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A study on Consumers Behavioural Attitudes towards Life Insurance Products A Case Study of Guntur Dist.
Seminar Paper submitted in partial fulfilment of requirement for Pre-Ph.D. of
DOCTOR OF PHILOSOPHY In the Department of Commerce &Business Administration Acharya Nagarjuna University, By
Prasadarao Yenugula Regd.No: Y14COMR110
Research Supervisor
Dr. T. Sreekrishna, M.B.A., Ph.D., Acharya Nagarjuna University
Department of Commerce and Business Administration ACHARYANAGARJUNAUNIVERSITY NAGARJUNA NAGAR, GUNTUR - Dt. ANDHRA PRADESH February 2015 0
A Study on Consumers Behavioural Attitudes towards Life Insurance Product A Case Study Of Guntur Dist. Abstract The present research is an attempt to illustrate the attitudes of Guntur consumers towards the Life Insurance services. The study has to be done by collecting the responses of consumers through structured questionnaire on five point Likert scale. A meaningful total of responses has to be collected to assess the level of awareness about the insurance services and their attitude towards insurance services. Research basis is to find the socio demographic and economic variables that have significant impact on consumers’ attitudes towards insurance services.
Keywords: Consumers, attitude, demography, insurance services, marketing activities
1. INTRODUCTION Attitudes are generally considered as judgments and these are results of either direct experience of the social environment or through observations. So attitude can be considered as a hypothetical construct, which represents degree of liking or disliking of an individual towards a particular object. Winning and losing are two opposite sides of a same coin and that coin is attitude. Attitude is composed of beliefs about the consequences of performing the behaviour and an evaluation of how the consumer will feel about those consequences. Attitude may be defined as an enduring organization of motivational, emotional, perceptual, and cognitive process with respect to some aspect of our environment (Best et.al, 2003). Whereas in the context of consumer behaviour, attitude is a learned predisposition to behave in a consistently favourable or unfavourable way with respect to a given object (Kanuk and Schiffman, 2000). As learned predispositions, attitudes have a motivational quality; that is they might propel 1
a consumer toward a particular behaviour or repel the consumer away from a particular behaviour. Various attributes and benefits of the product brands affect the attitudes of the consumers towards these product brands. On this basis it can be argued that what are the benefits, which can be perceived by the consumers from the insurance services for themselves, and also they can enquire about the way to get those benefits from insurance services. These types of queries want attention as consumers are very less aware about the benefits of insurance services in their lives. Reason for this type of problem may be poor information provided by the insurance companies. The problem occurs when the consumers face authentication about quality of the insurance services. Therefore it is very well understood that those consumers who do not have knowledge of these types of insurance services will fall into troubles in the course of evaluation of relative offerings by different competitive insurance companies. Various demographical factors play vital role in the development of relationships among different insurance service providers and consumers. Consumers come from different cultural backgrounds. They may have different needs and demands according to their social and cultural life. As India is a vast diverse country in terms of cultural and other aspects, so various insurance service providers need different strategies to cater the needs of different consumers in the insurance market. Insurance penetration in developing country like India, where social and cultural diversity exists varies from rural to urban areas. In case of poor people who are living below poverty line, there insurance penetration is supposed to be low. The foregoing therefore suggests that there will be difference between the common behaviour response to insurance services and strategies and what obtains in Indian business environment. So, by taking into consideration basic demographical variables, the present study will investigate the consumers’ behavioural attitudes towards Life Insurance Services. 2. STATEMENT OF THE PROBLEM The study of consumer’s behavioural attitude towards a professional service like life insurance in the post liberalization period is considered to be one of the most 2
challenging problems in the insurance sector. The main problem of the study is to examine the factors that influences consumer’s attitude To solve this problem, it is imperative for the insurance companies to keep a track of the customers through continuous feedback mechanism to understand customers’ changing expectations to develop strategies for the future. Hence, this study is undertaken to examine how the differential patterns of behavioural attitude of consumers influence the marketing of insurance services 3. NEED FOR THE STUDY In the current scenario with the liberalization of the life insurance industry the customer will be the single most important factor driving changes in the life insurance business. Fuelled by competition, increased awareness will bring the customers on to centre stage. For insurers, therefore, the critical success factor would be managing the customer. In the Indian context, with the onset of financial deregulation, monoliths of the insurance industry are changing. It is witnessing a redefining of its role by exhibiting a paradigm shift from brick mortar strategy to clickandmortar strategy. Thus, an insurance company’s ability to attract and retain the customers is a function of not only what it offers but also how it serves its existing customers. A large number of studies have been carried out in US and other Western countries to identify the important factors that guide the consumers while selecting life insurance products. While most seek a combination of financial protection as well as investment needs to achieve longterm goals like child’s education, buying a house etc., the need for buying an insurance not only differs among individuals, but also varies with the person’s age. The insurance needs of an unmarried working executive when he is in his early days of employment is different from his needs when he is middle aged and married with children. It is thus important that the individual evaluates his insurance need, considering his age, following which he can arrive at a suitable protection and investment mix and tenure. Life insurance companies have to understand the requirements of 3
the customers. For this purpose lots of surveys and studies have to be conducted periodically to explore and identify their expectations in the existing environment. 4. OBJECTIVES OF THE STUDY Main objective of the present study is to probe into the attitudes of Indian consumers towards insurance services by using basic socio demographic and economic variables 1. To observe the current scenario of the Life insurance Industry in India. 2. To identify and compare the attributes relating to customer preference and their influence on the purchase of Life insurance products.
5. HYPOTHESES For the present research work nine hypotheses have been developed: i.
There is no effect of age on consumers’ behavioural attitude towards
ii.
insurance services There is no effect of gender on consumers’ behavioural attitude towards
iii.
insurance services There is no effect of marital status on consumers’ behavioural attitude
iv.
towards insurance services There is no effect of level of education on consumers’ behavioural attitude
v.
towards insurance services There is no effect of mode of employment on consumers’ behavioural
vi.
attitude towards insurance services There is no effect of professional inclination on consumers’ behavioural
vii.
attitude towards insurance services There is no effect of level of household income on consumers’ behavioural
viii.
attitude towards insurance services There is no effect of mortgage property ownership on consumers’ behavioural attitude towards insurance services
4
ix.
There is no effect of owning insurance policies on consumers’ behavioural attitude towards insurance services.
6. REVIEW OF LITERATURE Quality of life consists of various factors including health, community life, gender equality, political freedom, political stability and security, material wellbeing, family life, and job security. In addition to it, insurance against illness or death is also considered as indicator for quality of life in developing countries. Being an indicator of quality of life, insurance has significance in human life. The literature of attitude and perception of life insurance policyholders have largely focused on factors predicting these attitudes (Skinner and Dubinsky, 1984; Kruse and Ozdemir, 2004). Factors such as consumers’ perceived value (Smith, 2006) satisfaction (Kuhlemeyer and Allen, 1999) and purchase decisionmaking responsibility (Barron and Staten, 1995) have been considered as most important them of the literature on attitude and perception of life insurance policyholders. For example, in a survey of 1,462 families, Skinner and Dubinsky found out that employment status of the wife and education of the husband discriminate mostly between which family member(s) is responsible for insurance purchasing decision. Other significant variables include wife‘s educational level, husband‘s employment status, family income, and husband‘s occupation. Kruse and Ozdemir (2004) explore the relationship between individual‘s risk perceptions and their willingnesstopay for increased safety in a lowprobability, highconsequence event.
A study conducted by Patil (2003) revealed that the insurance coverage of agricultural groups and agricultural labour is very low. The performance of childrenrelated policies such as Jeevan Kishore, Jeevan Balya, etc., is very 5
poor except the children money back policy, which has also not been contributing significantly. The demonstration of product features by the agents is not satisfactory. Raman and Gayatri (2004) have observed the customers’ awareness towards new insurance companies. They found that 53% of the respondents belong to the age group below 30, 24% to the age group 3140, 2% belong to the age group of 4150 and the rest of the respondents belong to the group of ‘above 50’. They also observed that a large percentage of the insured respondents (32%) are professional, and 56% of the respondents are married. It is also found that 52% of the respondents have taken a policy to cover risk and 44% of them to avoid tax and the remaining to invest their surplus amount.
In the areas of marketing research, customer satisfaction has been considered as one of the most discussed subject in past times, as for the service providers, measuring customer satisfaction is of utmost requirement.
Mushtaq (2005) concluded in their empirical study that Indian banks fall much below the perceptions of their customers on all the five dimensions of service quality, where as in case of foreign banks, these banks are exceeding the perceptions of their customers on two dimensions of service quality namely; tangibility and reliability. This finding revealed the notion that Indian banks in terms of service quality do not meet the expectations of their customers. In case of foreign banks perceptions and expectations of the customers about service quality offered by the banks do not have a big gap.
Najjar and Ram (2006) study on the US banking sector using a nondifference score of SERVQUAL scale focused on the importance of improving service quality in the banking sector. The study used statistical tools like ANOVA, Factor Analysis, and Regression to analyse the data. The final results of the service quality analysis showed that reliability and responsiveness were the 6
two most critical dimensions of service quality and they are directly related to overall service quality. The findings of the study substantiated the findings of Berry et al. where reliability and responsiveness were shown to be important factors of service quality.
It has been proved in marketing literature that retention of customers is less costly as compared to acquisition of new customers. Keeping this fact in mind various organizations focus on relationship marketing. Customer relationship management has come out as one of major strategies of companies in the modern context of business. Now companies are focusing on framing customer specific strategies so that all the customers of the company should be served effectively and efficiently according to their needs and demands. 7. SCOPE OF THE STUDY The study focuses on the consumer behaviour relating to the areas of customer preference, loyalty, purchase decision and complaining behaviour of customers in the purchase of life insurance products. In the current scenario the life insurance business has become liberalized and competitive. It is found that exploring the behaviour of the customers will give an insight to life insurance companies to maximize their customers. 8. RESEARCH METHODOLOGY Pilot Study The pilot study has to conduct to check the reliability and feasibility of the questions as well as the statements included in the questionnaire. The Cronbach’s Alpha method (coefficient of Reliability) and Hoteling’s t 2 test are to be used to check the normality as well as the reliability of the statements in Likert’s Five Point Scale. Main Study
7
This study is based on both primary data as well as secondary data. The primary data is collected from the consumers of life insurance through a well Framed questionnaire. The questions are to be constructed in optional type as well as in Likert’s Five Point Scale. The optional type is aimed at ascertaining Demographic details of the customers. The Likert’s Five Point Scale is applied to seek the opinion of the customers Regarding expectations, perceptions. Besides these, the customer’s opinion on the level of agreement on different characteristic features, purchase decision and emotional factors affecting purchase of life insurance policies, are also obtained.
Scaling Techniques The Likert’s Five Point Scale is a unique technique exploited in the study in the various context, based on the measures of opinion. In ascertaining expectations and perceptions, the Five Point Scale is allowed to range over Very Low to Very High with mediocre value representing medium expectation or perception. On other parts of the questionnaire the Five Point Scale works out to express the opinion of customers from Strong Agreement to Strong Disagreement. The middle value 3 represents neutral opinion of customers of life insurance policies. Explicitly, the two different Likert’s Five Point Scales are expressed below: 5 VERY HIGH 4 HIGH 3 MEDIUM 2 LOW 1 VERY LOW
5 STRONGLY AGREE 4 AGREE 3 NEUTRAL 2 DISAGREE 1 STRONGLY DISAGREE.
Data Collection The primary data is collected from the policy holders of the selected companies. The secondary data is collected from reports, journals, newspapers, magazines and websites. The primary data is collected through the questionnaire with suitable scales as mentioned above from the customers of life insurance policies in Guntur. Sample Size. 8
Since the population is unknown, a Simple Random Sampling procedure is to be adopted to obtain better statistical results to reflect the characteristic features of the population. Data Analysis. The primary data collected in the form of responses from the customers are systematically analysed by identifying the independent as well as dependent variables. All the responses of the customers obtained through Likert’s Five Point Scale forms the domain of dependent variables and the questions about life insurance policies, information search and demographic background are taken up as independent variables. Based on these two categories of variables, the following statistical tools are to be applied to obtain the results desired in the objectives of the study. Statistical Tools Used a. One sample ttest is used to ascertain the nature of opinion of respondents regarding the various consumer behavioural aspects of life insurance policies. b. Factor analysis is exploited to identify the predominant factors of customer’s expectations, perceptions, and characteristic features of the product and purchase decision. c. Oneway analysis of variance is used to know the influence of independent variables on the various factors of dependent variables. d. Discriminant analysis, Multiple Regression are sequentially used to identify a correlation between clusters and factors of consumer behaviour regarding life insurance policies. 9. LIMITATIONS OF THE STUDY The study suffers from certain limitations 1. The data for the purpose of the study is collected from respondents in Guntur only. 2. The study concentrates only on certain factors relating to customer purchase behaviour. There may be other influencing factors too, which have not been considered due to time and data constraints. 9
3. The primary data for the study is collected through questionnaires and the results of the study may suffer from the inherent drawbacks of such instrument. 4. The study compares the perceptions and expectations of the customers of the life insurance service. Perceptions are subjective in nature and are likely to change with the changing times and market conditions. This study cannot be generalized for the customers of life insurance products in the whole of India. The results obtained in this study or suggestions offered are based on the study conducted on the consumers in a small geographical base viz., the Guntur District.
REFERENCES Cronbach, L.J. (1951). Coefficient Alpha and Internal Consistency of tests. Psychometrika. 16, pp. 297334. Kuhlemeyer, G.A. and Allen, G.H. (1999). Consumer Satisfaction with Life Insurance: A Benchmarking Survey, Financial Counseling and Planning, 10(2), pp. 3544. Mushtaq, A.B. (2005). Service Quality Perceptions in Banks: A comparative analysis. Journal of Business Perspective, 9(1), pp. 1120. Najjar, L. and Ram, R.B. (2006). Service Quality: A Case Study of a Bank. The Quality Management Journal, 5(3), pp. 3544. Patil, K.S. (2003). Life Insurance Corporation of India, Its Products and Their Performance Evaluation: A Special Reference to Gulbarga District, Finance India, (17) 3, pp. 10371040. Skinner, S.J. and Dubinsky, A.J. (1984). Purchasing Insurance: Predictors of Family DecisionMaking Responsibility, Journal of Risk and Insurance, 51(3), pp. 513523.
10
Smith, S. (2006). Persistency in Pension Contributions in the UK: Evidence from Aggregate and MicroData Retrieved February 24, 2007, from http://www.bris.ac.uk/Depts/CMPO/workingpapers/wp139.pdf.
11
Seminar Paper submitted in partial fulfilment of requirement for Pre-Ph.D. of
DOCTOR OF PHILOSOPHY In the Department of Commerce &Business Administration Acharya Nagarjuna University, By
Prasadarao Yenugula Regd.No: Y14COMR110
Research Supervisor
Dr. T. Sreekrishna, M.B.A., Ph.D., Acharya Nagarjuna University
Department of Commerce and Business Administration ACHARYANAGARJUNAUNIVERSITY NAGARJUNA NAGAR, GUNTUR - Dt. ANDHRA PRADESH February 2015 0
A Study on Consumers Behavioural Attitudes towards Life Insurance Product A Case Study Of Guntur Dist. Abstract The present research is an attempt to illustrate the attitudes of Guntur consumers towards the Life Insurance services. The study has to be done by collecting the responses of consumers through structured questionnaire on five point Likert scale. A meaningful total of responses has to be collected to assess the level of awareness about the insurance services and their attitude towards insurance services. Research basis is to find the socio demographic and economic variables that have significant impact on consumers’ attitudes towards insurance services.
Keywords: Consumers, attitude, demography, insurance services, marketing activities
1. INTRODUCTION Attitudes are generally considered as judgments and these are results of either direct experience of the social environment or through observations. So attitude can be considered as a hypothetical construct, which represents degree of liking or disliking of an individual towards a particular object. Winning and losing are two opposite sides of a same coin and that coin is attitude. Attitude is composed of beliefs about the consequences of performing the behaviour and an evaluation of how the consumer will feel about those consequences. Attitude may be defined as an enduring organization of motivational, emotional, perceptual, and cognitive process with respect to some aspect of our environment (Best et.al, 2003). Whereas in the context of consumer behaviour, attitude is a learned predisposition to behave in a consistently favourable or unfavourable way with respect to a given object (Kanuk and Schiffman, 2000). As learned predispositions, attitudes have a motivational quality; that is they might propel 1
a consumer toward a particular behaviour or repel the consumer away from a particular behaviour. Various attributes and benefits of the product brands affect the attitudes of the consumers towards these product brands. On this basis it can be argued that what are the benefits, which can be perceived by the consumers from the insurance services for themselves, and also they can enquire about the way to get those benefits from insurance services. These types of queries want attention as consumers are very less aware about the benefits of insurance services in their lives. Reason for this type of problem may be poor information provided by the insurance companies. The problem occurs when the consumers face authentication about quality of the insurance services. Therefore it is very well understood that those consumers who do not have knowledge of these types of insurance services will fall into troubles in the course of evaluation of relative offerings by different competitive insurance companies. Various demographical factors play vital role in the development of relationships among different insurance service providers and consumers. Consumers come from different cultural backgrounds. They may have different needs and demands according to their social and cultural life. As India is a vast diverse country in terms of cultural and other aspects, so various insurance service providers need different strategies to cater the needs of different consumers in the insurance market. Insurance penetration in developing country like India, where social and cultural diversity exists varies from rural to urban areas. In case of poor people who are living below poverty line, there insurance penetration is supposed to be low. The foregoing therefore suggests that there will be difference between the common behaviour response to insurance services and strategies and what obtains in Indian business environment. So, by taking into consideration basic demographical variables, the present study will investigate the consumers’ behavioural attitudes towards Life Insurance Services. 2. STATEMENT OF THE PROBLEM The study of consumer’s behavioural attitude towards a professional service like life insurance in the post liberalization period is considered to be one of the most 2
challenging problems in the insurance sector. The main problem of the study is to examine the factors that influences consumer’s attitude To solve this problem, it is imperative for the insurance companies to keep a track of the customers through continuous feedback mechanism to understand customers’ changing expectations to develop strategies for the future. Hence, this study is undertaken to examine how the differential patterns of behavioural attitude of consumers influence the marketing of insurance services 3. NEED FOR THE STUDY In the current scenario with the liberalization of the life insurance industry the customer will be the single most important factor driving changes in the life insurance business. Fuelled by competition, increased awareness will bring the customers on to centre stage. For insurers, therefore, the critical success factor would be managing the customer. In the Indian context, with the onset of financial deregulation, monoliths of the insurance industry are changing. It is witnessing a redefining of its role by exhibiting a paradigm shift from brick mortar strategy to clickandmortar strategy. Thus, an insurance company’s ability to attract and retain the customers is a function of not only what it offers but also how it serves its existing customers. A large number of studies have been carried out in US and other Western countries to identify the important factors that guide the consumers while selecting life insurance products. While most seek a combination of financial protection as well as investment needs to achieve longterm goals like child’s education, buying a house etc., the need for buying an insurance not only differs among individuals, but also varies with the person’s age. The insurance needs of an unmarried working executive when he is in his early days of employment is different from his needs when he is middle aged and married with children. It is thus important that the individual evaluates his insurance need, considering his age, following which he can arrive at a suitable protection and investment mix and tenure. Life insurance companies have to understand the requirements of 3
the customers. For this purpose lots of surveys and studies have to be conducted periodically to explore and identify their expectations in the existing environment. 4. OBJECTIVES OF THE STUDY Main objective of the present study is to probe into the attitudes of Indian consumers towards insurance services by using basic socio demographic and economic variables 1. To observe the current scenario of the Life insurance Industry in India. 2. To identify and compare the attributes relating to customer preference and their influence on the purchase of Life insurance products.
5. HYPOTHESES For the present research work nine hypotheses have been developed: i.
There is no effect of age on consumers’ behavioural attitude towards
ii.
insurance services There is no effect of gender on consumers’ behavioural attitude towards
iii.
insurance services There is no effect of marital status on consumers’ behavioural attitude
iv.
towards insurance services There is no effect of level of education on consumers’ behavioural attitude
v.
towards insurance services There is no effect of mode of employment on consumers’ behavioural
vi.
attitude towards insurance services There is no effect of professional inclination on consumers’ behavioural
vii.
attitude towards insurance services There is no effect of level of household income on consumers’ behavioural
viii.
attitude towards insurance services There is no effect of mortgage property ownership on consumers’ behavioural attitude towards insurance services
4
ix.
There is no effect of owning insurance policies on consumers’ behavioural attitude towards insurance services.
6. REVIEW OF LITERATURE Quality of life consists of various factors including health, community life, gender equality, political freedom, political stability and security, material wellbeing, family life, and job security. In addition to it, insurance against illness or death is also considered as indicator for quality of life in developing countries. Being an indicator of quality of life, insurance has significance in human life. The literature of attitude and perception of life insurance policyholders have largely focused on factors predicting these attitudes (Skinner and Dubinsky, 1984; Kruse and Ozdemir, 2004). Factors such as consumers’ perceived value (Smith, 2006) satisfaction (Kuhlemeyer and Allen, 1999) and purchase decisionmaking responsibility (Barron and Staten, 1995) have been considered as most important them of the literature on attitude and perception of life insurance policyholders. For example, in a survey of 1,462 families, Skinner and Dubinsky found out that employment status of the wife and education of the husband discriminate mostly between which family member(s) is responsible for insurance purchasing decision. Other significant variables include wife‘s educational level, husband‘s employment status, family income, and husband‘s occupation. Kruse and Ozdemir (2004) explore the relationship between individual‘s risk perceptions and their willingnesstopay for increased safety in a lowprobability, highconsequence event.
A study conducted by Patil (2003) revealed that the insurance coverage of agricultural groups and agricultural labour is very low. The performance of childrenrelated policies such as Jeevan Kishore, Jeevan Balya, etc., is very 5
poor except the children money back policy, which has also not been contributing significantly. The demonstration of product features by the agents is not satisfactory. Raman and Gayatri (2004) have observed the customers’ awareness towards new insurance companies. They found that 53% of the respondents belong to the age group below 30, 24% to the age group 3140, 2% belong to the age group of 4150 and the rest of the respondents belong to the group of ‘above 50’. They also observed that a large percentage of the insured respondents (32%) are professional, and 56% of the respondents are married. It is also found that 52% of the respondents have taken a policy to cover risk and 44% of them to avoid tax and the remaining to invest their surplus amount.
In the areas of marketing research, customer satisfaction has been considered as one of the most discussed subject in past times, as for the service providers, measuring customer satisfaction is of utmost requirement.
Mushtaq (2005) concluded in their empirical study that Indian banks fall much below the perceptions of their customers on all the five dimensions of service quality, where as in case of foreign banks, these banks are exceeding the perceptions of their customers on two dimensions of service quality namely; tangibility and reliability. This finding revealed the notion that Indian banks in terms of service quality do not meet the expectations of their customers. In case of foreign banks perceptions and expectations of the customers about service quality offered by the banks do not have a big gap.
Najjar and Ram (2006) study on the US banking sector using a nondifference score of SERVQUAL scale focused on the importance of improving service quality in the banking sector. The study used statistical tools like ANOVA, Factor Analysis, and Regression to analyse the data. The final results of the service quality analysis showed that reliability and responsiveness were the 6
two most critical dimensions of service quality and they are directly related to overall service quality. The findings of the study substantiated the findings of Berry et al. where reliability and responsiveness were shown to be important factors of service quality.
It has been proved in marketing literature that retention of customers is less costly as compared to acquisition of new customers. Keeping this fact in mind various organizations focus on relationship marketing. Customer relationship management has come out as one of major strategies of companies in the modern context of business. Now companies are focusing on framing customer specific strategies so that all the customers of the company should be served effectively and efficiently according to their needs and demands. 7. SCOPE OF THE STUDY The study focuses on the consumer behaviour relating to the areas of customer preference, loyalty, purchase decision and complaining behaviour of customers in the purchase of life insurance products. In the current scenario the life insurance business has become liberalized and competitive. It is found that exploring the behaviour of the customers will give an insight to life insurance companies to maximize their customers. 8. RESEARCH METHODOLOGY Pilot Study The pilot study has to conduct to check the reliability and feasibility of the questions as well as the statements included in the questionnaire. The Cronbach’s Alpha method (coefficient of Reliability) and Hoteling’s t 2 test are to be used to check the normality as well as the reliability of the statements in Likert’s Five Point Scale. Main Study
7
This study is based on both primary data as well as secondary data. The primary data is collected from the consumers of life insurance through a well Framed questionnaire. The questions are to be constructed in optional type as well as in Likert’s Five Point Scale. The optional type is aimed at ascertaining Demographic details of the customers. The Likert’s Five Point Scale is applied to seek the opinion of the customers Regarding expectations, perceptions. Besides these, the customer’s opinion on the level of agreement on different characteristic features, purchase decision and emotional factors affecting purchase of life insurance policies, are also obtained.
Scaling Techniques The Likert’s Five Point Scale is a unique technique exploited in the study in the various context, based on the measures of opinion. In ascertaining expectations and perceptions, the Five Point Scale is allowed to range over Very Low to Very High with mediocre value representing medium expectation or perception. On other parts of the questionnaire the Five Point Scale works out to express the opinion of customers from Strong Agreement to Strong Disagreement. The middle value 3 represents neutral opinion of customers of life insurance policies. Explicitly, the two different Likert’s Five Point Scales are expressed below: 5 VERY HIGH 4 HIGH 3 MEDIUM 2 LOW 1 VERY LOW
5 STRONGLY AGREE 4 AGREE 3 NEUTRAL 2 DISAGREE 1 STRONGLY DISAGREE.
Data Collection The primary data is collected from the policy holders of the selected companies. The secondary data is collected from reports, journals, newspapers, magazines and websites. The primary data is collected through the questionnaire with suitable scales as mentioned above from the customers of life insurance policies in Guntur. Sample Size. 8
Since the population is unknown, a Simple Random Sampling procedure is to be adopted to obtain better statistical results to reflect the characteristic features of the population. Data Analysis. The primary data collected in the form of responses from the customers are systematically analysed by identifying the independent as well as dependent variables. All the responses of the customers obtained through Likert’s Five Point Scale forms the domain of dependent variables and the questions about life insurance policies, information search and demographic background are taken up as independent variables. Based on these two categories of variables, the following statistical tools are to be applied to obtain the results desired in the objectives of the study. Statistical Tools Used a. One sample ttest is used to ascertain the nature of opinion of respondents regarding the various consumer behavioural aspects of life insurance policies. b. Factor analysis is exploited to identify the predominant factors of customer’s expectations, perceptions, and characteristic features of the product and purchase decision. c. Oneway analysis of variance is used to know the influence of independent variables on the various factors of dependent variables. d. Discriminant analysis, Multiple Regression are sequentially used to identify a correlation between clusters and factors of consumer behaviour regarding life insurance policies. 9. LIMITATIONS OF THE STUDY The study suffers from certain limitations 1. The data for the purpose of the study is collected from respondents in Guntur only. 2. The study concentrates only on certain factors relating to customer purchase behaviour. There may be other influencing factors too, which have not been considered due to time and data constraints. 9
3. The primary data for the study is collected through questionnaires and the results of the study may suffer from the inherent drawbacks of such instrument. 4. The study compares the perceptions and expectations of the customers of the life insurance service. Perceptions are subjective in nature and are likely to change with the changing times and market conditions. This study cannot be generalized for the customers of life insurance products in the whole of India. The results obtained in this study or suggestions offered are based on the study conducted on the consumers in a small geographical base viz., the Guntur District.
REFERENCES Cronbach, L.J. (1951). Coefficient Alpha and Internal Consistency of tests. Psychometrika. 16, pp. 297334. Kuhlemeyer, G.A. and Allen, G.H. (1999). Consumer Satisfaction with Life Insurance: A Benchmarking Survey, Financial Counseling and Planning, 10(2), pp. 3544. Mushtaq, A.B. (2005). Service Quality Perceptions in Banks: A comparative analysis. Journal of Business Perspective, 9(1), pp. 1120. Najjar, L. and Ram, R.B. (2006). Service Quality: A Case Study of a Bank. The Quality Management Journal, 5(3), pp. 3544. Patil, K.S. (2003). Life Insurance Corporation of India, Its Products and Their Performance Evaluation: A Special Reference to Gulbarga District, Finance India, (17) 3, pp. 10371040. Skinner, S.J. and Dubinsky, A.J. (1984). Purchasing Insurance: Predictors of Family DecisionMaking Responsibility, Journal of Risk and Insurance, 51(3), pp. 513523.
10
Smith, S. (2006). Persistency in Pension Contributions in the UK: Evidence from Aggregate and MicroData Retrieved February 24, 2007, from http://www.bris.ac.uk/Depts/CMPO/workingpapers/wp139.pdf.
11
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