Implications of perceived benefits and snags on consumer attitude towards insurance policies

Abstract

Insurance industry in India is relied upon to contribute US $280 billion by 2020.This portends a significant leap for Insurance companies in India. The increased awareness, ever expanding distribution channels, improved service quality and innovative products are all contributing to the robustness of Insurance business in India. Besides these, insurance companies in India have an enormous potential that is under tapped. This is significantly evident in the existing penetration rate which is meagre 3.69%. Insurance industry in India has witnessed tremendous changes in the past decade, attributed to the dynamic changes in micro and macro factors such as- booming competition, changing demographic profile of the customers, government regulations, product innovation and technology interface. In the ensuing study an effort is made to identify and discuss the factors fostering or encumbering consumers from purchasing policies of Insurance companies. By adopting a diagnostic research design and survey technique, data was collected from around 124 sample elements that were chosen randomly using probability sampling method. Among the ten perceived benefits, high rate of return, tax benefits and policy tenure were found to be the key determinants positively influencing the buying behaviour of consumers. Similarly cumbersome terms and conditions, lack of transparency and procedural delays were found to be the factors that impede purchase action of consumers.