A Study of Consumer Behaviour in Relation to Insurance Products in Star Union Dai-chi

Prepared for

Pune Office

Prepared By:

MBA (141105)

Asm’s Institute of Business Management and Research,Pune.

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DECLARATION

I, Mr. Ankit Kankar, hereby declare that this project report is the record of authentic

work carried out by me during the period from 20nd May, 2014 to 30th July, 2015, and

has not been submitted to any other University or Institute for the award of any

degree / diploma etc.

Signature

Name of the student: Ankit Kankar

Roll No. 141105

Date:

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Certificate from Industry Guide

This is to certify that Mr. Ankit Kankar a student of the Post-Graduate Degree In Master’s Of Business Administration ( Marketing ) has worked in our organization on a project assigned by us. To the best of our knowledge, this report is a product of the student’s own effort on the project conducted under our guidance and supervision.

Organizational Guide

Designation

Organization

Address

Date

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Certificate from Faculty Guide

This is to certify that Mr.Ankit Kankar, a student of the Post-Graduate Degree in Master’s OF Business Administration, has worked under my guidance and supervision. This Summer Project Report has the requisite standard and to the best of our knowledge, no part of it has been reproduced from any other summer project, monograph, report or book.

Faculty Guide: Sunita Walvekar

Designation

Organization

Address

Date

Table of Contents

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Chapter No. Title Page No.

1 INTRODUCTION 10

1.1 EXECUTIVE SUMMARY 12

1.2 HISTORY OF INSURANCE 13

1.3 INDUSTRY BACKGROUND 15

1.4 A BRIEF HISTORY OF INSURANCE SECTOR IN INDIA 16

1.5 INSURANCE SECTOR REFORMS 18

1.6 INDIAN INSURANCE MARKET 19

2 COMPANY PROFILE 22

2.1 ABOUT STAR UNION DIA-CHI LIFE INSURANCE 23

2.2 ABOUT THE SPONSORS OF STAR UNION DIA-CHI LIFE INSURANCE

24

2.3 COMPANY’S VISION, MISSION AND VALUES 26

2.4 PRODUCTS OFFERED 29

2.5 HISTORY & AWARDS OF THE ORGANIZATION 30

3 DESCRIPTION OF BUSINESS PROBLEM 32

3.1 DESCRIPTION OF WORK ASSIGNED 33

3.2 DESCRIPTION OF WORK CARRIED OUT 36

4 CONCLUSION AND RECOMMENDATIONS 45

4.1 OBSERVATION AND LEARNINGS 46

4.2 CONCLUSIONS 48

4.3 RECOMMENDATIONS/SUGGESTIONS 49

4.4 BIBLIOGRAPHY 50

4.5 ANNEXURE 51

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List of Tables

(To be written sequentially as they appear in the text)

Table No. Title Page No.

3.2.12 SUGGESTIONS FOR BETTER PRODUCTS 43

3.2.13 SUGGESTIONS FOR BETTER FUNCTIONING 43

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List of Charts

Chart No. Title Page No.

1.6.1 LIFE INSURANCE DENSITY 19

1.6.2 MARKET SHARE OF INSURANCE COMPANIES

20

3.2.1 GENDER OF RESPONDENT 37

3.2.2 AGE OF RESPONDENT 38

3.2.3 OCCUPATION 38

3.2.4 SOURCE OF KNOWLEDGE 39

3.2.5 POSSESSION OF POLICY 39

3.2.6 REASON FOR NOT POSSESSING POLICY 40

3.2.7 COMPANY WHOSE PRODUCTS ARE PURCHASED

40

3.2.8 MOTIVATION TO BUY FROM THAT COMPANY

41

3.2.9 CUSTOMER OF STAR UNION DIA-CHI 41

3.2.10 REASON FOR NOT BUYING STAR UNION DIA-CHI PRODUCTS

42

3.2.11 REASON FOR BUYING STAR UNION DIA-CHI PRODUCTS

42

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LETTER OF TRANSMITTAL

Mrs. Sunita walvekar

Star Union Dia -chi Life Insurance

Dear Ma’am,

As discussed in May 2015, I’m submitting the report titled “A study of Consumer Behaviour

in Relation to Insurance Products in IDBI”.

This report focuses on bringing into light the attitude of current as well as future consumers

of Star Union Dia –chi life insurance towards the insurance products offered by the company.

I hope you find this report satisfactory.

Yours sincerely,

Ankit Kankar

Asm’s Institute of Business Management and Research,

Pune .

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ACKNOWLEDGEMENT

I would like to take this opportunity to express a deep sense of gratitude to my industry

mentors Mrs. Sunita Walvekar Star Union Dia-chi Life Insurance, for giving me proper

directions from time to time and constant words of advice and her support and guidance

during the course of the project.

I would also like to express my thankfulness to my Course Coordinator, Prof. Rakesh Bhati,

for his encouragement during the different phases of the project. Also, I would express my

gratefulness to Prof. Ajit Bodge my project guide from Asm’s IBMR, for sharing his

thoughts with me regarding the betterment of the project.

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CHAPTER 1- INTRODUCTION

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Life is full of risk and uncertainties. Since we are social human beings, we have certain

responsibilities too. Indian consumers have big influence of emotions and rationality on their

buying decisions. They believe in future rather than present and desire to have a better and

secured future. In this direction life insurance services have its own value in terms

of minimizing risk and uncertainties. Indian economy is developing and having huge middle

class societal status and salaried persons. Their money value for current needs and future

desires generate the reasons behind holding a policy. An attempt has been made in this report

to study the buying behaviour of consumers towards life insurance services.

 

Analyzing consumer behaviour is perceived as cornerstone of a successful marketing

strategy.

Consumer behaviour is a mental and emotional process and the observable behaviour of

consumers during searching, purchasing and post consumption of a product and service.

Similarly consumer behaviour is action and decision process of people who purchase goods

and services for personal consumption. Now if these defining criteria are closely observed, it

is evident that analyzing consumers’ decision making process is the foundation of entire

notion of consumer behaviour.

 

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1.1 EXECUTIVE SUMMARY

A Study of Consumer Behaviour in Relation to Insurance Products in Star

Union Dia-chi

Ankit Kankar

Asm’s Institute of Business Management and Research, Pune -19

July 30th, 2015

Influencing the ways that people act in their daily consumption lives is a concern for

researchers in a number of disciplinary areas, including consumer behaviour psychology,

sociology and marketing.

This project is focused on analyzing the Internal and the External factors which aim at

determining the customers buying behaviour towards insurance products of Star Union Dia-

chi . It is mainly focused in trying to understand the various factors responsible for the

buying decision. Understanding these factors is a critical task. The purchase decision in

general is prompt by number of factors viz. Psycho graphical, Economical, Socio Political,

Legal and Demographical. There are certain other factors which need to be understood while

keeping in mind the investment decisions made by customers, such as, Customer Buying

Behaviour, Customer Preferences and Perception, Brand Loyalty etc.

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1.2 HISTORY OF INSURANCE

In some sense we can say that insurance appeared simultaneously with appearance of human

society. In earlier economies, we can see insurance in the form of people helping each other.

For example, if a house is burnt, the members of the community help build a new one. Should

the same thing happen to one’s neighbour, the other neighbours must come to help.

Otherwise, neighbours will not receive help in the future. Insurance in the modern sense,

started as a methods of transferring or distributing risk, were practiced by Chinese and

Babylonian traders as long ago as the 3rd and 2nd millennia BC, respectively. Chinese

merchants travelling treacherous river rapids would redistribute their cargo across many

vessels to limit the loss due to any single vessel’s capsizing. The Babylonians developed a

system which was recorded in the famous Code of Hammurabi, c.1750 BC, and practiced by

early Mediterranean sailing merchants. If a merchant received a loan to fund his shipment, he

would pay the lender an additional sum in exchange for the lender’s guarantee to cancel the

loan should the shipment be stolen.

 Greek monarchs were the first to insure their people and made it official by registering the

insuring process in governmental notary offices. They invented the concept of 

the general average. Merchants whose goods were being shipped together would pay a

proportionally divided premium which would be used to reimburse any merchant whose

goods were jettisoned during storm or sinking of the vessel in the sea. The Greeks and

Romans introduced the origins of health and life insurance c. 600 AD when

they organized guilds called ―benevolent societies which cared for the families and paid

funeral expenses of members upon death. Guilds in the middle Ages served a similar

purpose.

Before insurance was established in the late 17th century, friendly societies existed in

England, in which people donated amounts of money to a general sum that could be used for

emergencies. Separate insurance contracts (i.e., insurance policies not bundled with loans or

other kinds of contracts) were invented in Greeks rulers in the 14th century, as were

insurance pools backed by pledges of landed estates. These new insurance contracts allowed

insurance to be separated from investment, a separation of roles that first proved useful in

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marine insurance. Insurance became far more sophisticated in post-Renaissance Europe, and

specialized varieties developed. Insurance as we know it today can be traced to the Great Fire

of London, which in 1666 A.D devoured 13,200 houses. In the aftermath of this disaster,

Nicholas Barbon opened an office to insure buildings. In 1680, he established England‘s first

fire insurance company, The Fire Office to insure brick and frame homes.

 The first insurance company in the United States underwrote fire insurance and was formed

in Charles Town (modern-day Charleston), South Carolina, in 1732.

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1.3 INDUSTRY BACKGROUND

The insurance industry of India consists of 51 insurance companies of which 24 are in life

insurance business and 27 are non-life insurers. Among the life insurers, Life Insurance

Corporation (LIC) is the sole public sector company. Apart from that, among the non-life

Insurers, there are six public sector insurers. In addition to these, there is sole national

reinsurer, namely, General Insurance Corporation of India. Other stakeholders in Indian

Insurance market include Agents (Individual and Corporate), Brokers, Surveyors and Third

Party Administrators servicing Health Insurance claims.

Out of 27 non-life insurance companies, 4 private sector insurers are registered to underwrite

policies exclusively in Health, Personal Accident and Travel insurance segments.

They are Star Health and Allied Insurance Company Ltd, Apollo Munich Health Insurance

Company Ltd, Max Bupa Health Insurance Company Ltd and Religare Health Insurance

Company Ltd. There are two more specialized insurers belonging to public sector, namely,

Export Credit Guarantee Corporation of India for Credit Insurance and Agriculture Insurance

Company Ltd for Crop Insurance.

Insurance penetration of India i.e. Premium collected by Indian insurers is 4.10% of GDP in

FY 2011-12. Per capita premium underwritten i.e. insurance density in India during FY 2011-

12 is US$ 59.0.

The insurance sector in India has come to a full circle from being an open competitive market

to nationalization and back to a liberalized market again. Tracing the developments in the

Indian insurance sector reviles the 360-degre turn witnessed over a period of almost two

centuries.

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1.4 A BRIEF HISTORY OF INSURANCE SECTOR IN INDIA

Life Insurance in its modern form came to India from England in the year 1818. Oriental Life

Insurance Company started by Europeans in Calcutta was the first life insurance company on

Indian Soil. All the insurance companies established during that period were brought up with

the purpose of looking after the needs of European community and Indian natives were not

being insured by these companies. However, later with the efforts of eminent people like

Babu Muttylal Seal, the foreign life insurance companies started insuring Indian lives. But

Indian lives were being treated as sub-standard lives and heavy extra premiums were being

charged on them. Bombay Mutual Life Assurance Society heralded the birth of first Indian

life insurance company in the year 1870, and covered Indian lives at normal rates.

Insurance is an Rs 450 billion industry in India. The life insurance segment writes about 80%

of the overall market value. Indian Insurance market was at its all time high in 2003 with a

growth of about 17.4% over the previous year. Since 2001 Insurance is growing at the rate of

15-20 % annually. The growth in the insurance industry is affected by volatility in real estate

rates, GDP rates and long term interest rates. Fluctuations in exchange rates also affect the

growth in this sector. The gross premium as a percentage of the GDP has gone up from 2.3 in

the year 2000 to 4.8 in 2006. The premium as percentage of the country’s gross domestic

product (GDP) has increased from 4.8 percent in 2006 to 5.2 percent in 2011. Together with

banking services, it adds about 7% to the country’s GDP.

Some of the important milestones in the life insurance business in India are:

1818: Oriental Life Insurance Company, the first life insurance company on Indian soil

started functioning.

1870: Bombay Mutual Life Assurance Society, the first Indian life insurance company started

its business

1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the

life insurance business.

1928: The Indian Insurance Companies Act enacted to enable the government to collect

statistical information about both life and non-life insurance businesses.

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1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective

of protecting the interests of the insuring public.

1956: 245 Indian and foreign insurers and provident societies are taken over by the central

government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with

a capital contribution of Rs. 5 crores from the Government of India.

Indian Insurance in 21st Century:

2000: IRDA starts giving licenses to private insurers: ICICI prudential and HDFC Standard

Life insurance first private insurers to sell a policy

2002: Banks allowed selling insurance plans. As TPAs enter the scene, insurers start setting

non-life claims in the cashless mode

2007: First Online Insurance portal, www.insurancemall.in set up by an Indian Insurance

Broker, Bonsai Insurance Broking Pvt Ltd.

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1.5 INSURANCE SECTOR REFORMS

Cap on ULIP charges and increase in lock in period:

Restriction on high distribution partner payouts

Reduction in overall contribution of ULIPs to new business premium

Benefit derived by insurers on account of high lapse and hence more surrender

penalty will be significantly impacted due to the cap on surrender charges

Insurers showing profits due to release of lapse reserves will not be able to sustain the

same in the future unless long term operational efficiencies are developed

Registration of Referral Agents:

There have been a slew of regulations around turnover criteria to be a referral partner

and cap on referral fee income as well as share of income through referral business

Training and tele-callers has been made mandatory

Cost of compliance expected to increase and some referral partners who may have to

apply for Broking licence which could delay insurance distribution operations

Compulsory purchase of annuity in pension plans:

Even in case the policy is surrendered, 2/3rd of accumulated funds will be used to

purchase annuity

Exit option being constrained may have significant negative implications for the

product segment

Guidelines around agents:

Persistency norms- the regulation stipulates a min level of persistency to be achieved

by each licensed agent. This is expected to reduce the agency force in the industry

License renewal- IRDA has mandated a min business requirement norm for licensing

agent. This is expected to reduce part-time agents thus improving customer service

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1.6 INDIAN INSURANCE MARKET

The insurance sector which stood at a strong US$ 72 billion in 2012 has the potential to grow

to US$ 280 billion by 2020. This growth is driven by India’s favourable regulatory

environment which guarantees stability and fair play. This environment has given rise to an

insurance market which encourages foreign investors to tap into the sector’s massive

potential. Ever since the Indian government liberalised the insurance sector in 2000 and

opened the doors for private participation, the sector has gone from strength to strength. The

resultant competition has provided the consumer with a never-before-seen range of products

and providers, and also enhanced service levels markedly. The health of the insurance sector

reflects a country’s economy. This sector not only generates long-term funds for

infrastructure development, but also increases a country’s risk-taking capacity. India’s

economic growth since the turn of the century is viewed as a significant development in the

global economy. This view is helped in no small part by a booming insurance industry.

Chart 1.6.1

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Chart 1.6.2- Market Share of Insurance Companies

Industry Dynamics

Factors that influence consistent growth in insurance sector are:

Effective distribution channels – The efficiency and cost of the various distribution

strategies used by companies are significant to their success in the insurance business.

This particularly holds true for the retail business.

Focus on overall financial inclusion – As time evolves, so must the approach of the

insurance sector in India. The objective of the insurance sector should ideally be to

offer a broader range of activities to a wider populace.

Consumer needs and preferences – The growth of India’s insurance industry can be

attributed to product innovation, dynamic distribution channels, and vibrant publicity

and promotional campaigns run by insurance companies. Benefits attached to the

products and the manner in which they are delivered (through various marketing tie-

ups) have helped bring customers and insurance companies closer to each other and

made the latter more relevant.

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Types of Insurances:

Insurance business is divided into four classes:

1. Life Insurance

2. Fire

3. Marine

4. Miscellaneous Insurance.

Life insurers undertake the Life Insurance business; general insurers handle the rest. The

Business of insurance essentially means defraying risks attached to an activity (including life)

and sharing the risks between various entities, both persons and organizations. Insurance

companies are important players in financial markets as they collect and invest large amounts

of premium in various investment instruments.

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CHAPTER 2- COMPANY PROFILE

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2.1 ABOUT STAR UNION DIA-CHI LIFE INSURANCE

 

Star Union Dia-chi Life Insurance Co Ltd. 

Star Union Dai-ichi Life Insurance Co. Ltd. (SUD Life) is a joint venture (JV) of  Bank of India, Union Bank of India and Dai-ichi Life, a leadinglife insurance company of Japan.

Bank of India and Union Bank are leading Indian public sector banks and have a robust nationwide network of more than 7800 branches that cater to more than 64 million customers.  Bank of India and Union Bank have sponsored select Regional Rural Banks, which provide SUD Life access to more than 1564 branches that make life insurance products available in rural areas.

Dai-ichi Life is the second largest life insurance company of Japan and is one of the top ten life insurers in the world. Dai-ichi Life was established in 1902 and is a recognized brand name across the globe.  Dai-ichi Life is renowned for sound product knowledge, superior asset management skills, and strong operational capabilities to manage life insurance businesses globally.

SUD Life is committed to providing insurance products across various stratas of society and geographies as per the needs of the customer. At SUD Life, the customer commands topmost priority. 

The promoters of SUD Life have a long-term commitment towards their customers and stake holders and have earned the trust of 64 million customers. These strengths and values have been inherited by SUD Life, as we make our way to become the next rising star in the Indian life insurance business, promising exceptional value to all our stakeholders

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2.2 ABOUT THE SPONSORS OF STAR UNION DIA-CHI LIFE INSURANCE CO. LTD.

 Star Union Dai-ichi Life Insurance Co. Ltd is a joint venture (JV) of Bank of India,

Union Bank of India and Dai-ichi Life, a leading life Insurance company of Japan.

Bank of India

Bank of India was founded on 7th September, 1906 and was under private ownership and control till July 1969, when it was nationalised along with 13 other banks.Beginning with one office in Mumbai, and a paid-up capital of Rs.50 lakh and 50 employees, today the Bank has a strong national presence and sizable international operations. In business volume, the Bank occupies premier position among nationalised banks.

The Bank has 4,545 branches across India that are controlled through 50 Zonal Offices.

There are 54 branches/offices and five Subsidiaries and one Joint Venture abroad.

The Bank came out with its maiden public issue in 1997 and a follow-on Qualified Institutions Placement in February 2008. In 1989, it became the first nationalised bank to establish a fully computerised branch and ATM facility at the Mahalaxmi Branch in Mumbai. The Bank is also a Founder Member of SWIFT in India. It pioneered the introduction of the Health Code System in 1982, for evaluating/rating its credit portfolio.

At present, the Bank has overseas presence in 20 foreign countries spread over 5 continents – with 53 offices including four Subsidiaries, 4 Representative Offices and 1 Joint Venture, at key banking and financial centres viz., Tokyo, Singapore, Hong Kong, London, Jersey, Paris and New York.

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Union Bank of India

Union Bank of India was founded on 11 November 1919 with its headquarters in Mumbai, being inaugurated by Mahatma Gandhi, in the  year 1921. The Bank now operates through over 3500 branches across the country and has shown a steady profit during all 93 years of its operations.Union Bank has been playing a very proactive role in the economic growth of India and it extends credit for the requirements of different sectors of economy including industries, exports, trading, agriculture, infrastructure and the individual segments. Through this diversified portfolio, resources are mobilized through Current, Savings and Term Deposits and through refinance and borrowings from abroad. The Bank has a large clientele base of over 49 million.

On technology front, 100% of the branches are computerized. It has also introduced Core Banking Solution with connectivity between branches. Many innovative products are developed using the technology platform to offer an array of choices to customers, adding speed and convenience to transactions.

Union Bank is backed by a dedicated  team  of  over 31,000 staff, who distinguish themselves with their customer centricity, willingness to learn and adherence to values enabling the bank to be recognized as a caring organization where people enjoy their work and relationship with customers.

Dai-Ichi Life

Dai-ichi Life Insurance Company Limited was founded in 1902 and is based in Tokyo, Japan. The company is now listed on the Tokyo Stock Exchange, as one of the world’s largest life insurance companies, with in force premiums of $38 billion and assets of $379 billion (as on 31st March 2013, on a consolidated basis).Dai-ichi Life has a rich experience and skill in the life insurance business, especially in areas such as product development, asset management and underwriting. “Dai-ichi" in Japanese means ‘first’, which is derived from its founding philosophy of ‘always putting the customer first’.

The company is internationally active in the life insurance business and asset management business in 6 countries including India as at March 2014. Since its foundation in 1902, Dai-ichi has always placed the customer first. This philosophy continues to guide the company as it moves forward.

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2.3 COMPANY’S VISION, PHILOSPHY AND VALUES

VISION

To be the Trustworthy Life Long Insurance Partner.

PHILOSPHY

Convert Transactional Relationships Into Subscriptional Relationships

VALUES

Passion Simplicity Integrity

Ambition Humility Innovation

EXCELLENCE

"In every aspect of work ranging from the in-house training institute to the detailed Personal

Insurance Plan. Star Union Dia-chi is focused on achieving the highest standards of quality

in every aspect of their business".

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HONESTY

"Is the heart of the Life Insurance business? Star Union Dia-chi believes that above all, Life

Insurance is based on trust. Transparency, Dependability and Integrity will form the

cornerstones of the Star Union Dia-chi experience."

KNOWLEDGE

"Is what makes experts. Star Union Dia-chi is focused on the Life Insurance business.

Perfectly combining global expertise with local knowledge, Star Union Dia-chi is the Indian

Life Insurance specialist."

CARING

"For the customer Star Union Dia-chi is redefining the Life Insurance paradigm to focus on

the needs of the customers. The Star Union Dia-chi service process is responsive,

personalized, humane and empathetic."

CULTURE

Our "in house culture recipe" has some of the finest ingredients going into its making. Some

of the more prominent aspects of our culture are stated below:

i. Customer comes first

ii. Do it right the first time

iii. Bias for result oriented action

iv. Financial strength and discipline

v. Clarity of purpose

vi. International quality standards

vii. Inclusive Meritocracy

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viii. Learning opportunities

ix. Fun at work

x. Commitment to published value system

TECHNOLOGY

To monitor and manage its network equipment across 34 sites, Star Union Dia-chi uses

Tulip Proactive Managed CE solution. The solution includes device management, proactive

troubleshooting and notification support. With the implementation of the solution, Star Union

Dia-Chi has reported improvement of network performance and availability, with a faster,

more effective change and configuration management.

PRODUCTS

Every individual has different needs at different stages of life. We at SUD Life recognize your financial needs and goals, and are committed in helping you meet them, by offering a wide range of life insurance plans and financial solutions.

We provide a variety of products for needs like Protection, Savings & Investments, Children Education and Marriage, Retirement, Income generation etc.

We are available at your nearest  BOI and UBI branches and also have a team of professional and dedicated agents and financial planners to assist you in planning your financial goals at different life stages

And , Groups can be as diverse as employees of an organization, depositors and account holders of a bank, or members of a cooperative society or even an association.

Group Life Insurance plans at SUD Life offers solutions to you and your members helping them meet their credit protection and life insurance needs in a hassle-free and cost effective way securing peace of mind for them and their family members.

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CORPORATE SOCIAL RESPONSIBILITY

1. SUD Life has inherited the culture of its promoter companies and focused to do Corporate Social Responsibility (CSR). SUD Life believes that the thrust of CSR and Sustainability is clearly with an objective to assist in bettering the lives of people by providing basic necessities as they are affected by unfortunate calamities/situation beyond control of mankind, without warning and catching them unawares, education and initiatives to uplift the life of poor and needy people of the Society. The purpose of the CSR activities of SUD Life is to ensure that the benefit of CSR reaches directly to the people. 

2.SUD Life has planned Corporate Social Responsibility (CSR) activity for F.Y.2014-15 as under:

 a. Natural Disaster Relief

b. Basic Necessities

c. Education

d. Health

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2.4 PRODUCTS OFFERED

INDIVIDUAL PRODUCTS

Every individual has different needs at different stages of life. We at SUD Life recognize your financial needs and goals, and are committed in helping you meet them, by offering a wide range of life insurance plans and financial solutions.

We provide a variety of products for needs like Protection, Savings & Investments, Children Education and Marriage, Retirement, Income generation etc.

We are available at your nearest  BOI and UBI branches and also have a team of professional and dedicated agents and financial planners to assist you in planning your financial goals at different life stages.

2.4.1. Star Union Dia-chi Bright Child Plan .

As a parent, your life's dreams and ambitions now revolve around your children.

You want to give them the best that life has to offer- a childhood full of happiness and

love, an education from a premier institute, a grand marriage in the midst of friends

and relatives- you want to help them launch their careers and you want to see them

well settled. Saving and investing money to fund all these goals is important. More

important is ensuring that this money grows, and is available to you in the right

amounts when you need it. SUD Life Bright Child is specifically tailored to meet

these needs with its distinct pay-out structure, crafted to meet the funding needs

related to your child's career and wedding.

2.4.2. Star Union Dia-chi Protection Insurance Plan

Your family’s security is your prime responsibility. Our protection solution helps you safeguard your family against unfortunate events in life. Choose our affordable term plan and ensure that your loved ones are well protected against these unfortunate events and the possibility of financial strain.

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Premier Protection Plan

An affordable term plan to provide financial assistance to your family in case of uncertainties

Accidental Death and Total and Permanent Disability Benefit Rider

A Traditional rider, which provides additional protection in case of unfortunate event of an accident

Family Income Benefit Rider

A Traditional rider, that provides protection in case of unfortunate demise

2.4.3. Star Union Dia-chi Savings Insurance Plan is a fixed term non-linked participating

plan that provides twin benefits of long-term savings and life cover.

We all save to meet different needs of our lives. Be it buying a

new home, or a dream vacation with your family or funding your

child’s education- saving is the first step to your big dream. SUD

Life offers you a bouquet of savings plans to choose from so that

you start planning for your future today.

Guaranteed Money Back Plan

A savings cum protection plan, which guarantees Money Back after every five years

Jeevan Ashray

An affordable life insurance plan that assures a steady growth of your savings

Jeevan Safar Plus

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A savings cum protection plan that guarantees 125% Sum Assured and more

2.4.4 Star Union Dia-chi Wealth Insurance Plan 

Two of the utmost priorities in our life are to create wealth and protect our families against uncertainties. Our wealth plans help you achieve these goals by investing your surplus money rightly so that you lead a comfortable life tomorrow.

Elite Assure Plan

A plan that allows you to choose how much supplementary income you need and for how long.

Dhan Suraksha Plus

A regular premium Unit Linked plan that helps you to build your wealth and protect your family.

Wealth Builder

A Unit Linked plan that gives you protection and wealth with one time investment.

2.4.5 Star Union Dia-chi Retirement Plan 

One of our major worry is whether we will be able to live the same life, without any compromises, even after our retirement. Opt for our retirement solutions today to lead a comfortable retired life tomorrow.

Assured Income Plan

A Non-Linked Non-Participating Guaranteed Return Endowment Assurance Plan

Immediate Annuity Plus

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An annuity plan, which offers you regular stream of income for life

GROUP PRODUCTS

Groups can be as diverse as employees of an organization, depositors and account holders of a bank, or members of a cooperative society or even an association.

Group Life Insurance plans at SUD Life offers solutions to you and your members helping them meet their credit protection and life insurance needs in a hassle-free and cost effective way securing peace of mind for them and their family members.

2.4.6 Star Union Dia-chi Credit Life Plan 

The Credit life insurance plans from SUD Life help you to protect your family against your loan liabilities. Now you can pass on your legacies and not liabilities, as in case of any uncertainties, these plans give you protection against the risk of liquidating your assets to repay your outstanding loan or debt.

Loan Suraksha

A plan that protects your family against your loans, in case of uncertainties.

Shiksha Suraksha 2

A plan that protects your family against the liability of your educational loan.

2.4.7 Star Union Dia-chi Term Plan

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Group term insurance plans of SUD Life provide life cover to groups of people. These schemes can be administered or taken by employees, associations, banks, societies etc and offer life cover at an affordable cost.

Group Term Insurance Scheme in lieu of EDLI

A beneficial protection plan for employees under the Employees Provident Fund scheme.

Group Term Insurance Plus

A Non-Linked Non-Participating Group Term Insurance Product.

Pradhan Mantri Jeevan Jyoti Bima Yojana

One year group term renewable plan

 

2.5 HISTORY & AWARD & RECOGNIZATION OF THE

ORGANIZATION

2009:-

- BOI signs MOU with Union Bank

-BOI - Tripartite MOU with Union Bank & Dia-chi Insurance

International

-BOI, Union Bank and Diachi Sign Joint Venture Agreement To

Establish A New Life Insurance Company In India

-Redhat Award 2009

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2010

Customer Showcase Award 2010

2011

India Insurance Award 2011

2012

Excellence in Financial Reporting 2012

Stars of the Industry 2012

2013

Technology Maturity Award 2013

2014

Excellence in Financial Reporting 2014

Bancassurance Leader of the Year Award 2014

2015

Award for Excellence in HR through Technology

Best Life Insurance Company in Private Sector by AVP news

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CHAPTER 3- DESCRIPTION OF THE BUSINESS PROBLEM

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3.1 DESCRIPTION OF WORK ASSIGNED

A Study of Consumer Behaviour in Relation to Insurance Products in

STAR UNION DIA-CHI

DEFINING CONSUMER BEHAVIOUR:

Consumer Behaviour may be defined as “the interplay of forces that takes place during a

consumption process, within a consumers’ self and his environment.

- this interaction takes place between three elements viz. knowledge, affect and behaviour;

- it continues through pre-purchase activity to the post purchase experience;

- it includes the stages of evaluating, acquiring, using and disposing of goods and services”.

The “consumer” includes both personal consumers and business/industrial/organizational

consumers.

Consumer behaviour explains the reasons and logic that underlie purchasing decisions and

consumption patterns; it explains the processes through which buyers make decisions.

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The study includes within its purview, the interplay between cognition, affect and behaviour

that goes on within a consumer during the consumption process: selecting, using and

disposing of goods and services.

Cognition: This includes within its ambit the “knowledge, information processing and

thinking” part; It includes the mental processes involved in processing of information,

thinking and interpretation of stimuli (people, objects, things, places and events). In our case,

stimuli would be product or service offering.

Affect: This is the “feelings” part. It includes the favourable or unfavourable feelings and

corresponding emotions towards a stimuli (eg. towards a product or service offering or a

brand). These vary in direction, intensity and persistence.

Behaviour: This is the “visible” part. In our case, this could be the purchase activity: to buy

or not a buy (again specific to a product or service offering, a brand or even related to any of

the 4 Ps).

The interaction is reciprocal between each of the three towards each other and with the

environment.

Studying consumer behaviour is important because it enables us to better focus our efforts

where we can get the results we want. By understanding consumer behaviour; our business

will provide the consumer with better goods and services. Better goods and services results in

more sales and therefore more profit. Not only is it important to improve goods and services;

it is necessary to know what type of products and what type of service to offer.

Consumer behaviour is strongly tied to their phase in the life cycle. Patterns of spending are

dictated by what is happening at a given time. Younger couples with no children have

different needs than those who have started a family. While teenagers and elderly people

have more discretionary income and can spend more freely.

Knowing this will help us decide who our core customer is. By using this information to

influence buying decisions; we can increase sales.

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It is also important to plan marketing strategies that are focused on this group. These

strategies should target our market and focus on niche marketing. Resources should not be

spent marketing to consumers outside of our target.

We will begin to understand our market when we have satisfied certain questions about our

customers. Why do they choose one product over the next? What impact does the role of

culture, education and advertising has on the decision to choose a product? How and why is

the consumer planning to use the product? Why are they loyal to a specific brand? What are

the risks involved in using or switching to our brand?

Having the answer to these questions will help us gain consumer confidence. We may have

the best product, but the consumer does not know this. We will speak to them through our

status in the community, our good-will, our price points and the way our product relates to

them. These factors will help to determine who will become our customers and who won't.

Consumers have needs and wants, and our objective is to identify the need and create the

want. Our ultimate goal is to influence consumer behaviour and convert this into profits for

our company. Businesses that can predict consumer behaviour have the edge over their

competitors. To predict consumer behaviour requires knowledge of the consumers’ values,

goals and lifestyle. Companies with this asset use it to develop better strategies, and are better

able to win over consumers. Hence, this study is very important.

SCOPE OF STUDY:

The scope of a subject refers to everything that is studied as part of that subject. When we set

out to explain the scope of consumer behaviour we need to refer to all that which forms part

of consumer behaviour.

Consumer behaviour includes not only the actual buyer and his act of buying but also the

various roles played by different individuals and the influence they exert on the final

purchase decision.

To define the scope of a subject it is important to set parameters or a framework within which

it shall be studied.. This framework is made up of three main sections-the decision process as

represented by the inner-most circle, the individual determinants on the middle Circle and the

external environment which is represented by the outer circle. The study of all these three

sections constitutes the scope of consumer behaviour. Here, we shall dwell on these

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constituents of the framework only briefly as they are explained in detail in the following

units.

 OBJECTIVE OF STUDY:

The main objective of this project is to study the consumer behaviour and various reactions of

customers with reference to Star Union Dia-chi Life Insurance Co. Ltd. And suggest ways to

improve its marketing efforts.

1. To study the trends in life insurance market

2. To study the profile of Star Union Dia-chi ’s customers.

3. To study the investors’ behaviour with respect to Star Union Dia-chi Life Insurnace.

4. To analyse the investors’ perception about Star Union Dia-chi .

3.2 DESCRIPTION OF WORK CARRIED OUT

Sample Size: 80 respondents responded to the pre-designed questionnaire.

Period of Study: 60 days (20 May - 30th July, 2015)

Location of Study: Pune and Mumbai, Maharashtra

Methodology:

Obtaining first hand information by pitching to customers and getting the

survey filled from them about the insurance products of StarUnion DIachi and

acquiring their views and beliefs about overall insurance products and hence

picking up the areas where we are good and also the areas where our way of

working can be improved in order to enhance customer satisfaction and increase

the business.

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FEEDBACK FROM RESPONDENTS:

i. Gender of Respondent

Male Female0

5

10

15

20

25

30

35

40

45

Gender

Chart 3.2.1 Gender of Respondent

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ii. Age of Respondent

18-30 31-46 47-53 54-550

10

20

30

40

50

60

70

Age

Age

Chart 3.2.2 Gender of respondent

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iii. Occupation

Occupation

StudentsProfessional(Engg./Doc./Lawyer)Home-makerGovt./Pvt. SectorSelf Employed

Chart 3.2.3 Occupation

iv. How did you come to know about Insurance products?

Friends/family

Television

Internet

Newspapers/magazines

Radio

Agents/field sales representatives

0510152025303540

Source

Source

Chart 3.2.4 Source of knowledge

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v. Do you currently have an Insurance Policy?

YES

NO

0 10 20 30 40 50 60 70

64

16

Possession of Policy

Possession of Policy

Chart 3.2.5 Possession of Policy

vi. If NO, why not?

Chart 3.2.6 Reason for not possessing policy

vii. If YES, which company’s?

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50% Returns are not lucrative enough

25% Not affordable

25% Not interested in buying it

44

8

4

8

4

4

4

8

Company

LICTATA AIGSBI LIFEBAJAJ ALLIANZICICI PrudentialMAX New YorkKotak MahindraStar Union Dia-chi

Chart 3.2.7 Company, whose Insurance products are purchased

viii. What prompted you to buy policy from that company?

Chart 3.2.8 Motivation to buy from that company

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Brand Image- 24Marketing guys convinced me- 12Past record of performance- 20

ix. Are you a customer of Star Union Dia-chi Life Insurance?

Customer of Star Union Dia-chi

YESNO

Chart 3.2.9 Customer of Star Union Dia-chi

x. If NO, why not?

I get better returns in other policies

I already have 1 or more policies and I am satisfied with them

I am not in the financial condition to invest right now

0 5 10 15 20 25 30 35

Reason

Reason

Chart 3.2.10 Reason for not buying Star Union Dia-chi ’s products

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xi. If YES, what do you like about our policies?

Chart 3.2.11 Reason for buying Star Union Dia-chi ’s products

xii. What suggestions would you give us to make our products better?

Sr. Number Suggestion Number of respondents

1. Min. Premium amount

should be less

16

2. Monthly premium payment

option should be available

18

Table 3.2.12 Suggestions for better products

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8Tax benefits are good

3It gives me good returns

5It is short term, hence it is hasslefree

xiii. Suggestions for better functioning of STAR UNION DIA-CHI

Sr. Number Suggestion Number of Respondents

1. More marketing/promotions

should be done

12

2. Policies should have

something unusual, as people

already possess policies from

other companies, so they are

not attracted by yours.

7

3. Should open more branches

at remote locations.

3

Table 3.2.13 Suggestions for better functioning

Limitations of Study:

1. The study was conducted only in the , Pune and Mumbai areas; hence the results

can be biased and hence not exactly accurate.

2. The survey was to be conducted on 100 respondents but due to time constraint and

unavailability of large number of respondents, the survey was filled by 80 people

only.

3. The survey includes more number of responses of people within the age group of

18-30. Hence, the study may be biased, as, at that age, income is less and people

take life insurance lightly.

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CHAPTER 4- CONCLUSION AND RECOMMENDATIONS

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4.1 OBSERVATION AND LEARNINGS

1. There is a good amount of people in the age group 18-30 who have not

bothered to buy a life insurance policy because they are very sure that

nothing would happen to them as they are fit and fine.

2. People prefer to buy a policy which has less years of premium payment

term.

3. More than life insurance, people are interested in a savings scheme. The

better savings plan they get, the more is their tendency to buy the policy.

4. Very less people are interested in a pure life insurance policy.

5. Tax benefits are also a major factor why people like to buy a policy.

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6. Customers are willing to pay through easy payment options such as ECS

and online payment so that their valuable time gets saved.

7. They are interested more in monthly premium payment options rather

than annually or half yearly.

8. Friends and family are major influencers on customers when it comes to

the decision of buying a life insurance policy.

9. LIC is still the market leader in life insurance sector.

10. Brand image and past record of performance are major stimuli in buying

decision.

11.Star Union Dia-chi has limited reach to prospective customers as

compared to other companies.

4.2 CONCLUSIONS

 The Summer Internship project has helped me gain huge practical knowledge

which can’t be gained only through books. This experience gave me an

opportunity to learn new things which provided me a peek into the corporate

culture. Being a fresher, I would never be exposed to a corporate environment if

it were not for this project. I thank Star Union Dia-chi life insurance for giving

me the chance to work with them as a summer intern and showing me the path

of knowledge and experience which will help me succeed in my career and

enter into a bright future.

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CONCLUSIONS ON CONSUMER BEHAVIOUR

1. While the fresh air of competition in every sector of economy brings in

major changes in consumer expectations, the insurance industry has

experienced a few unique aspects, such as regulation-inspired efforts to

educate insurance buyers and a vast change of skills and capabilities of

the intermediaries involved in the distribution.

2. With respect to life insurance, potential buyers are drivers of buying a

policy for one or more of these 3 major reasons: security of the money

invested, saving for one or more specific purposes and the availability of

tax benefits.

3. The challenge for the insurance companies is to address the motivating

factors of customers and come up with genuine solutions.

4. The potential buyer primarily expects that the saving should be a painless

process and that the money saved should be absolutely safe. The

challenge is to provide not only convenient payment options, but also

mechanisms that could offer some measure of protection and relief to the

customer if he is forced to disrupt the payment arrangement for

unforeseen reasons.

5. On the issue of customers’ perception of security of the money invested,

there are 2 important aspects. One is, how the features of the insurance

contract are put across the buyer (whether it is unit linked policy or

endowment oriented); and the second is, how to address effectively, the

question about dependability of the new generation companies that

potential new insurance buyers raise during sales calls. Both, the

insurance companies and the regulator need to address this behavioural

challenge very actively.

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6. Customers in major cities appreciate the need for higher level of

insurance cover with reference to their earning stage in working life.

7. Instances of customers requiring agents to arrange for loans against their

policies, or change nominations etc. are rare. Therefore companies need

to gear themselves to provide high service standards directly.

8. One aspect of customer service for new age companies that remains to be

tested widely is the claim payment record.

9. The entry of Pvt. players into insurance sector have expanded the product

segment to meet different level of requirements of customers. It has

brought greater choice to customers.

10.IRDA is also playing a very comprehensive role by regulating norms,

mandatory to private players, which increases confidence of customers in

the private companies.

4.3 RECOMMENDATIONS/ SUGGESTIONS

1. We need to tap the young crowd in the age group 18-30 and convince

them that buying a life insurance policy is necessary because life is very

unpredictable.

2. More plans should be made that involve less period of premium payment.

3. As friends and family members are major influencers of customers, our

advertisements and promotions should be family and friend-centred.

4. Group insurance policies like ‘full family insurance’ schemes should be

made.

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5. Our reach needs to be increased through social media (Facebook,

Twitter, YouTube campaigns), television, radio, newspapers etc.

6. Our insurance policies should have a range of premiums to suit every

pocket size.

7. In terms of distribution, we should increase the number of marketers-

more channels of distribution and more intermediaries.

8. Our advertisements should cover the benefits of our policies and what

differentiates our policies from those of other companies, in brief.

9. Our company should have more offices at smaller towns and uncovered

segments in the cities.

10. Mobile Commerce is the next big thing! We can have a mobile app

where our customers can get all the information related to our products as

well as pay their premiums.

4.4 BIBLIOGRAPHY

www.sudlife.in

www.staruniondia-chi.com/Press/PressRelease

http://www.insidebusiness360.com/index.php/why-it-is-important-to-study-consumer-behavior-8478/

http://www.moneycontrol.com/company-facts/

Yogakshema- LIC Handbook

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4.5 ANNEXURE

QUESTIONNAIRE

This is a short consumer behaviour survey of insurance products. Please do fill this, so that

we can provide you better products, services and satisfaction.

Age ____________

Gender

Male ______ Female _________

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Occupation :-

Students _______

Govt./Private Sector _____________

Self Employed _______________

Professional ____________

NRI _____________

Media Person __________

Other ________

How did you come to know about Life Insurance Policies ?

News Paper / Magazines ________

Television _________

Agents/Field Sale Representative _______

Telemarketing ________

Internet ________

Direct Mail _______

Radio _________

Direct sales Executives _________

Friends/ Family _______

Others ___________________________________________

Do you currently have an insurance Policy ?

Yes _____ No _______

If No , Why Not ?

Lack Of awareness _______

Returns are not lucrative enough _____

Not Appointed By Intermediaries ______

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Not Affordable ________

Others _____________________________________________________

If Yes, which company ?

LIC ______

ICICI Prudential _______

Bajaj Allianz _______

HDFC Standard _____

Birla Sun Life insurance _______

TATA AIG _________

SBI Life Insurance _________

Max Life Insurance _________

Aviva ________________

Kotak Mahindra _______________

Star Union Dia-chi _____________

Other ______________________________

What prompted you to buy policy from that company ?

Brand Image ____

Past record Of performance _____

My friends /acquaintances have bought from there ________

Market guys convinced me to buy ________

Impressed By ADS/ promotion _______

Desire to Buy from a new company ______

Others __________________________________________________

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