A

Summer Internship Report

On

The study of “Brand Loyalty of a Life Insurance Company” with

Regard to Life Insurance Corporation of India

In Partial Fulfilment of the requirement For the Award of

Management of Business Administration (MBA) 2017-2019

Under the Guidance of: Under the Supervision of:

Prof. D Surekha Thakur ABCD

Co-ordinator- SIP Faculty Guide

AGBS Hyderabad AGBS Hyderabad

By;

Mr. ShorabSinghal

Enrolment Number – A30601917046

Amity Global Business School

Hyderabad

1
 Declaration

I hereby declare that this project report entitled “Brand Loyalty of a Life Insurance
Company” with regard to Life Insurance Corporation of India is a result of my own
efforts which I have undergone as a part of the curriculum in “Bachelor of Business
Administration” in “Amity Global Business School”, Hyderabad.

I hereby declare that I have fulfilled all the provisions and acquired good knowledge
regarding “The Study of Brand Loyalty of a Life Insurance ” This project is a record of
original and independent work done by me during the period and has not been submitted
to any other Institute or University for the award of any degree or diploma.

ShorabSinghal

Enrollment No: A30601917046

MBA class of 2017-19

AGBS Hyderabad

Date:

2
 Acknowledgment

I have taken efforts in this project. However, it would have not been possible without the
kind support and help of many individuals and organizations. I would like to extend my
sincere thanks to all of them.

I contemplate it as a great privilege to express our profound respects, deep sense of

gratitude to Dr P Prasada Rao, Director General, Amity Global Business School, and
Hyderabad for giving me an opportunity to do my Summer Internship Project Talk
Insurance academy.

My sincere thanks to Prof D Surekha Thakur, Coordinator Summer Internship Program

for her constant supervision and guidance throughout my project.

My sincere thanks to ABCD , my Faculty Guide for providing seamless support and right
suggestions in the development of the project.

My sincere thanks to Mr. Mir Mustafa Ali Khan - Chief Learning Officer and Mr. Mir
Dastagir Ali Khan, my industry guide for providing me an opportunity to do my summer
internship project at Talk Insurance academy.

On a personal note I thank my beloved parents and friends for their moral support during
the course of the project.

Signature:

Name: Shorab Singhal

Enrolment no: A30601917046

AGBS Hyderabad

Date:

3
Amity Global Business School

Hyderabad

Certificate

This is to certify that Mr. ShorabSinghal Student of MBA Class of 2017-19, bearing
Enrollment No: A30601917046 has completed the project titled “Brand loyalty of a Life
Insurance Company”with regard to “Life Insurance Corporation of India” under my
supervision and Guidance as a partial fulfillment of MBA (2017-19).

Signature

ABCD

Faculty Guide

Place: Hyderabad

Date:

4
Table of Contents
S.NO Contents Page.NO
1 Executive Summary
2 Objectives of the Study
3 Research Methodology
1. Primary Data
2. Secondary Data
4 Limitations of the Study
5 Literature Review
Chapter1: Introduction to The Study of Brand Loyalty of A Life Insurance
Company

Chapter2: Company profile – TALK INSURANCE

Life Insurance Corporation of India

Chapter3: Comparative analysis of brand loyalty of LIC and Max Life

Insurance
Chapter4: Data Analysis And Interpretation on Brand loyalty
Chapter5: Findings, Learning, Conclusions
11 Annexures
1:Questionnaire
2:Case Study
3:Article
4: Brochure
12 Bibliography

5
Executive Summary

In modern era there is cut throat competition in the market. Many times any organization
not success because of its good product or with huge capital, but it is possible with the
help of backbone of good brand. Brand is an important term from the point view of
simplifying the decisions, Quality assurance, and Risk market. Brand is the identity of the
product. Corporate are more & more working or spending more on the brand and
corporate identity.
The industry is trying to retain their customer by various ways. The CRM (Customer
relations management) is taking places in the market, but industry and market has another
way of retaining and increasing customer that is a Brand Loyalty. Mental attachment of
customer with brand is helpful to increase business. It is expensive to gain new customer
determinations of Brand Loyalty, i.e. Changes & relatively in expensive to keep the
existing one especially if they are satisfied and more so, if they like the brand. Companies
don't want to miss any of the loyal customers.
In insurance sector Life Insurance Corporation of India, stands for last 50 years. The LIC
created best service brand in India last three years regularly. It is interesting to study the
Brand Loyalty of LIC in the growing insurance sector
At present, investment of saving has assumed great Importance. According to the study of
the market, it is being observed that markets are being doing well in Insurance. In near
Future a proper financial planning is required to invest money in all type of financial
Project because there is good potential in market to invest in this paper great emphasis is
given in Understanding the perception of investors towards the brand. The main objective
of this project is to know various determinants of brand loyalty. The researcher has drawn
certain conclusions, which are based on the analyzed data. In addition researcher has
made an attempt to suggest some remedies to improve gray Areas of the services of
organization. After analyzing the feedback the conclusion has been made that the
Respondent are very loyal towards brand LIC.

6
Definition
Brand loyalty is when consumers become committed to your brand and make repeat
purchases over time. Brand loyalty is a result of consumer behavior and is affected by a
person's preferences. Loyal customers will consistently purchase products from their
preferred brands, regardless of convenience or price. Companies will often use
different marketing strategies to cultivate loyal customers, be it is through loyalty
programs (i.e. rewards programs) or trials and incentives (ex. samples and free gifts).

The Nature of Brand Loyalty: -

A study of repeat purchase behavior for nine products based on a Chicago Tribune
purchase panel suggested that there were four brand loyalty patterns as follows.
1. Undivided loyalty is exhibited by families purchasing brand A in the following
sequence AAAAAA.
2. Divided loyalty is exhibited by the family purchasing brands A and B in the following
sequence A B A B A.
3. Unstable loyalty is shown by the family buying brands A and B in the following
sequence. AAAA B BB.
4. No loyalty is shown by families buying brands A, B, C, D, E, and F in the following
sequence. A B C D E F.

7
Objectives of the Study

The Objectives for the Marketing Study are as follows:

1. To study the concept of Brand Loyalty.
2. To study the Brand Loyalty of LIC.
3. To find out determinants of Brand Loyalty.
4. To know the brand image of LIC in the market.
5. To find out strength and weakness of LIC against Others Competitors

8
Research Methodology

Research Methodology:
The research methodology adapted for this research for the project titled ‘Brand loyalty of
a life insurance company of India includes the information of the features of the Brand
loyalty in the form of primary data & secondary data that had been received from the
Branch Managers of the banks and the officers of the LIC. It also includes the
information’s from the related books & the related websites.
To carry out the research, the various data is required such as conceptual knowledge
about Brand brand Loyalty, Policy holder's information about their preferences, choices,
investment awareness in Life Insurance, with respect to different Company.
The study is based on both primary and secondary data.
Primary data: -
The primary data is fresh information collected for a specified study. The primary data
can be gathered by observational, experimentation and survey method
The methods commonly used for the collection of primary data are:
1. Direct personal investigation, where the data is collected by the investigator from the
sources concerned.
2. Indirect oral interviews, where the interview is conducted directly or indirectly
concerned with subject matter of the enquiry.
3. Questionnaire method, here the method consists in preparing a questionnaire (a list of
questions relating to the field of enquiry and providing space for the answers to be filled
by the respondents.)

Secondary data: -
The Secondary data have been collected through the books, magazines, broachers,
Journal's & annual general report, socioeconomic profile and web sites.

9
Limitations of the Study

1. It is difficult to researcher to find out the determinations of Brand Loyalty, i.e.

Changes Sample to sample.
2. The investor’s knowledge about Life insurance Company's is so less, or maybe they are
not aware About the New Company.
3. There is a possibility of personal bias while answering the questionnaire.
4. Illiteracy of the respondent may affect the study.
5. the most loyal consumers can become so attached to their favorite technology, soft
drink or hair salon that they turn a blind eye when the provider falters. Loyal Apple
customer’s line up when a new product is launched and pay the sticker price despite the
fact they have no idea what to expect from the new product.
6. People who develop a strict brand loyalty to high-end products may become too
involved with superficial elements of status and prestige and pay excessive amounts for
these intangible traits.

10
Literature Review

1. Pritchard:
Examining the historical course of the studies with the subject of loyalty it is found that
the researches that try to define what loyalty is have significant space. The most basic
problem encountered in those studies is the failure to achieve a shared definition of
loyalty because although customer loyalty may be a key variable that explains keeping
the customer at hand it has been discussed in time whether loyalty is an attitude or
combination of attitude and behavior. According to the approach based on behavior,
loyalty is the behavioral reaction based on prejudice as the function of psychological
processes by the decision maker in the existence of one or more alternative in time.
2. Solomon et al:
Behavioral approach explained loyalty basing on the criteria including the share in
consumption, consumption probability, probability to consume the product again,
repeated consumption behavior, multidirectional consumption behaviors .According to
the second approach dealt as the combination of attitude and behavior brand loyalty “is a
form of repeat purchasing behavior reflecting a conscious decision to continue buying the
same brand, for brand loyalty to exist, a pattern of repeat purchase must be accompanied
by an underlying positive attitude towards the brand .This approach does not include only
the past purchasing behaviors and tendencies but also customer attitude and value.

3.Sudharshan:
Consequently according to this approach which was accepted in time, the customer
realizes loyalty in time through repeated consumption of any good or service when the
customer has a positive attitude toward the good/service or company providing the
good/service. In addition to the difference in description within the historical course, it is
found that the manner of dealing with loyalty has changed as well. In the early time
studies, Loyalty was used as dimensioning criteria because competition is low in the
period and the thought that activity would be more efficient in a market composed of
loyal individuals in terms of the effectiveness of marketing activities dominates. The

11
purpose of the studies in this period is to increase the efficiency and profitability of the
activities through classification based on loyalty via more loyal customers. Companies
failed to understand that the new customers they obtained after 1980’s particularly
through price discounts are those customers existing in the market but in the recession in
1990’s they tended to examine the performance of marketing and sales expenses.
4. Cunningham:
tendency suggested that it was much more costly to gain new customers than to preserve
the existing ones because it is quite difficult to detect the expectations and behaviors of
new customers and this requires additional costs This situation changed the viewpoint
toward loyalty and loyalty started to be perceived by the companies and brands as a fact
that should be achieved because in the existence of innovative products and increased
global competition made customer loyalty a managerial struggle Consequently not only
the measurement of loyalty but also management thereof came to the agenda and the
effort to search for the factors behind loyalty and achieve loyalty was based upon.
Similarly Fournier and Yao mentioned about 3 phase evolution: 1. Approaches that take
behavior as the basis: Approach that take the random or intended nature of repeated
behaviors. 2. Studies for improving brand loyalty: Studies based on behavioral definitions
for determining the reasons that could affect brand preference and purchasing and the
levels of effect of the reasons. Those studies exposed to the criticism to have definitive
aspects. 3. Researches with theoretical and philosophical focus: They are the studies that
differ according to psychological and anthropologic/sociologic point of view and
emphasize the meaning and hedonic/emotional dimensions of loyalty and concentrate on
cognitive processes in order to strengthen loyalty. 160 European Journal of Economics,
Finance and Administrative Sciences - Issue 51 (2012).
5. Tucker:
The efforts to define and manage loyalty bought the fact that loyalty may arise in
different forms depending on is reality to the agenda because the stipulation that every
repurchasing may not be loyalty and may not guarantee the future repurchasing’s was
achieved. One of the vanguards of grouping loyalty in this manner is Day. Day discussed
loyalty in two groups, namely intentional loyalty and spurious loyalty accepted loyalty as
three different tendencies (emotive, evaluative and behavioraldiscussed loyalty in four
dimensions on behavior and attitude basis. They named the situation of attitude and

12
repurchasing behavior being high as loyalty, the situation of attitude being high and
purchase repeat being low as latent loyalty, the situation of purchase behavior is being
and attitude being low as spurious loyalty and the situation of attitude and repurchasing
being low as no loyalty.
6. Gounaris:
Affective pha0se is created in the context of positive emotion toward the brand. In the
canotive phase the tendency toward the brand becomes devotion and there is the tendency
to stand distant from other brands. In the action which is the last phase inertia based on
the tendency to that brand started. While it is cognitive phase which is the easiest phase to
reach for the enterprise the most difficult phase is action. According to Oliver, although
those phases explain loyalty it fails to define ultimate loyalty that provides purchasing the
same brand in all terms and conditions. Although it has a place in the loyalty literature
prior to this study of Oliver, the concept of inertia had a broader place and started to be
discussed through this study. Despite the concept of inertia was suggested by Oliver as a
result of action loyalty achieved, as it shall be discussed in the later sections of the
theoretical framework, since the concept of inertia is not based on consciousness it started
to be used as a concept that fails to reflect loyalty, that arises only depending on the
conditions and that may change according to conditions.
7. Stathakopoulos:
There are four types of loyalty on the basis of purchase, social effect and emotional
devotion to the brand:  No Loyalty: They are those who do not purchase and while they
have no interest in the brand and social effects failed to orient to the brand.  Covetous
Loyalty: They do not purchase but emotional tie to the brand is high and this tie was
created by the social environment.  Inertia Loyalty: They have a tendency toward the
brand for habit, convenience or any other reason without emotional tie with the brand and
social effect. The customers having this nature of loyalty can make a systematic selection
among other brands but while this selection has low level of emotional involvement and
personal investment there is no devotion to the brand.  Premium Loyalty: If the
emotional tie and social effect is high while the customer purchases at high level it is
loyalty.
8. Reichheld:

13
According to Rowley customers may demonstrate their loyalty in any one of a number of
ways; they may choose to stay with a provider, whether this continuance is defined as a
relationship or not, or they may increase the number of purchases or the frequency of
their purchases or even both According to this approach it is a relation that shapes
repurchasing that reveals the existence of loyalty rather than repurchasing itself. Rowley
took this framework on the basis of inertial and positive attitudes including the behavioral
and attitudinal dimensions, and discussed customer loyalty in 4 groups namely, captive
(inertial behavior and attitude), convenience-seeker (positive behavior and inertial
attitude), contented (inertial behavior and positive attitude) and committed (positive
behavior and attitude) according to behavioral and attitudinal dimension.

14
Chapter-1

15
Brand loyalty of a life insurance company

In modern era there is cut throat competition in the market. Many times any organization
not success because of its good product or with huge capital, but it is possible with the
help of backbone of good brand. Brand is an important term from the point view of
market. Brand is the identity of the product. Corporate are more & more working or
spending more on the brand and corporate identity. While investing the money investors
think over the key aspects of any investments that are time & risk. Investors have wide
range of investment avenues available to them. They may be classified into the various
categories i.e. Non-Marketable Financial Assets, Shares, Mutual Funds Scheme, Life
insurance particular product, Instrument and on Brand of that product. A brand is the key
aspect of purchasing the product or invests the money. Brands are important to consumer
as they provide them with choice, a means of simplifying the decisions, Quality
assurance, and Risk avoidance and self-experience. While making the decision of
investment, people think on different parameters.
A brand & Brand Loyalty is also one of the important parameter, key element of decision
making of investment. The element Brand Loyalty affects more on decision of the
investor. In Insurance business this brand Loyalty is found in regards to Life Insurance
Corporation of India. People are more loyal towards this Company. Policies etc. The
decision of investor or the particular customer is not only depending upon the risk, return,
and on convenience, but also depends upon that the market without the brand & Loyalty.
Some well-situated organizations are trying to get benefit or their reputed brand & it's
Loyalty. Brand Loyalty is a conscious or unconscious decision expressed through
intention or behavior to repurchase a brand continually. Loyalty reflects the consumer
attitude, faith, and behavior, toward the brand. By purchasing the particular brand
regularly customer show's Brand Loyalty.
The industry is trying to retain their customer by various ways. The CRM (Customer
relationship management) is taking places in the market, but industry and market has

16
another way of retaining and increasing customer that is a Brand Loyalty. Mental
attachment of customer with brand is helpful to increase business. It is expensive to gain
new customer & relatively in expensive to keep the existing one, especially if they are
satisfied and more so, if they like the brand. Companies don't want to miss any of the
loyal customers. In insurance sector Life Insurance Corporation of India, stands for last
50 years. The LIC created best service brand in India last three years regularly. It is
interesting to study the Brand Loyalty of LIC in the growing insurance sector.

What is Brand Loyalty?

Brand loyalty is when consumers become committed to your brand and make repeat
purchases over time. Brand loyalty is a result of consumer behavior and is affected by a
person's preferences. Loyal customers will consistently purchase products from their
preferred brands, regardless of convenience or price. Companies will often use
3different marketing strategies to cultivate loyal customers, be it is through loyalty
programs (i.e. rewards programs) or trials and incentives (ex. samples and free gifts).

History
The life insurance business developed in India after for increasing the asset or
maintaining the asset, organizations are trying different way like CRM &BRM. Loyalty
reflects the consumer's attitude towards the brand, especially when there is a change
either in price of product features. India and for setting up of the Life Insurance
Corporation of India. The bill as passed is known as the Life Insurance Corporation Act.
The corporate started functioning from September 1, 1956, with the effect from this date
the corporation became the sole agency for carrying on life insurance business in the
country. The corporation has got monopoly to carry on Life Insurance business. The LIC
transacts business throughout India and also in some foreign countries through its
branches, particularly in U.K. Mauritius, Srilanka, Fiji & Bahrain. Life Insurance
Corporation of India is a body corporate having a perpetual succession and common seal
with power to acquire, had and dispose of property and may by its name sue or be sued.
The corporation consists of such number of persons not exceeding is as the central
government thinks fit to appoint there to and one of them is appointed by the central govt.
to be the chairmen there of the head office of the LIC is at Mumbai. It has seven zonal

17
offices, 100 divisional offices and more than 2000 branch offices spread over the India.
Thus Life Insurance Corporation was born committed to the socio-economic welfare of
the people with its three basic objectives:
1. Harnessing the saving.
2. Providing security
3. Utilizing people's money for people welfare.

Need For the Study

Today’s life insurance business is not the one we have seen in the past. It has become
much more diversified. With the shift in the customer preferences from deposits to
investments, intense competition etc., and the life insurance company saw their profit
margin declining. Thus it has become imperative for the life insurance to retain the
customer by providing more value added services under one roof as well as to find
alternative ways to generate more income. As brand loyalty provides the best possible
solution to all these, most of the life insurance company nowadays have started selling
insurance products to its customers. Hence there is a need for the study to know whether
life insurance Corporation of India has been benefited and to suggest the areas where they
can make use of and converge the attention of the life insurance company if any, is
required.

SCOPE of the STUDY

1. This study includes the concept Brand Loyalty, the organization LIC of India.
2. The study is conducted in Satara to analyze the investor's preference regarding Loyalty
of Brand in Life Insurance sector.
3. To analyze the data researcher used simple analytical techniques and tools such as pie
charts, and ranking.
4. The study also throws light on the brand loyalty building by LIC of India with its
customers, as it is the deciding factor for considering as a one-stop shop for all their
financial solutions.
5. It also indicates the persons who are willing to take life insurance policy in the
immediate future and the reasons for taking the same. Brand policy

18
6. It also pinpoints the willingness of the customer in accepting the brand, as their choice
is met Life Insurance for obtaining a policy.

19
Chapter-2

20
 Talk Insurance Academy –A Detailed Profile
Introduction

Talk Insurance Academy has now launched new training programs, focusing on the
personality and communication development of our youth. These programs cater to the needs
of today's fast growing corporate sector and the budding professionals.
Talk Insurance Academy is a registered Partnership Firm managed by Professionals
belonging to Life Insurance Industry.
Talk Insurance Academy is engaged in promoting the concept of Insurance through its
training and certification programs.
The Academy caters to the needs of all concerned individuals who want to enhance their
learning & development.

Vision:
To be the professional and responsible Insurance and Non – Insurance training activity firm
for all concerned Individuals.

Mission:
It is our endeavor to be one of the best names in training and development activities. We
 Effectively use the vicinity at the optimum level
 Executing the training programs in a cost effective manner
 Understanding the need and requirement of our client with utmost care and delivering the
result in time

21
Values of Talk Insurance Academy
True:
True is our core value and the start of our activity, we are true right from the beginning to the
end to all our customers which is very important for us to have a good growth in our nature
of business.
Reliable:
Reliable or Reliability is a true value upon which we as an entity work; we assure our clients
that their time and money invested would give those timely results which they have dreamed.
Understand:
Understand is a value which would make us one of the foremost runners in the hearts of our
trainees and clients as we would understand their requirement and deliver service to them.
Sustain:
Sustain would put us as a support with respect to the learning and development of our client
and would take us long way in order to deliver best services.
Time: Time is the value we cherish most to deliver the expectations with quality in time all
time.

Life Insurance Corporation of India

Introduction:-
Life Insurance Corporation (India) (LIC) is an Indian state-owned insurance
group and investment company headquartered in Mumbai. It is the largest insurance
company in India with an estimated asset value of ₹1,560,482 crore (US$230 billion). As of
2015 it had total life fund of Rs.1433103.14 crore with total value of policies sold of 367.82
lakh that year.
The Life Insurance Corporation of India was founded in 1956 when the Parliament of
India passed the Life Insurance of India Act that nationalized the private insurance industry
in India. Over 245 insurance companies and provident societies were merged to create the
state owned Life Insurance Corporation.

22
Type state-owned enterprise (Govt Corporation)
Industry financial service
Founded 1september 1956
Headquarters Mumbai, India
Key peopleS.k Roy (Chairman)
S.B mainak (managing director)
N.R guha (managing director)
V.K sharma (managing director)
Usha sangwan (managing director)
Products Life insurance
Health insurance
Mutual funds
Investment management
Revenue US$ 88.400 billion (2015)
Total Assets RS 1560.482 crore (2015)
Owner Govt of India
Number of 11, 9767
Employees
Subsidiaries LIC housing finance
LIC personal fund
LIC international
LIC cards services
LIC Nomura mutual funds
Website www.licindia.in

Vision

23
"A trans-nationally competitive financial conglomerate of significance to societies and Pride
of India.
Board of directors

Shri S.K. Roy, (Chairman, LIC of India)

Shri v.k Sharma (managing director, LIC of India)
Smt Usha sangwan (managing director, LIC of India)
Shri shaktikanta das (managing director, LIC of India)
Smt. Snehlata Srivastava (managing director, LIC of India)
Shri Ashwini Kumar (CMD, Dena bank)
Shri sanjaykallapur (Non-official member)

Objectives of LIC

1Spread Life Insurance widely and in particular to the rural areas and to the socially and
economically backward classes with a view to reaching all insurable persons in the country
and providing them adequate financial cover against death at a reasonable cost.
2 Maximize mobilization of people's savings by making insurance-linked savings adequately
attractive.
3 Bear in mind, in the investment of funds, the primary obligation to its policyholders, whose
money it holds in trust, without losing sight of the interest of the community as a whole; the
funds to be deployed to the best advantage of the investors as well as the community as a
whole, keeping in view national priorities and obligations of attractive return.
4 Conduct business with utmost economy and with the full realization that the moneys
belong to the policyholders.
5 Act as trustees of the insured public in their individual and collective capacities.
6 Meet the various life insurance needs of the community that would arise in the changing
social and economic environment.

24
Product Details

Independence. Before 1950 there were 245 companies in private sector doing Life Insurance
business. From January 19, 1956, the Life Insurance business comes under the control and
ownership of central government. In June 1956, the parliament passed the bill for
nationalization of the life Insurance business in specified, popular products of LIC are as
follows:
A. Whole Life Policy.
B. Endowment Policy.
C. Group Insurance scheme.
D. Pension Plans.
E. Unit linked plan.
F. Special Plan.
G. Money back Plan.
LIC is dealings with financial products, i.e. insurance, more than 50 years. The organizations
Always stand from customer's side for more return safety & risk. From the starting LIC
include summary Life insurance policies of & investment plan for child, youngsters, couple,
and old use people.

History

The story of insurance is probably as old as the story of mankind. The same instinct that
prompts modern businessmen today to secure themselves against loss and disaster existed in
primitive men also. They too sought to avert the evil consequences of fire and flood and loss
of life and were willing to make some sort of sacrifice in order to achieve security. Though
the concept of insurance is largely a development of the recent past, particularly after the
industrial era – past few centuries – yet its beginnings date back almost 6000 years.

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
25
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 BabuMuttylal 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. Starting as Indian enterprise with highly patriotic motives, insurance
companies came into existence to carry the message of insurance and social security through
insurance to various sectors of society. Bharat Insurance Company (1896) was also one of
such companies inspired by nationalism. The Swadeshi movement of 1905-1907 gave rise to
more insurance companies. The United India in Madras, National Indian and National
Insurance in Calcutta and the Co-operative Assurance at Lahore were established in 1906. In
1907, Hindustan Co-operative Insurance Company took its birth in one of the rooms of the
Jorasanko, house of the great poet Rabindranath Tagore, in Calcutta. The Indian Mercantile,
General Assurance and Swadeshi Life (later Bombay Life) were some of the companies
established during the same period. Prior to 1912 India had no legislation to regulate
insurance business. In the year 1912, the Life Insurance Companies Act, and the Provident
Fund Act were passed. The Life Insurance Companies Act, 1912 made it necessary that the
premium rate tables and periodical valuations of companies should be certified by an
actuary. But the Act discriminated between foreign and Indian companies on many accounts,
putting the Indian companies at a disadvantage.

The first two decades of the twentieth century saw lot of growth in insurance business. From
44 companies with total business-in-force as Rs.22.44 crore, it rose to 176 companies with
total business-in-force as Rs.298 crore in 1938. During the mushrooming of insurance
companies many financially unsound concerns were also floated which failed miserably. The
Insurance Act 1938 was the first legislation governing not only life insurance but also non-
life insurance to provide strict state control over insurance business. The demand for
nationalization of life insurance industry was made repeatedly in the past but it gathered

26
momentum in 1944 when a bill to amend the Life Insurance Act 1938 was introduced in the
Legislative Assembly. However, it was much later on the 19th of January, 1956, that life
insurance in India was nationalized. About 154 Indian insurance companies, 16 non-Indian
companies and 75 provident were operating in India at the time of nationalization.
Nationalization was accomplished in two stages; initially the management of the companies
was taken over by means of an Ordinance, and later, the ownership too by means of a
comprehensive bill. The Parliament of India passed the Life Insurance Corporation Act on
the 19th of June 1956, and the Life Insurance Corporation of India was created on 1st
September, 1956, with the objective of spreading life insurance much more widely and in
particular to the rural areas with a view to reach all insurable persons in the country,
providing them adequate financial cover at a reasonable cost.

LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its corporate
office in the year 1956. Since life insurance contracts are long term contracts and during the
currency of the policy it requires a variety of services need was felt in the later years to
expand the operations and place a branch office at each district headquarter. Re-organization
of LIC took place and large numbers of new branch offices were opened. As a result of re-
organisation servicing functions were transferred to the branches, and branches were made
accounting units. It worked wonders with the performance of the corporation. It may be seen
that from about 200.00 crores of New Business in 1957 the corporation crossed 1000.00
crores only in the year 1969-70, and it took another 10 years for LIC to cross 2000.00 crore
mark of new business. But with re-organisation happening in the early eighties, by 1985-86
LIC had already crossed 7000.00 crore Sum Assured on new policies.

Today LIC functions with 2048 fully computerized branch offices, 113 divisional offices, 8
zonal offices, 1381 satallite offices and the corporate office. LIC’s Wide Area Network
covers 113divisional offices and connects all the branches through a Metro Area Network.
LIC has tied up with some Banks and Service providers to offer on-line premium collection
facility in selected cities. LIC’s ECS and ATM premium payment facility is an addition to
customer convenience. Apart from on-line Kiosks and IVRS, Info Centres have been

27
commissioned at Mumbai, Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, New
Delhi, Pune and many other cities. With a vision of providing easy access to its
policyholders, LIC has launched its SATELLITE SAMPARK offices. The satellite offices
are smaller, leaner and closer to the customer. The digitalized records of the satellite offices
will facilitate anywhere servicing and many other conveniences in the future.

LIC continues to be the dominant life insurer even in the liberalized scenario of Indian
insurance and is moving fast on a new growth trajectory surpassing its own past records. LIC
has issued over one crore policies during the current year. It has crossed the milestone of
issuing 1,01,32,955 new policies by 15th Oct, 2005, posting a healthy growth rate of 16.67%
over the corresponding period of the previous year.

From then to now, LIC has crossed many milestones and has set unprecedented performance
records in various aspects of life insurance business. The same motives which inspired our
forefathers to bring insurance into existence in this country inspire us at LIC to take this
message of protection to light the lamps of security in as many homes as possible and to help
the people in providing security to their families.

» 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.

28
1928: The Indian Insurance Companies Act enacted to enable the government to collect
statistical information about both life and non-life insurance businesses.

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 nationalised. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with
a capital contribution of Rs. 5 crore from the Government of India.

The General insurance business in India, on the other hand, can trace its roots to the Triton
Insurance Company Ltd., the first general insurance company established in the year 1850 in
Calcutta by the British.

» Some of the important milestones in the general insurance business in India are:

1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of
general insurance business.

1957: General Insurance Council, a wing of the Insurance Association of India, frames a
code of conduct for ensuring fair conduct and sound business practices.

1968: The Insurance Act amended to regulate investments and set minimum solvency
margins and the Tariff Advisory Committee set up.

1972: The General Insurance Business (Nationalisation) Act, 1972 nationalised the general
insurance business in India with effect from 1st January 1973.

29
107 insurers amalgamated and grouped into four company’s viz. the National Insurance
Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company
Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company.

Chapter: 3

30
Comparative analysis of brand loyalty of LIC WithMax Life Insurance

Brand Loyalty of Life Insurance Corporation of India:

LIC continues to be the dominant life insurer even in the liberalized scenario of Indian
insurance and is moving fast on a new growth trajectory surpassing its own past records. LIC
has issued over one crore policies during the current year. It has crossed the milestone of
issuing 1,01,32,955 new policies by 15th Oct, 2005, posting a healthy growth rate of 16.67%
over the corresponding period of the previous year. From then to now, LIC has crossed many
milestones and has set unprecedented performance records in various aspects of life
insurance business.
The same motives which inspired our forefathers to bring insurance into existence in this
country inspire us at LIC to take this message of protection to light the lamps of security in
as many homes as possible and to help the people in providing security to their families.
LIC HOUSING FINANCELIC Housing Finance Ltd. is one of the largest Housing Finance
Company in India. Incorporated on 19th June 1989 under the Companies Act, 1956, the
company was promoted by LIC of India and went public in the year 1994. The Company
launched its maiden GDR issue in 2004.
The Authorized Capital of the Company is Rs.1500 Million (Rs.150 Crores) and its paid up
Capital is Rs.850 Millions (Rs.85 Crores).
The Company is recognized by National Housing Bank and listed on the National Stock
Exchange (NSE) & Bombay Stock Exchange Limited (BSE) and its shares are traded only in
De-mat format. The GDR's are listed on the Luxembourg Stock Exchange. The main
objective of the Company is providing long term finance to individuals for purchase /
construction / repair and renovation of new / existing flats / houses. The Company also

31
provides finance on existing property for business / personal needs and gives loans to
professionals for purchase / construction of Clinics / Nursing Homes / Diagnostic Centres /
Office Space and also for purchase of equipments.
The Company possesses one of the industry's most extensive marketing networks in India:
Registered and Corporate Office at Mumbai, 7 Regional Offices, 13 Back Offices and 190
marketing units across India. In addition the company has appointed over 1241 Direct Sales
Agents (DSAs), 6535 Home Loan Agents (HLAs) and 782
Customer Relationship Associates (CRAs) to extend its marketing reach. Back Offices
spread across the country conduct the credit appraisal and administrative functions. The
Company has set up a Representative Office in Dubai and Kuwait to cater to the Non-
Resident Indians in the GLCC countries covering Bahrain, Dubai, Kuwait, Qatar and Saudi
Arabia. Today the Company has a proud group of over 10, 00,000 prudent house owners
who have enjoyed the Company's financial assistance.

Products of LIC:
As individuals it is inherent to differ. Each individual's insurance needs and requirements are
different from that of the others. LIC's Insurance Plans are policies that talk to you
individually and give you the most suitable options that can fit your requirement.

A:Endowment Plan:
1. Lic's Jeevan Pragati
2. Lic's Jeevan Labh
3. Lic's Single Premium Endowment Plan
4.Lic's New Endowment Plan
5. Lic's New Jeevan Anand
6.LIC's Jeevan Rakshak
7. LIC's Limited Premium Endowment Plan
8. LIC's Jeevan Lakshya

B: Money Back Plans:

32
1.LIC's Bima Diamond
2.Lic's new money back plan - 20 years
3. Lic's new money back plan - 25 years

C: LIC New BimaBachat:

D: LIC New Children's Money Back Plan:

E: Term Assurance Plans:

1.LIC's Anmol Jeevan II
2. LIC's Amulya Jeevan II
3. LIC's Jeevan Tarun
4. LIC's e-Term - Sales Brochure

F: LIC New Term Assurance Rider - (Uin: 512b210v01)

Brand Loyalty of Max Life Insurance:

In order to provide customized life insurance solutions to customers via the bank’s network, Max
New York Life Insurance and Axis Bank have signed a 10-year relationship.
Max New York Life Insurance (MNYL), the seventh-largest life insurance company in India and
the third-largest Indian private bank, Axis Bank, have signed a 10-year strategic relationship to
provide customized life insurance solutions to customers via the bank’s network.

“We are confident of making this partnership with Axis Bank a great success. Our partnership
with Axis Bank—one of the most admired banks with a strong countrywide distribution, is
another step towards creating a top-of-the-rung balanced multi-channel distribution,” Analjit
Singh, chairman, Max New York Life Insurance, said.“Having built a strong customer-centric
franchise, we believe that they tie-up with a trusted brand like Max New York Life Insurance

33
 will enhance our product bouquet,’’ said Shikha Sharma, managing director & chief executive
officer, Axis Bank.
The bank tie-up will help Max New York Life Insurance business to strengthen its distribution
while Axis Bank will enhance its insurance product bouquet. Operations will begin from today.
It will also provide life insurance solutions to bank customers in 650 cities through more than
1,000 Axis Bank branches and intends to serve 20 lakh customers in five years. “We also
believe, given India's geographical diversity and low life insurance penetration level, multi-
channel distribution is the most effective way to connect with new customers,” Mr Singh
said. Max New York Life already has a tie-up with 54 other banks which include Yes Bank and
Barclays Finance. According to Rajesh Sud, managing director of Max New York Life
Insurance, the company is selling 65% of its insurance products through its own distribution
agencies while only 35% of its insurance is sold through other agencies like banks.

LIFE INSURANCE
A life insurance ensures that you protect your family against all the odds, even if you are not
around. Giving your family immunity gives you the security from worrying constantly about
their future. A life insurance is also a great investment option. A yearly investment will promise
you some incredible returns in the future. With Axis Bank, you can choose from several Life
Insurance options that fit your requirements. Policies are available to help you make the best
decision for your life insurance plan. After all, it is a decision that will stay with you forever. So
choose wisely and smartly.

 Max Life Online Term Plan:

Your family’s happiness and security are your top priorities. Therefore, when it comes to
protecting your family and fulfilling their dreams,
 Max Life Forever Young Pension Plan:
Max Life Forever Young Pension Plan provides the benefits of equity participation to build a
large retirement corpus and at the same time offers a guarantee to protect your savings from

34
 market downturns. It also offers additional benefits to safeguard your family against
unforeseen eventualities so that you and your loved ones live life on your own terms.
 Max Life Fast Track Super Plan:
Your investments need a product that helps you achieve your goals, by providing you with
portfolio strategies and multiple Fund options.
 Max Life Super Term Plan:
In an increasingly uncertain world, it is your top priority to ensure that your family continues
to enjoy financial security and a comfortable lifestyle even in your absence.
 Max Life Guaranteed Lifetime Income Plan:
You have worked hard to achieve financial independence and a comfortable lifestyle. You
want to maintain the same lifestyle during your golden years.
 Max Life Life Perfect Partner Super:
In your journey through life, you will need to take care of changing needs like asset creation,
investing for retirement, children’s education, marriage and so on.

 Max Life Life Gain Premier:

In your journey through life, you plan to fulfil various important goals like your children’s
education and/or marriage, peaceful retirement life etc.
 Max Life Guaranteed Income Plan:
Life is all about fulfilling your dreams for your family, like providing for children’s
education, planning for retirement, etc.
 Max Life Platinum Wealth Plan:
Life’s goals can only be reached through foresight and proper planning, in which one must
fervently believe.
 Max Life Whole Life Super:
In your journey through life, you plan and save for your child’s education, marriage, your
retirement, etc. but what about creating a legacy for your loved ones after you.
 Max Life Maxis Super:

35
 You have worked hard to achieve success and provide the best to your family. You always
want to see your Wealth growing and also keep it secured when you need it the most to fulfill
your life’s goals.
 Max Life Shiksha Plus Super Plan:
As parents, you want to provide the best education to your children.
 Max Life Monthly Income Advantage Plan:
Life is all about fulfilling your dreams for your loved ones like providing for best of
education.

Max Life Riders:

A Rider provides extra benefit in addition to the basic benefits offered under a Life Insurance
Policy.

HEALTH INSURANCE:
In today’s world, rising costs are a major cause of worry. And if by any chance, you fall ill or
meet with an accident, the costs shoot through the roof. With the progress of technology, medical
costs have also risen. This is where, health insurance comes in. A health insurance promises you
security. You can be certain that in case of some unforeseen circumstances, you will be
protected. Your medical expenses will be taken care of under the health insurance that you
choose and you will not have to worry about the medical costs. A health insurance gives you a
peace of mind, something that you require most in today’s day and age.
 MediPrime
Tata AIG MediPrime is a transparent health insurance policy without any sub-limits on health
expenses, so both you and your savings remain healthy.

 Wellsurance Woman
Tata AIG Wellsurance Woman, a perfect health insurance for women that looks beyond her
health insurance needs and ensures her well being in all phases of life.

36
 Know More
 Wellsurance Executive
Tata AIG Wellsurance Executive goes beyond what health insurance policies do, and is designed
to take care of the busy executive and his well being.

 Individual Accident and Sickness Hospital Cash Policy

Tata AIG Individual Accident and Sickness Hospital Cash is a perfect supplement for an
individual’s health insurance policy and can be taken along with any other health insurance
schemes.

 Wellsurance Family
You give your family nothing but the best. When it comes to health insurance, it should be no
different. Tata AIG Wellsurance Family pays special attention to each member of your family, to
prevent unexpected emergencies from affecting your financial health.

 Group Mediprime
Now your Savings Account cares for your Family’s health

HOUSE INSURANCE:
You worked harder, longer and saved every penny to give yourself and your loved ones the
security of a home. It’s only understandable that you should want to secure your most important
asset from any possible kind of natural or man-made catastrophe. Tata AIG realizes the need and
has designed a home insurance product that cater to everyone’s home insurance needs. After all,
homes are not built every day.
Standard Fire & Special Perils Policy
Key Features:
This policy provides coverage to your building structure provided it should not be of Kutcha
construction against the below mentioned perils.
 Fire
 Lightning
 Explosion/Implosion

37
 Aircraft Damage
 Riot, Strike and Malicious damage
 Impact damage by any Rail/Road, vehicle or animal by direct contact (excluding damage by own
vehicle)
 Subsidence and landslide including rockslide
 Bursting and/or overflowing of Water Tanks, Apparatus and Pipes
 Missile Testing operations
 Bush Fire
 Flood, Storm, Inundation etc.
 Earthquake

Fixation of sum insured: The sum Insured shall be present day cost of construction of the
building excluding the value of land.

TRAVEL INSURANCE

 Travel Guard Insurance for Overseas Travel

Travel in peace anywhere in the world. Travel with Tata AIG's Travel Guard.
 Student Guard Plus for Students Traveling Overseas
Student Guard Plus product is designed keeping in mind the student going abroad to pursue
higher studies as well as the University insurance requirements for such courses.
Asia Guard
Asia Guard provides a comprehensive level of protection that can take care of any and every
mishap, right from loss of baggage to critical medical situations.

MOTOR INSURANCE

Private Car Insurance:

Your car is your valued possession. Therefore, it becomes crucial to insure it. In today’s times
you need a comprehensive policy that not only covers you against the mandatory third party
liability but also against the damage to the vehicle caused due to fire, theft, explosion, burglary,

38
 riots, strikes, earthquakes, flood, cyclones, accidents, malicious acts and terrorist activities. A
Car Insurance is always your friend in times such as these.
Auto Secure, a car insurance policy from Tata AIG, has been designed to give you the extra
assurance and peace of mind you need. That’s not all,through Tata AIG’s unique add on covers,
you can enhance the protection and coverage for your car. You can also calculate your EMI
through the car EMI Calculator.
Key Features:
 Free pick-up of car!*
 Direct settlement facility at special garages!*
 Upto 6-month accident-repair warranty
 Quality spares and materials, guaranteed!
 Claim settlement in 7 days!
 Enhanced protection though 8 unique add on covers.

What does the Auto Secure car insurance cover?

 Loss or Damage to your Vehicle: Any partial or total loss to your vehicle arising out of accident
or on account of fire and special perils is covered.
 Third Party Legal Liability: Covers Third party property damage (up to 7.5 lacs) and Third party
Bodily injury
 No deduction on count of Salvage value
 Green Channel Settlement: Green Channel Settlement is another first in the car insurance
industry. This innovation promises to make accident claims and repairs easier than never before!
You get value added propositions through our accredited garages.
 Auto Restore Warranty: Tata AIG Auto Secure policyholders can enjoy'Warranty on Accident
Repairs' when a customer opts for the 'Green Channel Settlement
 Enhanced protection though 8 unique add on covers.

Get Added Protection from our unique Add On covers

39
 Depreciation Reimbursement: Full claim without any deduction for depreciation on the value of
parts replaced. The cover is available for vehicles up to 3 years old and operates for maximum 2
claims during the policy period.
 Return to Invoice: Covers the difference between the ‘claim amount receivable’ under the policy
and the ‘purchase price of vehicle or current replacement price’ in case the vehicle is declared a
Total Loss or a Constructive Total Loss. In case the same vehicle make and model is available at
a lower price than the purchase price, then the lower price will be considered for arriving at the
differential amount. The cover also pays first time registration charges and road tax on the
insured vehicle. Cover is available for vehicles that are up to 3 years old. This cover is available
only to first registered owner of the vehicle and is not available for imported vehicles.
 Daily Allowance: Pays a fixed sum as an allowance towards hiring a transport while the vehicle
is under repair for a valid claim and the repair time is more than 3 days. The cover will be valid
for maximum 10 days and in case of Total Loss / Theft claims, validity will be up to 15 days.
 No Claim Bonus Protection: Provides the protection of NCB in case of one valid own damage
claim in the policy during the policy period. The cover can only be provided in case the vehicle
has 25% NO Claim Bonus and no claim in preceding 2 years. The protected NCB is available
only if vehicle is renewed with Tata AIG.
 Repair of Glass, Fibre, Plastic and Rubber Parts: In case any of the Glass, Fibre, Plastic and
Rubber parts are repaired in case of a claim, the No Claim Bonus is not impacted and the insured
continues to enjoy the same on renewal.
 Key Replacement: Pays the cost to replace vehicle keys if lost or stolen, plus the cost of locks if
the vehicle is broken into.
 Emergency Transport and Hotel Expenses: Pays the cost of overnight stay and transportation
charges for returning to the place of residence or the nearest city of travel, if the vehicle becomes
immobile due to an accident while travelling outside municipal limits.
 Loss of Personal Belongings: Pays for the loss or damage to personal belongings inside a vehicle
at the time of loss or damage to the vehicle.

40
Chapter: 4

41
 Data analysis and Interpretation
1

42
2

43
3

44
4

45
5

46
6

47
7

48
8

49
9

50
10

51
11

52
12

53
13

54
14

55
15

56
Chapter: 5

57
 Findings, Learning and Conclusion

Findings:

1. Insurance is an inevitable part of human being today

2. People are much more aware about LIC

3. Brand LIC have a monopoly in the market

4. LIC is the most trusted company in the market

5. Many investors don’t know about other foreign companies prevailing in the market

6. While investing people generally think about benefit of safety and value for money

7. Trust, image and companies track record are mostly considered by investor.

8. If Investor's get aware & convinced by the adviser

58
9. There is less impact of advertising on investors that he can't recall the advertisement.

Learnings:

1. Loyal customers of LIC helps LIC to get more business brand name LIC help them to
attract new consumer and reduces marketing cost to LIC.

2. LIC has a strong loyalty base which is competitive threat to other insurance company.3.
Brand LIC does not induce costumers in terms of price perception

4. Investors tend to remain loyal to Brand LIC because of strong foot-hold in the market
base. 5. LIC is the most preferred insurance company in India, but LIC is facing competition
from other companies like ICICI, HDFC, and Reliance.

6. While selecting insurance company y, safety and value for many benefits are mostly
considered by investors. Trust as well as company track record are important parameters
according to investors for selecting insurance company.

59
Conclusion

In the present competitive world the success of the company depends on satisfying
theInvestors as well as channel members. Brand Loyalty concept is related with the Faith of
brand. The customers trust on brand it results in to the brand Loyalty Product Without brand
name cannot meet the customer requirements in the name of the brands; Companies want to
charge more or try to exploit the customer. Company or for customer. If customers are
indifferent to the brand and buy with Respect to features, price, and convenience with little
concern to the brand name, there is Likely little equity

Brand LIC enjoy a strong foot hold in insurance sector even after privatizing Insurance sector
around a decade ago none of private insurance company was able to Taste the success as
Brand LIC. People prefer LIC because of brand value, Company’s Track record and also
because of emotional sentiment attach to LIC.

60
After careful study of "A study of Brand Loyalty" with reference to Life Insurance
Corporation of India, LIC is a well-established brand in the market because of its long
market standing and loyalty.

The investment habits of Indian consumers are changing very frequently. The individuals
have their own perception towards various types of investment plans. The study of this
research work was focused over consumer’s perception on investment towards Life Insurance
Services. The objectives of the study were to evaluate the factors underlying consumer
perception towards investment in life insurance policies; and to compare the differences in
consumer perception of male and female consumers.

The tests that were used for our research activities were- Item to Total Correlation Test,
which we applied on 26 items and only one was dropped out, 25 items being accepted. Next
was Reliability Test to check the reliability of the items. The result was 0.915. Therefore the
items were highly reliable.

Then we applied the consumer’s perception towards Life Insurance Policies is positive. It
developed a positive mind sets for their investment pattern, in insurance policies. Still some
actions are needed for developing insurance market. The major factors playing the role in
developing consumer’s perception towards Life Insurance Policies are Consumer Loyalty,
Service Quality, Ease of Procedures, Satisfaction Level, Company Image, and Company-
Client Relationship. Insurance industry has to go ahead. A lot of opportunities are still
waiting. This research will help in developing the market share, loyalty and further
development in insurance sector.

61
ANNEXURE

62
 QUESTIONNAIRE

1.Gender?

A. Male B. Female

2. Age Group?

A. Below 20 B. 21-25 Yrs.

C. 25-30 Yrs. D. 35 And Above

3. Educational Qualification?

A. Under Graduate B. Graduate

C. Post Graduate D. Doctorate

63
4. Monthly Income?

A. 10,000-20,000 RS B. 20,000-25,000 RS

C. 25,000-30,000 RS D. 30,000-35,000 RS

E. 35,000 And Above

5. Give Reasons for Insuring With LIC?

A. Company Profile B. Brand

C. Grievances Handling D. Undue Delay in Claim

E. Public Sector F. All The Above

6. What Scheme of Insurance Policy Have You Taken?

A. Whole Life B. Endowment Plus

C. Money Back D. Pension Fund

E. ULIP F. Others

7. Satisfaction Level towards Services Offered by LIC?

A. Fully Satisfied B. Partially Satisfied

C. Not Satisfied

8. If You Buy a New Policy Would you like to go For LIC?

A. Yes B. No

64
9. Rate Your Overall Satisfaction With Insurance Policy of LIC of India?

A. Highly Satisfied B. Satisfactory

C. Average D. Dissatisfactory

E. Highly Dissatisfactory

10. Agents Inform and Guide the Customers at Regular Intervals as Regards the Policy
Status, Due Dates of Premiums, New Products and Services?

A. Strongly Agree B. Agree

C. Neither Agree nor Disagree D. Disagree Strongly

E. Disagree

11. Would You Suggest Your Friends/Family Members to Get Insured With LIC?

A. Yes B. No

C. Maybe

12. According to you what is The Importance of Brand Loyalty in Insurance Sector?

A. Very Important B. Important

C. Not so Important

13. Various Reasons for Being Loyal to LIC?

A. Value for Money B. Consistency in Service

C. Trust and Safety D. Goodwill And Company Track Record

65
14. According to You Does Advertisement Play an Important Role in Deciding Brand
Loyalty For Insurance Company?

A. Yes B. No

15. Would You Prefer to Shift From Current Insurance Company to Another?

A. I Would Shift B. I Would Not Shift

C.It Depends

Life Insurance Corporation of India – A Case Study

The Life Insurance Corporation (LIC) of India was established in 1956by the Indian
government as a separate entity dealing with life insurance. The corporation was created by a
nationalization process, under which 245 Indian and foreign insurance companies were
merged.

The brand was given a logo of two hands protecting a lamp (see Image 1). The acid test for
the life insurer came in 1999 with the de-regularization of the Indian insurance sector. The
opening up of the sector was undertaken to improve the penetration of insurance products,
provide better services, and at the same time, reduce government intervention.

With the advent of foreign players, the market share of LIC shrank by 22 per cent, while the
annual premiums declined from 564 per cent to 109 per cent between 2000-01 and 2002-03.
However, the entry of foreign players served as a silver lining for LIC, since it resulted in
considerable growth in the life insurance industry and life insurance penetration rose to 4 per
cent in 2008-09 from 2.15 per cent in 2000-01 (Manickawasagam and Pandikuma 2010).
Ever since the entry of private players in the insurance industry, experts have been writing

66
off LIC, but the Company has displayed considerable resilience and foresight, which has
helped it grow from strength to strength.

Gearing up

The LIC management was quick to realize that to tide over the challenges, which had
emerged, some key changes had to be undertaken. Hence, the company began to focus on
three core areas for improvement (Narain 2000):

• upgrading the marketing skills of its mammoth workforce

• energizing the entire organization and awakening it from years of slumber

• initiating steps to enhance speed, quality, and adoption of technology

Harnessing people Power

Government Organizations have been seen to buckle under the huge employee costs that
accrue to them. However, LIC was able to utilize the same people power to fuel its growth.
Rather than handing out Voluntary retirement schemes (VRS) to reduce its salaried
employee base, it initiated a host of HR initiatives to improve employee productivity. Its post
recruitment Orientation training (PROT) is believed to transform average Sellers into top
performers. Under this programme, 4 lakh agents were provided intensive training in 2010,
Another initiative that was started in 2009 was ‘senior business associates’ (development
officers) who were hired at very low costs and reimbursed as part of office expenses. In
2009, 550 such officers were able to generate premiums worth Rs2600 crore. Encouraged by
their performance, the senior business associates were increased to 1000 in 2010 (Nair and
Kurup 2010). Another practice that has served to motivate employees at LIC is the
discouragement of lateral hiring, as it believes in acquiring and nurturing talent and spending
tremendous sums of resources over 8-10 years in shaping recruits into officers. Every year, it

67
relocates 10 per cent of its workforce through transfers and promotions to develop better
functional and regional understanding. In 2009 alone, it moved 10,500 employees across
2853 offices all over India. To ensure successful adoption of the new roles, managers at
select career levels are provided a week long induction programme to ensure that the
movement is seamless. While most organizations adhere to the Culture of the boss training
the juniors, the reverse is true in the case of the learning culture at LIC, Here junior Officers
Coach the senior executives. Most transferees and promotees at LIC learn the intricacies of
their new roles from their juniors. This practice of bottom-up coaching is reflective of the
unconditional trust that exists in the interpersonal relationships in the organization (Machado
2009).

Claim Settlements

Claim settlement has been a major Source of Consumer apprehension. Moreover,

government Organizations, due to their cumbersome procedures and apathetic attitudes, often
drove customers towards private players. However, LIC successfully improved performance
on this parameter and became the most credible life insurer based on actual claim
performance.

This is no small feat for a company that receives over 45,000 claims on an average working
day (ET -Brand Equity 2008). During the year 2008-2009, it settled claim worth Rs 1.49
crore, settling 97 per cent Claims on or before the due date and settling 93 per cent non-early
death claims (i.e., claims that fall after three years from the commencement of the policy)
within twenty days of intimation. With its continued dedication, LIC managed to achieve the
best claim settlement ratio in the industry— 96.54 per cent for the year 2009-10.

68
Taking up Technology

LIC began to leverage information technology in servicing its business from the onset. The
Company introduced Computers in 1964 by replacing unit record machines that had been
introduced in the 1950s. During the 1990s, standardization of hardware and software was
initiated. To increase responsiveness towards customers, in 1995, LIC began offering online
service to policyholders and agents. This facilitated the availability of policy status report,
acceptance of premium and revival, and loan quotation on demand. LIC also set up
interactive voice response system (IVRS) in fifty-nine centres across the country and 150
interactive touch screen-based multimedia kiosks in strategic locations in metros and larger
cities to disseminate information. These kiosks also accepted premium payments. 2008, it
introduced Entrepreneur Data Management System (EDMS) across all its branches in a
phased manner. This enabled LIC to maintain paperless records of its customers.

Channels of Distribution

Till the year 2000, LIC relied only on agency channels of distribution, but with the entry of
private players, it started to consider alternative forms of distribution. The channels it
adopted include bancassurance mode or selling insurance through banks, brokers, and
corporate agents. Over the years, L1C has collaborated with thirty-nine banks for
bancassurance mode, including nine nationalized banks. Other than this, it also utilizes the
services of 510 corporate agent and 125 insurance brokers. In 2010, tied up with Net Ambit,
a company engaged in the distribution of financial Services, to further enhance its alternative
distribution system. Through this arrangement. LIC’s products are now available across 140
offices of Net Ambit .Other than this, the direct channel was launched in Aug 2009 to cater
to tech savvy customers. This helped the company in lead generation; the customer’s interest

69
is captured by the server, which passes on the information to the direct sales executive for
approaching the customer.

Rural Focus

Through its high level of accessibility and availability, LIC has been able to increase
proximity with the target group, irrespective of their location and status. While the private
players restricted themselves to the more affluent classes, it was LIC’s duty to extend its
services to cover the poorest and remotest customer. For its rural drive, it not only hired
agents from rural areas, but also opened up satellite offices to cater to the rural masses.

The Jeevan Mangal (see Image 2) and New Jana Raksha polices were rural specific products
and hence were complete hits there. In 2009-10, as much as 26 per cent of LIC’s business
came from the rural areas. The company sold 15 lakh micro policies to people below the
poverty line during the same period (Kurup 2010). Its rural strategy also worked wonders
due to a number of pertinent innovative schemes like Bima Gram- programme wherein a
portion of the premium collected.

Wide Portfolio

As the needs of consumers’ underwent changes, LIC upgraded its portfolio to launch
schemes for every pocket and every need. Currently, it offers over fifty different plans that
range from the conventional plans such as endowment assurance (Jeevan Anand), term
assurance (Jeevan Mangal, and money back plans to contemporary unit linked plans (LIC
Market Plus 1) (see Images 3,4). Other than this, it also has plans for Women, children,
pensioners, etc. (Superbrands, 2009).

Promotion

70
Just like any other industry, in the insurance sector too promotion is critical for a firms
survival. Initially, most insurance companies relied on the print media for advertising since
insurance is a high involvement product. However, slowly their advertising spends across
other mediums, particularly television, began to rise. LIC also upped its advertising spends
over the years and has consistently ranked amongst the top ten advertisers in print and
television mediums. In an attempt to lure the youth towards its brand, LIC also sponsored
spots on KaunBanengaCrorepati and Zee Cine Awards in 2005. Its advertising spend in the
same year was to the tune of Rs116-crore. Prior to 2007, the company was dealing with
forty-five advertising agencies, thirteen at the national level and thirty-two at the zonal level.
In 2007, it decided to empanel just four agencies, thus, breaking away from a twelve year-old
practice (Exchange for Media 2004). In 2010, it chose four agencies RK Swamy BBDO,
Mudra, JWalter Thompson, and Draft FCB Ulka-for creative and media duties. The media
budget for the same year was a massive Rs 250-crore spread across print, digital, television,
radio, and below the line (communication targeted to individuals like through emails, etc.).
The seriousness that LIC has displayed towards its communication strategy has also added to
its image as a marketer to reckon with.

Focus on Customer Service

LIC identified quite early that one of the key ways to bringing in new Customers and
retaining existing ones was to improve the level of services delivered. Operating in a market
where insurance is primarily a push product, with Customers having low levels of financial
literacy, the company has worked extremely hard to tap into the minds and hearts of its target
audience. In 2004, LIC hired the services of Wipro and IBM for its customer relation
management project at a cost of Rs 50 crore. Under the project, both companies worked
together to compile data of over fifteen crore policyholders of the company. A thorough
analysis of this data enabled the company to study consumer behavior and chalk out its
marketing strategy (Pandey 2004). It also introduced a host of customer friendly initiatives

71
such as facilitated Settlement of Survival benefits without Calling for policy documents,
concessions to Customers for reviving their lapsed policies, and alternate channels for
payment of premium through ATMs, ECS (electronic Clearance system), the Internet, and
even SMS. It is through such customer-centric measures that despite the entry of a slew of
private players, LIC has still been able to hold on to its dominant position.

Road Ahead

Many believed that the multinational giants with their deep pockets and Smart marketing
think tanks would eat into the market share of LIC. However, much to their chagrin, LIC
over the years has managed to retain consumer trust and has built on its image. This trust was
demonstrated by the Company topping Brand Equity’s most-trusted brands Survey for five
consecutive years from 2004 to 2008. It was able to leverage its brand aura to extend to
businesses like housing finance, asset management, etc.

In January 2011, LIC crossed the landmark 2.5 crore policies and received 34,137.12 crore in
first premium income, i.e., first premium received in a particular financial year, in the
financial year 2010-11. The endowment plan launched in September 2010 garnered
1017,560 policies with a first premium income of Rs 4804.12 crore, in just over four months.
Thus, with such superior performance and highest brand recall in the industry, brand LIC has
clearly proven that far from extinguishing, the lamp is going to burn stronger and brighter
lighting up more and more lives.

Discussion Questions:

1. What have been the Key success factors that have helped LIC tide over competition?

2. How did LIC manage to gain a foothold in rural India?

3. What role has LIC’s promotion strategy played in brand building?

72
73
LIC Have more Brand Loyalty Kvs- An Article

ISSN 0974 – 9497 Year: August 2009

India is a country where the average selling of life insurance policies is still lower than many
western and asian countries, with the second largest population in world the Indian insurance
market is looking very prospective to many multinational and Indian insurance companies
for expanding their business and market share.
Before the opening of indian market for Multinational Insurance Companies, Life Insurance
Corporation (LIC) was the only company which dealt in Life Insurance and after opening of
this sector to other private companies, all the world leaders of life insurance have started
their operation in india. With their world market experience and network, these companies
have offered many good schemes to lure all type of Indian consumers but unfortunately
failed to get the major share of market.
Still the LIC is the biggest player in the life insurance market with approx 65% market share.
But why Indian counsumers do not trust on many companies and why the major population
of india do not have any life insurance policy or what are the factors plays major role in
buying behavior of consumers towards life insurance policies.

74
Bibliography
A) Books
1. Bhave.S.R., Saga of Security, LIC of India
2. Henry D., Road to brand equity, Himalaya Publishing House.
3. Dr. Gupta.S.L., Brand Management, Himalaya Publishing House
4. Dr. Joshi .C.J., Textbook of Insurance (B.Com-1), PhadakePrakashan.

5. Jha S.M., Service Marketing, Himalaya Publishing House.

6. Kotler Philip, Marketing Management.
7. SenguptaSubroto, Brand positioning, Tata Mac- grew hill publishing co. Ltd.

B) Journals

1. LIC annual report. 2005-2006.

2. Manual for agent, LIC of India

C) Websites
1. www.licindia.com
2. Www. yahoo.com
3. Www. google .com
4. Www. Wekipedia.com

75