YOU PREFER?
lic of india
bajaj allianz
icici prudential
Shriram life
Hdfc sanchaya plus
55%22%
23%
DO YOU WANT TO BUY A NEW POLICY
WOULD YOU LIKE TO INVEST IN SHRIRAM
COMPANY?
yes
no
maybe
Out of 50 respondents 59% have insurance policy/s in LIC of India and 18% are in
in BAJAJ ALLIANZ, 19% of respondents have policies
in ICICI PRUDENTIAL and only 2% respondent have policy in other companies.
The above figure shows that out of fifty respondents 28 numbers (55%) desire to buy a new
(22%) are not interested
IF YES THEN WHICH INSURANCE COMPANY
lic of india
bajaj allianz
icici prudential
Shriram life
Hdfc sanchaya plus
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Out of 50 respondents 51% are interested in Shriram Life I
because of its growth potential. 25% numbers of respondents in the said company are buying
for utmost good faith. Only 2% says his purchase was driven by different other reasons for
different reasons. Rest 22% are not interested in Shriram Life I
Above figure out of 50 respondents 32 said premium
from life insurance company and 16 said important rest others either important or not
important, And in charges while buying policy from life insurance company 18 said highly
important and 25 said important and 5 have said neutral rest others said n
the policy term while buying policy out of 50 respondents 22 said highly important 24 said
25%
2%
22%
IF YES WHAT WILL MAKE YOU TO INVEST IN
SHRIRAM LIFE INSURANCE?
010203040
WHAT PARAMETERS YOU HAVE LOOKED INTO AT THE TIME
OF BUYING POLICY FROM LIFE INSURANCE COMPANY
Highly Important Important
FIGURE 7
51% are interested in Shriram Life Insurance to buy a life insurance
because of its growth potential. 25% numbers of respondents in the said company are buying
utmost good faith. Only 2% says his purchase was driven by different other reasons for
are not interested in Shriram Life Insurance.
FIGURE 8
50 respondents 32 said premium highly important while buying
and 16 said important rest others either important or not
important, And in charges while buying policy from life insurance company 18 said highly
important and 25 said important and 5 have said neutral rest others said not important, And in
the policy term while buying policy out of 50 respondents 22 said highly important 24 said
51%
25%
22%
IF YES WHAT WILL MAKE YOU TO INVEST IN
SHRIRAM LIFE INSURANCE?
growth potential
utmost good faith
others
no answer
WHAT PARAMETERS YOU HAVE LOOKED INTO AT THE TIME
OF BUYING POLICY FROM LIFE INSURANCE COMPANY?
Important Neutral Least Important Not Important
nsurance to buy a life insurance
because of its growth potential. 25% numbers of respondents in the said company are buying
utmost good faith. Only 2% says his purchase was driven by different other reasons for
highly important while buying policy
and 16 said important rest others either important or not
important, And in charges while buying policy from life insurance company 18 said highly
ot important, And in
the policy term while buying policy out of 50 respondents 22 said highly important 24 said
IF YES WHAT WILL MAKE YOU TO INVEST IN
growth potential
utmost good faith
others
no answer
WHAT PARAMETERS YOU HAVE LOOKED INTO AT THE TIME
Not Important
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important rest 3 said neutral or not important. And in Rider benefits 28 said highly important
15 said important rest others have said neutral. And in bonus and interest 34 said highly
important or 11 said important rest others said either important or not important. And in
accessibility 25 said highly important 20 said important rest others said either important or
not important, about company image 33 said highly important and 10 said important rest
others said either important or not important.
FINDINGS
• According to the survey safety is the most important criterion which is accepted
among all the respondents towards their investment alternatives followed by return,
brand name, tax benefit, liquidity and capital growth.
• According to the study premium and company image is to be the highly important
criteria which we consider before taking up life insurance this is mainly because
people expect safety and security for their money which they invest.
• People who belong to different age groups have different perception regarding the
most important criteria before taking the decision on a life insurance.
• The scheme mostly preferred by insurance holder was life protection schemes like
death benefit followed by money growth plans like high return plans.
• It was found that nearly 50% of the respondents usually save less than 15% and the
kind of investment mostly preferred by the respondents were both long and short
term.
• Consumer awareness of Shriram Life Insurance is less as compared to the PSUs. So
efforts should be made to increase the awareness of the company.
LIMITATIONS OF THE RESEARCH
The sample size chosen for the questionnaire was only 50 and that may not represent
the true picture of the consumer perception about the life insurance sector.
The research got confined to the city of Bhubaneswar. The respondent belonged only
to Bhubaneswar and not others who were out of Bhubaneswar.
Nearly the number of respondents are 36 in the age group of below 30. Few student
respondent were chosen and fortunately all have life insurance policies by their name.
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The second highest age group is 31-40 .This group of persons are at the planning
stage of their life and good number of life insurance buyer are found under this group.
The product offered by different companies had different options and names in them,
so at the time of comparison it became very difficult. The parameters for comparison
were also different in the selected companies.
One of the important criteria that was selected by the respondents which they consider
before taking an insurance policy was “company image” but there was no parameter
available to compare criteria like this between the companies.
SUGGESTIONS
1. Consumer should be aware of company‘s profile and returns associated with
insurance.
2. The financial advisor should be right enough to serve the consumer. The
consumer should also be aware of the advisor or others who is looking after their
investment.
3. Company should publish their performance by comparing it with their competitors.
4. Company should adopt strategies to explore that private insurance companies are
safer and securer than public insurance company like LIC.
5. Middle income people suggest that premium can be collected on monthly basis
instead of twice a year.
CONCLUSION
The study titled ”Study of consumers perception about Life insurance policies enables the life
insurance companies to understand how consumer’s perception differs from person to person.
How a consumer selects, organizes and interprets the service quality, and product quality of
different life insurance policies, offers by various life insurance companies.
The response of the insurance companies has been very positive and within a short
span of time, the Indian Insurance market scenario has seen a perceptible change in terms of
improved customer service benchmark and introduction of innovative and tailors made
products.Most of the insurance majors have represented in the form of joint venture in Indian
market.The new products that have been introduced by the companies have certain innovative
features in terms of better customer services and also wider covers. This has given customer
sample choice to select the products.
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BIBLIOGRAPHY
1. PHILIP KOTLER (2001) ‘Marketing Management Prenticehall Pvt.ltd. New
Delhi, Millennium edition
2. KOTHARI C.R(1999)’Research Methodology’ Wishwa Prakashan, New
Delhi,2nd
edition.
3. LEONG.SCHFFMAN and LESLIE LAZAR KANUK (2007) Consumer
Behaviour Prentice Hall Pvt. Ltd. New Delhi.9th
edition.
WEBSITES :
1. WWW.Shriramlifeinsurance.com
2. www.irda.org
3. www.slideshare.net
4. www.academia.edu
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