LIC of India carries on endowment plan with profit, modified endowment plan with profit, Jeevan Mitra Double Risk cover, (i) (ii)

Transcription

1 LIFE INSURANCE PRODUCTS, PERFORMANCE EVALUATION AND CUSTOMER SATISFACTION IN THE REGIME OF IRDA A COMPARATIVE STUDY OF LIC OF INDIA & ICICI PRUDENTIAL LIFE INSURANCE COMPANY LIMITED Insurance is an umbrella against a rainy day. It is an agreement between the Insurer and the Insured in which the insured is assured by the insurer to compensate the loss occurred by a particular cause during a certain period by a definite cause in exchange of some consideration known as premium. Life Insurance provides protection to the family at the premature death of an individual or gives adequate amount at an old age when earning capacities are reduced. In this way, Life Insurance does not only provide protection but also it is a sort of investment wherein a certain sum is returnable to the insured at the time of death or at the expiry of certain period. This agreement is based on utmost good faith and insurable interest. As regards Life Insurance Corporation of India, it came into existence on Sep 1, 1956 when the Life Insurance business was nationalized by the Government of India. Since then, Life Insurance Business has undergone a number of changes. In 1993, the Government of India setup the Malhotra Committee headed by Shri R.N. Malhotra, the Governor of Reserve Bank of India with a view to suggest reforms in the Insurance Sector. At the recommendation of this committee, Insurance Regulatory Development Authority came into existence in 2000 to regulate the Insurance Business in Private Sector. As regards ICICI Prudential Life Insurance Company Limited, it was established on November 24, 2000 and since then, it has been working in the partnership of ICICI Bank and Prudential plc. U.K. and occupy a place of 1

2 pride being number one in Private Sector. As regards the market potential of Insurance Business in India, it is still 20% of its estimated Potential. Toady LIC is the largest company in the Public Sector whereas ICICI Prudential Life Insurance Company Limited is the largest Company in the Private Sector in terms of Market Share. As there is hardly any research on Insurance Products, Performance Evaluation and Customer Satisfaction in Insurance Sector in India, hence the present study has been selected by taking Life Insurance Corporation of India, being the largest unit working in the Public Sector and ICICI Prudential Life Insurance Company Limited working as the largest Company in the Private Sector. These two companies have been making their utmost efforts in providing attractive insurance products to the customers and performing well. Even then, the customers are not feeling satisfaction in terms of claims settlement and efficient services. With this hypothesis, the present study is an attempt in the direction of making an in-depth appraisal of life insurance products, performance and customer satisfaction of both the companies so as to find out weaknesses and suggest measures to improve the financial position of the units in the interest of general public. The whole of the study has been divided into eight chapters. Most of the analysis has been made on the basis of Appropriate Technique. The main findings of the study emerged out as follows: (i) LIC of India carries on whole life with profits plan, whole life limited plan, Jeevan Tarang under whole life plan where as ICICI Prudential Life Insurance Company Limited caries on ICICI Pru. whole life Plan under this category. (ii) LIC of India carries on endowment plan with profit, modified endowment plan with profit, Jeevan Mitra Double Risk cover, 2

3 Jeevan Mitra Triple Risk cover, New Jeevan Raskha Plan, Jeevan Anand with Profit Plan and Jeevan Amrit with Profit Plan whereas ICICI Prudential Life Insurance Company Limited carries on ICICI Pru. save n protect under endowment Insurance plans. (iii) LIC of India carries on Money Back Policy twenty years, twenty five years, Jeevan Surabhi with Profit Plan, Bima Bachat, New Bima Gold whereas ICICI Prudential Life Insurance Company Limited carries on Cash Back Plan under Money Back Plans. LIC of India carries on Anmol Jeevan -1, Amulya Jeevan 1, whereas ICICI Prudential Life Insurance Company Limited carries on ICICI Pru. guaranteed savings Insurance plan, ICICI Pru I protect, ICICI Pru. Pure Protect, Life Guard, Home Assure Plan under Term Assurance Plans. (iv) LIC of India carries on Jeevan Akshya-VI, New Jeevan Suraksha I, New Jeevan Dhara I, Jeevan Nidhi (Pension Plan) whereas ICICI Prudential Life Insurance Company Limited carries on ICICI Pru. forever life, ICICI Pru. immediate annuity under annuity/pension plans. LIC of India carries on Marriage Endowment Education Annuity with Profit Plan, Jeevan Kishore with Profit Plan, Jeevan Chhaya with Profit Plan, Komal Jeevan with Guaranteed Addition, Jeevan Anurag with Profit Plan, Child Carrier Plan and Child Future Plan whereas ICICI Prudential Life Insurance Company Limited carries on ICICI Pru. Smart Kid Regular Premium under Children Plans. (v) LIC of India carries on Endowment Plus (Unit Linked Endowment Plan) Pension Plus whereas ICICI Prudential Life Insurance 3

4 Company Limited carries on ICICI Pru. Life Stage Wealth II, ICICI Pru. Pinnacle II, ICICI Pru. Life Time Premier and ICICI Pru. Life Link Wealth sp under Unit Plans. (vi) LIC of India carries on Jeevan Sathi under Joint Life Plan whereas ICICI Prudential Life Insurance Company Limited carries no Plan under Joint Life Plan. (vii) LIC of India carries on Health Protection Plus whereas ICICI Prudential Life Insurance Company Limited carries on Medi Assurance, Hospital Care II, Crisis Cover under Health Product Plans. (viii) LIC of India carries on Jeevan Aadhar and Jeevan Vishwas whereas ICICI Prudential Life Insurance Company Limited carries no plan under plans for Handicapped Dependants. (ix) LIC of India carries on Jeevan Bharti I whereas ICICI Prudential Life Insurance Company Limited carries no plan under Special Money Back Plan for Women. (x) LIC of India carries on Jeevan Shree I and Jeevan Pramukh whereas ICICI Prudential Life Insurance Company Limited carries no plan under plans for High Worth Individuals. (xi) LIC of India carries on Jeevan Saral and Bima Nivesh whereas ICICI Prudential Life Insurance Company Limited carries no plan under Special Category. 4

5 (xii) As regards marketing activities of LIC of India and ICICI Prudential Life Insurance Company Limited, It is observed that LIC of India used to carry on its business with 8 Zonal offices, 109 Divisional offices, 2048 branches and 1004 Satellite offices. On the whole, number of offices of LIC of India increased from 2155 in to 3169 in indicating an expansion of 1014 offices over a period of nine years under study. (xiii) As far as ICICI Prudential Life Insurance Company Ltd. is related, its offices increased from 16 in to 2104 in However, the number of officers decreased to 1918 in All this indicates that LIC has wider network of its business as compared to that of ICICI Prudential Life Insurance Company Ltd. (xiv) The number of agents in LIC of India increased from in to in indicating an increase of.77 times whereas that of ICICI Prudential Life Insurance Company Ltd. increased from in to 2,11,000 in All this indicates that LIC has wider network of agents as compared to that of ICICI Prudential Life Insurance Company Ltd. (xv) The business of LIC of India increased from Rs lakh in to Rs. 1,85,81,259 Lakh in whereas ICICI Prudential Life Insurance Company Limited is related, it started its business with Rs lakh in in India which reached to Rs lakh in As regards Business outside India, LIC achieved business worth Rs lakh in which increased to Rs lakh in All this indicates that Both LIC of India & ICICI Prudential Life Insurance Company Limited 5

6 made a remarkable progress but ICICI Prudential Insurance Company Ltd. grew up more rapidly as compared to LIC of India in terms of increase over the corresponding period as certified by an annual compound growth rate of percent in case of LIC of India and percent in case of ICICI Prudential Life Insurance Company Ltd. (xvi) As regards performance evaluation of LIC of India and ICICI Prudential Life Insurance Company Limited, It is observed that Net premium of LIC of India indicated an annual compound growth rate of percent over a period of nine years under study whereas that of ICICI Prudential Insurance Company Limited indicated an annual compound growth rate of percent over the corresponding period. (xvii) Interest, Dividend & Rent received of LIC of India raised from Rs. 22,86,190 lakh in to Rs. 67,19,788 lakh in indicating an annual compound growth rate of whereas that of ICICI Prudential Life Insurance Company Limited from Rs. 170 lakh in to Rs. 1,36,165 lakh in indicating an annual compound growth rate of percent. (xviii) As regards profit on sale of investment, that of LIC of India & ICICI prudential Life Insurance Company Ltd. fluctuated over the corresponding period. In LIC of India, there was no gain on revaluation in fair value upto After that there was a loss of Rs lakh in , Rs lakh in , Rs lakh in and a profit of Rs lakh in whereas that of ICICI Prudential Insurance Company Limited 6

7 lost worth Rs. 115 lakh in but it gained Rs lakh & Rs lakh in & respectively. (xix) As regards Unrealized gain/loss, it was nil in case of LIC of India whereas ICICI Prudential Life Insurance Company Limited did not earn unrealized gain/loss upto After that, it earned gain upto Thereafter, it lost worth Rs lakh in which converted into a gain of Rs lakh in (xx) LIC of India did not make any adjustment for appropriation or Expropriation whereas ICICI Prudential Insurance Company Limited made adjustment for appropriation worth Rs lakh in which decreased to Rs. 160 lakh in & it made adjustment for appropriation worth Rs lakh in (xxi) Other income of the corporation fluctuated from Rs in to Rs lakh in indicating an increase of 1.73 times whereas that of ICICI Prudential Life Insurance company grew from Rs. 18 lakh in to Rs lakh in indicating an increase of times. (xxii) As regards Expenses, LIC of India paid commission worth Rs lakh in which increased to Rs lakh in indicating an increase of 1.68 times whereas that of ICICI Prudential Life Insurance company Limited indicated an increase of times over the corresponding period. (xxiii) Operating expenses Of LIC of India jumped from Rs lakh in to Rs lakh in indicating an increase of 7

8 1.87 times whereas that of ICICI Prudential Life Insurance company Limited grew up upto After that it decreased to.12 times in due to control over the operating expenses by virtue of good management. (xxiv) LIC of India made provisions for doubtful debts whereas ICICI Prudential Life Insurance company Limited did not make such any provision. (xxv) LIC of India made provisions for taxation worth Rs lakh in which fluctuated to Rs lakh in indicating an increase of 3.18 times whereas that of ICICI Prudential Life Insurance company Limited refunded worth Rs. 965 Lakh in It made provisions for taxations worth Rs lakh in In , it did not make any provision. Again in , it made provisions worth Rs. 610 lakh which reached to Rs lakh in However there was a refund of worth Rs. 305 lakh in (xxvi) LIC of India made provisions other than taxations whereas ICICI Prudential Life Insurance company Limited did not make any provisions. (xxvii) LIC of India paid benefit worth Rs lakh which spurted to Rs lakh in certifying an increase of 3.53 times over the corresponding period whereas that of ICICI Prudential life Insurance company Limited increased to times. (xxviii) First year LIC of India paid bonus worth Rs lakh which increased to Rs lakh in indicating an increase of

9 times over the period whereas ICICI Prudential life Insurance company Limited started to pay interim Bonus worth Rs. 6 lakh in It decreased by 1 lakh in each next year. Besides it, both are liable against life policies in force, the corporation paid for it worth Rs lakh in which reached to Rs lakh in indicating an increase of 2.44 times whereas that of ICICI Prudential life Insurance company Limited was worth Rs lakh in which increased to Rs lakh in certifying an increase of times. (xxix) LIC of India did not make any provisions for linked liability upto However, it started to make provisions for it worth Rs lakh in which grew upto Rs lakh in indicating an increase of 5.84 times whereas ICICI Prudential life Insurance company Limited made provisions for it worth Rs. 725 lakh in It increased to Rs lakh in indicating an increase of times. However, LIC of India made an appropriation for future worth Rs lakh in whereas that of ICICI Prudential life Insurance company Limited was nil. (xxx) Surplus of LIC of India was worth Rs lakh in This was the highest surplus over the corresponding period. After that, it went on decreasing and fell to Rs lakh in indicating at decrease of.91 times due to the competition with the private companies in insurance business whereas ICICI Prudential life Insurance company Limited earned loss in the beginning for two years continuously. In third year, it did not make any surplus/deficit. In , it started to earn surplus worth Rs lakh which jumped to Rs lakh in 9

10 indicating an increase of times. All this indicates that LIC stands better in comparison to ICICI Prudential Life Insurance Company Limited. (xxxi) First year premium of LIC of India increased from Rs lakh in to Rs lakh in indicating an increase of 1.50 times whereas that of ICICI Prudential life Insurance company Limited Rs lakh in to Rs lakh in indicating an increase of times. As regards Renewal premium of LIC of India, it indicated an annual compound growth rate of percent whereas that of ICICI Prudential life Insurance company Limited indicated an annual compound growth rate of percent over the corresponding period. (xxxii) However, single premium of LIC of India decreased from Rs lakh in to Rs lakh in But it started to increase & reached to Rs lakh in whereas that of ICICI Prudential life Insurance company Limited increased from Rs lakh in to Rs lakh in On the whole, total premium of LIC of India indicated an annual compound growth rate of percent whereas that of ICICI Prudential life Insurance company Limited indicated an annual compound growth rate of percent over the corresponding period. (xxxiii) As regards reinsurance ceded, that of LIC of India increased from Rs lakh in to Rs lakh in indicating an increase of 4.72 times over the corresponding period whereas that of ICICI Prudential life Insurance company Limited increased from Rs 4 lakh in to Rs lakh in indicating an increase 10

11 of 1322 times. On the whole, Net premium of LIC of India indicated an annual compound growth rate of percent whereas that of ICICI Prudential life Insurance company Limited indicated an annual compound growth rate of percent. All this indicates that both Insurance Companies are growing well but ICICI Prudential life Insurance company Limited is going upward rapidly. (xxxiv) Income from investment of LIC of India increased from Rs lakh in to Rs lakh in indicating an annual compound growth rate of percent. As far as ICICI Prudential Life Insurance Company Limited is related, it s income started from Rs. 170 lakh in which grew up to Rs lakh in indicating an annual compound growth rate of percent. All this indicates that LIC of India earned more income from investment as compared to that of ICICI Prudential Life Insurance Company Limited in absolute terms, but ICICI Prudential Life Insurance Company Limited made a rapid progress as is certified by annual compound growth rate. (xxxv) LIC of India paid claims by death worth Rs lakh in which spurted to Rs lakh in indicating an annual compound growth rate of percent whereas ICICI Prudential Life Insurance Company Ltd. started to pay claims by death from Rs. 65 lakh in which increased to Rs lakh in indicating an annual compound growth rate of percent. As regards claims paid by maturity, LIC of India paid worth Rs lakh in which reached to Rs lakh in indicating an annual compound growth rate of

12 percent whereas that of ICICI Prudential Life Insurance Company Limited increased from Rs. 25 lakh in to Rs lakh in certifying an annual compound growth rate of percent. On the whole, total claims of LIC of India indicated an annual compound growth rate of percent over the corresponding period whereas that of ICICI Prudential Life Insurance Company Limited registered to be percent. All this indicates that LIC of India paid claims more in absolute terms as compared to ICICI Prudential Life Insurance Company Limited. (xxxvi) Amount of Annuities paid by LIC of India increased from Rs lakh in to Rs lakh in indicating an increase of 2.71 times whereas that of ICICI Prudential Life Insurance Company Limited did not pay any annuities upto It started to pay annuities of Rs. 5 lakh in It increased to Rs lakh in All this certifies that LIC of India paid more annuities as compared to ICICI Prudential Life Insurance Company Limited. (xxxvii) The amount of Surrenders of LIC of India increased from Rs lakh in to Rs lakh in indicating an increase of 8.76 times whereas ICICI Prudential Life Insurance Company Limited started to pay surrenders worth Rs. 13 lakh in It reached to Rs lakh in certifying an increase of times over the previous eight years. All this infers that the amount of surrenders of LIC of India accounted more than that of to ICICI Prudential Life Insurance Company Limited, 12

13 indicating a greater need of persuasion to policy holders in LIC of India. (xxxviii) The commission paid by LIC of India increased from Rs lakh in to Rs lakh in indicating an increase of 1.68 times over the corresponding period whereas that of ICICI Prudential Life Insurance Company Limited increased from Rs lakh in to Rs lakh in indicating an increase of times. Al this indicates that LIC of India paid more commission as compared to ICICI Prudential Life Insurance Company Limited. In other words, LIC of India captured more business and provided more employment to agents. (xxxix) LIC of India started to pay bonus worth Rs. 134 lakh in It increased to Rs. 475 lakh in But it decreased to 227 lakh in However, it slightly increased to Rs. 263 lakh in but it could not be maintained in when the amount of bonus decreased to Rs. to 154 lakh and went on fluctuating continuously and touched to a bottom of Rs. 136 lakh in As far as ICICI Prudential Life Insurance Company Limited is related, it started to pay bonus with Rs. 659 lakh in which increased to lakh in increasing of Rs lakh over all four years. All this certifies that ICICI Prudential Life Insurance Company Limited is more liberalized in paying bonus as compared to LIC of India Limited. (xl) Employees remuneration & welfare benefits of LIC of India increased from Rs lakh in Rs lakh in indicating an increase of 1.55 times whereas that of ICICI 13

14 Prudential Life Insurance Company Limited spurted from Rs lakh in to Rs lakh in indicating an increase of times. (xli) As regards other expenses, that of LIC of India increased from Rs lakh in to Rs lakh in certifying an increase of 2.82 times whereas that of ICICI Prudential Life Insurance Company Limited increased from Rs lakh in to Rs lakh in indicating an increase of times. On the whole, LIC of India paid expenses to operate business Rs lakh in which increased to Rs lakh in indicating an increase of 1.87 times over the corresponding period whereas ICICI Prudential Life Insurance Company Limited paid expenses for its business Rs lakh in which increased to Rs lakh in certifying on increase of times. All this indicates that the operating expenses of LIC of India accounted more than that of ICICI Prudential Life Insurance Company Limited. (xlii) Net Profit Ratio of LIC of India decreased from 1.65 percent in to.87percent in However, it increased again & accounted to be 1percent in But it could not be maintain in subsquent year when it decreased to 70 percent in and to.56 percent in But it improved to.61percent in However, it could not be maintained in when it decreased to.57 percent. As far as ICICI Prudential Insurance Company Limited is related, it continuously suffered losses from to , However it converted into positive percent of 1.57 in

15 indicating a turnaround of the company by virtue of its effective management. (xliii) Operating Expenses to Net Business Ratio of LIC of India was 8.55 percent in which decreased in next two years and touched to 8.22 percent in But it increased to 8.81 percent in However, it decreased in subsequent two years and touched to an ebb of 5.55 percent in But it could not be maintained in next two years when it increased to 5.77 percent in and 6.58 percent in whereas that of ICICI Prudential Life Insurance Company Limited was percent in It started to go down and came to percent in which was really a remarkable effort. However, it increased to percent in , percent in But, it decreased to percent in and percent in All this certifies that operating expenses to net business ratio of LIC of India is less than that of ICICI Prudential Life Insurance Company Limited indicating better performance of LIC India. (xliv) Operating profit to operating assets ratio of LIC of India fluctuated between a range of 1.84 percent to 3.35 percent whereas that of ICICI Prudential Life Insurance Company Limited witnessed a pitiable situation from to However, it accounted for 33.32percent in indicating the effective measures taken by the company. All this infers that operating profit to operating assets ratio of ICICI Prudential Life Insurance Company Limited tended to be less than that of LIC of India in all the years except indicating a need of enhancing its operating income. 15

16 (xlv) Return on capital employed of LIC of India fluctuated between a range of 2.64 times to 7.28 times whereas that of ICICI Prudential Life Insurance Company Limited witnessed a pitiable situation from to However, it accounted for.22 times in indicating the effective measures taken by the company. All this indicates that Return on capital employed of LIC of India is better than that of ICICI Prudential Life Insurance Company Limited. (xlvi) Return on net worth of LIC of India decreased from 7.28 times in to 2.89 times in over the corresponding period due to entry of the private enterprises in Insurance business whereas that of ICICI Prudential Life Insurance Company Limited accounted negative upto But it converted into positive figure.20 times in due to its better performance. All this indicates that LIC of India stands better than ICICI Prudential Life Insurance Company Limited in view of profitability & stability. (xlvii) The growth analysis of the study infers that Net assets of LIC of India indicated an annual compound growth rate of 19.8 percent whereas that of ICICI Prudential Life Insurance Company Limited Indicated on annual compound growth rate of percent. All this indicates that net assets of ICICI Prudential Life Insurance Company Limited increased quicker than LIC of India Limited. (xlviii) Fixed Assets of LIC of India increased from Rs lakh in to Rs lakh in indicating an increase of 2.31 times whereas that of ICICI Prudential Life Insurance Company Limited increased from Rs lakh in to Rs lakh in certifying an increase of 8.34 times over the corresponding 16

17 period. All this indicates that fixed assets of ICICI Prudential Life Insurance Company Limited increased more as compared to that of LIC of India. (xlix) LIC of India earned profit worth Rs lakh in which decreased to Rs lakh in But it started to grow up & reached to Rs lakh in In , it decreased to Rs lakh. However, it started to improve in coming years & reached to Rs lakh in indicating an increase of.29 times over the corresponding period. As far as ICICI Prudential Life Insurance Company Limited is related, it ran into losses continuously upto But, It earned profit worth Rs lakh In indicating an increase of 3.45 times over All this certifies that LIC stands better than ICICI Prudential Life Insurance Company Limited in view of stability & profitability. (l) LIC of India retained reserve & surplus worth Rs lakh in which increased to Rs lakh in indicating an annual compound growth rate of percent whereas ICICI Prudential Life Insurance Company Limited had no reserve & surplus upto It, first of all, made a reserve of Rs lakh in which reached to Rs lakh in indicating an annual compound growth rate of percent. All this certifies that the Growth rate of Reserve & surplus of ICICI Prudential Life Insurance Company Limited remained better as compared to that of LIC of India. (li) Policies of LIC of India increased from thousand in to thousand in indicating an increase of.67 times 17

18 whereas that of ICICI Prudential Life Insurance Company Limited increased from 98 thousand in to 1762 thousand in indicating an increase of times. All this indicates that polices of ICICI Prudential Life Insurance Company Limited increased more rapidly as compared to that of LIC of India. (lii) Life fund of LIC of India increased from Rs lakh in to Rs lakh in indicating an increase of 3.08 times whereas that of ICICI Prudential Life Insurance Company Limited was nil in It started to maintain Life fund worth Rs 22 lakh in In next year, it exhausted its life fund in setting off its losses. However, it made a life fund of Rs lakh in to Rs lakh in All this indicates that LIC of India has greater Life fund as compared to that of ICICI Prudential Life Insurance Company Limited. (liii) As regards essentiality of Life Insurance, it is found that (i) 95% of the respondents prefer to have life Insurance by virtue of social security while 5% of the respondent do not give any weight age to any life insurance products; (ii) 80% of the respondents prefer LIC of India by virtue its status in public sector and 20% of the respondent prefer ICICI Prudential Life Insurance company Limited for the purpose of having life Insurance policies; (iii) 100% of the respondents prefer LIC of India by virtue of return on investment, 95% of the respondents prefer LIC of India by virtue of securities and 5% prefer ICICI Prudential Life Insurance company Limited; (iv) 90% of the respondents prefer ICICI Prudential Life Insurance company Limited by virtue of low premium 10% of the respondents 18

19 prefer LIC of India because of higher premium; (v) All the respondents prefer insurance services including easy access ability to Deposit centre, time premium collection, provision in case of policy Lapse and Bonus; (vi) 80% of the respondents assume Life insurance as a tax saving plan, 75% assume Life insurance as a saving scheme with good return and 99% of the respondent assume Life Insurance as a financial security for family; (vii) 80% of the respondents are aware of insurance benefits like sum assured, Maturity date and risk coverage. Only 20% of the respondent are aware of additional benefits; (viii) 90% of the respondents take insurance plan disadvantageous in view of blockage of funds for fixed term and complex process in case of policy lapse. (liv) The mean score, S.D. on customer satisfaction level of LIC of India and ICICI Prudential Insurance Company Limited were found 78 and 68.4, 3.16 and 6.94 respectively with t value of The two companies differ significantly in terms of customer satisfaction. Thus, the alternate hypothesis that features of Life Insurance products positively affect the customer satisfaction is accepted. Suggestions On the basis of the study conducted, the following suggestions are submitted to strengthen the performance of LIC of India and ICICI Prudential Life Insurance Company Limited. (i) Inspite of many products available in the market for sale, the common people know only a few. Majority of the prospective assured hardly 19

20 know differences between products such as whole life, annuity, endowment policies, bonus paid by the company, surrender value and other concepts connected with the life insurance contract. Thus creation of the awareness of the product knowledge should be made by giving appropriate explanations by the agents. Tacticts of selling products which are carrying high commission rates should be avoided. (ii) The role of advertisements in insurance industry is minimum since advertisement is an invitation to an offer. The scope of advertisement pertains to only the name of the company, broad classification of products and names of products. Explanation about the products should be given in detail. (iii) Life insurance is an important tool in the overall financial planning purview of any individual s life which assists in mitigating the financial impact of the risks faced by the individual. Life Insurance policy is taken for one or more of three major reasons security of money invested, saving for one or more specific purposes and the availability of tax benefits. People are intended to carry Insurance policies not only of risk coverage but also for future savings. Proper awareness campaign should be made among the villagers regarding the mobilization of savings and also to explore potentiality in rural areas. (iv) Customer expectations function as standards of customer satisfaction and customers compare their perceptions of performance with the service quality. So thorough knowledge about costumer expectations, consumer behaviour and customer satisfaction from life insurance products should be studied well by the insurance companies while fixing various 20

21 attributes to their products. The pre-purchase and post-purchase services also determine the customer satisfaction. Emphasis should be laid on quality services. (v) No one likes lapse of policies and to give up the hard earned money. For revival, the existing official formalities are hard. Especially for high Sum Assured policies, the conditions of medical fitness like ECG, X-Ray, BST, Lipidogram etc should be liberalized. (vi) Premium payment becomes very difficult recently. In LIC OF INDIA counters, huge queue is standing for hours to remit their premiums. Steps should be taken to start new counters for easy premium payments. (vii) House loan formalities are very hard. Loan should be given on the basis of premium paying capacity and also on the basis of the amount of policies. (viii) Policies are mobilized through agents and for their services commission is being provided. Proper training should be extended to them with allowances and facilities like EPF gratuities and pensions which may be extended to them just like as other employees. (ix) Emphasis should be laid on curtailing the operating expenses by enhancing the productivity of employees in LIC of India so as to enhance the profitability of the corporation and stand to the forces of competition with ICICI Prudential Life Insurance Company Limited. 21

22 On the basis of the above study, it can be very safely concluded that the features of life insurance products positively affect customer satisfaction which, in turn, enhances market share and profitability. LIC of India stands better in view of customer satisfaction by virtue of the features of its products as compared to that of ICICI Prudential Life Insurance Company Limited. However, ICICI Prudential Life Insurance Company Limited is making its utmost efforts to compete with LIC of India. If the suggestions referred to as above are translated into practice, both companies might achieve excellence in their performance and customer satisfaction might be converted into customer delight. 22