Investors behaviour towards insurance

and likeliness in investing in IDBI

By
Sashidhar N J (MBA13076)

India is one of the least

insured countries.

Industry Backgroun

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.
Insurance is a Rs. 400 billion business in India and together
with banking services adds about 7% to Indias GDP.
Amongst the emerging economies, India is one of the least
insured countries but the potential for further growth is
phenomenal.
Source- 1) Insurance Regulatory And Development
Authority, India
2) World insurance report 2013 by Capgemini

Company Background
IDBI Federal Life Insurance is a joint venture between three major financial
organizations
IDBI bank Ltd.- 48%
share

Federal bank- 26%

share
Ageas- 26% share

IDBI federal life

insurance co. Ltd

Products Offered
Life insurance
Childsurance
Incomesurance
Microsurance

IDBI says, how do I

increase my sales?

Market Researchers Problem:

1) Investors
behaviour
towards
insurance
2) likeliness in
investing in
IDBI

Components
of the MR
problem-

1) Consumers
expectation
2) Risk
3) Factors
4) substitutes

Research Design
Explorat
ory
Descripti
ve

Netnography
Depth
Interviews
Expert
Interviews
Netnography
Surveys

Secondary Research
Insurance in India India is a country where the average selling of life
insurance policies is still lower than many western
and Asian countries.
Indian consumers do not trust on many
companies and the major population of India do
not have any life insurance policy.
insurance
policy
is gold when
it comes to
risk protection
In India,
insurance
is viewed
largely
as a taxsaving instrument
Things get a little murkier in the region of insurance as
investment..
Source- 1) world insurance report
2013, Capgemini
2) An article on

Unfortunately insurance is a poor

performer when compared other
traditional modes of investment

Interesting Insights
Insurance is the most preferred
investment alternative followed by
fixed deposits and mutual funds,
shares being the least.

The most desired insurance plan

is life insurance. Also, retirement
plan is more desired than
education plan.

The most preferable insurance

company is LIC followed by ICICI
and HDFC.

People feel that safety is extremely

important in an investment.

Company image has been ranked

as the top factor for deciding any
insurance policy with a company.
SourceInternational Journal for
Research in Management and

Insurance is a burn
in the pocket

Exploratory Resea
Depth Interviews

(Please go away, I dont

need anything)
Basket of insightsNo of
Insurance is mostly used as a tool to
respondents- 10
Duration- 15protect the insurers family. but when it
20min
comes to investment people arent much
Locationinterested.
Hyderabad
There arent much schemes in insurance
Respondentshouseholds
for investments as said by the

respondents.
There are a lot of substitutes when it
comes to investment, such as mutual
funds, the traditional bank deposits, gold
and silver, shares and real estate.

There arent much

schemes in
insurance

 They believe that insurance is burn in the pocket, as many do it because

sometimes they have to.
When asked about IDBI federal, many of them havent heard about it possibly
due to lack of promotions.
Therefore, naturally no one would suggest IDBI Federal to any of their family or
friends as they will go with the existing company.
In insurance once a company gets a customer, customer is likely to be loyal.

Many havent heard about

IDBI federal
Lack of

promotions

Continued..

Exploratory ResearchExpert Interviews

Delphi 1
Namemanish
chauhan
Ownerjagoinvest
or.com

Delphi 2
Namebasavaraj
tonagatti
Ownerbasunivesh.c
om
He is a
certified
financial
planner

Insights
Insurance is a great option for investments as
there isnt much risk involved. But it is better not
to see it as a pure investment.
There are better options to invest if only invested
for returns.
IDBI isnt trusted by people. Moreover, they need
to do a lot of promotions to be known among
people.
People most often ask suggestions for an
insurance plan for around 25 years and are more
keen on taking up a life insurance plan.
IDBI needs innovative products.

Observed over 1000

comments
Observed over 15 blogs and
websites

Exploratory Resear
Netnography

..\websites and blog

People see insurance mainly as a risks.docx
aversion but then few see it
as an investment. Those who see insurance as an investment are
asking for suggestions to cover up housing loans.
Almost all them are looking for a policy that lasts at least 25
years.
All of these people are planning for an insurance to protect their
family.
Minimum premium observed is 25000.
Interestingly most of them preferred LIC even though the
premiums are costly compared to other private players. This
clearly shows that company image is a crucial factor.
There is no trace of IDBI Federal life insurance co.

The Road To Surve

Depth
Interviews

Insurance is mostly used as a tool to protect the insurers

family. but when it comes to investment people arent much
interested.
IDBI federal isnt much known.

Expert
Interviews

Insurance is a great option for investments as

there isnt much risk involved. But it is better not
to see it as a pure investment.
IDBI isnt trusted by people. Moreover, they need
to do a lot of promotions to be known among
people.

Netnograp
hy

Interestingly most of them preferred LIC even though the

premiums are costly compared to other private players. This
clearly shows that company image is a crucial factor.
There is no trace of IDBI Federal life insurance co.

Sampling
Sampling method Non-probability sampling
Sampling on purpose Based on the demographic
variables
Sample size- 91
Location- Hyderabad
Time spend with each respondent- 20 min approx.

..\IDBI survey.xlsx
..\Questions asked.docx

Demographics of sample

Descriptive research

Inference
Out of those who answered around 70% own an
insurance policy. Although the sampling done is random,
secondary data shows that only a very few of the Indian
population owns an insurance policy.
This means that these are people largely from tier 1 cities
and some parts of tier 2 cities and almost none from the
rural population.
Among the people who own an insurance policy around
55% own a life insurance policy, while only 10% own a
health insurance. This suggests are people are more
concerned about their familys safety.

 Among those who owned an insurance policy around

57% said it was from LIC, while only 15% come from
other companies. This clearly shows a dominance in this
field.
As predicted earlier majority of the people said that they
feel insurance is a safety cover for their family. Whereas
only less than 10% feel that it makes life after retirement
easier.

Continued..

Choose the top three options of investments as to which one

would you opt for when you want a safety cover for your future
and family?

Inference
Most chosen option amongst the possible
investment options is insurance.
Where as the least chosen option is shares.
This clearly shows that risk is an important factor
and people arent ready to take any risks in
investments.
Although real estate is seen as a great option only
a few of them said they would like to invest in it.
This also shows that risk is certainly a factor.
Final word- insurance is the most trusted option
when it comes to protection of family.

Allotting 20
Lakh Rupees in
investments

Inference
People invested the most in insurance. This shows the trust
factor and low risk.
As observed people invested the least in shares. This shows risk.
An interesting thing is that most of them who invested in
insurance have put only 0-5 lakhs of money. Which clearly
shows that people are interested to invest only the said amount.
Also, as expected the second most invested option is bank
deposits, which has no risk involved at all.
Ironically real estate has been given a fair amount of
investment.

Yet again most of them preferred to invest in insurance for one or the
other reason

Insurance and bank deposits are seen as the cheapest mode of

investment with satisfactory returns. It has been proved again that risk is
a very important factor.

Almost over 60% said that investing in insurance isnt risky. Where as
30% are neutral.

Paired Sample t-Test

Hypothesis- When it comes to safety for the future and
family, insurance policy as an option is more opted by
the investors than bank deposits.

Confidence interval- 95%, alpha- 0.05

Sig. = 0.717

Therefore the sig. value is greater than alpha,

reject hypothesis.

failed to

Cross tabs based on

gender

Most of the men think that investing in insurance is a safety cover for
them and their family where as women think that it will cover all their
expenses when in danger, which is also protection. But none of them
thought about retirement.

Most of the men said that they prefer to invest in insurance over other
alternatives. Where as women think other wise which is ironic.

Men strongly feel that investing in insurance is better than investing in

gold where as women think other wise.

Men agree that investing in insurance is better than investing in real

estate where as ironically women dont agree to this even after knowing
that there is a risk involved in investing in real estate.

Investing in insurance is better than investing in chit funds, women

strongly feel. But then men remain neutral.

Investing in insurance is definitely not better that investing in bank

deposits. Both men and women agree to it.

Both men and women agree to the fact that capital growth is important.

Both men and women say that company profile and image is an
extremely important factor.

Summary
Insurance is the most trusted investment option
when it comes to protection and safety, where as it
isnt a great option to see it only as an investment.
Risk and company image are the important factors
that a person sees while investing.
Theres absolutely no penetration of insurance
companies into the rural areas.
Most of the people bought insurance from LIC.
Most of them did not want to suggest IDBI to their
friends and family, also the experts didnt want to
suggest IDBI as they feel that right now people dont
trust IDBI much.

Suggestions
1) IDBI needs to build trust with the customers.
How do I build trust?
Word of mouth is a powerful tool for promotions.
For this awareness is very important, as it seems
like many of them arent aware of IDBI.
How do I spread awareness?
IDBI needs to advertise.
Internet and social media promotions is quite a
powerful tool.
Send emails.
Advertise on busy financial and investment blogs.
This suggestion is based on the insights from experts and households.

2) It is very important that a customer should have

many options to choose from, as different customer
has different demands.
What do I do then?
If at all IDBI wants to be the best in the field they
will have to introduce more schemes as the
present schemes are minimum when compared to
other players. (this has been suggested by many
people)
Please give an example.
IDBI doesnt have a monthly payment option.
nowadays
comparing
ThisMoreover,
suggestion iscustomers
based on the interviews
withare
households.
policies.

3) IDBI could recruit interns to find the right

advertising strategy and work on digital marketing
rather than concentrating only on sales.
What would that do?
This would help them improve awareness.

This suggestion is based on my observation on the internet

Challenges faced..
Many of them werent interested in answering the
survey.
I was treated as a typical salesman.
Many of them have taken 20 min to answer the
survey and an extra 20 min to about my college
and why have I taken up this work.

What I could have done

better..
I could have done better had I not had the
unexpected health issue.
Could have done something related to digital
marketing, but was short in time due to health
related issues.
Could have gone out to rural areas too.

My learning

The sales man experience.

Learned a lot of things about insurance and its
industry.
Interaction with the experts via email.

Thank you..
Dr. Deepak Gupta ji for his very valuable MR
course.
Kannan V, the company mentor.
And of course our very own Shrikanth Kulkarni sir,
my mentor.

Questions

THANK YOU