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International Journal of Multidisciplinary Research Vol.1 Issue 8, December 2011, ISSN 2231 5780

EMPIRICAL STUDY ON SATISFACTION OF THE POLICYHOLDERS TOWARDS THE SERVICES PROVIDED BY LIC OF INDIA IN MADURAI DIVISION
DR. J. ARULSURESH*
*Assistant Professor, Loyola College ,Chennai, India.

ABSTRACT The success of the life insurance business depends on the awareness of the policyholders about the products and satisfaction of the policyholders regarding the service rendered by LIC of India. Life insurance being a service sector is no exception to this principle. The basics of Customer Relations Management (CRM) include a business strategy that focuses on developing and retaining the relationships existing between customer and organization. CRM also provides the customer with a much needed avenue to find expression for his problems, ideas and suggestions. Hundreds of sales leads are lost yearly as disinterested employees pay slack attention to customer suggestions. A venue is required for these suggestions. This is supplied by CRM implementation. ______________________________________________________________________________ 1.1 INTRODUCTION The current scenario in the insurance industry is a complex and competitive environment tinged with little stability. The major hassle the industry faces is obtaining clients. This is due to the fact that the big fish in the insurance industry dominate the sector. It has become increasingly difficult for this particular sector to gain profits while curtailing costs. Right now insurers can achieve excellent policy administration; good billing systems etc but fall short on the customer front. However this alone is insufficient to survive on. Insurers have now realized that CRM is essential if they want to deliver high quality services since it satisfies current customers and gains new ones. This is because policies get sold only if relationships are built. CRM solves these problems with its user-friendly, web-based CRM tools that increase sales opportunities 1.2 METHODOLOGY This study is an empirical research based on survey method. It is a blend of both descriptive and the analytical methods of study. An interview schedule was prepared separately for finding out the perception of the policyholders towards the service rendered by LIC of India. 1.3 CONSTRUCTION OF TOOLS A pilot study was undergone by the researcher in order to identify the research problem and tools. Based on this, the researcher has decided to use structured interview schedules. With a view to identify the variable for constructions of the interview schedules, the researcher
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International Journal of Multidisciplinary Research Vol.1 Issue 8, December 2011, ISSN 2231 5780

obtained an in-depth review of previous studies. Moreover, discussions were held with the policyholders and officers of LIC of India, Madurai Division. In the light of the information gathered, interview schedules were constructed for this study to collect data from the policyholders. This was done to assess and test the validity in the context of the LIC of India of Madurai division. In this way, the interview schedule was tested. The comments and suggestions offered by the policyholders, were duly incorporated in the interview schedule. Thus the interview schedule was finalized. 1.4 SAMPLE DESIGN As per the instructions given by IRDA, the LIC of India opened branches in rural and semi urban and urban areas. The LIC of India Madurai Division is located in six districts. There are about 25 branches in this division. The researcher has selected all these branches under census method for this study. There are about 300 policyholders selected at random in order to obtain their opinion of the service offered by LIC of India. That is, 12 policyholders from each branch were selected. 1.5 FIELD WORK The field survey, for this study, was conducted by the researcher himself. As each interview schedule required nearly one hour for securing information. Most of the LIC of India branches in Madurai Division have working hours between 10.a.m and 4.p.m. So the researcher contacted them after the working hours. On the dates fixed, in the first instance, the policyholders were interviewed. As there were 25 branches in the sampling area it took 6 months for the researcher to complete the survey of the policyholders of the LIC of India. 1.6 DATA PROCESSING After completing the data collection, a thorough check was made. The whole interview schedule was processed for coding the data in a computer. Then, the cross tables were prepared by using experts and appropriate tools were framed to get good results. 1.7 FRAMEWORK OF ANALYSIS In order to analyse the perception of the policyholders, techniques namely Percentage Analysis, and Factor Analysis were used. 1.8 OPINION ABOUT THE SERVICE RENDERED BY THE LIC OF INDIA TO THE RESPONDENTS FACTOR ANALYSIS Insurance industry is a service-oriented unit. It renders services like available space; display adequate information, suggestion box and so on to the policyholders. It is essential that LIC of India should attract and satisfy the policyholders in different ways. There are 14 measures identified by the researcher and the respondents were asked to fill in the respective
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International Journal of Multidisciplinary Research Vol.1 Issue 8, December 2011, ISSN 2231 5780

columns. The researcher has used multivariate technique called factor analysis in order to classify the selected variables. Factor analysis is a statistical method used to describe variability among observed variables in terms of fewer unobserved variables called factors. The observed variables are modeled as linear combinations of the factor, plus error terms. The information gained about the interdependences can be used later to reduce to it a set of variables in a data sheet. Factor analysis originated in psychometrics and is used in behaviour sciences, social sciences, marketing product management, operations research and other applied science that deal with large quantities of data. Factor Analysis is a method for investigating whether number of variables of interest Y1,Y2,.Yn are linearly related to a smaller number of unobservable factors F1,F2,.Fn.. Factor analysis is a way of grouping of variables based on the criterion of common characteristics which would serve as a common denominator for such a classification. 1.8.1 THE ANALYTICAL FRAMEWORK This technique was adopted to analyse the opinion of the policyholder about the service provided by LIC of India branches in Madurai Division. But the principal factor method with orthogonal variance rotation is mostly used widely available in factor analytic computer programmes. One of the final outcomes of a factor analysis is called rotated factor matrix, a table of co-efficient that compresses the ratios between the variable and factor that have been prepared. The sum of the squares of the factor loading of a variable is called communalities (h2). The communalities of a factor are its common factor variance. The factors whose factor loading is 0.50 or greater are considered significant factors. This limit is chosen because it had been judged that factors with less than 50 per cent common variation with the rotated factor pattern are too weak to report. In the present study, the principal factor analysis method with orthogonal varimax rotation is used to identify the significance of different variables of the opinion of policyholders on service provided by LIC. The estimated results are presented in Table 1.1 1.8.2 RESULT AND DISCUSSION OF OPINION OF THE POLICYHOLDERS There are 14 statements given to the respondents. They have filled in their opinion in different columns. Besides, the rotated factor loadings received by F1,F2 are presented in Table 1.1
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International Journal of Multidisciplinary Research Vol.1 Issue 8, December 2011, ISSN 2231 5780

TABLE 1.1 OPINION OF THE POLICYHOLDERS ON SERVICE PROVIDED BY LIC OF INDIA Sl.No. 1. 2. 3. 4. 5. Variables Branch is Easy to Approach Amenities are Adequate Parking Facilities are Available Availability of Space Customers Meet the Officers Periodically Customers can Periodically Meet Factor 1 0.758 0.750 0.722 0.718 Development 0.675 Factor 2 Communalities 0.666 0.470 0.385 0.643 0.579

6.

the

Agents 0.585

0.395

7.

Displays all Information on Notice 0.576 Board Clarification Officials of Doubts with LIC

0.491

0.176

8.

0.797

0.577

9. 10.

Pamphlets for all the Policies Complaints are Considered without Delay Touch Screen to know about the Position of Policies Suggestion Box is Available Branch Premises are Kept Clean Branch following Time Norms

0.761 0.741

0.576 0.343

12. 13. 14.

0.612 0.609 0.449 0.487

0.713 0.666 0.170

Source: Primary Data.

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11.

0.653

0.556

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International Journal of Multidisciplinary Research Vol.1 Issue 8, December 2011, ISSN 2231 5780

Table 1.1 represents the matrix of common factor co-efficients or factor loading. The number factor extracted was from LIC policyholders. The ratios which have the highest loading (>0.50) in each fact are grouped, that is the ratios which are more closely related to particular group are bolded. In the following section, these results have been interpreted by carefully examining the significant loadings for ratios clustering on each factor. 1.8.3 FACTOR 1 In the first factor variable like, branch is easy to approach (0.750), amenities are adequate (0.750) parking facilities are available (0.722), customers can meet the development officers periodically (0.675) customers meet the agents periodically (0.58) and displays all the information on the notice board (0.576) have been examined, LIC branches were easy to approach (0.758) have the highest significant positive loading. Hence factor one is characterized as Availability of Services in LIC Branch. 1.8.4 FACTOR 2 The second factor consists of the variables namely, clarification of doubts with LIC officials (0.797), pamphlets for all the policies (0.761), complaints are considered without delay (0.741), touch screen to know about the position of policies (0.653) suggestion box is available (0.612), branch premises are kept clean (0.609) and branch follows time norms (0.487). These are the variables with the highest significance in factor two. These variables represent protection of policyholders. Factor two is termed as grievance redresal mechanism. 1.9 CONCLUSION Since most insurance companies are not adequately equipped to help their agents deal with customer centered problems CRM insurance enables insurance organizations to survive in a tough economic climate by using the data the insurance company has on the existing customers and then use it to increase the level of profitability. It manages to enhance customer relationships based on customer's unique requirements. CRM enables customers themselves to do research on products, have answers to their questions etc. In addition to this policyholders can check their claim status, change their account information, submit complaints etc. Insurers find that CRM is assisting them in their marketing efforts as well through a comprehensive understanding of the client base. CRM aids the insurance companies by ensuring that campaigns are more affective. REFERENCES
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1. www. insurancejournal.com 2. M.N. Mishra, Insurance-Principle and Practice, S. Chand and Company Ltd, New Delhi,
1998, p.230.

3. www. insurancenetworking. com

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International Journal of Multidisciplinary Research Vol.1 Issue 8, December 2011, ISSN 2231 5780

4. Charles Dutt, Insurance Marketing its Principle and Practice, - A Short Overview,
Swiss Re-insurance Company, First Edition, p.28.

5. G.R. Desai, Life Insurance in India-its history and Dimensions of Growth, MacMillan
Indian, New Delhi, 1973, pp.13-15.

6. Prasoon Kumar Roy, Life Insurance Lightens the Hope of the People, The Insurance
Times, Vol.7, February 1987,pp.10 and 11.

7. National Council of Applied Economics Research Attitude towards Life Insurance

Cover, Report on Household Income and its Disposition, New Delhi, 1979, pp.1-87.

8. M.N. Mishra, Life Insurance Corporation of India-A Study of Working and

Performance, RBSA Publishers, Jaipur, 1991, pp.49-182.

9. LIC of India, Spreading the Light Yogakshema, Vol. 44, No.5, May 2000, p.24.

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