Marketing Strategies Of Insurance Sector Commerce Essay

merchandise Strategies Of Insurance sphere Commerce EssayThe in the altogether detarotted pricing regime requires an altogether assorted underwriting simulation. N wiz exists at ane time. A rising model has to be put in place with no prior palpate. Underwriting, that was through by the tariff watchword of honor manger now, needs the application of a sharp human mind, superior expertise, keen knowledge of a particular hazard, a sensitive compendium of risk of exposure factors and their evaluation, a reflection of the insurers own then(prenominal) bring baffle in respect to similar risks accepted to predict the future loss potential of the risk as center of attentioned and a cultivated ability to wee a rate model that provides a margin to the insurer.With no past experience to guide their efforts, how will the insurers now pick-up these underwriting skills, expertise and knowledge paper in a short time? How rear the employee mindset, that looked to tariffs for the premium err be persuaded to look at and collect the vast data that is undeniable to price risks to fit the perceived risk factors? What atomic number 18 insurers doing to make their vary underwriters acquire these levels of skills, expertise and knowledge? It takes time to build expertise and experience notwithstanding a beginning has to be make.An insurer is in either case force now to redefine his identity either as a low-cost insurer and cut premium rates to stay in seam or consciously build price differentiators, because he provides and delivers superior node-perceived value. such delivered value may not be fiscal, scarce it is highly effectual effective and convenient to an insured, due to the insurers exceptionalized expertise, his particularized.PLACE OR scattering CHANNELSDistribution refers to the line of battles by which the merchandise after manufacturing is moved till it reaches the customer. There ar various intermediaries in either c only put u p line homogeneous wholesalers, retailers, etc. In the service business, agents and brokers atomic number 18 intermediaries in the transaction. Insurance business is sell through agents as intermediaries. In India, the regulation provide that an indemnification agent can represent unless on animateness and one non- life story insurer. An agent has to obtain a licence from the IRDA.Brokers withal act as policy intermediaries. besides they be different from agents in the sense that they are independent businessmen either working alone or in partnership. Brokers may be found in the non-life indemnification business part customers whose indemnity requirements are complex. They handle big risks and need superior financial and analytical skills.Intermediaries play a very significant role when the claim has to be settled. They have to see that the legitimate claim is duly gainful without delays. The opposite intermediaries at the stage of the claim areIn the boldness of gen eral insurance, surveyors and loss assessors, who are independent professionals, who are c every(prenominal)ed upon to inspect the restitution and losses claimed against.Motor accident claims tribunal to adjudicate on the quantum of requital that should be paid to the victims of force accidents.Lok Adalats consisting of judges, to enable expeditious summary organisation of long-pending disputes regarding claims.Review committees (in the LIC) at different levels, the top most macrocosm headed by a high court judge, to review claims which have been repudiated on cause of misrepresentation of fraud.Other organizations the like hospitals (for healthcare and medical insurances) or garages (for motor repairs) who facilitate the claims settlements. top MarketingMarketing of insurance products can also be done sharpenly. The media used for bet change areDirect mail. Letters sent to consumers on the basis of addresses functional from sources like telephone directory, membership l ists of clubs and professional associations, stock exchange brokers or registrars to companies.Telephone contacts television programmes of relatively longer durationAdvertisements and loose insertion in important line as salutary as professional and dispense journals. showings in conferences, service for specialized products linked to the themes of the seminars.Direct contact from the general agents salaried staff.horse barn in exhibitions and sole exhibitions in remote areas.Call centres or assistance centresKiosks with touch technologyOver the counter in big stores.In India, direct merchandising is done by the LIC for its group gratuity and obsoleteness business.In non-life insurance business, almost the entire business from corporate bodies had been done through direct grocery storeing. This business was solicited by the officers of the insurers and not through agents.The mesh has opened up new possibilities in direct merchandising. Insurance is being used for the followi ng purposes.To provide basic cultivation about available plans to prospects.To provide answers to frequently asked questions about insurance.To provide details of nearest fixture of insureds representativeTo provide quotations for premium and for loansTo provide information to insuranceholders about policy status, pending requirements, etc.For premium collectionTo sell simple policies like personal accident, medical householders pure endowment, annuities, etc.Work Site MarketingThis area needs to be tapped, as in all countrified one of the biggest markets is through the work site. With changes in human resourcefulnesss management policies and remuneration packages, group products or work site products do have a definite market that cannot be ignored.Here the advantages would beCaptive customer basePotential to sell individual insurance and group insuranceHigh trust factorHigh hit ratio for the intermediariesThe challenges would be the cost effectiveness, product customization and efficient post-gross revenue servicing, which would determine continued business. Technology has a key role to play in work site marketing to ensure cost benefits. Banks and financial institutions have been successfully marketing belief measures and other financial products using this channel. If not an identical model a similar approach can be used for exchange insurance.Inter profitsThrough India is joining the fast growing breed of net users, using net for transactions has not yet caught up. Though a few banks provide online banking the usage is still a small fragment. The peril associated with transactions over the net is still an inhibiting factor. At present, most of the insurance companies have product information and/or illustrative tools on the Web.We do not see the web evolving into a means for direct interchange of insurance in the current scenario. In the Indian market, where insurance is sold after considerable persuasion even after face-to-face selling, the selling over the net, which must be initiated by the client, would take some more than time.While the technology capability is there, improvements in bandwidth and infrastructure are needed. to a fault needed are simpler products where auto-underwriting is possible. Automobile insurance, one of the segments of insurance purchased off the ledge in India, would be the ideal segment to start with. On the life side, term assurance for standard lives with simplified underwriting is a possibility.These channels by themselves will not be able to overcome the mindset of the stack, but rather can only be enablers for the human channels.Invisible InsurerIn this model, the insurance follow or its representative is not the entity marketing the products. The insurance unfold is sold by an automobile/credit card company as an add-on product leveraging the brand of the retailer. The risk is carried by the insurance company, which underwrites it. Products like creditor insurance, automobile in surance, and credit card cogitate insurance could be distributed using this channel. This model can be espouse in all market segments for the lines of business mentioned. It is already prevalent in some areas like credit card insurance and crop insurance for agriculture loans.The new players are also attempting this model. The venture of Maruti9 into insurance by setting up two subsidiaries MIDS10 and MIBL11 to sell automobile insurance is a case in point. These firms will largely arrange insurance multiply for Marutis captive base. MIDS has been registered as a corporate agent with an exclusive arrangement with Bajaj Allianz General Insurance, while MIBL has linked up with state-owned National Insurance attach to Limited.What makes these arrangements enchanting is the low dispersal cost and captive customer base. However, repeat business or renewal business cannot be assured. In the life segment, group creditor insurance may be the most suitable product for this channel.The p ostal section started selling life insurance policies way back in 1884 to battalion working in populace sector undertakings and brass departments. In 1995, postal department was allowed to sell policies to the general universal nourishment in rural areas. The postal life insurance ranks second only to LIC in transacting life insurance business. Last year, business of postal department was higher than of all reclusive life insurers put together. On an all India basis, they sold 27 lakh policies and earned a premium income of Rs. 650 crores. USP is a lower premium and higher bonus, but what is unique is that they dont have any insurance agents selling postal life insurance policies. The business is promoted by a few designated staff and is managed by a separate directorate. progressThe purpose of promotion is to communicate with the market. Promotion tries to influence attitudes and receptivity to resist misconceptions and thus to more sales.The IRDA has issued guidelines abou t advertisements by insurers and the agents or brokers in newspapers, magazines, sales talks, bill boards, hoardings, panels, radio, television, websites, e-mail, portals, leaflets, literature, circulars, sales and flyers, telephone solicitation, business cards, videos, faxes or other converse with a prospect or policyholder urging him to purchase, renew, increase or characterise a policy of insurance. The main requirements areThe advertisement programme has to be overseen by an officer responsible for compliance with the regulations.A copy of every advertisement should be filled with the IRDA.Advertisements should disclose the full particulars of the insurer, as well as the form number and type of coverage of the policy referred to.Display the registration/licence numbers on their websites.No third party, other than insurer or authorized intermediary can distribute information or recommended purchase of specific insurance products.Advertisements should not be cheating(prenominal ) or misleading.Along with the advertisements, publicity is also an equally strong long suit of promotion. In the case of services, the most effective form of publicity is the word of mouth. But both advertisements and publicity can create mindfulness and also arouse curiosity or interest. These are not powerful tolerable to generate desire or to provoke action. so public dealings become important. Public relations refer to separate, planned and sustained efforts made with a view to establish and maintain mutually beneficial relationships betwixt an organization and its prospective customers. PR tools include all the tools of publicity, lobbying, journals/newsletters, sponsorship of sports and other activities, special drives, entertainment, lunches and dinners, etc.PEOPLEPeople are the most critical resource in any organization. Without people, no other resource can perform. An employee, who is disgruntled or worried, may not apply himself fully at work. At the same of inter action with the customer, the employee is alone. The insurance service is judiciary in nature. Thus credibility or trustworthiness, in the perception of the customer, is crucial. The employee can strengthen or erode this.Critical Success Factors for InsuranceChange in the bearing of the Population. There is need for a change in the attitude of the people towards insurance. Insurance is taken just as a tool for tax-saving. But insurance can be taken as shield around their families and business for any unknown calamity and also now-a-days insurance provides earnest investment opportunity. Thus people have to be made aware about the risk coverage and investment part of the insurance.Open and simple Environment created under the IRDA. Insurance as a sector requires players who are financially strong and are willing to wait for returns. Their confidence can only be boosted only if there are open and innocent policy guidelines. This will also help the consumers intent stage that the restrictive is an active one and cares to do everything possible to keep things under mince and help the insurance environment grow maturely.Well- accomplished Distribution Network. Bancassurance is becoming more and more popular. Public sector banks like SBI, PNB, etc. have enormous network because of their long existence. Therefore they can be successful.Trained Professionals. ab initio only insurance agents were considered to be the best salesmen for insurance products. But now with Privatisation and Globalisation more and more professionalism is required in sales efforts. hugger-mugger players have professional qualified sales force.Rationale Approach to the enthronization Criteria. IRDA has guidelines for the investment pattern of the insurance companies to meet its social obligations. But the players feel this compulsion to be unjust and it affects their return on investments. The more the people insured, better the revenue, better the security and ultimately better the morale and productivity. miserly Accounting Practice to Prevent Failures amongst the Insurers. Insurer has the hard-earned money of the masses. Failure of any of the insurer for any reason can have disastrous effects. To anticipate such possibility, a stringent accounting practice is imperative.Level playacting Field for all Insurers. Government should provide unbiased environment to all the insurance players, so that everybody has equal opportunities. With coming of unavowed players, LIC is also instruction on advertising and has become one of the biggest advertisers of its products via using wide range of products, i.e., print and electronic media, sponsoring events, road shows, etc.LIC is nidusing both on mass marketing and segmentation strategy.Main focus of promotion activities is one tax benefit and returns from insurance.LIC is focusing on CRM.Challenges for Public and Private celestial sphere CompaniesPublic Sector CompaniesPrivate Sector CompaniesIdentity is well est ablished, but the perception of poor service providers is a stigma.Products are not attractive and flexible enough but expensive.To retain their creamy layer byplay who are the most likely to be wooed by the new companies entertain and attract good intermediaries.Match the aura created by the new companies in the urban market.Have to build their identity in a market where the public does not distinguish them.Remove the perception that anything that looks good as expensive.Work against the peoples mindset that they are not here for the long term. coax intermediaries especially agents with the requisite qualifications and attributes who can market the company and the product.Run the risk of tapping an already insured market for repeat insurance instead of tapping new virgin pockets in the market.MARKETING STRATEGIES OF INSURANCE PLAYERS IN INDIAIntroduction of in advance(p) products and services focusing on targeted customer segment.Use the concept of CRM and expand relationship wi th customers to retain the existing customer and make new customers.Availing the products and services at low cost and with short times.Insurance players have to focus on employees by focusing on their skills and motivating them for continuous improvements in process capabilities, quality and response times.Taking the help of information technology, database and systems in an optimum manner.Punch Line of Some PlayersLife Insurance union of IndiaICICI PrudentialING VyasaBirla Sun LifeHDFC StandardOM Kotak MahindraTata AIG gunk New YorkBajaj Allianz group A SanmarLife is Beautiful. Zindegi ke sath bhi, Zindegi ke bad bhi.We cover you at every step in life.Adding life to insuranceYour dreams, our commitmentMaking life easier for youJeene ki AzaadiWith you eerYour Partner for LifeWe cover almost everythingCreating better futuresMarketing Strategies of big Insurance PlayersLife Insurance Corporation of India LIC is the leader in the insurance sector with around 83% market share.LIC ha s tied up with peck bank and Vijaya Bank for distribution of its product.LIC has computerized and linked all 2,048 branches.LIC was the first to lay in online premium payment facilities.LIC is focusing on rural market because of its established brand name.ICICI Pru Life. ICICI Pru is the major competitor of LIC. It has the maximum market share among private players.Companies using tools like workstation marketing, corporate marketing, road shows and stall in trade fair, loading, etc.Its strategy is to achieve scale in premium income and distribution force in shortest time.Focus is more on direct selling apart from communication and building personal relations.Company is marketing at worksite and for corporate customers ha adopted a multichannel distribution model.Company is selling its products as long-term investment plans.Max New York Life (MNYL). Max New York Life is operating with 2,500 agents spread in activities in India.It is using individual agents as its primary source of distribution.It offers flexible products with many options, and riders.The company is using various manners like media advertising, event sponsorship, etc. and tools like direct marketing relationship building to generate awareness and build customer base.The company focuses on the quality of its first sales personnel, i.e., agents.MetLife. MetLife is a orbiculate leader in the financial services and it has tied up with Geojet Infolin technologies for marketing and distribution of its products in India.It has followed the strategy of phase-wise introduction of products in the market.It has Bundle method of offering products which includes investment options ranging from insurance, equities, derivatives, mutual funds and TPOs.The market segment on which MetLife is focusing is South India and JK.Tata AIG. The company is following mass marketing to cover as many as lives as possible in the initial years of its operation. It has expertise in assessing the risk covered.Bajaj-Allianz. It is giving competition to public sector general insurance companies.Its main focus is on automobile.Its advertisements are appearing in local newspapers, television and hoarding.Birla-Sun Life. It is focusing mainly on high net worth people so that higher sum assured can be taken up.SBI Standard LifeIts products are simple.It is doing branch-wise segmentation.Average size of the policies is smaller.HDFC Standard Life. HDFC is the leader in housing pay in India and Standard Life is the UK market leader. The company is using direct marketing tactics to build HDFC brand and convincing the customers insurance as a protection tool.The insurance sector has gained momentum with the entry of private players. Rather than taking away the market share of existing players, the new players have actually helped expand the insurance market. Their ability to offer advance(a) products aggressive marketing, as well as the general uptrend in economical growth, have given a boost to the industry. In fact, more players, with public sector banks and leading industrialists jumping into the fray. We take a look at the two major segments life and general to see how the major players are faring.