Transcript CHAPTER 13

CHAPTER 13
LIFE INSURANCE MARKETING
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.
2
• 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
3
• 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.
4
• Marketing concepts are different for
tangible products and that for
services.
• Every service caters to different
type of needs of the customers.
5
THE DISTRIBUTION
CHANNEL
6
• 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.
7
• Brokers and Insurance Consultants are
equally important.
• Direct selling saves costs.
• In India, personal contacts by agents
may continue to be necessary.
8
• 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.
9
SOLD, 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.
10
• 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.
11
• 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.
12
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
13
- Satisfaction for settlement of claim or
disappointment for money could have
been utilised elsewhere better at the
end.
14
• 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.
15
STRENGTHENING
RELATIONSHIPS.
16
• 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.
17
• 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.
18
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.
19
FUNCTIONS OF AN AGENT
20
• 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.
21
CODE 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.
22
• 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.
23
• 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.
24
• 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.
25
• 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.
26
ADVERTISEMENTS
27
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.
28
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.
29
• 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.
30
• 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.
31
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.
32
KEEPING CUSTOMERS
HAPPY
33
• 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’.
34
• 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.
35
• 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.
36
• 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.
37
• 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.
38
• 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.
39
THANK YOU
M. J. MALIK
S.B.A.
836 B.O.
AHMEDABAD D.O.
09879094925
[email protected]