DECLARATION

This is to declare that the report entitled “ANALYSIS OF

CONSUMER BEHAVIOUR WITH RESPECT TO PRIVATE
INSURANCE MARKETING” is made at the MAX NEW YORK
LIFE INSURANCE in the fulfillment of completion of the summer
Internship Program by Nirav Upadhyay, under the supervision and
guidance of Mr. Anmesh Andhariya (Sales Manager), Mr. Hemang
Desai (Training Manager). I confirm that this report truly
represents my work and accomplishment undertaken as a part of
my summer Internship program in Max New York Life Insurance.
This work is not a replication of work done previously by any
other individual or work.

1
 PREFACE

To be an MBA student is matter of pride because you are in a field which helps you to
develop from a normal human being into a disciplined and dedicated professional. In the
management field you cannot create success stories if you are not a good learner. You need to
be a good learner to sharpen your knowledge in the particular field to achieve and attain
desired goals and heights.

Mere bookish or theoretical knowledge cannot help you in any field whether it is
management, technology, research or any other field. The only thing that can help you is
having a sound practical knowledge of the concerned field. As part of my learning in
management field and also a requirement of the MBA program, I have been very fortunate to
receive practical knowledge in MAX NEW YORK LIFE INSURANCE COMPANY LTD.
AT BHAVNAGAR BRANCH.

I received my training at Max New York Life as a requirement of the MBA

curriculum. This training has made me clear the difference between the theoretical knowledge
and the practical scenario, making me aware of the importance of practical working
conditions/situations.

I have tried to present whatever knowledge I gained, and learned at MAX NEW
YORK LIFE INSURANCE LTD during my training period in a very systematic manner.

2
 Acknowledgement

I am deeply indebted my deep regards to Mr. Amitoz singh, Branch Head of Max
New York Life, Bhavnagar, for providing us facilities, support and guidance to work with
Max New York Life Insurance Ltd. I am highly obliged to him for granting me to undertake
my training at Bhavnagar Branch.

Words are not enough in expressing my profound sense of thankfulness to Mr.

Animesh Andhariya, Sales Manager, and Mr. Hemang Desai, Training Manager, for their
excellent guidance and support throughout the training.. I am highly grateful to them for
exemplary supervision and stimulating training sessions. I am indebted to them for
encouraging and initiating us to undertake this project. I remain grateful for their invaluable
support, guidance, encouragement, inspiration and help rendered to us at both training and
personal level.

I am also thankful to the both of Associate partners, other sales managers, and other
employees of Max New York Life for providing great support and help in completion of the
training.

Nirav upadhyay

3
 Table of content
Introduction to Industry…………………………………………………05
 Insurance …………………………………………………………06
 Life Insurance …………………………………………………...08
 Insurance In India ………………………………………………09
 List of top Insurance companies in India ……………………..14
 Key Terminologies ……………………………………………...17

Introduction to Company ………………………………………………. 19

 History …………………………………………………………..20
 Vision, Mission ………………………………………………….21
 Organization Structure ………………………………………...24
 Human Resource Dept. …………………………………………26
 Marketing Department …………………………………………30

Research Methodology ……………………………………………………34

 Objectives ………………………………………………………..35
 Literature Review ……………………………………………….36
 Sampling …………………………………………………………39
 Data Analysis …………………………………………………….40
 Limitations ……………………………………………………….50

Bibliography ………………………………………………………………..51

4
 Insurance Industry
Introduction and development in India

5
 Insurance Industry

The business of insurance is related to the protection of the economic value of asset.
Every asset has a value. The asset would have been created through the efforts of the owner,
in the expectation that, either through the income generated there from or some other output,
some of his needs would be met. In the case of the factory or a cow, the production is sold and
income is generated. In the case of a motor car, it provides comfort and convenience in
transportation. There is no direct income. There is a normally expected life time for the asset
during which it is expected to perform. The owner, aware of this, can so manage his affairs
that by the end of that life time, a substitute is made available to ensure that the value or
income is not lost. However, if the asset gets lost earlier, being destroyed or made non-
functional, through an accident or other unfortunate event, the owner and those deriving
benefits there from suffer. Insurance is a mechanism that helps to reduce such advise
consequences
.

The concept of insurance is intimately related to security. Insurance acts as a

protective shield against risk and future uncertainties. Traditionally, a risk-averse behavior has
been a characteristic feature of Indians who preferred a "low & certain" disposable income to
a "high & uncertain" one.

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  What is insurance?
 Protection of economic value of assets
 Mechanism to reduce impact of adverse events on value generating assets
 Purpose and need?
 PERIL perils are uncertain
 RISK damage to assets due to these perils.
 Insurance is a function of UNCERTAINITY.

If there is no uncertainty, it cannot be insured

 With insurance people who are exposed to the same risk come together and agree that
if any member suffers loss the others will share the loss and make good the person
who suffered the loss.
 Human life is a income generating asset which can be lost due to premature death.
Death is certain – timing is uncertain
 Life insurance does not protect the life – it tries to minimize the impact of an untimely
death on those dependent on that income.

 Basic principles of insurance

 People are exposed to risks and the consequences are too difficult for one
individual to bear
 No one person should be in a position to make the risk happen.

 Insurance - the business

 Brings together people with common interests
 Collect a contribution – premium
 Pay compensation – claims
The insurance company is the trustee – managing the common fund.

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  Role in Economic development.
 Life insurance is a major instrument in mobilizing the savings of the people.
These savings are channeled into investments for economic groups.
 The strengths of life insurance is in the fact that huge amounts are collected
and pooled together for the benefit of the policy holders.
 The insurance company is in the role of fiduciary – that all decisions be made
for the benefit of the community.

Meaning of life insurance:

There are three parties in a life insurance transaction: the insurer, the insured, and the
owner of the policy (policy holder), although the owner and the insured are often the same
person. Another important person involved in a life insurance policy is the beneficiary. The
beneficiary is the person who will receive the policy proceeds upon the death of he insured.

Life insurance may be divided into two basic classes – term and permanent.

 Term life insurance provides for life insurance coverage for a specified term of years
for a specified premium. The policy does not accumulate cash value.
 Permanent life insurance is life that remains in force until the policy matures, unless
the owners fails to pay premium when due.
 Whole life insurance provides for a level premium, and a cash value table included in
the policy guaranteed by the company. The primary advantages of life are guaranteed
death benefits, guaranteed cash values, fixed and known annual premiums, and
mortality an expense charges will not reduce the cash value shown in the policy.
 Universal life insurance (UL) is a relatively new insurance product intended to provide
permanent insurance coverage with greater flexibility in premium payment and the
potential for a higher internal rate of return. A universal life policy includes a cash
account.

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Insurance in India

Hence insurance has become a close associate of Indians since 1818, when Oriental
Life Insurance Company was started by Europeans in Kolkata to cater to the needs of their
own community. The age was characterized by intense racial discrimination as Indian
insurance policy holders were charged higher premiums than their foreign counterparts. The
first Indian Insurance Company to cover Indian lives at normal rates was Bombay Mutual
Life Assurance Society which was established in the year 1870.

Important milestones in the Indian life insurance business

1912: The Indian Life Assurance Companies Act came into force for regulating the life
insurance business.

1928: The Indian Insurance Companies Act was enacted for enabling the government to
collect statistical information on both life and non-life insurance businesses.

1938: The earlier legislation consolidated the Insurance Act with the aim of safeguarding the
interests of the insuring public.

1956: 245 Indian and foreign insurers and provident societies were taken over by the central
government and they got nationalized. LIC was formed by an Act of Parliament, viz. LIC Act,
1956. It started off with a capital of Rs. 5 crores and that too from the Government of India.

1999: The Insurance Regulatory and Development Authority (IRDA) Act of 1999 deregulated
the insurance sector in India and allowed the entry of private companies into the insurance
sector. Moreover, the flow of Foreign Direct Investment (FDI) was also restricted to 26 % of
the total capital held by the Indian Insurance Companies.

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Growth of Indian Life Insurance Sector

The life insurance sector of India has added up to 4.1% of GDP in 2009. A
considerable growth was recorded since the time the sector was opened for the private
companies. The contribution in FDI by the life insurance segment was recorded at US$
1.3 billion, even though the government is likely to increase the FDI cap limit from 26%
to 49%, a bill of which is pending at Rajya Sabha.

As per the data provided by IRDA, the business of life insurance companies had a
growth of 22% at US$ 12 billion in April-November 2009-10, in comparison to US$ 9.8
billion during the same period last year. Such a huge of single premium policies led the
industry to record.

FDI Policy in Indian Life Insurance Industry

The FDI limit in the insurance sector has been capped at 26% for the foreign
marketers but the government is thinking to increase it to 49% and a bill of this offer is
pending at Rajya Sabha. The LIC is still the major company in the life insurance sector
but with such an emergence of the private companies, providing a range of moneymaking
policies and investment chances for people from all walks of life the situation is fast
changing. The Unit Linked Investment Plans (ULIP) offering life cover as well as scope
for saving and investment deserves extra acknowledgement in this issue. Furthermore,
with minimum lock-in period of three years such plans are subjected to avoid miss usage
of important tax benefits.

10
Key features of life insurance:

1. Nomination:

When one makes a nomination, as the policy holder you continue to be the owner
of the policy and the nominee does not have any right under the policy so long as
you are alive. The nominee has only the right to receive the policy money in case
of death within the term of policy.

2. Assignment:

If your intention is that your policy money should go only to a particular person,
you need to assign the policy in favor of that person.

3. Death benefit:

The primary feature of the life insurance policy is the death benefit it provides.
Permanent policies provide a death benefit that is guaranteed for the life of the
insured, provided the premium has been paid and the policy has not been
surrendered.

4. Cash value:

The cash value of a permanent life insurance policy is accumulated through out
the life of the policy. It equals the amount a policy owner would receive, after any
applicable surrender charges, if the policy were surrendered before the insured‟s
death.

5. Dividends:

Many life insurance companies issue life insurance policies that entitle the policy
owner to share in company‟s divisible surplus.

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6. Paid – up additions:

Dividends paid to a policy owner of a participating policy can be used in

numerous ways, one of which is toward the purchase of additional coverage
called paid up additions.

7. Policy loans:

Some life insurance policies allow a policy owner to apply for a loan against the
value of their policy. Either a fixed or variable rate of interest is charged. This
feature allows the policy owner an easily accessible loan in times of need or
opportunities.

8. Conversion from term to permanent:

When in need of temporary protection, individuals often purchase term life

insurance. If one owns a term policy, sometimes a provision is available that will
allow her to convert her policy to a permanent one without providing additional
proof of insurability.

9. Disability waiver of premium:

Waiver of premium is an option or benefit that can be attached to a life insurance

policy at an additional cost. It guarantees that coverage will stay in force and
continue to grow.

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Future of Indian Insurance Market

As per the report of “Booming Insurance Market in India” (2008-11),

concentration of insurance markets in many developed countries of the world has made
the Indian insurance market more magnetic in terms of international insurance players.
Furthermore, the report says,

 Home insurance sector is likely to achieve a 100% growth since home insurance
are made compulsory for housing loan approvals by the financial institutions.
 In the coming three years health insurance sector is all set to become the second
largest business after motor insurance.
 During the period of 2008-09 to 2010-11 the non life insurance premium is likely
to have a growth of 25%.

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List of top Insurance Companies in India.

Following are the top insurance players in India.

Life Insurance Corporation of India

The Life Insurance Corporation of India is undoubtedly India‟s largest life

insurance company. Fully owned by government, LIC is also the largest investor of the
country. LIC has an estimated asset of Rs. 8 Trillion. It also funds almost 24.6% of the
expenses of Government of India. Established in 1956 and head quartered in Mumbai,
Life Insurance Corporation of India has 8 zonal offices, 100 divisional offices, 2048
branch offices and a vast network of 10,02,149 agents spread across the country.

Tata AIG Insurance Solutions

Tata AIG insurance solutions, one of the leading insurance providers in India,
started its operation on April1, 2001. A Joint Venture between Tata Group (74% stake)
and American International Group inc. (AIG) (26% stake). Tata AIG Insurance Solutions
has two different units for life insurance and general insurance. The life insurance unit is
known as Tata AIG Life Insurance Company Limited, whereas the general insurance unit
is known as Tata AIG General Insurance Company Limited.

AVIVA Life Insurance

AVIVA Life Insurance, one of the popular insurance companies in India, is a joint
venture between the renowned business groups, Dabur and the largest insurance group in
the UK, aviva plc. AVIVA Life Insurance has an extensive network of 208 branches and
about 40 Bank assurance partnerships, spread across 3,000 cities and towns across the
country. There are more than 30,000 Financial Planning Advisers (FPAs) working for
AVIVA Life Insurance. It offers various plans like Child, Retirement, Health, Savings,
Protection and Rural.

14
MetLife Insurance

MetLife India Insurance Company Limited is another popular player in Indian

insurance sector. A joint venture between the Jammu and Kashmir Bank, M. Pallonji and
Co. Private Limited and other private investors and MetLife International Holdings, Inc.,
MetLife Insurance offers a wide range of financial solutions to its customers including
Met Suraksha, Met Suraksha TROP, Met Mortgage Protector and Met Suraksha Plus etc.
It has its branches situated over 600 locations across the country. More than 50,000
Financial Advisors work for MetLife.

ING Vysya Life Insurance

ING Vysya Life Insurance entered into the Indian insurance industry in
September 2001. A joint venture between ING Group, Ambuja Cements, Exide Industries
and Enam Group, ING Vysya Life Insurance uses its two channels, viz. the Alternate
Channel and the Tied Agency Force to distribute its products. The first channel has
branches in 234 cities across the country and has got 366 sales teams. On the other hand,
the later one has more than 60,000 advisors. Currently, ING Vysya Life Insurance has tie
ups with more than 200 cooperative banks.

Max New York Life

Max New York Life Insurance Company Ltd. is one of the top insurance
companies in India. A joint venture between Max India Limited and New York Life
International (a part of the Fortune 100 company - New York Life), Max New York Life
Insurance Company Ltd. started its operation in April 2001. It currently has around 715
offices located in 389 cities across the country. It also has around 75,832 agent advisors.
Max New York Life offers 39 products, which cover both, lie and health insurance.

15
Birla Sun Life Financial Services

Birla Sun Life Financial Services is a joint venture between Aditya Birla Group
and Sun Life Financial Inc, Canada. It has got an extensive network of more than 600
branches. More than 1,75,000 empanelled advisors work for Birla Sun Life, which
currently covers over 2 million lives. Lives

Bajaj Allianz

Bajaj Allianz is a joint venture between Bajaj Finserv Limited and Allianz SE,
where Bajaj Finserv Limited holds 74% of the stake, whereas Allianz SE holds the rest
26% stake. Bajaj Allianz has been rated iAAA by ICRA for its ability to pay claims. The
company also achieved a growth of 11% with a premium income of Rs. 2866 crore as on
March 31, 2009.

Bharti AXA Life Insurance

Bharti AXA Life Insurance, one of the top insurance companies in India, is a joint
venture between Bharti group and world leader AXA. Bharti holds 74% stakes, whereas
AXA holds the rest of 26%. Bharti AXA has its branches located in 12 states across the
country. It offers a range of individual, group and health plans for its customers.
Currently more than 8000 employees work for Bharti AXA Life Insurance.

16
Key Terminologies in insurance:

Propose:
He is a person who wants to be insured is called proposer.
Life to be insured:
He is a person who is insured for life.
Under Writer:
He is a person who decides/selects either to give insurance or not or to whom that
should be given.
Premium:
The first installment to have an insurance policy
Renewal Premium:
It is the other installments which are required to be paid to continue a policy.
Sum Assured:
S.A. is the amount of insurance
Surrender Value:
Surrender value is the amount of return which a policy holder receives at the time
of surrendering his policy during his policy period.
Sum at risk:
The excess of sum assured over the fund value of the policy is called sum at risk.
Sum assured – Fund Value

Level Death Benefit:

Under death benefit, at time of policy holder‟s death sum assured or fund value of
policy whichever is higher is given to the policy holder‟s nominee that is called level
death benefit.

17
Top-up:
In ULIPs customer is allowed to put any extra amount in the policy except
premium. That added amount paid in policy is called top-up.

Actuary:
He is the person who
 Prepares plans
 Decides premiums
 Keeps eyes on company‟s law obedience
 Valuation of firm
 Prepares rules and regulations

Traditional Plans

 The investment of a part of a policy is made in debt market.

 The traditional policy ensures certain specific return after certain period.
 The investment in traditional policy is considered safer than other.

ULIPS

 Policy in which the investment is made in mutual Fund.

 It also called “variable insurance plan.”
 On maturity person gets “Fund Value”

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Max New York Life Insurance

Company Profile

19
 Max New York Life Insurance Ltd.

The company Max New York Life Insurance is a joint business enterprise
between India's leading Multi-business Corporation Max India Limited and New York
Life, a Fortune 100 Company. The companies merged in 2000, the company started its
commercial operations in India one year later in April, 2001

Max India Ltd. New York Life Insurance

(74%) (26%)

Max New York Life Insurance Company in India

Max New York Life Insurance Company has,

 87,688 agent advisors at 712 offices across 389 cities in the country.
 36 referral tie-ups with banks,
 24 partnership distribution and
 Alliance marketing relationships.

 The company has put in place a unique model of distribution to deepen our rural
penetration and has 137 offices dedicated to rural areas.
 Currently the company has more than eleven thousand employees in India working in
the various insurance divisions.

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Vision:
Vision of the company is to be the most admired Life Insurance Company in India.

Mission:
To achieve this vision the company has some ethical and admirable steps and
procedures. That will add a further star in company‟s value in the market.

The company’s way towards achievement of vision.

 Superior sales process

 Detailed need analysis
 Products tested for protection orientation
 Comprehensive training for employees and agents`

21
  Robust customer management process blueprint of service leadership
 Transparent performance management process
 Fair terms of business
 Adequate capitalization
 Prudent investment practices/asset quality.

Max Life Insurance Solutions

Max New York Life Insurance provides individual, group, life and health insurance
options to customers in India. Other services like investment plans, retirement plans, insurance
plans for children, group credit life plan, health insurance plans, saving plans, rural plans, group
gratuity cum term insurance plan, protection plans and deposit linked insurance plans to groups
are also on offer.

The plans offered by insurance companies are divided into two parts those are Traditional
and ULIPS.

MNYL’s investment Portfolio:

Sr. Investment Plan Equity Market Govt. Security

1 Growth Super 100% 0%
2 Growth Fund 70% 30%
3 Balanced Fund 40% 60%
4 Conservative Fund 15% 85%
5 Secured Fund 0% 100%
6 Money Market Fund 0% 100% RBI‟s secu.

22
Switch:

When customer shifts his investment from any of the above plans to any other is called
switch. For e.g. from growth super to balanced or from secured to balanced.

Redirection:

In redirection the customer is allowed to change the investment fund. His other premiums
may be in other funds and new premium may be invested in other is called redirection.

Dynamic Opportunity Fund:

Under this, the rights of switching from one policy to other are given to the fund
manager.

23
 Organization Hierarchy of the Branch

Branch Profile:

Partner/Br. Manager: Mr. Mayukh Mathur

Associate Partners: Mr. Nilesh Belani
Mr. Arun
Training Managers: Mr. Hemang Desai
Mr. Shaktisinh Gohil
Deputy Manager: Mr. Digant Pancholi
Operation Department: Mr. Munjal Parmar
Mr. Dharmesh Parmar

24
Sales Managers Mr. Animesh Andhariya
Mr. Jayesh Pandya
Mr. Shashikant Dave
Mr. Bhavin Joshi
Mr. Ankur
Mr. Sohil
Mr. Keyur Patel
Mr. Manish Trivedi
Mr. Sanjay Parekh

25
 MNYL’s Recruitment Process

1. Identification of vacancies:

In MNYL the Sales Managers are the H.R.Officers. They are required to make quality
recruitment for the company. The Sales Managers have to contact the consultants or from their
relatives or any other social group wherever they belong.

2. Preparing Job Description

The sales managers prepare job description and advertise it to all the possible areas from
where they can get a quality agent. For advertising the job they can make them aware about the
future growth, levels of commissions available, easy time management for the work.

26
The candidates were selected on the basis of the following criteria.
 Education: 12th pass.
 Age: 25 yrs.
 Must be inhabitant of the city for last 5 years.
 Should be married. (In many cases the selectors have to be liberal for selection for non
married persons)

3. Short Listening on Q-Scores

The candidate willing to join as an agent is asked to attend a short listening where he is
scanned for his potentials in the insurance market. There the person may be made aware of the
current situation of insurance market. Q-scores refer to the quality scores of the candidate to join
the market.

4. Conducting the interview:

Q-scores will put the candidate to the next stage of the selection process. That is the
interview. The interview will be taken by the partner (Br. head) or the associate partner of the
branch. After interview the candidate will be asked to fill the P-200, the list of initial customers‟
list.

5. Scheduling the training:

Selection of the candidate will allow him to attend the training held by the MNYL‟s expert
training managers. The expert Training Managers will provide them the training for IC 33, the
examination by IRDA, which a candidate is required to pass to become an agent. With that the
candidates will be taught the sales process, the follow of a unique sales procedure.

27
 6. IRDA’s online examination:
IRDA the regulating authority of insurance in India holds the examination which is required
to be passed by the candidates who wants to be an agent. The candidate is required to pass the
examination with minimum 50% to be an agent or to get agent license.

7. Final Selection:
Passing the examination will allow a candidate to become an agent of the life insurance
company. With that the agent will get an agent code in his account the agent will enter the
policies on which he will get a commission.

Induction of the new agent:

The new agent is not directly put to the field but the sales manager is required to go with
the agent. The agent is required to make calls from his/her initial customers‟ lists and they are
required to fix the appointment with the client. There the sales manager will show a demo for
how to deal with the customers to get their positive response. That will be done by the sales
managers twice or thrice. After that the agent will go along with sales mangers and show their
way of approaching the customers. With that the sales manager will observe the way of
convincing of the agent. The role of sales manager is to identify the need improvement in agent
and will take suitable steps for improvement.
The sales managers are also required to fill a feedback form so that evaluation can be
reported to associate partner and partner. Thus Max New York Life is having a unique induction
process.

28
 Training and Development at Max New York Life

As the candidate is selected and get the selection approval from partner and associate
partner, the candidate will be put to the initial training. There Mr. Hemang Desai, the training
manager of Bhavnagar branch, will provide them training of IC-33. It is the training which will
provide the knowledge to the candidate about insurance background and other laws related to the
insurance industry. The initial training is for 15 days and then the candidate has to appear in the
licentiate exam. The exam is conducted online and the results are declared immediately as the
exam is over. The candidate has to secure minimum 50% marks out of total. This exam will
allow the candidate to have a license and work as an agent advisor for that company.

After the initial training, the agents are provided training for further addition of
knowledge for insurance business. The training is called FTS (Flight to Success). Under this
training, the agents are taught to acquire new skills for successful closing of insurance deals. The
agents are taught how to develop the skills for ice-breaking.

The trainings are not provided with such special timings but every month the agents are
put to training sessions called „gurukul‟. Under which the agents are provided knowledge of new
legal and political changes of insurance industries.

29
 Marketing Department
The most important area or the department of any insurance company is the marketing.
The marketing department is the core element of the insurance industries. In the initial training
the agents are made familiar with the sales process of the company. The marketing department of
MAX NEW YORK LIFE INSURANCE LTD has the following distribution channel.

Branch or an agency finds the opportunity to develop the market of the company in a
particular region considering the requirement of insurance. For the same Sales managers are
there to find out the individual agents or the corporate body to make the sales on behalf. The
advisors are the individuals who contact and meet suitable customer for the insurance.

To sell Max New York Life has a unique sales process. As the agent is selected, he is
given P-200 (Project 200) to fill. P-200 includes a list prepared by the agent of his initial
customers, from his natural and referral market. As the agent is put to field work, he starts his
calling from that list.

30
 1. Prospecting:
Prospecting is a process of identification of probable customers of for the agent. The agent
has to always look for probable customer in his close relations and also from his personal and
professional relations. Not only that he has to continue ask for the references form these relatives
and friends or any other business party. Prospecting includes very important factors for
identifying proper or valid customer. That includes background of that person, he must have his
primary information, which includes information regarding his income, his family needs, and
family members etc. basically the agent is asked to identify the customer between age group 25
to 45. He should be married and may have children. The person must fit in NOPP of the agent.

31
 N – Need
O – Opportunity
P – Physically fit
P – Paying capacity

2. Approach:
As the person is fitting to NOPP of the agent, he is required to approach that person on phone
to have an appointment of that person. Approach talk includes the information about him and the
company background. With that he is also required to provide some background of the reason
why he has called the person and ask for suitable time for meeting.

3. Need Identification:
Need identification includes whether that person is really capable of paying the insurance
premium or not. There may be several reasons for surrendering the policy of lapse of policy.
With that the person who is being approached for insurance policy, must have need of
purchasing the insurance. For e.g as indicated above that a person must be a married one so that
he has his family and his duties to his family and the insurance may prove truly helpful to his
family after death or falling physically disable.

Need identification includes many important steps to be followed for the clear cut idea about
the need of the particular person.

32
 Fact finding sheet:
This is one of the very useful instruments of need identification. It includes the
comparison between the income sources of future and expected certain expenditures. The fact
finding sheet works as follows.
The fact finding sheet compares the expected sources of incomes and expected expenses.
Is includes the expenses such as education of children, marriage of children, retirement planning,
per month expenditure, rent of the house if has. While income includes, insurance policies if a
person is having, sources of continuous incomes, investment in shares or mutual funds, fixed
deposits. By comparing both of these the difference is find out and that is called a short fall.
Short fall will show the insurance need of that person.

4. Solutions:
Based on the need identification of the person, the agent is required is required to prepare
solution which satisfies his future needs. The agent gets all the required information along
with paying capacity of that person and on those bases he finds out most effective solution
and provides the information to that client. As its policy of the company not to have a plan
suggestion on the first interaction with the customers, the agent is required to have an idea
about the background of the client and as a part of customized solution he prepares or finds
the best suitable plan for the same.

5. Decision:
For agent its life blood to close the deal in his favor. Now the agent will have to
concentrate on the intelligence of the client. The plan found suitable by the agent for that
particular client, must provide the proper understanding to the client. It‟s a responsibility of
the agent to explain all probable benefits and possible out put of the plan. The agent will
concentrate to satisfy all his customer‟s needs and provide him the plan which he requires the
most.

33
Research Methodology

34
Research Objectives

1. To get some good market exposure by dealing with the prospects face to face.
2. To improve ability of agent advisors to sell an insurance products.
3. To know the perception of the customers about the life insurance.
4. To acquire deep knowledge of financial product like life insurance
5. To have an idea about the consumers perception about the services and products of
private insurance companies.
6. To identify the major objections by the customers in completion of insurance deal.

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 Literature Review

1. In the one of the very well-known research the researcher has identified such objections
and tried to overcome these objections to concert the meet in a positive closing. For that
the researcher had carried an analysis on the behavior of consumers, and identified the
ways to convince the customers to have an effective communication. The success of the
insurance deal depends on the preparedness and presence of mind of the agent.
Objections are the first step to have a good knowledge about consumer behavior and will
provide you some background to have an experience to deal with customers. Prepare
multiple answers to every single objection you can think of! Role play this scenario in
your head back and forth with you playing both roles; yourself and your customer. If you
have somebody you feel close enough to without feeling embarrassed, then use them too.
Just write down all the possible objections you can think of and have them read that to in
a scenario. 1

2. In another research the researcher has observed the very special objection that is no
money objection. He has also tried out to try the level of objection in which the customer
is denying to have an insurance policy and neglect the need of in insurance policy. Find
out the true objection. If the objection is money or the customer states that he cannot
afford life insurance, you can emphasize the fact that his family will suffer and there will
really be a shortage of income if something were to happen to him. Ask him: Don't you
think it's a good idea to provide protection for your family, right now, while you are able?
Ask a question or a series of questions that force the customer to say yes. When you have
the customer answering yes consistently you are moving in the direction of overcoming
the objection and closing the sale.

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3. Ask open-ended questions. Open-ended questions are the type that cannot be answered
with one word, or a "yes" or a "no." You could ask, "Can you give me a little detail about
your financial picture as it stands today? These types of questions get the customer
talking and they will reveal a lot of information about themselves. Sometimes you can
home in on a fact or detail and use that as leverage when you are trying to overcome
objections.

4. The life insurance sales obstacles that one faces when selling life insurance can be
daunting and even a little frightening. "No one has endurance like the man who sells
insurance." That's an old refrain. Life insurance agents used to memorize it; it was meant
to keep them going, because everyone knew that those salesmen had to face rejection and
animosity like few other professional people. Usually, they were always finding
themselves on someone else's territory--that is, at someone else's kitchen table--and
trying to sell them a product that, to the average person, might as well be the air that we
breathe.

5. The obstacles that one faces when selling life insurance mostly have to do with the
prospect's ignorance. Like economics itself, life insurance is a product that is
simultaneously extremely important and among the most misunderstood, or just flat-out
not thought about, subjects on the planet. It's got everything to do with one's money and
yet those who we could say are really knowledgeable about the subject are few and far
between. So you come up against your first obstacle as a life insurance salesman: the
prospect's ignorance. It could even be the ignorance of a client of your company who was
not very well educated by the former agent from whom you inherited them. You enter
their home expecting them to welcome whatever advice you tell them...but as soon as you
ask them to give you a check for a new, better policy or to place money into an annuity
for them things fall apart. People naturally resist ideas that they don't understand--even
when those ideas could help them do things a better way.

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 Research Tool.

For conducting this research questionnaire was not a suitable instrument as there may be
the chances of false answers or improper ways of answering. That‟s why persona observation is
kept for conducting the research. This instrument is flexible with respect to the answers given by
the consumers. The decisions are dependent of the observation depends on the cues and clues of
the customers.

It may also happen that customers may not like to answers many of the questions for
example, name of agent from whom they have already purchased a policy, or annual incomes
and savings made by them.

For those important answers we have special method of fact finding sheet. As shown
above, the fact finding sheet will ensure the customers that answers provided by them will be
helpful to them. They will like to share such things also with the agent advisors. It has personally
observed that customers generally don‟t argue after having surety or full explanation about the
fact finding sheet.

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Sampling

The research which the researcher has conducted requires primary and secondary data as
its about the perception of the customers, not only mine but others observations and experiences
can be helpful to have a concrete decision making.

Sample size:
The researcher has taken sample size of 100 customers. These are the customers to whom I
myself and my team had gone to conduct a research. We booked appointments and went to meet
them personally to have an idea about their perception.

Primary data:
The researcher has taken great care while making questions to the clients when we were in a
direct interaction with them. The customers‟ indirect answers and cues were important for the
observation.

Secondary data:
For secondary data the researcher has referred the data of a few well known agent and sales
managers‟ customers. With the help of those data and personal views of those agents and sales
managers, the research became more prudent.

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Data collection and analysis:

1. Number of customers having insurance policies.

90
80
70
60
50
40
30
20
10
0
Yes No

In our persona observation we saw that out of our 100 customers 85 were having
their policies and only 15 were not having the policies. It shows that the awareness
among the people about the insurance policies is higher. Not only that but it is also
noticed that the customers were having policies of LIC.

2. At first interaction were they willing to purchase the insurance from private
insurance provider or not.
In the study it was observed that the consumers don‟t like to purchase insurance from private
insurance provider. Out of our 100 customers our 95 denied at first interaction and showed
some feeling of lake of trust towards the private insurance companies. Such investors
generally have trust on LIC. The customers were giving us the appointments just because of
the personal relations of the agents. Though it was same, they don‟t agree to have an
insurance plan from that candidate as he is from private company.

40
 100

80

60

40

20

0
yes No

Under this research from the observations we could have an idea about different objections
laid down by the majority of the customers are as follows.

 No trust Objection

 No need Objection

 No money Objection

 No interest Objection

 No time Objection

 Over load of premiums because of other policies.

 Less returns as compared to mutual funds

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 The customers object to purchase a policy from the agent but as said earlier the
personal relationship is the critical success factor for the insurance agent, many of the customers
has to agree on the deal. The customers have to put their hands down to the agents and for the
sake of the business of the agent they get ready to purchase a policy. Sometimes it also results in
the lapse of the policy. Many of the customers had agreed that before they had purchased a
policy and they had to lapse their policy because of non-payment of premiums.

In many of the cases the customers had also agreed that many agents themselves offer the
customers to pay first few premiums and then not to carry them up. That challenges the ethical
issue of the agent.

No need
No money
No interest
Already have
No time
Less return
No trust

The above chart clearly mansions the distribution of different objections given by the
customers. The above chart divides the different objections in different divisions as shown in the
below table.

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Objections No No No time No trust No Need Less Already
money interest return Have

No. of 10 21 13 24 14 03 15
customers

As shown the consumers objections have been classified into different categories. The
insurance is the field where no one would like to enter directly. The customers would try to
escape or to give an excuse from entering in to the contract. That‟s why this study has been
carried out just to identify the major issues why the customers are objecting from insurance
product.

With this research we have also tried to identify the major reasons why the customers are
not willing to enter in to contract with a private insurance and insurance. Let‟s have a detailed
view of the objections of the customers.

1. No Trust

This is the major objection given by the customers in private insurance

marketing. As shown in the above diagram out of our 100 customers, 24 had this
objection for purchasing the insurance policy from the private insurance company. The
perception of the customers are such as LIC is a government entity that‟s why the money
invested in that company is safe as comparatively to the private company. The reason
why customers are not willing to invest in private companies is the ULIPS. In that agents
generally provides guarantee of unexpected returns and at the end of certain period the
amount gets reduced. Because of that the amount received is less than what was invested.

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 This is the first major objection which a customer would put against the agent.
The agent must know the reasons why a customer is claiming about the trustworthiness of
the company. That background of the customers‟ perception will help the agent to make a
successful deal. The agent may be well prepared about the objections that will lead the
deal to a satisfactory level on both the sides the agent and the customers.

The given chart will show the figure that how many customers were ready to have
an insurance policy after a careful explanation.

100

80

60

40

20

0
Yes No

The ratio of positive closing of the policy is very low (20:80) when the customers are
having some doubts about the trustworthiness of the company. This ratio shows that
customers shows very less interest though agent tries to get the best of their efforts.

2. No Need:

This is the most probably found objection for selling an insurance policy to the
customers. Customers always have a perception that they don‟t need an insurance cover.
It‟s just a burden to the current life to have a responsibility to pay regular premiums on
time. As shown in above diagram out of our 100 customers 14 were such who didn‟t
agree that they need an insurance policy.

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 Generally people believe that insurance is the business where the return is only
available if that person dies. That‟s why he opt for the other ways of investment. The
crucial reason for such mentality of the people is that they exactly don‟t know the
meaning of insurance. They don‟t know that the insurance is the business associated with
uncertainiry. And as they have such belief they will never agree to the point where they
are assured that there would be guaranteed return.

100

80

60

40

20

0
Yes No

The closing ratio of policy under this objection is a bit higher (40:60) when customer
gives such objections. Compared to no trust objective this objection is weakly put by
the customers. Such customers can be converted to positive deals easily.

3. No Money

Customers are the people who have certain decisions for not to purchase an
insurance policy that‟s why they will never agree to purchase the insurance policy. They
rudely say that they don‟t have enough money to pay the insurance premiums. It may
happen that they are already having the policies. It has been found that the people have
more than one company‟s policies.

As shown above that out of our 100 customers 10 had objection that they are not
capable to pay insurance premium.

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 100

80

60

40

20

0
Yes No

The closing ratio under this objection is a bit lower (30:70) under this objection.
This objection is also a weak one the closing ratio shows out of 100, 30 customers will agree
to have a policy.

4. No Interest

The customers will not show their interest towards insurance. Today is a situation
of insurance is such where no person would pay attention to you when you are interested
to involve someone to your business. As seen in the first questions that they are not
willing to deal with a private insurance service provider. They will not willing to provide
you an appointment to have a proposal of an insurance policy. This is the well-used
objection to avoid such disturbances.

100

80

60

40

20

0
Yes No

The closing ratio under this objection is 30:70.

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 5. Already have insurance policies

People who are communicated may have the insurance policies well in advance.
Though they have sufficient number of policies, they will show the willingness to
purchase a new one just the agent who has come is one of his relative or a good friend. It
may also happen that the customer is not interested in purchasing further policies or may
not capable to pay further premiums.

100

80

60

40

20

0
Yes No

The closing ratio for this objection is 35:65. That shows the closing of deal positively under
this objection is comparatively higher than others.

6. No time

When customer is not willing to have an interaction with any insurance agent, he
will not provide a time for personal interaction with the agent. The agent must be ready to
listen to such answers when he is asking for the permission or appointment from the
customers. The customers to whom me and my team had called, out of those total only
70% allowed us to have a permission to have interaction with them.

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 100

80

60

40

20

0
Yes No

The closing ratio in this objection is very low 20:80. The agent will have to be punctual and
well prepared while dealing with such customers.

7. Less Return

The real investors are having a complain regarding the returns available with the insurance
policies. They argue that the insurance is for a longer period and the returns which they provide
are comparatively less than the other investment tools such as Mutual funds, share market, post
or provident fund. Other problem with the insurance is that for a longer period the cash lays
without use.

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 100

80

60

40

20

0
Yes No

The closing ration under this objection is very high. Such customers will surely agree for
the insurance. A proper care or influence over such person will definitely close the deal
positively.

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Limitations of Research

As a human being, the limitations are reflected in this research. The research has been
carried out with a bit of my knowledge. As a student of marketing analysis of consumer behavior
is very significant. Still I feel some of the limitations which are as follows.

1. The research has considered 100 people as sample. To analyse the behavior of consunmer
it may prove insufficient.

2. The study is limited up to Bhavnagar district only. So this research may not helpful to
others who are not dealing with Bhavnagar. It may but not surely some\one can use it.

3. The research tool selected was personal observation. It may happen that the researcher
fail in understanding the mindsets of people, or the suggestions from other sales
managers and agent advisors may prove weak.

4. One of the most influencing and most critical limitations is that the researcher is not
trained for the research study and this is my first research study.

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 Bibliography

1. IC 33, insurance book. Introduction to insurance.

2. http://www.scribd.com/doc/37973975/Insurance

3. http://www.ehow.com/how_4833079_overcome-objections-sales.html

4. http://www.ehow.com/how_5571537_overcome-life-insurance-objections.html

5. http://www.ehow.com/how_5352567_overcome-life-insurance-obstacles.html

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