2. International Journal of Management
3. To find the factors those are associated with the level of risk perception
in life insurance.
4. To provide valuable suggestions to enhance the risk bearing ability of
the respondents.
HYPOTHESES
In the light of the objectives of the study, the following hypotheses have been framed.
1. Sex does not influence the level of risk perception.
2. Age does not influence the level of risk perception.
3. Marital status does not influence the level of risk perception.
4. The nature of family is not associated with the level of risk perception.
5. Level of education does not influence the level of risk perception.
6. Occupation is not associated with the level of risk perception.
7. Monthly income and risk perception is not associated with each other.
8. Monthly savings does not influence the level of risk perception.
9. There exists no association between the total family members and the level of
risk perception.
10. Status in family does not influence the level of risk perception.
11. There exists no association between reading habit and the level of risk
perception.
12. There exists no association between viewing of television and the level of risk
perception.
13. Listening radio does not influence the level of risk perception.
SAMPLING
A sum of 300 respondents was contacted. Among them 247 respondents furnished
complete information. The remaining 53 respondents did not turn back to respond.
Random sampling method was used to identify the sample respondents.
The respondents from Vellore District were selected for the study.
METHODOLOGY
The data used in this study was primary data. Questionnaire is used for data
collection. The questions are restructured by undertaking a pilot study.
The questionnaire consists of four divisions pertaining to the socio- economic profile
of respondents, risk factors related to personal life, social life, and business or
investment
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FRAMEWORK OF ANALYSIS
The data collected is analyzed with the help of statistical tool such as
i) Simple percentage method
ii) Range and
iii) Chi – Square test.
SUMMARY OF FINDINGS
The findings of this study are divided into two sections namely socio-economic
profile of sample respondents and factors influencing risk perception.
Socio-Economic Profile of Sample Respondents
1. Out of 247 respondents, maximum numbers (56%) of respondents’ reside
in urban area.
2. Though 44% of the respondents are residing in rural area, majority (80%)
of them work in urban area.
3. Of the total sample respondents, 71% are male and the remaining 29% are
female.
4. Majority number of respondents i.e., 137(55%) are youngsters who belong
to the age group that ranges up to 30.
5. Majority of the respondents (58%) are married.
6. Most of the respondents are from nuclear family and they numbered
134(54%).
7. Around 44% of the respondents are Under Graduates.
8. The occupation pattern of the respondents reveals that 164(66%) of them
are employed, 47(19%) are businessmen and only 16(7%) are agriculturists.
9. Among the total respondents, 53% are with monthly income ranging up to
Rs.5, 000 and only 17% are with higher income which is above Rs.10, 000.
10. Around 43% of the respondents are with family income ranging upto
Rs.7,500. Majority of them belongs to low and middle income group
11. 170(69%) respondents’ monthly savings ranges upto Rs.1,000 only.
12. As majority (43%) of the respondents belongs to low income group, around
52% of the respondents’ family savings ranges upto Rs.1,500 only.
13. The total family members of majority (58%) of the respondents are four
and five.
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4. International Journal of Management
14. Majority (57%) of the respondents are playing the role as member of the
family.
15. In case of the availability of communication facility to the sample
respondents, 77% of the respondents have telephone, 55% of them have
Mobile phone and 44% of them are using Email facility.
16. Out of the total 247 respondents, more number of respondents (63%) are
regular readers of newspapers and magazines and only five percent do not
have the habit of reading newspapers and magazines.
17. The percentage of respondents is high (53%) in case of those who are
regular viewers of television and only three percent of the respondents do
not view television at all.
18. Most of the respondents (53%) are occasional listeners of radio.
19. In case of browsing and mailing, around 26% of the respondents browse
and mail regularly and 43% occasionally.
Factors Influencing Risk Perception
A sum of thirteen individual attributes has been selected to test whether risk
perception differs on the basis of these attributes. Risk perception index and Chi-
Square test have been employed to examine whether there is any significant
association between each of the individual attributes and the risk perception of the
respondents.
1. The average risk perception index of male respondents is more than their
counterparts. There exists a significant association between sex and risk
perception
2. The average risk perception index of the respondents decrease with the
increase in age. There exists no association between age and the level of
perceived risk
3. The unmarried respondents are having high average risk perception index.
It is found that there is no association between marital status and level of
risk perception.
4. The average risk perception index of the respondents who are in joint
family is more than that of the respondents those who are in the nuclear
family. The chi-square result reveals that there is a highly significant
association between the nature of the family and the risk perception.
5. The average risk perception index of diploma and professional course
holders is high compared to others. There exists no association between
educational qualification and risk perception.
6. The respondents who are doing business are having high average risk
perception index. There exists a significant association between occupation
and level of risk perception.
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7. The average risk perception index increases with increase in monthly
income. It is found that there is no association between monthly income
and level of perceived risk.
8. The average risk perception index increases with increase in monthly
savings. It is found that there is no association between monthly savings
and level of risk perception.
9. The average risk perception index increases with the increase in the total
number of members in the family. There exists no association between total
number of members in the family and risk perception.
10. The respondents who assumed the role as head and those who assumed the
role as member in the family are having the same risk perception index.
There exists no association between status in the family and risk perception.
11. The average risk perception index is high for those respondents who read
newspapers and magazines regularly and the average risk perception index
is low for those who do not have the reading habit. It is found that there is
no association between reading habit and risk perception.
12. The average risk perception index is high for those who do not view
Television at all. There exists no association between viewing Television
and level of risk perception.
13. The respondents who listen Radio regularly are having high average risk
perception index. There exists a significant association between listening
radio and level of risk perception.
Variable 2 value
1. Sex 22.754**
2. Age 0.290
3. Marital status 0.700
4. Nature of family 6.595*
5. Educational qualification 9.342
6. Occupation 14.302*
7. Monthly income 4.536
8. Monthly savings 5.781
9. Total family members 5.309
10. Status in family 1.226
11. Reading habit 5.088
12. Viewing Television 3.322
13. Listening Radio 12.828*
*significant at five percent level **significant at one percent level
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SUGGESTIONS
The following are the suggestions suggested to the educational institutions, the
general public, the social clubs and the government.
TO THE EDUCATIONAL INSTITUTION
When a person gets a job or a promotion, 85% of the time it is because of
his attitude, and only15% of the time because of intelligence and
knowledge of specific facts and figures. It is surprising that almost 100% of
education goes to teach facts and figures, which account for only 15% of
success in life. Educational institutions should build courage in the minds
of students to face any risk they come across in their life.
Educational institutions should frame the system in such a way they build
fundamental traits of character – such as honesty, compassion, courage,
persistence and responsibility. A true education is must which trains both
the head and the heart.
A real education should train the students to choose their advisers carefully
but to use their own judgment.
The greatest motivator is belief. Educational institutions have to inculcate
in students the belief that they are responsible for their actions and
behaviour. As soon as they accept responsibilities, they accept and handle
risk comfortably.
“Parents are first teachers and teachers are second parents”. Both teachers
and parents can be good mentors for the youth to equip them in managing
various risk they face as a member of the family, as a member of the
society, as an employee of a concern or as owner of a concern.
TO THE GENERAL PUBLIC
People are facing risk everywhere. Handling such risk always strengthens
oneself and provides opportunity for self development. New challenges
develop new potential. They cannot control all the events that happens in
their lives, but they can control how they deal with them.
No one can take risk. If they tell they are taking risk, it means that they are
managing risk. Human beings are gifted with sixth sense i.e., common
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sense, the ability to see things as they are and do them as ought to be done.
When things go wrong, as they sometimes will, they can react towards the
risk responsibly by using their commonsense.
Accepting responsibilities in family, society or at work place involves
taking calculated, not foolish risks and being accountable, which is
sometimes uncomfortable. Most people would rather stay in their comfort
zones and live passive lives without accepting responsibilities but they can
accept responsibilities and handle risk smoothly by evaluating all the pros
and cons, then taking the most appropriate decision or action.
People should be willing to accept risky jobs and do a little bit more than
what they get paid for to become the kind of person they want to be in their
profession.
Most people prefer to work in other’s concern rather to start their own
concern or invest in any business, because of the risk involved in the latter.
A burning desire is the starting point of all accomplishment. To start and
run a business successfully a person should have a positive attitude coupled
with hard work and commonsense. It is not the luck that helps businessmen
but their action, preparation and planning that helps to manage any risk and
succeed.
Humans can create their own environment, whereas animals adapt to their
environment. Everyone should use the greatest gift, the ability to think, to
its full potential to manage the risk they face anywhere.
TO THE SOCIAL CLUBS
Gone are those days, where people wait for the government to do all public
work. Now, they form groups in the name of social clubs and work to solve
their problems and risk they face in the society.
Social clubs should concentrate on those risky activities where there is no
government’s concentration and contribution.
Social clubs can also attract the government’s attention to solve various
crucial problems which is out of their control and authority than an
individual. It helps to reduce the risk of every individual in running their
day to day life.
Government’s work in reducing the hazards and risks faced by the people
in the country can be made effective and easy with the support of various
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voluntary organizations, charities and other NGO’s where the general
public is also the members.
Social clubs and other related organizations should give their supportive
hand to the government in informing and spreading the public policies in
the country.
TO THE GOVERNMENT
Government is the heart of any country. It is the central focal point around
which all people in the country make their journey. The role of government
is very crucial as it influences every ones life directly or indirectly. Today
people are facing risks and they find hard to run even their daily life due to
unexpected hazards like terrorist attack, bomb blast, war, disease, natural
calamities like flood, storm etc. An individual or a social club can not solve
such massive disaster which affects the whole country to a greater extent
due to financial and other constraints. In such cases only the government
can handle such critical situations and make it good as it is before to some
extent.
It becomes a custom that when there is a change in the ruling party, there is
always atleast some change in the public policy. This creates more risk for
the general public in many ways. The public policies should be standard
irrespective of the change in the party who governs the country.
Government should train and motivate all the ministers, cabinet members,
chief officials and other government servants from top level to the bottom
level that they all are there to help the public and serve them but not to use
their power and authority in frightening them. Because today people find
that making a complaint in a police station or filing a suit in a court and
facing the resultant reactions as the most risky thing they face elsewhere.
There is a general illusion among public that the government departments
and other government organizations are working lethargically and even if
they complaint to higher authorities, it is of no use and sometimes creates a
great risk to them. Government should take steps in solving the public
queries and risks in a quicker manner rather questioning them and putting
them in trouble.
Each and every government department should inculcate certain basic
ethical values like sincerity, honesty, integrity and timeliness in doing their
job to avoid bribery, corruption etc., which will reduce the risk of the public
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in paying huge amount illegally to get their work done in any government
office.
Government should encourage financially and morally those individuals
and corporate who undertake risky ventures. They should provide soft loans
with flexible terms and conditions of repayment. For those projects
involving huge investments, the government can participate in their share
capital and become a partner in sharing the risk and loss involved in it.
Government announced various policies and financial supports to all kinds
of business through banks and various industrial development corporations.
But most of the people are not aware of it completely. Government should
communicate such public policies through a powerful media to make it
effective and to help the business community to manage their risk in
arranging finance and other sources.
Like a mother, who takes care of her children, a government should take
care of the people, protect them from various risks and guide them to
manage it successfully.
CONCLUSION
Success involves taking calculated risks. People sometimes mistake
irresponsible and rash behaviour as risk-taking. They end up with negative results and
blame it on bad luck. Risk taking is relative. The person who never attempts anything
risky makes no mistakes. However, not making the attempt is often a bigger mistake
than making the attempt and failing. Indecision is habit forming and contagious.
Many opportunities are lost because of indecision. Everyone can take risk, but
not gamble. Risk takers move ahead with their eyes open. Gamblers shoot in the dark.
Risk must be taken, because the greatest hazard in life is to risk nothing. The person,
who risks nothing, does nothing, has nothing, and is nothing. They may avoid
suffering, sorrow, but they cannot learn, feel, change, grow, love or live. Chained by
their attitudes they are slaves, they have forfeited their freedom. Only a person who
risks is free.
“To laugh is to risk appearing the fool.
To weep is to risk appearing sentimental.
To expose feelings is to risk exposing your true self.
To love is to risk not being loved in return.
To live is to risk dying.
To hope is to risk despair
To try is to risk failure.”
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Web sites:
Public Insurance Companies
Life Insurance Corporation of India (LIC) www.licindia.com
National Insurance Company of India www.nationalinsuranceindia.com
New India Assurance Company www.niacl.com
Oriental India Insurance Company www.orientalinsurance.nic.in
United India Assurance Company www.uiic.co.in
www.licindia.com
www.prulife.com
www.sbilife.com
www.maxnewyork.com
www.tata - aig.com
www.ingvysyalife.com
www.allianzebyuers.com
www.hdfeinsurance.com
www.ampsanmar.com
www.aviva.com
www.metlifeindia.com
www.bimaonline.com
Reference:
1. Martis. Clifford, Growth of services – Buliding better customer relation, Preethi
prakashan, August 1996
2. Insurance Information Strategies, MetaGroup, File :115, by Judy Johnson, Oct 2001
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