CHAPTER 13 LIFE INSURANCE MARKETING. 2 INTRODUCTION Purpose of all business - to create and retain customers. To do this it is necessary to create customer.

CHAPTER 13CHAPTER 13

LIFE INSURANCE MARKETINGLIFE INSURANCE MARKETING

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INTRODUCTION• Purpose of all business - to create and

retain customers.

• To do this it is necessary to create customer awareness

• Make the customer interested in the product by

• Making the product available at affordable cost & suiting his convenience.

• Customer satisfaction for continuation as customers.

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• Business has to reach customers by making the goods and services available at convenient outlets, ensure customers experience satisfactions while using them.

• Marketing comprises of all these focusing on customer

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• Products and distributions are designed to match peoples needs.

• Studies in the past have developed ideas and concepts that help marketers become more effective in their functions.

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• Marketing concepts are different for tangible products and that for services.

• Every service caters to different type of needs of the customers.

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THE DISTRIBUTION THE DISTRIBUTION CHANNELCHANNEL

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• Route by which the product prepared by the producer reaches the consumer.

• Bridges the distance between the producer and consumer.

• In life insurance , the agent is the primary component.

• Supervisor of agents (Development Officer or Agency Manager) is important. He makes the channel effective by creating and training agents.

• New agents widen the channel.

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• Brokers and Insurance Consultants are equally important.

• Direct selling saves costs.

• In India, personal contacts by agents may continue to be necessary.

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• Another method is the use of network of branches of banks.

• This will save in cost of infrastructure and overheads.

• It may be possible to develop composite products having elements of both banking product and life insurance.

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SOLD, NOT BOUGHTSOLD, NOT BOUGHT

• General Insurance is bought because it is compulsory under the law in some cases e.g. Motor Insurance.

• In Life Insurance there is no compulsion.

• The possibility of death is either ignored or not considered imminent.

• People have priority on today over tomorrow.

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• There is tendency to leave everything to fate.

• When the need for life insurance is realised, the person may not be in good health and insurer may refuse to grant the cover.

• Hence need to sell.

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• The person met by an agent at his normal place of work or residence is a better risk than the one who comes to the office and asks for insurance.

• The agent is the primary underwriter who studies and reports to the insurer.

• The moral hazard must be looked at more carefully.

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THE CUSTOMER• Experience of service at the time of

claim.

• Customer in Life Insurance is the person who buys the policy and make a claim too.

• Two mind sets -

- Anxiety and fear of death at the start

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- Satisfaction for settlement of claim or disappointment for money could have been utilised elsewhere better at the end.

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• Claimants of death benefits are different from the Life Assured and know very little about the terms/conditions of policy and the reason of taking out a policy.

• Agents may help claimants in completing the formalities which will provide customer satisfaction.

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STRENGTHENING STRENGTHENING RELATIONSHIPS.RELATIONSHIPS.

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• Agent is link between the customer and the insurer.

• Customer Agent link is stronger than company customer link.

• Customer loyalty to the insurer depends on how strong agent customer link is.

• Death claim provides opportunity to strengthen this link.

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• Agent should keep in touch with his policyholders to become aware of their insurance needs, policy servicing aspects etc.

• Contact with customers conveys that agent cares for the customers.

• An agent who does not keep in touch is not trusted by the customers.

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IMPORTANT OBSERVATIONS.IMPORTANT OBSERVATIONS.

It is important for agents to:

• Maintain regular contacts with policyholder.

• To build trusting relationship

• To help keep the policy in force by continuous follow up &

• Always place the customer interest above their own.

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FUNCTIONS OF AN AGENTFUNCTIONS OF AN AGENT

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• Solicit and procure life insurance business for the insurer.

• Advise prospect suitably keeping his circumstances and needs in mind.

• Complete the formalities necessary to get the policy expeditiously.

• Keep in touch with changing circumstances relating to insurance.

• Facilitate quick settlement of claims.• Be totally honest with the prospect and the

insurer.

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CODE OF CONDUCTCODE OF CONDUCT

As per IRDA Regulations:

• Agent will identify himself and the Insurance Company of which he is an agent.

• Display the licence to the prospect.

• Explain all available options to the prospect.

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• Recommend a suitable plan taking into account the needs of the prospect.

• Disclose the scales of commission if asked for by the prospect.

• Explain the nature and importance of the information required in the proposal form.

• Make all enquiries about the prospect.

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• Impress upon the prospect the need to disclose all information.

• Inform insurer about any material facts that may affect underwriting decision.

• Convey to the prospect about the status of the proposal.

• Advise policyholders to effect nomination.

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• Render necessary assistance to policyholders/claimants/beneficiaries in complying with requirements asked for by the insurer.

• Make every attempt to ensure remittance of premiums by the policyholders within stipulated time by giving notice orally and in writing.

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• Not to induce prospects to submit wrong information.

• Not to interfere with the proposals introduced by the other insurance agents.

• Not demand or receive from beneficiary, share of proceeds under insurance contract.

• Not cause the termination of and existing policy with a view to effect a new proposal.

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ADVERTISEMENTSADVERTISEMENTS

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Advertisements are effective:

• As reminders to intimate change of address, pay premiums, make nominations etc.

• As information on bonus declaration, special campaigns for revivals, concessions, new plans etc.

• To build corporate image as for financially strong, as responsible senior citizen, etc.

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IRDA Regulations state that:

• Claims made about the benefits should not be beyond the ability of the policy to deliver.

• Benefits described should match policy provisions.

• Words or phrases should not be used in such a way as to hide or minimize the cost of hazards.

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• Important exclusions, limitations and conditions of the contract should be disclosed sufficiently.

• Information should not be misleading.

• Illustrations about future benefits or assumptions should not be unrealistic or unrealisable in the light of current performance.

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• Benefits that are not guaranteed should not be referred to in ways that they are not noticed.

• There should be no implication of sponsorship, affiliation or approval that does not exist.

• There should not be any unfair comparisons with products of the competitors.

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Settlement of death claim at the earliest forms a sort of an advertisement.

• Satisfied claimants are powerful and effective as word of mouth media.

• The word of mouth endorsement helps life insurance, agents and insurer.

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KEEPING CUSTOMERS KEEPING CUSTOMERS HAPPYHAPPY

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• Customer is satisfied when the product meets his needs.

• This happens at the time of claim - which is far off.

• It is important to keep him happy during this period to avoid ‘COGNITIVE DISSONANCE’.

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• This arises because of doubts about the decision to buy.

• In Life Insurance it may easily arise as others will talk about alternative plans, better insurers, etc.

• In such cases the agent should reassure him at every possible opportunity that the purchase he made was not a mistake.

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• Studies show that people are happy when they are recognised, respected and not taken for granted.

• Recognition happens when one’s feelings are understood.

• Agents can do a lot in recognition of people.

• One way is clarify policyholder when he is in doubt.

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• Other way is to avoid denying the validity of his thoughts.

• Respect other person’s views. This is important while handling objections during during a sale.

• Recognition is high when the thoughts of other person are anticipated and attended to.

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• Two other factors which make customers happy are Responsiveness and Ease of Access.

• This can be done by agent easily .

• It is difficult for an office to be warm and personalised when dealing with anybody.

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• Some agents do not let the policyholders go to the office at all.

• They get everything done.

• Such agents are reinforcing the impression that the agent is trustworthy and can be depended upon to fulfill his promises.

• The image of insurer remains high.

THANK YOU

M. J. MALIKS.B.A.

836 B.O.AHMEDABAD D.O.

[email protected]