2007 Oxford Business & Economics Conference ISBN : 978-0-9742114-7-3 Analyzing Indian Policy Holders’ Response to Attributes of Life Insurance Products Amit Pal Chhabra* and Vijaya Gupta** Abstract The insurance market in India grew by 112.3% during the last five years, the third largest growth globally. The Indian insurance market generated total revenues of $21.1 billion in 2004, representing a compound annual growth rate (CAGR) of 16.7% during 2000-2004. However India still has a low insurance penetration of 1.95%, ranked 51st in the world. Out of 25-30% of India’s savings, less than 10% is spent on insurance. Over four decades the industry has been state monopoly with Life Insurance Corporation being the only player. With the advent of competition and due to regulation, the market is already beginning to witness wide array of products from players whose number is set to grow. To compete in this niche market, one has to have a right product mix, effective branding, distribution and after sales services such as premium collection and claim settlement etc. which are proven to be tough challenges for the new players. Meanwhile, consumers are also becoming increasingly more aware of their financial assets and taking cautious decisions. They are looking for integrated financial solutions that can offer stability of returns along with total protection. Insurance products have to be customized accordingly by the player. This study is an attempt to create Indian consumer’s profile for life insurance policy products through their responses to various attributes of life insurance products. A random stratified sample of 300 policy holders has been selected across Mumbai and the primary data collected has been statistically analyzed to understand the perception of the Indian consumer in the present circumstances. It also attempts to capture the future change in their perception due to socio-economic transformation in the system. An attempt has also been made to compare and analyze the profile of the Indian policy holder vis-a-vis policy holder of a developed country. Key words – Indian life insurance industry, Indian policy holder, attributes of life insurance, regulation, customization *Student, Post Graduate Diploma in Industrial Management, 13th batch at NITIE, Bachelor of Information Technology, having three years experience in IT marketing and data analysis. apsc_n@yahoo.com **Associate Professor in Economics for the past six years at NITIE, worked as lecturer (10 years) and reader (3 years) in Economics at the National Institute of Technology, June 24-26, 2007 Oxford University, UK 1 2007 Oxford Business & Economics Conference ISBN : 978-0-9742114-7-3 Jaipur, and visiting faculty for one year at the Sheffield University Management School, and Sheffield Hallam University, Sheffield, the UK. Educational qualification – M.Phil, Ph. D (Economics of Dry Farming Technology), vijaya298@yahoo.com Both are at the National Institute of Industrial Engineering (NITIE), Vihar Lake, Mumbai - 400 087, India June 24-26, 2007 Oxford University, UK 2