Service Sector Management

INSURANCE MARKETING

Introduction

Marketing mix of Insurance sector

Market segmentation

Challenges for Insurance sector

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Introduction

What is Insurance?

A contract between two parties whereby one party called

insurer undertakes in exchange for a fixed sum called
premiums, to pay the other party called insured a fixed
amount of money on the happening of a certain event
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Marketing mix of Insurance sector

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Product Mix

LIFE INSURANCE :

Whole life and term policies

Endowment policies: A lump sum amount in case of

death/expiry of the policy

Money back policies: Periodic payments during the

term of the policy itself; In case of death, payment
of full sum assured

Annuity / Pension policies: Premium is paid as a

single lump sum or  through installments to get
regular income after the retirement
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GENERAL INSURANCE

• Auto Insurance
• Health Care Insurance
• Travel Insurance
• Home Insurance
• Fire Insurance
• Marine Insurance
• Accident Insurance
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Pricing Mix
For life insurance the premium depends on three
factors

Costs: Fixed percentage of insurer’s office

expenses, salaries, computers, and maintenance
of buildings, commissions to be paid to the
agents

Mortality: Mortality tables allow the insurer to

calculate the average chance of someone dying
within one year

Interest: The insurance firm receives interest on

the premium payment, from the time of policy
taken, up to the maturity/death. When the
period is longer , the effects on interest income
is more
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For general insurance (Auto) the premium depends

on

• Make of the vehicle

• Year of manufacture
• Place of registration
• Current showroom price of the vehicle

Discounts may be offered for existing clients

renewing the policy
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Distribution

• Personal selling (Insurance agents)

• Internet

• Innovations in insurance distribution –

Bancassurance

• Tie ups with financial products (Mutual funds etc)

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Promotion

• Advertisements

• Personal Selling

• Tie ups with banks, financial service providers

• Tele marketing

• Word of mouth
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Claims management –
Life Insurance
Notification to the company that
the payment is due under the
terms of the policy (expiry date)

• In case of the death of the person insured, Death

certificate issued by Municipal Authority need to
be submitted

• In case of unnatural death claim, First

Information Report, Post - Mortem Report, Police
Report

• An investigation is made into the documents by

the insurance firm before settling the claim
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Claims management – Auto Insurance

Documents required for auto insurance claim:

1. Claim form duly signed

2. RC copy of the vehicle
3. Driving license copy
4. FIR on a case-to-case basis (in case of accident)
5. Original estimate (in case of accident)
6. Original repair invoice, payment receipt from the
service center (in case of accident)
7. RTO transfer papers duly signed, mentioning
that the vehicle cannot be located (in case of
theft)
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Challenges for Insurance sector

• Innovation in insurance distribution channels

• Penetration in rural areas

• Competition

• Monopoly in life insurance

• Consumer expectations

• Changes in environment, incidents of terrorism,

wars etc
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University questions

• Market segmentation in insurance industry

• Insurance in no more a public sector monopoly in

India

• Environmental factors affecting insurance

• Physical evidence in Insurance industry

• Consumer decision making process in insurance

purchase