The insurance companies have to ensure quality products at a competitive price. Companies can lower the price of the product by reducing the cost. Their survival depends upon their policy-holders. The policy-holders become confident of not losing much when an accident or uncertainty takes place. On the report of the insured about an accident the company officials send surveyors to assess the loss caused to the policy-holders. However, as several of the insurance providers are international companies having made their presence felt in several countries, the service provided by them is a reflection of the experience gained by them across the globe, and in that sense, the findings may be generalised to a great extent.

1. Volume 43
Number 2
June 2016
SedmeSmall Enterprises Development,
Management & Extension
Journal
(An ISO 9001-2008 organisation)

2. EDITORIAL BOARD
Chief Editor
Associate Editors
Reviewers
Journal Coordinators
Mr. M. Chandrasekar Reddy
Dr. Dibyendu Choudhury
Dr. Girija Bai Gattu
Dr. Neeta Baporikar
Dr. Rachita Rana
Dr. A. Srihari Krishna
Dr. Sarita Kumari
Dr. Brajaballav Kar
Dr. Soumendra Kumar Patra
Dr. K. Sudarsan
Ms. P. Anjali Prasanna
Mr. B. Sharath Babu
Director General, ni-msme, Hyderabad, India
Faculty Member, ni-msme, Hyderabad, India
Professor & Director (Business Management), Namibia University of Science and
Technology, Namibia, Africa
Professor & Director, Institute of Information Technology and Management, Janakpuri,
New Delhi, India
Director, Siddhartha Educational Academy Group of Institutions, Tirupati, Andhra
Pradesh, India
Professor (HRM & Managerial Economics), SIES College of Management Studies, Navi
Mumbai, Maharashtra, India
AssociateProfessor,KalingaInstituteofIndustrialTechnology,Bhubaneswar,Odisha,India
Associate Professor (OM & Decision Science), Institute of Management & Information
Science, Bhubaneswar, Odisha, India
Assistant Professor, Sreenivasa Institute of Technology and Management Studies,
Chittoor, Andhra Pradesh, India

3. AN EMPRICAL NOTE ON
GENERAL INSURANCE PRODUCTS
C. Sankar *
ABSTRACT
June 2016
The insurance companies have to ensure quality products at a competitive price. Companies can
lower the price of the product by reducing the cost. Their survival depends upon their policy-holders. The
policy-holders become confident of not losing much when an accident or uncertainty takes place. On the
report of the insured about an accident the company officials send surveyors to assess the loss caused to
the policy-holders. However, as several of the insurance providers are international companies having
made their presence felt in several countries, the service provided by them is a reflection of the experience
gainedbythemacrosstheglobe,andinthatsense,thefindingsmaybegeneralisedtoagreatextent.
Keywords: Factors,service,products,company,price
Introduction
Insurance is a form of risk management first and foremost, used to hedge against the
risk of a needy loss. Insurance is defined as the rational transfer of the risk of a loss, from
one individual to another, in swap for a premium, and it can be thought of as a certain
small loss to prevent a large, possibly devastating loss.An insurer is a company selling
the insurance; an insured is the person or entity buying the insurance.The insurance rate
isafactorusedtomakeadecisionabouttheamounttobechargedforacertainamountof
insurance exposure called the premium. Risk management, the practice of appraising
andschemingrisk,hasevolvedasaseparatefieldofstudyandsocarriedout.
* Dr. C. Sankar is Assistant Professor, Department of Commerce, Karpagam University,
Coimbatore-641021,Tamil Nadu; e-mail:sankarzee.c@gmail.com.mobile:9566997631;

4. Reviewof literature
Govind Johri (2009) in his article discussed customer satisfaction with regard to
General insurance industry. This new trust and innovativeness is the key to
competitiveness. The survey has clearly revealed perception gaps in the area of: (i)
visual appeal of document and office, (ii) product knowledge and adherence to
promises, (iii) responsiveness and dependability, (iv) error-free records and empathy.
Kavitha, Latha, and Jamuna (2012) in their articles on General insurance companies,
part of financial sector, remarked that they were expected to show profits though they
were service-oriented organisations. The premium income under these two schemes
namely, personal accident, and Mediclaim schemes constituted more than 85 per cent
of the total premium income for all the four schemes namely, Personal Accident,
HealthInsurance,Workmen’s CompensationandMediclaimschemes. Manisha Rani
(2012) in her research article focused on a survey of insurance companies in India.
From 49 members of the Indian association in the directory (2011) published by the
association 30 companies were selected at random to find out how customer
relationship could become more effective with the aid of information technology and
to see if Customer Relationship Management (CRM), when properly carried out
using appropriate information technology, could yield optimal results for the
organisation. Manjit Singh and Rohit Kumar (2009) in their article revealed emerging
trends in the growth, financial performance, and strategies for improving the
performance of General insurance companies in India. It was highlighted that public
sector insurance companies were suffering from loss when it came to their core
insurance business, but still managed to get good net earnings, which was mainly
ascribed to the investmentincome.RajeevAhuja and Indranil De (2004) in their paper
empirically confirmed that demand for insurance was limited where supply of health
care services was weak. In particular, inter-state variation in demand for universal
health insurance schemes for the poor in India is explained by inter-state variation in
health care infrastructure and the proportion of the poor for whom the scheme is
designed.
Sandhu and Neetu Bala (2011) conducted a study on Life Insurance Corporations’
customers located in the major cities namely, Amritsar, Jalandhar, and Ludhiana in
Punjab, a progressive state of India. They considered a sample of 450 customers who
were approached personally at their work places and residences. Managerial
implication and directions for further research had also been discussed. Selvakumar
and Vijayakumar (2013) undertook an empirical study based on the survey method.A
policy-holder has freedom to take up a particular policy from any one of the insurance
SEDME 43.2
2/ Sankar

5. An Emprical Note on.../3
companies. Therefore, the study was undertaken with reference to Madurai region.
Shreedevi and Manimegalai (2013) in their study attempted to compare the
performance of public and private General insurance companies in terms of certain
parameters. The growth rate was 55.36 per cent in 2004-05 and the highest growth
rate of 61.24 per cent was recorded in 2006-07, which decreased to 24.67 per cent in
2010-11.
Insurance has come to play a major role in the life of humanity. Slowly people
started to realise the need for insurance, which continues as long as life exists. In fact
insurance is not restricted to any category of society in terms of caste, ages or life-
styles. Also, many people have a notion that insurance is a good form of an
investment, which is not right. The life insurance industry has become increasingly
competitiveinrecentyears.
Modeof operation
The policy-holders become confident of not losing much when an accident or
uncertainty takes place. On the report of the insured about an accident, the company
officials send surveyors to assess the loss caused to the policy-holders. The surveyor
submits a report to the insurance company as to the particulars of damage like the
quantum of goods or machinery lost and their value. The company, after studying the
report of the surveyor, takes necessary steps to settle the claim.The claim made by the
policy-holder is not always fully admitted. The insurance company takes into
consideration the age of the machinery/ contraction/ installation of the asset. In case
of goods, their current worth is noted. The claim of the policy-holder is settled as per
theestablishedguidelinesobtainablewiththeinsurancecompanyconcerned.
Significanceof thestudy
The insurance companies have to ensure quality products at a competitive price.
Companies can lower the price of the product by reducing the cost. Their survival
depends upon their policy-holders, the factor that influences the selection of general
insurance products.The study attempts to evaluate the factors influencing in selection
of general insurance products. Today, only one business, which affects all walks of
business, is insurance. That’s why insurance industry occupies a very significant
place among financial services functioning in the world. Due to growing complexity
of life, trade and commerce, individual as well as business firms are turning to
manage various risks. Hence, a proper knowledge of what insurance is and what
purpose does it serve to individual or an organization is consequently necessary.
June 2016

6. Companies must ensure that their marketing mix suits all segments of people and
should beformulatedbasedon thepreferenceof customers.
Objectivesof thestudy
I. To evaluate the factors influencing the selection of the products and the services of
Generalinsurancecompanies
ii. To offer suitable suggestions and recommendations for further improvement of the
performanceof Generalinsurancecompanies
Methods ofdata collection
The study is based on both primary and secondary data. The primary data were
collected from the policy-holders who had taken General insurance policies such as
motor insurance policy, fire insurance policy, and health insurance policy from any
branch of both public and private sector insurance companies. The General insurance
companies in Salem district selected for the study were New India, United India, ICICI
Lombard, Bajaj Allianz, IFFCO Tokio. For the purpose of collecting primary data, a
structured interview schedule was used for policy-holders. The secondary data were
collected from the annual reports of IRDAand GIC, annual reports of selected General
insurancecompanies,magazines,variousjournalsrelatedtoinsurance,technicalbooks,
edited volumes, other articles from General insurance companies and other records
published by the Salem district regional office and divisional offices of General
insurancecompaniessituatedinSalemdistrict,TamilNadu.
Sampling method
About 500 policy-holders were approached to collect the required data for the
study. The researcher could not receive information from 50 respondents. The
researcher had no option other than to fix the sample at 450. Of them 301 policy-
holders were taken from public sector General insurance and 149 policy-holders were
taken from private sector General insurance. The policy-holders were selected on the
basis of non-random sampling by following convenience sampling method. The
selected respondents belonged to different fields and hence the study covered a cross-
section of society such as teachers, lawyers, doctors, engineers, businessmen, and
farmersinSalemdistrict,TamilNadu.
Statisticaltechniques foranalysis
The collected data were analysed with reference to each of the objectives of the
study. Descriptive analyses were employed.Analysis and interpretation were done by
using SPSS -21.0 andAmos-2.10 softwarepackages.
SEDME 43.2
4/ Sankar

7. Limitationsof thestudy
I. Theresponses for thestudy weresolicitedfromtheSalemdistrictonly.
ii. Thesamplecollectedhas beenrestrictedto450.
Levelofsatisfaction
Factors influencing the policy-holders to take policies in General insurance have
been identified, and individual factors were analysed by the simple percentage
analysis. Policy selection was a part of performance. It was based on highly
favourable attitudes towards the policy and conscious commitment each time the
customer purchases a policy in this category. Table -1 describes the distribution of
respondents based on the level of satisfaction that customers had with their policy
selection.
From table-1 it can be clearly inferred that the respondents were highly satisfied
with factors like product price, reminder for renewal of policy, office appearance,
motivation given by the officials to buy the policy, guidance/help at the time of
purchasing the policy, promptness in issuing the policy, contacts by the development
officers/agents after issuing the policy, Development officer’s attitude in helping the
policy holders at the time of making claims, amount settled by the company (relative
worth of the amount), and bonus for next premium payment having percentages 42.4,
52.4, 38.9, 38.4, 35.3, 44.4, 45.1, 57.3, 42.4, and 52.4 correspondingly. The
respondents were satisfied with the factors of courtesy of staff, officers/agents being
easily accessible, response in time, attitude of surveyor, agent’s attitude in guiding the
claim settlement, company’s attitude in settling claims, moral support, convenient
service, covering more services having percentages 49.1, 42.4, 53.3, 34.4, 42.4,
49.3,42.4, 52.3 and 34.4 respectively. The respondents were neutral towards factors
like speed in claim settlement, knowledge of the person dealing with you, type of the
product, and transparency of the policies, claim settlement percentage, benefits
associated with the policy having percentages 32.7, 44.7, 48.2, 32.7, 44.7, and 48.2
correspondingly. It was found from the analysis that a majority of 57.3 per cent of
respondents were highly satisfied with the development officer’s attitude in helping
the policy-holders at the time of making claim in General insurance policy. From the
foregoing it can be inferred that the above stated satisfying factors induce the policy-
holders to purchase the policies in General insurance. Thus, the above factors were
takenas thosecoveredintheselectionof Generalinsurancepolicies.
An Emprical Note on.../5

8. TABLE-1
Factors influencing towards Level of Satisfaction
Sl.No. Factors HS S N DS HDS
1. Courtesy of staff 81 221
(18.0) (49.1) (17.1) (13.8) (2.0)
2. Product price 191 170 57 30 2
(42.4) (37.8) (12.7) (6.7) (0.4)
3. Officers/agents are easily accessible 171 191 81 3 4
(38.0) (42.4) (18.0) (0.7) (0.9)
4. Reminder for renewal of policy 236 175 31 4 4
(52.4) (38.9) (6.9) (0.9) (0.9)
5. Response in time 146 240 47 8 9
(32.4) (53.3) (10.4) (1.8) (2.0)
6. Speed in claim settlement 144 129 147 21 9
(32.0) (28.7) (32.7) (4.7) (2.0)
7. Knowledge of the person dealing with you 71 138 201 31 9
(15.8) (30.7) (44.7) (6.9) (2.0)
8. Type of the product 80 115 217 20 18
(17.8) (25.6) (48.2) (94.4) (4.0)
9. Attitude of surveyor 149 155 85 48 13
(33.1) (34.4) (18.9) (10.7) (2.9)
10. Office appearance 175 136 84 38 17
(38.9) (30.2) (18.7) (8.4) (3.8)
11. Motivation given by the 173 99 89 46 43
officials to buy the policy (38.4) (22.0) (19.8) (10.2) (9.6)
12. Guidance/help at the time 159 137 83 35 36
of purchasing the policy (35.3) (30.4) (18.4) (7.8) (8.0)
13. Promptness in issuing the policy 200 164 80 2 4
(44.4) (36.4) (17.8) (0.4) (0.9)
14. Contacts by the development officers/ 203 145 63 25 14
agents after issuing the policy (45.1) (32.2) (14.0) (5.6) (3.1)
15. Development officer’s attitude in helping 258 119 47 21 5
the policy holders at the time of making claims (57.3) (26.4) (10.4) (4.7) (1.1)
the time of making claims
16. Agent’s attitude in guiding the 181 191 64 Nil 14
claim settlement (40.2) (42.4) (14.2) (3.1)
17. Company’s attitude in settling claims 81 222 76 62 9
(18.0) (49.3) (16.9) (13.8) (2.0)
77 62 9
June 2016
6/ Sankar

9. Source: Primary data. * Figures in brackets indicate percentage.
Sl.No. Factors HS S N DS HDS
18. Amount settled by the company (relative worth 191 171 56 30 2
of the amount) (42.4) (38.0) (12.4) (6.7) (0.4)
19. Moral support 172 191 80 3 4
(38.2) (42.4) 917.8) (0.7) (0.9)
20. Bonus for next premium payment 236 176 30 4 4
(52.4) (39.1) (6.7) (0.9) (0.9)
21. Convenient service 146 240 48 7 9
(32.4) (52.3) (10.7) (1.6) (2.0)
22. Transparency of the policies 144 130 147 20 9
(32.0) (28.9) (32.7) (4.4) (2.0)
23. Claim settlement percentage 71 139 201 30 9
(15.8) (30.9) (44.7) (6.7) (2.0)
24. Benefits associated with policy 81 115 217 19 18
(18.0) (25.6) (48.2) (4.2) (4.0)
25. Covering more services 149 115 85 48 13
(33.1) (34.4) (18.9) (10.7) (2.9)
HS:Highlysatisfied;S :Satisfied;N : Neutral;DS :Dissatisfied; HDS: Highly
dissatisfied
Suggestions and recommendations
i. The insurance companies have customer service sections and grievance redress
officers. It seems that these sections were created mainly as a formality rather than
for enhancing their performance and efficiency, complied as per the guidelines of
Government of India. These sections need to be rejuvenated and given due
importance.
ii. The respondents were given detailed information of the General insurance through
their advertisement and company agents/ officers. Therefore, it is suggested that
the General insurance companies may give a wide range of services to the
customers and project the attractive advertisement through television (local
channel), wall painting and radio (F.M). By doing so, more number of people may
becomeawareoftheservicesandutilisetheserviceofGeneralinsurance.
iii.General insurance companies have to think up the strategies to increase the
premium growth rate over the target growth rate in case of personal accident and
workman’s compensationschemes,sincetheactualgrowth was notsignificant.
SEDME 43.2
An Emprical Note on.../7

10. iv. People are aware about the presence of insurance companies but awareness about
the importance of insurance as risk avoidance tool is low. Companies advertise
benefits, risk coverage, etc. IRDA would make efforts to create awareness about
thesocialsignificanceofGeneralinsuranceamongthemasses.
Conclusion
The study has to evaluate the comparative performance of public and private
sector General insurance companies. The metrics is validated and tested in an
environment where several national and international General insurance companies
are vying to capture the small scale industries General insurance market. The study
has revealed the pitfalls in the performance general insurance policyholders etc., This
requires immediate consideration, as it is against the recommended, practices of
providing service. Social responsibility is also a dimension which needs to be
strengthened by the insurance providers. However, as several of the insurance
providers are multi-national companies having made their presence felt in several
countries, the service provided by them is a reflection of the experience gained by
them across the globe, and in that sense, the findings may be generalized to a great
extent.
REFERENCES
Ahuja R., and Indranil De, (2004). Health Insurance for the Poor-Need to Strengthen Healthcare
Provision, Economicand PoliticalWeekly,4491-4493.
Asmarubiya Begam, A., and Mohamed Nasardeen, S.M., Empirical Study on Factors Influencing
Consumer Choice of Life Products, Journal of Management and Science, Special
Issue2.
Gopalkrishna,B. Rodrigues, Lewlyn L.R., Varambally, K.V.M., (2008) Service Quality in General
InsuranceSector:An EmpiricalStudy, IndianJournalofIndustrialRelations,44(1).
Govind Johri, (2009). Customer Satisfaction in General Insurance Industry-A Step toward
Competitiveness.AJournalofRiskand Insurance Pravartak,4 (3).
Kavitha Tnr., LathaA., & Jamuna S. (2012). Customers’Attitude towards General Insurance-AFactor
AnalysisApproach,IOSR JournalofBusiness and Management,3(1), 31-36.
Rani M., (2012). CRM in Insurance Services, International Journal of Innovations in Engineering and
Technology, 1(1), 51-58.
Sandhu, H.S., & Neetu Bala, (2011). Customers’Perception towards Service Quality of Life Insurance
Corporation of India: A Factor Analytic Approach, International Journal of Business
and SocialScience,2(18), 219-230.
June 2016
8/ Sankar

11. Sankar.C (2016). Empirical Study on Policyholder’s Opinion towards Reason of Taking General
InsurancePolicy,InternationalJournalofAcademicResearch,4(1), 88-92.
Sankar.C (2016). Recital of Non-Life Insurance Industry, LAP LAMBERT Academic Publishing,
Germany.
Selvakumar K., & Vijayakumar S., (2013). Attitude of Policyholders towards Administration of
General Insurance Companies with Reference to Madurai Region, SUMEDHAJournal
ofManagement,2(2), 93-116.
Shreedevi D., & Manimegalai D., (2013). A Comparative Study of Public and Private non- life
Insurance Companies in India, International Journal of Financial Management
(IJFM),2(1), 13-19.
Singh M. & Kumar R., (2009). Emerging trends in financial Performance of General Insurance
Industry inIndia.IndianManagementStudiesJournal,13,31-44.
VinayagamoorthyA& Sankar C (2012).AComparative Study on Service Quality Perception of Public
General Insurance and Private General Insurance Companies in Salem City,
ACUMEN-MarianJournalofCommerceandManagement,5 (2), 71-72.
VinayagamoorthyA& Sankar.C (2012). Policyholders’Awareness towards General Insurance Policy-
ComparativeAnalysis, JournalofDevelopmentResearch,7(1), 73-85.
Web References
http://www.lonsdalebrokers.com/en/knowledge-centre/100.aspx
https://en.wikipedia.org/wiki/Insurance
SEDME 43.2
An Emprical Note on.../9

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