CHAPTER.

REVIEW OF LITRETURE ON INSURANCE

Lect. D.ramkumar(2003), “Relationship Marketing – The new mantra for life

insurance sector”. Department Of Management Studies, N.M.S.S. Vallaichamy
Nadir College, Nagamalai, Madurai studied the role of relationship marketing in
life insurance sector. In today’s impersonal marketplace, customer satisfaction,
retention and loyalty are rapidly become the thing of the past. Relationship
marketing brings them back to the forefront, providing easy-to-apply solutions
and strategies for establishing meaningful bonds with customers and turning
them into reliable, life-long partners. Relationship marketing can be defined as
the process to “identify and establish, maintain and enhance and, when
necessary, terminate relationships with customers and other stakeholders at a
profit so that the objective of all parties involved are met; and this is done by
mutual exchange and fulfillment of promises”. The important objectives of
relationship marketing are to acquire new customers, maintain and enhance
existing relationships with existing customers, reactivation of ex-customers, and
handling of customer terminations.

Dr. Ch.rajesham (2004), “changing scenario of India insurance sector”,

department of commerce & Business Management, University P G college,
Kakatiya University Khammam, Andhra Pradesh revised that insurance sector has
not only been playing a leading role within the financial system in India but also
has significant socio-economical function, making inroads into the interiors of the
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economy and is being considered as one of the fast developing area in the
Indian financial sector too. It has also been facilitating economic development
with an objective to build an efficient, effective and a stable insurance business in
India as well as a strong base

to both the needs of the real economy and socio-economic objective of the
country. It has been mobilizing long term saving through life- insurance to support
economic growth and also facilitating economic development, insurance cover to
a large segment of people, while the non-life insurance and reinsurance firms in
India are main providers of risk financing for manmade disasters and natural
catastrophes. Thus, both life insurance and non-life insurance are found playing a
significant role in avoiding or facing the risk of life and business enterprises and
also aiding to certain extents for their smooth sailing.

J.Mehra (2005), “innovations in life insurance industry”, the financial express, new
delhi studied that economic growth in the emerging markets has time and again
outpaced the developed and industrialized countries. Alongside the rising
importance of emerging economics, their life insurance sectors are also drawing
more attention. It’s been four years since the life insurance sector was opened up
for private players in India. The reasons that prompted the government to bring in
reform in this sector are well known. While the public sector life insurance
companies made enormous contribution in the spread of awareness about
insurance, and expanded the market, it was recognized that their reach was still
limited, the range of product offered restricted to the services to the consumer
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inadequate. It was also felt that the rapid economic growth witnessed in the
90s couldn’t be sustained without a thriving insurance sector.

Today, the private accounts for nearly 20% of the market. The market share of the
private players has to be seen in the context of this enlarged market. There has
been a flurry of private players providing a wide range of innovation products,
services and customized solutions.

Keerthi, P. and Vijayalakshmi, R., “A Study on the Expectations and Perceptions of

the Services in Private Life Insurance Companies, SMART Journals, Vol. 5, 2009. A
study conducted by Keerthi, P. and Vijayalakshmi, R. (2009)90 “A Study on the
Expectations and Perceptions of the Services in Private Life Insurance Companies”
reveals that the policyholders’ expectations are well met in the case of certain
factors reacting to service quality. But in the case of other variables, there exists a
significant gap which means that policyholders have experienced low levels of
service as against their expectations. If all the players in the Life insurance
industry focus on the effective delivery of services, they can win the hearts of
customers and anticipate their increased market share.

Ramanathan, K.V., A Project on “A Study on Policyholders Satisfaction with Special

Reference to Life Insurance Corporation of India, Thanjavur Division,
Bharathidasan University, 2011. research has resulted in the development of a
reliable and valid instrument for assessing customer perceived service quality,
awareness level, and satisfaction level of customers towards life insurance

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industry. Here, service quality needs to be measured using a six dimensional
hierarchal structure consisting of assurance, competence, personalized financial
planning, corporate image, tangibles and technology dimensions. This would help
the service managers to efficiently allocate resources, by focusing on important
dimensions first. There is no right and wrong in this. The success of marketing
insurance depends on understanding the social and cultural needs of the target
population, and matching the market segment with the suitable intermediary
segment.

R.S. Arora,“Marketing of Services: A Study of LIC in Jalandhar Division”, Ph.D.

Thesis Submitted to Guru Nanak Dev University, Amritsar, 2008. R.S.Arora64
(2008) in his thesis entitled, “Marketing of Services: A Study of LIC in Jalandhar
Division” has explained that service quality to be a multidimensional construct.
The research indicated that the five dimensional structure of service quality was
not only industry specific but also country specific. The results also showed that
out of the seven factors used to define service quality, responsiveness had the
strongest correlation and was the best predictor of the overall quality. Product
convenience

was found to have the greatest influence on customer satisfaction followed by

assurance and tangibility. The results regarding the intermediaries showed that
the agents attached 56 more weight to all aspects as compared to bank
employees. The agents gave more importance to good customer service and
regular updating of knowledge, whereas the bank employees stressed more on
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providing objective information. No significant difference was found in the
demands of customers of both agents and bank employees. The data analysis
revealed that agents had better success rate as compared to the bank employees
in selling products and that agent’s perceived lower competitive pressure than
bank employees.

R. Kumar, “Performance Evaluation of General Insurance Companies: A Study of

Post-Reform Period”, Ph.D. Thesis Submitted to Punjabi University, Patiala, 2010.
R. Kumar65 (2010) in his thesis entitled, “Performance Evaluation of General
Insurance Companies: A Study of Post-Reform Period” has explained that the
public sector exhibited higher underwriting losses in the post-reform period than
the pre-reform period. The higher investment return of the public sector general
insurance companies compensated their underwriting losses. The author had
suggested that productivity of the private insurers was higher than the public
insurers due to their hi-tech environment and modern technology features
supported by them. The study suggested methods to improve the performance of
these companies.

V. Singla, “Impact of Service Quality on Customer Loyalty: A Study of Hotel

Industry in Punjab and Chandigarh”, Ph.D. Thesis Submitted to Punjabi University,
Patiala, 2010 . Singla 66 (2010) in her thesis entitled, “Impact of Service Quality on
Customer Loyalty: A Study of Hotel Industry in Punjab and Chandigarh” has
modified the SERVQUAL scale to include six dimensions. The gap scores were
significant for a number of attributes and these attributes were different for
different categories of hotels. The performance was found to be below the

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expectations of the customers. So, they were 57 unable to deliver the service
according to customers’ expectation. The study also showed that the managers
over estimated and were also too self assured about the delivery of a particular
service. Lastly, the study had suggested measures for improving customer loyalty.

M.K. Brady and C.J. Joseph, “Some New thoughts on Conceptualizing Perceived
Service Quality; A Hierarchical Approach”, Journal of Marketing, Vol. 65, 2001,
pp.34-47. M.K. Brady and C.J. Joseph58 (2001) in their article titled, “Some New
Thoughts on Conceptualizing Perceived Service Quality; A Hierarchical Approach”
have concluded that evidence proved that customers form service quality
perceptions on the basis of the three primary dimensions: interaction,
environment and outcome and customers based their evaluation of these primary
factors on their assessment of three corresponding sub factors. The combination
of all these constitute the customers’ overall perception of the service quality.
The results also indicated that reliability, responsiveness and empathy are
important for providing superior service quality.

Shobhit and Sanjay Shukla, “Failure of Private Insurance Players in Rural Areas- An
Analysis”, Insurance Industry-The Current Scenario, ICFAI University Press,
Hyderabad, 2005, pp.9-19. Shobhit and Sanjay Shukla (2005) conducted a study in
Lucknow city and its adjoining rural areas to expose the reasons for the failure of
insurance players of private sector in attaining a significant share in the rural
market. The study revealed that there is a major difference in the objectives and
expectations between rural and urban policyholders. Rural population showed
high bias towards low premium and maximum risk coverage. In rural areas private

6
players have not achieved much success. The private players have not been
able to provide policies preferred by rural people. In urban areas, for the
conservative consumers insurance is a tax saving device. In urban areas
consumers belonging to the middle income group prefer policies of public sector
players and only high income group preferred private sector players. The study
also revealed that in urban areas the efficient customer service helped the 24
market penetration by private players.

Srinivasan K. K. “Changes in the Insurance Market Globally-Regulators’

Perspectives”, IRDA Journal, October 2006, pp.12-15. Srinivasan K.K. (2006) in his
article attempts to identify the key areas of change that require the regulator’s
urgent attention. The regulator has to be supportive of industry development.
The regulator also has to play a positive role in enhancing international
competitiveness of the players. The regulator also has to monitor the rural and
social obligations of the insurers.

Khansili, Dinesh Chandra, “A New Way of Thinking-Innovation in Product and

Pricing by the LIC”, IRDA Journal, Vol.11, No. 6, May 2004, pp.25-26 . Khansill
(2004) examines the innovation in product design and pricing by LIC. Innovation in
life insurance market is attributed to the 37 initiatives taken by new private
companies. The private life insurance companies have joint venture partners from
countries operating in US, UK, Germany, Canada and Australia. The practices of
the life insurance market of these countries are reflected in the products made
available in our country by private life insurance companies.

Reddy, Appi V., Marketing of Life Insurance Services, Printwell Publishers,

Jabalpur, 1998 Reddy (1994) in his study makes a comprehensive analysis of

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marketing programmes of LIC of India to market its products to different
segments of customers. He has examined the problem on the basis of evaluation
of the perception of different customers’ segments in respect of different
components of marketing mix that are essential to meet the 39 challenges posed
by intangibility in service-provider-customerinteraction and customer
involvement in service consumption and production. The results of the study
suggest that policies with profit plans account for about ninety percent of the
total policies sold and policies without profit plans account for about ten percent
of the same. Segmentwise analysis of preference of policies also suggest that
majority of customers in all segments prefer policies with profit plans. Analysis of
motives for buying insurance policies indicates that risk coverage is the most
important motive in the selection of life insurance policies.