The term insurance marketing refers to the marketing of insurance service with the motto of customer-orientation and profit-generation. The insurance marketing focuses on the formulation of an ideal mix for the insurance business so that the insurance organizations survive and thrive in a right perspective. They quality of services can be improved by formulating a fair mix of the core and peripheral services.
The marketing concept in the insurance business is concerned with the expansion of insurance business in the best interest of society vis-à-vis the insurance organisatoins. The insurance companies lag behind most manufacturers in-recognizing the marketing concept in their organizations. Insurance companies tend towards a strong sales orientation, since the services they sell, although certainly necessary ones, rarely sell themselves. Potential policy holders are reluctant to think about the disaster and death. So they postpone planning for these possibilities unless they are contacted and influenced by insurance agents. Thus the insuranceowardcompany‟ssales,notmarketing. Butmutualinthe o modern business world, the marketing concept insists on fixing of accountability for overall marketing performance.
The selection of risks (product planning), policy writing (customer service), rating of actuarial (pricing) and agency management (distribution) –all marketing activities make up an integrated marketing strategy. Particularly in the developing countries like ours, the organizational objectives advocate spreading of insurance services much more widely and in particular to the rural areas and specially to
the economically backward classes with a view to reaching all insurable persons. This naturally necessitates an integral marketing strategy. In other words, market-orientation in place of sales orientation is need of the hour. Hence the marketing concept in the insurance business foeuses on the formulation of marketing mix or a control over the whole group of marketing activities that make up an integrated marketing strategy.
In the insurance organizations, the task of formulating the overall marketing strategies cannot be performed efficiently unless the market is segmented. It was against this background that marketing studies engineered a sound foundation for segmenting the markets of insurance business. The market for the insurance business is found vast, the potential policyholders are in very good number and their needs and requirements are not identical. The segmentation helps the insurance organisatoins in dividing and sub-dividing the market into small segments in which the needs and requirements are found by the large identical.
If the market segmentation is done in a right fashion, the marketers find it convenient to identify the level of expectation of users. The main purpose of market segmentation is to know the market. Unless the insurance companies know the needs and requirements and identify the level of expectations of the policy holders, it is difficult to formulate a sound marketing strategy.
Where a large number of users living in the rural areas, the emergence of a strong rural sector cannot be negated. The region-wise segmentation simplifies the task of having a microscopic study of culture, language, likes and dislikes. This helps in making the marketing decisions creative. It is essential that the insurance organisatoins capitalize on the available opportunities in the market. They need to increase their market share. This makes it essential that they succeed in informing, sensing and persuading the different segments where the potential users are available. It is not productive to concentrate on only one segment. The insurance professionals need to business in all the segments, such as rural and urban, men and women, agricultural and industrial or so. The need of the hour is to spread the insurance business even to the agricultural sector of the economy.
The segmentation would help insurance professionals in making the promotional measures creative which would be very much instrumental in sensitizing he prospects. The advertisement professionals would make advertisement appeals, messages, campaigns proactive to the receiving capacity of the target audience. The sales promotion measures can also be innovated to get a positive response. The personal selling may be effective since the sales personnel/ agents are supposed to be aware of the needs and requirements of customers/ users. Thus the segmentation would help marketers in many ways. The pricing/ fee decision can also be rationalized and the weaker sections of the society would get substantial benefits. The main thing in segmentation is receiving the expectations of users/ prospects in a right fashion and accordingly developing a suitable marketing strategy.
Marketing Mix for Insurance
The insurance organizations in general and the public sector insurance organisatoins in particular need to assign due weightage to the formulation of marketing mix for the insurance business. The emerging trends indicate that if the insurance organizations delay the process of formulating a sound marketing mix for their business, there would be a sharp fall in their market share in the future, which would bring down the rate of profitability. It is against this background that we go through the problem of marketing mix for the insurance services. This makes it essential to study the different submixes of marketing such as the product mix, the promotion mix, the price mix, the place mix, the people, the process and the physical evidence, in relation to the marketing of insurance.
The insurance organizations produce or generate services in different forms. A product is both what a seller has to sell and what a buyer has to buy. thus any enterprise that has something to sell, tangible goods or not is selling products. In the insurance business, the insurance organisatoins are found selling services and therefore, services are their product. Thus a product is also called a bundle of utilities consisting of various product features and accompanying services. When an individual or a company
buys a policy from the insurance organizatio assistance and advice, the prestige of the insurance organizations, the facilities of claims and compensations are also bought.
In the context of formulating the product mix, it is essential that the insurance organisatoins promote innovation and in the product portfolio include even those services and schemes which are likely to get a positive response in the future. In addition, they need to formulate a sound package that proves to be more motivational. While formulating a package, the insurance professionals need to assign due weightage to the interests of rural India. The private sector insurance organisatoins have been found making their service mix internationally competitive. This makes a strong advocacy in favour of innovative product strategy for the public sector insurance organizations.
In view of the above, the following aspects need due attention of policy makers:
1. The formulation of product mix should be in the face of innovative product strategy. The strategies adopted by the foreign and private insurance companies should be taken into consideration while initiating the innovation process.
2. The Data Processing Department is supposed to collect necessary information related to the changing level of expectations of prospects so that the senior executives make the product portfolio productive to the users and profitable to the insurance organizations.
3. It is also significant that the insurance organizations initiate the process of elimination of the services, schemes not profitable to them. This necessitates a study of the product life cycle.
4. The formulation of product strategy should assign due weightage to the rural segment emerging as a big profitable segment.
5. The insurance organisatoins include in the product portfolio even those policies and schemes which become instrumental in safeguarding the interests of the weaker sections of the society.
6. The formulation of a package is also found important. We find the foreign insurance companies designing a package on the basis of the needs and requirements of the concerned segment. This would make the product mix competitive.
7. There are some of the profitable areas which till not are found either partially tapped or even totally untapped. The agents, rural career agents, the branch managers bear the responsibility of identifying the profitable segments of future and helping the senior executive in tapping the potential optimally.
8. A sound product portfolio is the need of the hour and therefore the regulatory barriers or constraints in activating the innovation process should be minimized.
In the formulation of marketing mix, the promotion mix occupies a significant place. In the promotion mix, a number of submixes, such as the advertising, public relations, sales promotion, word-of-mouth promotion, personal selling are included.
Advertising a paid form of persuasive communications is found important to promote the insurance business. The advertising professionals bear the responsibility of making the advertisement slogans, appeals, campaigns creative so that the process of sensitizing the prospects is found proactive. The insurance companies advertise through telecast media, broadcast media and the print media. Among these, telecast media is found to be more effective in sensitizing process. With the help of audio-visual exposure, the rate of acceptability of the messages can be increased sizeably. If the advertising professionals are well aware of the messages creative. The broadcast media can also be used for that very purpose. Through the available big transmission network and a well developed system, the insurance organisatoins are supposed to use even the broadcast media. Another benefit of this media is to reach the messages even to the remotest parts of the country. The print media can also be used for promoting the insurance business. Being economic in nature and impressive in expression, the print media of late, has been found gaining popularity. The sophistication in the print technologies has made the media more attractive. It is against this background that now almost all the organizations assign due weightage to this. The insurance organizations need to promote the print media since this would simplify their task of making the appeals effective by using regional languages.
In addition to advertisement, the insurance/ professionals also need to think in favour of publicity since this component of promotion if used in a right fashion makes our promotional efforts proactive. The advertisements may be insensitive, but we find publicity effective since the messages, views, opinions, facts, figures are publicized by media or the vocal leaders. It is a device to promote business without making any payment and therefore it is called as an unpaid form of persuasive communication bearing high rate of sensitivity. Strengthening the public relations activities is another dimension requiring due attention and the public relations officers shall beat the responsibility of projecting a positive image of the organisatoin. The PRO is considered to be professional having the world class excellence in influencing the prospects, users, others. He/She bears an important responsibility of informing, sensing and persuading. He/she is found responsible for managing the sales dialogues. This makes it essential that we find selection of suitable persons for the said purpose and in addition also intensify training programmes, refresher courses, capsule courses to educate and train them in tune with the changing business conditions. The receptionists, secretaries, front-line-staff publicize the business with their gesture and posture. They are supposed to know-how to talk, how to initiate, how to impress and how to conclude. They should look smart and attractive and should also have quality communicative ability. It is an art which is found based on certain properties. It is essential to educate and train them properly so that they, with the help of their dialogues and body communications succeed in impressing upon the prospects/ users. If they are well aware of the changing level of expectations of customers, the task is made easier.
Sales promotion is a temporary device which is adopted only for a particular period. In the insurance business, the incentives to the policy holders users or to the agents, rural career agents or even to the insurance personnel for promoting the business are the sales promotion tools. Incentives to the end users for taking a policy play an incremental role in promoting the insurance business. The offering of small gifts during a particular period, the rebate, discount, bonus can be instrumental in increasing the business
of insurance organizations. It is right to mention that such incentive to the policy holders/ prospects would be successful in increasing the business. It is the responsibility of the insurance professionals that they keep on activating the process of innovation so that the foreign insurance companies find it difficult to compete with the public sector insurance organizations.
This makes it clear that incentives to the user/ policyholders as well as to the agents and the rural career agents would be instrumental in promoting the insurance business, provided the insurance professionals innovate the same, much earlier than their competitors.
The personal selling occupies a place of outstanding significance. This is due to the fact that the insurance business is substantially influenced by the instrumentality of agents and the rural career agents. It they are aware of the art of informing, sensing and persuading the potential policyholders, the task of insurance organisations is simplified considerably.
Personal selling is based on the excellence of an individual. This focuses our attention on the ability of an individual to influence the impulse by activating the persuasion process. This makes it significant that the agents as well as the rural career agents have certain outstanding properties or attributes, such as patience, communicative ability, attractive personality and commitment to the profession. Hence the insurance organizations are supposed to assign due weightage to the excellence in an individual who is assigned this responsibility. The need to provide due incentive to the agents so that they work satisfactorily and keep on moving the process of informing and persuading the policyholders/ prospects. While recruiting agents, the insurance professionals need to be careful so that persons with high communicative ability, an attractive physique and everlasting patience are assigned the responsibility of acting as an agent. The branch managers bear the responsibility of managing and developing the agents by monitoring their contributions to the process of increasing the insurance business. They are supposed to organize refresher courses to develop the agents so that the emerging trends in the investment potentials of a command area vis-à-vis the changing level of expectations of the policyholders/ prospects are transmitted to them in a right fashion and on time. The personal selling thus requires an intensive care. It is high time that the Career Agents Schemes and the Rural Career Agentsare promoted.
The word-of-mouth communications result into wider publicity which substantially sensitive the process of influencing the impulse of users/ prospects of the insurance services. The satisfied group of customers, the opinion leaders, the social reformists, the popular personalities acts as word-of-mouth communicators. The insurance organizations need to assign due weightage to the quality of service made available to the users. The insurance professionals are also supposed to seek the cooperation of opinion leaders, vocal persons for promoting the business and for that the offering of small gifts to them is required essential.
Another dimension of this component of the promotion mix is to seek the cooperation of users who are satisfied with the services. They are habitual users and therefore it is natural that they talk to their friends and relatives about your positive contributions. The advertisements slogans may be insensitive, even the sales promotion measures may be ineffective but the positive feelings of your friends and
relations communicated to you can‟t be ineffe the promotion of any business is the quality of services that you offer to your users/ customers.
In the insurance business, the pricing decisions are concerned with the premium charged against the policies interest charged for defaulting the payment of premium and credit facilities, commission charged for underwriting and consultancy services. The formulating of pricing strategies becomes significant with the viewpoint of influencing the target market or prospects. It is pertinent that the insurance organisatoins in general and public sector insurance organizations in particular adopt such a strategy for pricing that makes it a motivational tool and paves the ways for increasing the insurance business. This necessitates a new vision for setting premium structure and paying the bonus and charging the interest.
The insurance organizations prefer to make a mix of high a low pricing strategy. To be more specific, in the public sector insurance organisatoins which are instrumental in offering policies, schemes for the weaker sections, it is pertinent that the pricing strategy is rationalized to cater to the low paying capacity of the concerned segment. However the insurance organisatoins would be required to think in favour of a high pricing strategy for the affluent section of the society. The motive is to make the premium structure commercially viable so that the insurance organizations succeed in having a sound product portfolio besides fuelling development orientation.
The pricing decisions make it essential that the insurers keep in their minds the nature of policy vis-à-vis the segment to which the prospects belong. The insurance executives bear the responsibility of managing the pricing decisions in such a way that a rational premium structure is possible. There are number of factors influencing the rate of premium, such as the positive developments in the socio- economic environment, growing healthcare facilities, rising standard of living of the masses, increasing
discretionary income, increasing rate of literacy, attitudinal change in investors or so. The investment decisions of insurance organisatoin are also found instrumental in influencing the costs.
Another component of the marketing mix is related to the place decisions. While locating branches, the branch managers need to consider a number of factors, such as smooth accessibility, availability of infrastructural facilities and the management of branch offices and premises. In addition, it is also significant that the branch managers assign due weightage to the safety provision. The places found of vulnerable nature should not be selected for the location of branch offices-à-vis and the safety of insurance personnel and cash need due attention. The management of offices makes it significant that the branch managers are particular to the office furnishing, civic amenities and facilities, parking facilities and interior office decoration. The foreign insurance companies are found serious to
this component of place management which helps them in attracting the users. Besides, the management of premises is also an important component since of late the management experts make a strong advocacy in favour of aesthetic management for generating the work culture and motivating the users. The plantation, gardening, dustbin, drains, sign posts are some of the important facets which makes your premises attractive and healthy.
In view of the above, it is right to opine that the place management of insurance branch offices needs a new vision, a distinct approach and an innovative strategy. This is essential to make the work place conducive, attractive, proactive to the generation of efficiency or so. The motives are to offer the promised services to the end users without any distortion and making the branch offices a point of attraction. The branch managers need professional excellence to make place decision productive.
The management scientists make a strong advocacy in favour of managing the insurance personnel since they identify people as an important component of the marketing mix. This focuses our attention on the development of insurance professionals. The use of computers, micro-computers, fax machines, sophisticated telephonic services, e-mailing, internet and intranet services have a big impact on the perception of quality of services. This makes it essential that the insurance organisatoin also think in favour of developing personnel in line with the development and use of information technologies.This gravitates attention on the education and training facilities to the insurance personnel. The front-line-staff as well as the branch manages are required to be given the training facilities so that they are in a position to make possible an effective use of the technologies. The insurance organisatoins bear the responsibility of developing the credentials of their employees. the senior executives while recruiting, training and developing the insurance personnel make it sure that employees serving the organisation
have a high behavioral profile in which empathy has been given due place.
The marketing management of an organisation plays a contributory role in fuelling the processes of qualitative-cum-quantitative improvements. The different mixes are required to be innovated to cater to the changing needs and requirements of the different categories of users. The product mix necessitates a fair synchronization of core and peripheral services, the product portfolio is required to be made optimal, the packages need due attention in the formulation process, the new services are required to be incorporate, the unprofitable services or schemes are required to be eliminated and the effective fulfillment of development needs require world class insurance professionals who by making their decision innovative are found successful in having a sound product mix. In addition, the promotion decisions also need a new vision, a distinct approach mix. In addition, the promotion decision also need a new vision, a distinct approach and an new strategy. The sophistication in the process of advertising, the creativity in advertisement messages and slogans, the well managed public relation activities, the innovative tools of sale promotion, the word-of-mouth communications, the personal selling, and the telemarketing need due attention of marketing executives. The premium, bonus, commission policies need to be made rational and the place decision require due weightage. The management of insurance personnel requires an overriding priority and the physical attractions of insurance professionals are to be given due weightage.
In view of the above, it is right to opine that the marketing practices need a new look, an innovative approach and the conceptualization of the holistic concept of management. The defined principles of social or societal marketing if practiced in a right fashion would pave avenues for the blending of three important considerations, such as profit-generation, customer-satisfaction and social-orientation. It is in this context that the public sector insurance organizations need to realize gravity of the situation and to assign an overriding priority to the management of marketing activities.