International Journal of Multidisciplinary Research and Development

International Journal of Multidisciplinary Research and Development

Online ISSN: 2349-4182, Print ISSN: 2349-5979
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Volume 4; Issue 10; October 2017; Page No. 84-87

A study on customer satisfaction towards LIC with special reference to Villupuram town
1
Dr. C Selvarani, 2 A Riswana Parveen
1
Assistant Professor, Research Supervisor, Department of Commerce, Arignar Anna Arts & Science College, Villupuram,
Tamil Nadu, India
2
Research Scholar (M.Phil), Arignar Anna Arts & Science College, Villupuram, Tamil Nadu, India

Abstract
Over the last few years, developments in the insurance sector have resulted in a fundamental change in the way the business is
conducted. Customer servicing today has become the focal point of insurance companies. However, there is absolutely no
exaggeration in mentioning that the amount of customer grievances in the insurance domain has gone up steeply. Redressal of
customers' grievances is just a reactive way of insurers providing the minimum expected customer service. The need of the hour is
a more proactive approach aimed at seeking what additional elements would delight the customer more and more. This study
explores factors, which are important determinants of customer satisfaction in case of life insurance customers, to see how much
effect the factors have on overall customer satisfaction; and identifies the common grievances of customers with regard to their life
insurance policies. The study was restricted in the town of Villupuram. The factors identified for overall customer satisfaction are
customised and timely service, Brand unique selling proposition considerate employees Price Immunity and results indicate that
satisfaction with product offerings is the primary driver of overall customer satisfaction in case of insurance policies, even if the
after sale service is not up to the satisfaction level. Customers were satisfied with their insurance policies but they were not
satisfied with the quality of agents.

Keywords: customer satisfaction, customer, customer relationship management, LIC

Introduction Statement of the problem

Customer satisfaction is a business term, is a measure of how Investors are confusing because various policies are available
products and services supplied by a company meet or surpass in market. So this study will help the customers to understand
customer expectation. It is seen as a key performance the customer’s satisfaction and perception level about life
indicator within business and part of the four prospective of insurance policies with respect to Life Insurance Corporation
balanced score card. In a competitive market place were of India with respect to Villupuram District and how a
businesses compete for customers, customer satisfaction is customers satisfied while they selects, organises and interprets
seen as a key differentiator and increasingly has become a key the quality of service and product offered by the company.
element of business strategy customer satisfaction drives
successful private sector business. High performing businesses Objectives
have developed principles and strategies for achieving  To find out the socio-economic profile of insurance
customer satisfaction. A framework or set of ideas for using investors.
customer satisfaction principles and strategies to improve the  To find out the awarness of people about insurance
quality responsiveness, and possibility of public sector policies provided by the LIC of India, Villupuram.
privately provided services in vulnerable communities. The  To identify the customer preference towards life insurance
framework suggested that resident who live in tough policies of LIC of India, Villupuram.
neighbourhoods can be supported through customer  To Find the level of customer satisfaction of various life
satisfaction strategies to become empowered individuals. insurance policies offered by LIC of India, Villupuram.
Customer satisfaction is a measure of how products and  To study the various factors that influences the customer to
services supplied by a company meet or surpass customer choose the life insurance policy.
expectation. In a competitive marketplace where businesses  To analyse the strength and weekness of the life insurance
compete for customers, customer satisfaction is seen as a key policies of LIC of India, Villlupuram.
differentiator and increasingly has become a key element of
business strategy. The concept of consumer satisfaction Review of literature
occupies a central position in marketing thought and practice. Pushp Deep Dagar and Sunil Phougat (2011) [5] in their article
Satisfaction is a major outcome of marketing activity and on “Impact of Privatization of Life Insurance Sector on
serves to link processes culminating in purchase and Consumer” reveal that the policyholders are more satisfied
consumption with post purchase phenomena such as attitude with the services of private insurers than LIC with regard to
change, repeat purchase, and brand loyalty. the attractive policy offerings with low premium and long

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period and their consistent services. Data Analysis and Interpretation

Vikas Gautam (2011) [6] in his study captioned, “Service
Quality perceptions of customers about insurance companies: Table 1: Annual income of the LIC policy holders
An Empirical Study”, to analyze and to compare the service Income No. of Respondentst ttsTS %
quality perceptions of the customers in public and private Below 1 Lakhs 18 12
insurance companies. He finds that among the five service 1 Lakhs – 5 lakhs 75 50
quality dimensions namely, reliability, responsiveness, 5 Lakhs – 10 Lakhs 25 17
Above 10 Lakhs 32 21
tangibility, assurance and empathy, the public sector insurance
Sources: Primary Data
company – LIC - has high quality perception in reliability,
responsiveness, assurance and empathy dimensions compared The table-1 resembles that 50% of the policy holders said that
to private sector whereas in tangibility dimension, the private their annual income is between 1 Lakhs – 5 Lakhs, 21% of
players has high level of perception compared to LIC. policy holders have their annual income above 10 Lakhs, 17%
Deepika Upadhyaya and Manish Badlani (2011) [2] carried out of policy holders said that their annual income is between 5
a study entitled, “Service Quality Perception and Customer Lakhs – 10 Lakhs and 12 % of them said their annual income
Satisfaction in Life Insurance Companies in India”, with a is below 1 lakhs
view to identify customer satisfaction in retail life insurance in
Table 2: Response and guidance at regular intervals of agents is
India. They identify that the customers are more satisfied with satisfactory regarding the LIC policies
the pricing factor followed by employee competence, product
and service, technology, physical appearances, trust, service Factors No. of respondents %
Strongly Agree 74 49
delivery, advertising and service management.
Agree 36 24
Dharmendra Singh (2011) [3] in his study titled, “Factors Neither Agree nor Disagree 21 14
affecting customers preferences for life insurers: An Empirical Disagree 13 9
Study”, reveal that quick claim settlement, convenient Strongly Disagree 6 4
payment system and better complaint redressal are the Sources: Primary Data
important factors which influences the policyholders
satisfaction. The above table-2 indicates that 49% of the policy holders
said that they are strongly agree that the response and
Methodology guidance of agents at regular intervals regarding the policies,
24% said they are agree, 14% of them said neither agree nor
Research methodology is a way of systematically solve the
disagreee, 9% of them said disagree and 4% of them said that
research problem in this study. In this research adopted
they are strongly disagree with the response and guidance of
various steps for collecting the data. agents at regular intervals regarding the policies
This research has been done with the aid of both the primary
and secondary data. The source of primary data is drawn from Table 3: Policies / Plans of LIC is superior to or more attractive than
a sample survey of 100 customers of LIC of India The datas the private insurance companies
are derived through well structured questionnaire. The Factors No. of respondents %
secondary data is drawn from variety of source like research Strongly Agree 64 43
articles from Journals, Magazines, Books, New Reports and Agree 38 25
Websites. Neither Agree nor Disagree 19 13
Disagree 22 13
Strongly Disagree 7 6
Sample Unit Sources: Primary Data
The sample unit selected for the study is Customers of LIC,
Villupuram The above table-3 indicates that 43% of the policy holders
said that they are strongly agree that policies /plans of LIC is
Sampling Size superior to or more attractive than the private insurance
100 respondents were selected for the survey from Villupuram companies, 25% said they are agree, 13% of them said
LIC. disagreee, 13% of them said neither agree nor disagree and
6% of them said that they are strongly disagree that policies
Sampling Method /plans of LIC is superior to or more attractive than the private
insurance companies.
Simple random Sampling was the sampling technique used for
collecting the data. CHI-Square Analysis
Analysis between services offered and overall satisfaction
Statistical Tools Used with insurance policies
 Percentage Analysis Services Offered (X) : 12 36 9 18
 Weighted Average Method Overall Satisfaction
 Chi – Square Analysis with insurance policies (Y) : 27 45 0 03

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H0: There is no significant difference between services H1: There is significant difference between services offered
offered and overall satisfaction with insurance policies. and overall satisfaction with insurance policies.

Table 4
Particular Fully satisfied Partially satisfied Not satisfied Total
Services Offered (X) 35 97 18 150
Overall Satisfaction with Insurance Policies (Y) 30 106 14 150
Total 65 213 32 300

Table 4.1: CHI-Square Table young people in the age group of 20-40.
Observed values Expected values (O-E) (O-E)2 (O-E)2/E
35 32.5 2.5 6.25 0.192308 Suggestions
97 106.5 -9.5 90.25 0.847418 To increase the level of insurance penetration LIC may focus
18 16 2 4 0.25 on bringing products that suit to the rural customers. 2. The
30 32.5 -2.5 6.25 0.192308 company if possible should invest in advertising, conduct road
106 106.5 -0.5 0.25 0.002347 shows, and spend money on hoardings, so that it can better
14 16 -2 4 0.25 propagate awareness about its various lesser known products.
TOTAL 150 111 1.734381 LIC may provide additional funds to its development officers
and agents. Claim settlement process should be made fast and
must not involve lengthy decision making process. Customer
friendly documentationi.e.it should be made easier and faster.

Conclusion
2 = 1.73 Insurance is a tool by which fatalities of a small number are
compensated out of funds collected from plenteous. Insurance
Degrees of freedom(r) = (r-1) * (c-1) is a safeguard against uncertain events that may occur in the
= (2-1) * (3-1) future. Company image is the highly important criteria that
=2 consumers consider before taking up a life insurance. This is
2 table value at 0.02% = 5.991 mainly because people expect safety and secure for their
Calculated value = 26.482 money which they invest, followed by the factor Premium
which we pay to the insurer and then Bonus and Interest paid
Interpretation by the company, services etc LIC dominates the Indian
Hence we reject Ho insurance industry. In today’s competitive world, customer
Calculated value is larger than table value so there is satisfaction has become an important aspect to retain the
significant difference between services offered and overall customers, not only to grow but also to serve. Increased
satisfaction with insurance policies. competition, wide range of product offerings and multiple
distribution channels cause companies to value satisfied and
Findings highly profitable customers. Customer service is the critical
From the above study, it has been found that can be drawn success factor in a company and providing top notch customer
from the survey conducted by us can be summarized in the service differentiates great customer service from indifferent
way Bank Deposits are the most preferred investment customer service. The entry of private sector insurance
alternative which is available to people followed by companies into the Indian insurance sector triggered off a
alternatives such as Insurance, Real Estate, Gold and Silver, series of changes in the industry. Even with the stiff
Mutual etc. The scheme mostly preferred by insurance holders competition in the market place, it is evident from the study
was life protection schemes like death benefits followed by that products offered by the LIC are creative, innovative and
money growth plans like wealth creation and high return of the liking of the customers, moreover they are satisfied by
plans. It was found that nearly 50% of the respondents usually the true knowledge provided by the company or agents and
save less than 15% and the kind of investment mostly they are easily accessible, Flexible payment schemes with no
preferred by the respondents were both long and short term. hidden cost, there is no undue delay in claims settlement,
According to the survey safety is the most important criterion customers are highly satisfied by the grievance redressal
which is excepted among all the respondents towards their mechanism, and in the near future if they will go for the policy
investment alternatives followed by Return, Brand Name, Tax they will stuck to LIC of India, which shows the great faith
Benefits, Liquidity and Capital Growth. According to the and positive perception of the customers towards LIC of India.
study company image is to be the highly important criteria,
which we consider before taking up a life insurance this is References
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more than half of investor’s investing in insurance are the 2. Deepika Upadhyaya, Manish Badlani. Service Quality

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Perception and Customer Satisfaction in Life Insurance

Companies in India, International Conference on
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