to determine customer- thrift behaviour with a

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Presented by: Regn. No. 24401881

Moirangthem Pauly of 2009-2010

Roll 30910 No. 0603425

IMPHAL BRANCH KHUYATHONG BAZAR -795001

Est:25. September. 2005

Organisational guide:

Mr.Debendro Kr Singh,BM (BRANCH MANAGER IMPHAL-1)

To determine customer- thrift behaviour with a focus on saving

instrument available in the market.

CP 304 : Summer Training Project


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Introductiony The future is always uncertain. There is hardly one doesnt worry about the

risk on the happening of any unforeseen events.

y

Insurance is a contract between two parties whereby one party calledinsurer undertakes in exchange for a fixed sum called premiums to pay the

other party called the insured a fixed amount of money on the happening of a

certain events. Insurance is a protection against financial loss arising on the

happening of unexpected event. Insurance companies collect the premiums to

provide for this protection. A loss is paid out of the premium collected fromthe insuring public and the insurance companies act as trustees to the amount

collected.


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Life Insurance

y Life insurance could be defined as a policy that will pay a specified

sum to beneficiaries upon the death of the insured.

y It is an agreement that guarantees the payment of stated amount of

monetary benefits upon the death of the insured. Life insurance could

be said as protection against the death of the insured in the form of

payment to a designated beneficiary, typically a family member ofbusiness.


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INSURANCE AS AN INVESTMENT TOOL:

y Insurance invest in the economy. Insurance provides funds to help businessgrow and create jobs.

y Support the provision of credit

Insurance provides support for credit. Even though mortgage lenders approvean applicant for a home loan base on the applicants credit worthiness, mostlenders also require that the dwelling to cover red by homeowners insurance.Likewise a business applying for a loan to purchase inventory might be requiredto show that the inventory is insured before the loan is granted.

y Reduces anxiety

Insurance also reduce anxiety because the insured knows insurance will provideindemnification if a covered loss occurs. By shouldering the burden ofunexpected or catastrophic losses, insurance helps business avoid bankruptcyand keeps workers employed and local economies healthy. It also contributes toa stable society where people can plan for the future without an update fear of

catastrophic loss.


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COMPANYPROFILE

y HDFC STANDARD LIFE INSURANCE is a joint venturebetweenHDFC Limited India and Standard Life London ofUK.

y HDFC Standard Life Insurance Company Limited is one of the firstcompanies to be licensed by IRDA to operate in the Insurance sector. Itis a joint venture between Housing Development Finance CooperationLimited (HDFC Limited), Indias leading housing finance institutionand a Group Company of the Standard Life.

y HDFC Limited, Indias premium housing finance institution hasassisted more than 3.3 million families own a home, since its inceptionin 1977 across 2400 cities and towns through its network of over 250offices.


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y It has international offices in Dubai, London and Singapore with

service associates in Saudi Arabia, Qatar, Kuwait and Oman to assistNRIs and PIOs to own a home back in India.

y As of December 2008 the total assets size has crossed more than Rs.

95,000 crores including the mortgage loan assets of more than Rs.82,800 crores. The corporation has a deposit base of Rs.

17,551crores, earning the trust of more than 9, 00,000 depositors.

y Customer Service and satisfaction has been the mainstay of theorganization.


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Standard Life Group

y Standard Life is Europes largest mutual life assurance company.

y The Standard Life Group has been looking after the financial needs of customers for over180 years. It currently has the customer base of around 7 million people who rely on thecompany for their insurance, pension, investment, banking and health-care needs.

y Its investment manager currently administers $125billion in assets.

y It is a leading pension provider in the UK , and is rated by Standard & poors as strongwith a rating of A+ and as good with a rating of A1 by Moodys.

y Standard Life was awarded the Best Pension Provider in 2004, 2005 and 2006 at theMoney Marketing Awards, and it was voted a 5 star life and pension provider at theFinancial Advisor Service Awards for the last 10 years running. The 5 Star accolade hasalso been awarded to Standard Life Investments for the last 10 years, and Standard LifeBank since its inception in 1998.


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CORPORATE OBJECTIVE

Vision

y The most successful and admire life insurance company, which

means that we are the most trusted company, the earliest to deal

with, offer the best value for money, and set the standards inindustry. The most obvious choice for all.

Mission

y Own up for any errors politely, an family refuse any unfair request.

y Recognition to people who consistently demonstrate integrity.y Take business decision, after analysing relevant facts only ethical

means


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Mission

contd........................

y Ensure accurate information and understanding about our product

and services in all forms of communication like advertising ,

literature, public statements etc.

y

Honour every legitimate commitment made by ourrepresentatives.

y Ensure that all transaction clearly reflect the agree understanding

between all parties.

y

Conduct all business only parents who follow fair practices.


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Values

Values that we observe while we work:

y Integrity

y Innovation

y Customer centricy People Care One for all and all for one

y Team work

y Joy and simplicity


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SWOT ANALYSIS

y STRENGTH

y Domestic image of HDFC supported by Standard Lifes international imageis the strength of the company.

y Strong and well spread network of qualified intermediaries and sales

person.y Strong capital and research base.

y The company provides customer service of the highest order.

y Huge basket of product range which are suitable to all age and income

groups.y Large pool of technically skilled manpower with the depth knowledge and

understanding of the market.

y The company also provides innovative products to carter the differentneeds of different customers.


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WEAKNESS

y Heavy management expenses and the administrative costs.

y Low consumer confidence on the private players.y Vertical hierarchical reporting structure with many designation and

cadres leading to power politics at all levels without any expectation.

y Poor retention percentage of tie up agents.

OPPORTUNITIES

y Insurable population: According to IRDA only 10% of the populationis insured which represents around 30% of the insured population.

yThere will be inflow of managerial and financial expertise from theworlds leading insurance markets. Further the burden of educatingconsumers will also be shared among any players.

y International companies will help in building world class expertise inlocal market by introducing the best global practices.


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Identification of Problems

1.Proper understanding about the saving instrument available in the

Imphal market.

2.Benefiits of Life Insurance as a saving as a tool.


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RESEARCH METHODOLOGY

Title

y To determine customer- thrift behaviour with a focus on saving

instrument available in the market.

Definition:

y Customer thrift behaviour is define as the process by which an

individuals or an organisation formed for the purpose of holding

deposit(saving) or a wise economy in the management of money andother resources such loan association, credit union and saving bank.


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TITLE JUSTIFICATION

y The study deals mainly with studying the buying pattern in theinsurance Industry with special focus as saving tools. The varioussegment of the markets divided in terms of insurance needs asgroup. Satisfaction levels etc. will also studied.

OBJECTIVEOF STUDYy To find out the difference saving instruments in Imphal City and the

best saving Life Insurance Company.

y To find the attitude of the people towards the life insurance

companies.y To find the most trusted Life Insurance Company.

y To give awareness of the life insurance and measures to improve it.

y Position of life insurance in the mind of the customers.


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RESEARCH DESIGNED OF THESTUDY

Descriptive research

y The research design selected for this research is Descriptiveresearch design.

SAMPLINGMETHODOLOGY

Sampling method:

y The researcher had choice between probability and non probabilitysampling method. In this study a sample non probability method

namely convenience sampling was adopted.

y For my study I have selected Non- probability method in which Iselected convincing sampling method.


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SamplingUnit:

y The respondent who are ask to fill out questionnaires are the

sampling units. These comprise of Govt. Employees, Self Employed,

professional, housewives, etc.

Sample size:y The sample size was 60 which are restricted to 35(for future sales of

policies), comprised of peoples from Imphal due to time constraints.

(The analysis was done for whole 60 samples)

y SamplingArea: The area of the research was Imphal (Manipur),

INDIA.

y


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FINDINGS:

AGE GROUP OF SURVEYRESPONDENTS

Age group No. of respondent

18 - 25 years 32

26 25 years 17

36 50 years 09

More than 50 years 02

Total 60


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18-25

26-3536-50

more than 50 years


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GENDERCLASSIFICATION OF SURVEYED RESPONDENTS

PARTICULARS No. of respondent

Male 37

Female 23

Total 60


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male62%

female38%


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CUSTOMER PROFILE OF SURVEYED RESPONDENT

CUSTOMER PROFILE NO. OFRESPONDENT

STUDENTS 15

GOVERNMENT SERVICE EMPLOYEE 17

BUSINESS 23

SELF EMPLOYED O5

TOTAL 60


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STUDENT

government serviceemployed

business

self employed


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Data showing peoples perception on appropriate age to start

saving

Response No. of respondent Percentage (%)

Between 25-30 37 61.66%

Between 30-40 19 31.66%

Between 40-50 04 6.66%

After 50 years 0 0%


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between 25-30

between30-40

between 40-50

61.66%

31.66%

6.66%


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ANALYSIS:

y What are recurring deposit accounts?

The recurring deposit account is an account in the bank (or a post

office in some countries) where an investor deposit a fixed amountof money every month for a fixed tenure (mostly ragging from one

year to five years). This scheme is meant for investor who want to

deposit a fixed amount every month, in order to get a lump sum

after some years. The small monthly saving in the Recurring deposit

scheme enable the depositor to accumulate a handsome amount of

maturity. Interest at term deposit rates is computable on quarterly

compounded basis.


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Post office Recurring Deposits VS Bank Recurring Deposits

y A post office recurring deposit account(RDA) is similar to recurringdeposit in a bank, where we can invest a fixed amount on a monthly basis.The postal RDA has a fixed tenure of five years.

y These deposits accumulate money at an annual fixed rate of interest of 8percent. the interest is compounded on a quarterly basis. The minimuminvestment in a post office RDA is Rs 10 and there no prescribe upperlimit. For example, if we invest Rs 100 every month in 60 investment , wewill earn a sum of Rs 7,289 after 5 years.

y Banks, however, offer a flexible time period on their recurring deposits. Wecan open RDA for a minimum period of six months, and thereafter inmultiplies of 3 months up to the maximum years of 10 years.

y In banks, we can start a recurring deposit with State Bank of India for amonthly investment of Rs 100.


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y For example, a fixed deposit for two years is withdrawn after 20

months; interest will be paid only for the one full year completed.

The depositor will lose interest for the remaining 8 months.y

y If a bank FD is closed before completing the original term of the

deposit, banks have the discretion to charge penal interest. If a bank

decides to charge penal interest, the depositor will be paid interestat a lower rate than that was contracted.

y

y A postal time deposit fetches annual interest rate in the range of 6.25

to 7.5 per cent. A bank FD offers annual interest rates in the range of3.75 percent to 7.27 per cent. Senior citizens enjoy the privilege of

earning higher interest rates on bank FDs, ranging from 4.25 per

cent and 7.95 per cent.


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ADVANTAGES OF BANK FIXED DEPOSITS:

1. If deposited into FD (Fixed Deposit ) its more save for you.

2. Its interest % is high when compare with other deposits like SB

(saving bank A/C) & Current A/C

3. For the senior citizen, the FD gives the highest rate of interest. It

depends upon the banks .

4. We can keep FD with Time base and Money base schemes.

5. For example: 2 years deposits or 5 years deposits / upto Rs

.50,00,000/- or Rs.10,00,00,000/-.


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DISADVANTAGES OF BANK FIXED DEPOSITS:

y We cant withdraw the deposited money back until the terms of

deposit completes. For example: if we deposit our money into the

FD for 5 years up to Rs. 5000000/-. After 2 years of deposit we

cant withdraw back without completion of the deposit amount

reached.

y Two most best saving instrument available in the Imphal market.

a) bank fixed deposit b) insurance


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Saving Instrument No. of Respondents Share (%)

Bank fixed deposit 35 58.33%

Life Insurance 25 41.66%

Total 60 100%


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bank fixed depositinsurance


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Data showing people who save regularly.

RESPONDENTS

NO. OF

RESPONDENTS SHARE (%)

YES 56 93.33%

NO 04 6.66%

TOTAL 60 100%


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yes

no


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Data shows people invest in Mutual Funds

RESPONSE

NO. OF

RESPONDENTS

SHARE (%)

YES 09 15

NO 51 85

TOTAL 60 100%


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Yes

no


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Data shows people invest in stock market.

RESPONSE

NO. OF

RESPONDENTS

SHARE (%)

Yes 15 25

No 45 75

Total 60 100


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yesno


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Data gives people perception about insurance

RESPONSE NO. OFRESPONDENTS SHARE (%)

Protection tools 43 71.66

Tax saving instrument 11 18.33

Saving tools 06 10


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protection tools

tax savinginstrument

saving tools


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Data shows people having the insurance policy.

RESPONSE

NO. OFRESPONDENTS SHARE (%)

Yes 51 85

No 09 15

Total 60 100


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yesno


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MARKET SHARE OF LIFEINSURANCECOMPANIES:

LIFEINSURER NUMBEROFPOLICIES

HDFC STANDARD LIFE INSURANCE

9

LIC 35

BAJAJ ALLAINZ 3

ICICI PRUDENTIAL 7

MAX LIFE 2


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HDFC SLIC

LIC

BAJAJ ALLIANZ

ICICIPRUDENTIAL

MAX LIFE


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Child plansEndowment Plans

Pension Plans


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CHART SHOWING IDEAL POLICYPATTERN

Ideal policy pattern

No. of respondents

1 year 07

5 years 10

10 years 28

15 years 15


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1 year

5 years10 years

15 years


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FINDINGS

y According the survey 93.33% people save their earning in Imphal. So remaining6.667% either have invested all their earning or do not have enough amounts tosave.

y Among that 58.33% people have opted bank as a best saving instrument and41.66% to the life insurance company.

y

Of the simple size of 60 surveyed respondents 85% of the respondents are havingLife Insurance policy.

y 15% of the respondents is either not having the Life Insurance policy at thepresent or their policy is already matured. So there is also plus point forinsurance sector to capture the market.

y People think insurance as the protection tool.

y People purchase insurance policy mostly for protection purpose and some of thepeople for saving.

y The good will of the company also attracts customer towards a InsuranceCompany.

y People also take insurance policy as a security for their children.


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CONCLUSION

y From the analysis and findings in the field of life Insurance threw

up some interesting trends. A general impression that we gathered

during Data collection was the immense awareness and knowledge

among people about various saving institute and their saving

instrument. People are beginning to look beyond LIC for theinsurance needed and are willing to trust privates players with

their hard earned money.

y People in general have been impression by the marketing and

advertising campaigns of insurance companies. A high penetrationof print, radio and television and campaigns over the years is

beginning to have its impact now.


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y Another heartening trend was in terms of people viewing insurance as

a tax saving and investment instrument as much as protective one. A

very high number of respondents have opted for insurance for suchpurposes and it shows how insurance company have been successful to

attract public money in recent times.

yThe general satisfaction levels among public with regards to savinginstrument still require improvement. But there in lies the Bank Fixed

Deposit are most trusted and desirable saving instrument in Imphal

city. In regard to life insurance company like HDFC standard Life

Insurance Company Ltd. LIC has never been known for promoteservice or customer oriented methods and HDFC standard Life can

build on these factors.


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SUGGESTIONS

y As the people think that insurance is a tool to protect their family &

a tax saving device they are aware of the fact and realising its

important. The company should try to expand & build up its

infrastructure because there is a large potential in India.

y Company should come up with its branch in Imphal. With the

objective and goals to meet the demands & expectations of the

public. Because the entrance of private player will increase the

competition and it would be tough task to secure a good position in

market.


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THANK YOU

to determine customer- thrift behaviour with a

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