Strategic Marketing

Assignment
Submitted By: Sharad Chandra Pyakurel (EMBA Fall 2012)


Customer Analysis of Nepal Life Insurance Company Limited
The objective of the current study is an attempt to find current segmentation, motivation
and unmet need of Nepal Life Insurance's customers. For the purpose of the study, data
were collected through primary sources by framing 24 different questionnaire related to
basic customer attributes viz. segmentation, customer motivation and unmet needs.
Analysis has done based on response received from questionnaire. The results of the study
bring out the major customer demographics, perception, expectation and preference of
customers towards NepalLife insurance.
1. Segmentation:
Gender: Out of 20 respondents 13 are male and 7 are female. It seems that male insured
are nearly double than female insured.
Age: Out of 20 respondents,20% are within age band 20-25 years, 35% within 25-30
years, and 45% are 30 years or above. It looks majority of people purchase life insurance
within age of 25 to 30 years.

Family Size: 10% people says their family has 0-2 members, 40% respond 3-4
members, 40% are from family size of 5-6, and 10% are from family size of 7 or more.
Majority customers are from family of 3 to 6 members.

Education: Out of 20 respondents, 45% are graduate, 25 are 10+2 and 30% are others. It
means majority of policyholders are educated.

Occupation: 45% are from private or government service, 30% are self employed and
25% are others. Majority of policyholders are engaged with private of government
service.

Income: 20% respondents have monthly income 10-20k, 30% earn 20-30k monthly, 30%
earn 30-40k monthly and 20% earn more than 40k monthly. Average policyholders are
from middle income group of 20 to 40k per month.

2. Customer Motivation:
Awareness of Life Insurance: out of 20 respondents 50% people know life insurance,
50% people are not aware about life insurance. It means half of customers are not aware
about life insurance but they purchased because of others referral or agents forcing.

Tax saving: 55% respondents know life insurance can be used for tax saving but 45%
respondents are not informed about it.

How NepalLife? 50% are referred by friends and agents, and 25% news paper and 25%
other source
Strategic Marketing
Assignment
Submitted By: Sharad Chandra Pyakurel (EMBA Fall 2012)


Preference for life insurance: Life insurance coverage, risk coverage, endowment
period, policy features, bonus rate, and good will of company. Majority of people prefers
higher bonus rate and company's good will.

Why purchased from NepalLife? Due to all factors security, seeking high return, risk
coverage, and service delivery. Majority of people purchased expecting higher bonus in
future.

Satisfied with benefit of NepalLife? 55% are satisfied and 45% are not satisfied.
Reasons for dissatisfaction are very low actual return than committed, deduction of even
paid in case of surrender, high premium, and unclear calculation.

Rating of NepalLife with respect to, Service, Returns (yearly bonus), Life
Cover, and Charges: 15% good, 60% Ok, and 25% not good

Customer service and courtesy: Out of 20 respondents 20% are satisfied, 50% are
partially satisfied, and 30% are not satisfied

Branch Location: 55% people partially satisfied with the branch location, 20% are
satisfied and 25% feel NepalLife's branch location is not convenient for them.

Is suitable premium? Out of 20 respondents 40% feel premium charged by NepalLife is
partially satisfactory, and 60% feels premium is high (i.e. not suitable)

Staffs take sincere interest in clients problem solving: 65% people are partially agreed
with it, 15% are disagreed and 4 are agreed

Operating hour regarding customer service and delivery: 70% are not satisfied with
the operating hour and service time of NepalLife, and 30% are partially satisfied.

Transaction in NepalLife is safe and error free? All 100% respondents partially agree
that transactions in NepalLife are safe and error free.

3. Unmet Needs:
Direct Policy Discount: Majority i.e. 90% respondents expects NepalLife should give
discount in premium equivalent to total agency commission if customer want to purchase
policy from company directly without through agent. Only two are disagreed with this
regard.

Online facility: All respondents wish NepalLife should make provision to purchase
policy online. Majority of respondents (60%) are willing to pay their premium through
online payment service.

Strategic Marketing
Assignment
Submitted By: Sharad Chandra Pyakurel (EMBA Fall 2012)

Weekend service: Majority of people (80%) prefer that NepalLife should provide its
service like renewal collection, policy loan, claim, new policy, etc. on Saturday too.



Competitor Analysis


Porter's 5 Forces Analysis


1. Threat of New Entrants. The average entrepreneur can't come along
and start a large insurance company. The threat of new entrants lies
within the insurance industry itself. Some companies have carved out
niche areas in which they underwrite insurance. These insurance
companies are fearful of being squeezed out by the big players. Another
threat for many insurance companies is other financial services
companies entering the market. What would it take for a bank or
investment bank to start offering insurance products? In some countries,
only regulations that prevent banks and other financial firms from
entering the industry. If those barriers were ever broken down, like they
were in the U.S. with the Gramm-Leach-Bliley Act of 1999, you can be
sure that the floodgates will open.
2. Power of Suppliers. The suppliers of capital might not pose a big threat,
but the threat of suppliers luring away human capital does. If a talented
insurance underwriter is working for a smaller insurance company (or one
in a niche industry), there is the chance that person will be enticed away
by larger companies looking to move into a particular market.
3. Power of Buyers. The individual doesn't pose much of a threat to the
insurance industry. Large corporate clients have a lot more bargaining
power with insurance companies. Large corporate clients like airlines and
pharmaceutical companies pay millions of dollars a year in premiums.
Insurance companies try extremely hard to get high-margin corporate
clients.
4. Availability of Substitutes. This one is pretty straight forward, for there
are plenty of substitutes in the insurance industry. Most large insurance
companies offer similar suites of services. Whether it is auto, home,
commercial, health or life insurance, chances are there are competitors
Strategic Marketing
Assignment
Submitted By: Sharad Chandra Pyakurel (EMBA Fall 2012)

that can offer similar services. In some areas of insurance, however, the
availability of substitutes are few and far between. Companies focusing on
niche areas usually have a competitive advantage, but this advantage
depends entirely on the size of the niche and on whether there are any
barriers preventing other firms from entering.
5. Competitive Rivalry. The insurance industry is becoming highly
competitive. The difference between one insurance company and another
is usually not that great. As a result, insurance has become more like a
commodity - an area in which the insurance company with the low cost
structure, greater efficiency and better customer service will beat out
competitors. Insurance companies also use higher investment returns and
a variety of insurance investment products to try to lure in customers. In
the long run, we're likely to see more consolidation in the insurance
industry. Larger companies prefer to take over or merge with other
companies rather than spend the money to market and advertise to
people.