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The Impact of Internet Marketing in Insurance Company
The Impact of Internet Marketing in Insurance Company
EXECUTIVE SUMMARY
The project describes Marketing is one of the most important expect that
help any product to develop and same is the case for Insurance sector and their
product. Insurance is a basically a service which is provided to the people rather
then a physical product therefore it is effected by service marketing. 7 p such as
Product mix, Price mix, Place mix, Physical evidence, People mix, Process mix,
Promotion mix are used by insurance to sell insurance products
A product mix is the set of all products and items that a particular seller
offers for sale. In case of insurance sector, the product mix comprises of Life and
Non – life insurance policies that are offered to the customer by the company.
Thus market segmentation is the process that segments a market into smaller sub-
markets called segments. Segments are homogeneous within and desirably
heterogeneous in between. The rationale of intra-group homogeneity is that
people with similar attributes are likely to respond somewhat similarly to a given
marketing strategy
Insurance companies will continue to face increased competition from
banks and securities firms entering the insurance markets. As more of these firms
begin to sell insurance policies, increasing numbers of insurance sales agents will
be employed in them, rather than in insurance companies.
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The impact of internet marketing in insurance company
TABLE OF CONTENTS
Page
No.
Chapter – 1
Introduction 01
Chapter – 2
History and growth of insurance in India 13
Chapter – 3
Objectives of the study 55
Chapter – 4
Research methodology 57
Chapter – 5
Data analysis 61
Chapter – 6
Conclusion 69
Limitations ` 71
Recommendations 73
Chapter – 7
References 76
Chapter – 8
Annexure 78
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The impact of internet marketing in insurance company
INTRODUCTION
Security has always been a universal desire, right from the earliest civilizations.
This quest for security has been a major motivating force in the progress of mankind. The
early societies looked up to their families for providing this security, which resulted in
cohesive units. Gradually, as lifestyles changed and as man progressed into a more
modern industrialized setup, this cohesive quality of the family started fading. One had to
look for other ways of providing economic security and somewhere along the line was
born insurance.
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The impact of internet marketing in insurance company
INTRODUCTION
Drastic development in the software industry, penetration of internet in the people
lives leads to become the connection of the medium for the web world. Computers
from locations that are geographically dispersed can talk with each other through the
Internet. The wired connections of computer have been emerged as wireless and fastest
network of computers throughout the world. The growth of 2G, 3G and 4G made the
global as a small village. Markets can able communicate their products through online
with constraint free method.
The connectedness and dynamicity of Internet processes is revolutionizing the traditional
models of our society, from technology to academics to administration to entertainment.
It is the way the internet is ruling the world. Still, the internet is considered as a source
of information gathering for the majority of your customers. Many people are there
who still prefer the live interaction when they buy. This may deter customers from
buying if you have a small business with one location. Over 50% of households shop
online and this number is continued to grow, are reaching less than two out of three
households.
The penetration of the internet, e-commerce and online marketing has become the
most popular application—earning large revenues and forging a rapid growth in related
technology. It is indicated in a report that [Holzhey, Trauth and Birkmaier, 14] around
300 million people all over the world use the Internet and about 15–20 percent of them
use the Internet for e-commerce. At present, south-east Asian countries exhibit the
highest rate of Internet growth. India has been one of the key players in the information
technology sector over the past few years. Internet access in India has doubled every
year over the last five years and predicts this will increase still further in future years.
E-commerce has been mainly on business to consumer (B2C) applications, focusing on
to know the needs and wants of the consumers and try to fulfill those requirements
through the product development process. Insurance is the industry initially struggled
much to bring their products to the customers due to the lack of knowledge about
insurance aspects. More over convincing the customer is difficult task to the sales force;
it is believed that the insurance policies have been taken for the people who are likely to
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The impact of internet marketing in insurance company
die. Many of the sales force are reluctant to meet even the educated potential customers.
After the continuous effort taken by the insurance industry especially Insurance
Regulatory Development Authority of India (IRDA) has developed lot of policies to
educate the potential customers about the necessity of insurance and well defined
objectives framed for themselves to market the industry. Still there is a revolution in
the technology; at the same time, the insurance industry has been reluctant to adapt to e-
business due to factors such as lack of essential software facilities, non- awareness
among customers and security concerns.
Continuous effort made the industry to adopt the internet technology in insurance
business. Through the internet the advertisement has been promoted in the insurance
industry to create awareness about the product, price and reason to buy to the
customers.
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The impact of internet marketing in insurance company
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The impact of internet marketing in insurance company
insurance policy to the customer and the customer responds with details including a
description of the entity being insured, the terms and the duration of the insurance
policy. When both the customer and insurance company agree to go ahead with the
transaction, the buyer pays the initial premium to the insurance company and the policy
certificate is sent to the buyer.
The post-sales phase of e-insurance is however considerably different from e-
commerce. In e- commerce, human intervention is required for activities in the post-
sales phase such as repair or replacement of parts. However, a major interaction
between an insurer and the insurance company occurs in the post-sales phase if the
insurer submits a claim for the amount insured. Online claim settlement involves
complex interactions between the insurer, the insurance company and possibly legal and
judicial authorities and, in an automated environment, requires close interactions
between humans and automated agents. This phase is therefore the most difficult to
implement over the Internet and online insurance sites mostly rely on human
intervention for this phase.
The Internet has changed consumer behavior and marketing channels in a lot of ways.
Over the last 10years, insurance industry has actively developed online channels and
offers a wide variety of web-based services to their customers to reduce the operating
costs and increase the service efficiency (Chang, 2012). More and more investors are
using the web to get financial information for knowing the current status. Hoffman et al.
(1999) indicate that most people have yet to shop online is due to a fundamental lack
of faith existing among vendors and consumers on the web. The insurance
marketplace is undergoing a transformation that may eventually lead to significant
changes in how consumers purchase insurance products. At the same time, the insurance
industry, has so far achieved relatively little success offering its products and services
online. It is important for companies to find why the adoption of online insurance is
not as popular as other e -finance service. Trust, and the lack of it, is a critical
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The impact of internet marketing in insurance company
the success in the business. It can be assumed that satisfied customers can only be
achieved when the management regards the process of achieving customer satisfaction
as their overall goal. As stated by various authors (Ballantayne et al. 1996; Berry, 1986)
it is easier - and much cheaper - to retain existing customers than to get new ones.
Additionally, another benefit from achieving satisfied customers is the fact that the
willingness to repurchase is much higher for satisfied customers than for dissatisfied and
indifferent ones. Despite this awareness concerning the importance of customer
satisfaction, it is beyond the ability of many of today's service companies to
maintain satisfied customers. Customer attitudes about services are intrinsically related.
In a dynamic framework, the customer's satisfaction with a specific service encounter
depends on pre-existing or contemporaneous attitudes about service quality (Anderson
& Sullivan, 1992, Cronin & Taylor, 1992).
Customer satisfaction is highly based on the concept of customer value. Companies have
to, in one way or the other, deliver value to the customer; either by expanding the
amount of product attributes, or by fulfilling other customer needs. Customer value
creation is at the heart of relationships between services recipients and service
providers (Batiz-Lazo, 2001).
In order to build up a lasting and successful customer relationship the provider needs to
have a deep understanding of the customer’s business activities in which the customer
creates value for himself (Helander and Hirvonen, 2001).
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The impact of internet marketing in insurance company
claim, would only create confidence in buyer about the product bought by him (Govind
Johri 2009).
1.9 Insurance companies offering e-services can be classified into the following
categories:
1.9.1 Webpage
The insurance companies have a separate web page for promoting their online insurance
services. The webpage will provide almost all the details about the products and the
features, reason to buy, duration of the policies, sum assured and assumed bonus, etc.,
this online facility will maximize the strength of the company to move further in the
minds of the customers. LIC is a public sector company provides all the details about
the products to the customers.
1.9.4 Middlemen
Middlemen are intermediaries who do not sell the insurance policies directly but they
help the potential customers of the insurance companies for choosing the products.
1.9.5 Aggregators
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The impact of internet marketing in insurance company
Aggregators have own sites that will help the clients to know the variations between the
policies will be given. Moreover they will give some additional information about the
products.
The company’s success is promoting the products depends on understanding the needs
and wants of the customers. There must be compatibility between the products and the
requirements of the insurers. A decade back, penetration of products have been
made through excessive promotional strategies especially advertisement. Even
those advertisements can have broadcasted less frequent and time bound.
Advertisements are made either through passive channels like newspapers, magazines,
billboards, radio and television, or, through active channels like human insurance agents.
At present the policy is tailor-made to the needs of the buyer. E-insurance employs the
Internet to reach customers through advertisements more effectively. Lot of
advertisement banners, pop-ups and road blocks occupied significant portion in the
online marketing to grasp the mind of the customers. Companies and insurance agent
can contact the clients through email to answer the queries about the products. The
home page of the company provides company’s profile which facilitates the customers
to make decisions.
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The impact of internet marketing in insurance company
compete with the market leader and the challenger. But at the same time, few companies
focus on niche customers to earn continuous profitability in the organization. Niche
creation is evidently one of the most important factors in the insurance industry.
Insurance providers in India like General Insurance Corporation and Life Insurance
Corporation already have a solid customer base and years of reputation. These
companies thus have established niches. To ensure that these niches continue to exist in
the online insurance industry, value added services like recommendations of policies to
possible buyers, easy and fast policy purchase and prompt and hassle-free claim
settlement should be provided to customers.
The IRDA bill comprises the reforms introduced by the Indian government to open up
the insurance sector to participation by private and foreign companies. IRDA was itself
established as a corporate body to regulate insurance in the country. The key functions
of IRDA include:
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The impact of internet marketing in insurance company
Attracting the market through internet is very complex and tedious task to the marketers
to attract. An illiterate with computer knowledge can collect information from internet.
Moreover insurance in internet will not be the attractive site to refer and suggest.
Educating the people through the site can be little possible until they are interested. At
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The impact of internet marketing in insurance company
the same time certain procedures can be done through a personal interaction with the
employees of the insurance companies such as surrender of policy and claim settlement.
Tax benefits from the insurance industry will be the additional reasons for surplus
income of the people. It has to be can be clearly communicated to the customers, will
help them to retain in the business. But these areas cannot be doing better through online
insurance services. That is why, still insurance companies are depending the agents to
generate the sources of income. Consumers attitude is keep on changing every day and
learn new products not only from the membership groups such as family members,
relatives, friends and other opinion leaders. They learn new things and concepts from the
aggressive media of television advertisement. To attract the customers companies use
different varieties of advertisement using various celebrities to position the product
in the minds of the customers. Multiple channels of advertisement over the Internet
provide a possible way to reach insurance customers more effectively.
At the same time, after sales service are not fulfill the requirements of the
insurance customers. Majority of the works has been done after purchase of the
insurance policy. Post purchase satisfactions alone make the customers delight. But
through online insurance the post purchase satisfaction cannot be done effectively.
It can be done only through effective employee interactions with the customers. So the
organization has to maintain good employee morale, motivation and mood to provide the
best service to the customers.
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The impact of internet marketing in insurance company
Ask individuals wanting to buy life insurance, about how they do their tax
planning and the first reply will be - insurance policy. Such is the nature of life
insurance. It is bought by almost everyone right from the bigwigs of the business
world to small retail investors. And most buy it for one core reason - to save tax.
But this is not the only reason.
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Painful Existence:
Maybe an individual has planned well during his earning years to secure
himself financially. He has also designed his financial portfolio in such a way that
he is drawing a comfortable monthly income to support his family expenditure.
But what if an individual were to have a health problem afflicting him or his
spouse? What if the remedy to this ailment were to cost him a sum beyond his
financial capacity? Here again, life insurance can act as the saving grace in two
ways. One, by way of a medical rider like the accidental death benefit rider,
permanent disability benefit rider, critical illness benefit rider. These riders are
taken along with the life insurance plan and help cover the medical expenses.
Tax benefits:
Do we need to elaborate on this any further? Traditionally, life insurance
has always been bought more for tax benefits than for what
it is actually purported to do; i.e. insure human life. But the role of life
insurance in an individual's tax planning cannot, in any way, be undermined.
Under the new regime, individuals can now invest up to Rs 100,000 in insurance
premium to avail of a deduction from taxable income. The tax sops provided on
insurance help `increase' the individual's disposable income and make him
consider taking a life insurance plan which he otherwise may not have done.
Investment:
The other major persons who invest in Insurance are those who have
earned good money in their young age and want to invest in some safe investment
scheme which also provides additional benefits like life insurance cover and
pension benefits at later stages of life.
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The impact of internet marketing in insurance company
FUNCTION OF INSURANCE
PRIMARY FUNCTIONS:
a) Providing Protection:
The primary function of insurance is to provide protection against future
risk, accidents and uncertainty. Insurance cannot check the happening of the risk,
but can certainly provide for the losses of risk. Professor Hopkins observes
"Insurance is a protection against economic loss, by sharing the risk with others.”
c) Assessment of risk:
Insurance determines the probable volume of risk by evaluating various
factors that give rise to risk. Risk is the basis for determining the premium rate
also.
d) Provide certainty:
Insurance is a device which helps to change from uncertainty to
uncertainty. This may the reason that John Magee writes that the function of
insurance is to provide certainty. Similarly, Regal and-Miller observe, "Insurance
is device whereby the uncertain risks may be made more certain".
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The impact of internet marketing in insurance company
SECONDARY FUNCTIONS:
a)Prevention of losses:
Insurance cautions individuals and businessmen to adopt suitable device to
prevent unfortunate consequences of risk by observing safety instructions;
installation of automatic sparkler or alarm systems, etc. Prevention of losses
causes lesser payment to the assured by the insurer and this will encourage for
more savings by way of premium. Reduced rate of premiums stimulate for more
business and better protection to the insured.
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The impact of internet marketing in insurance company
INTRODUCTION TO MARKETING
Marketing is one of the most important expect that help any product to develop
and same is the case for Insurance sector and their product. Insurance is a basically a
service which is provided to the people rather then a physical product therefore it is
effected by service marketing.
Marketers help design products, finding out what customers want and what can
practically be made available given technology and price constraints.
Marketers distribute products there must be some efficient way to get the products
from the factory to the end-consumer.
Marketers also promote products, and this is perhaps what we tend to think of first
when we think of marketing. Promotion involves advertising and much more.
Other tools to promote products include trade promotion (store sales, coupons,
and rebates), obtain infavorable and visible shelf-space, and obtaining favorable
press coverage.
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The impact of internet marketing in insurance company
INSURANCE MARKETING
As the Life Insurance Marketing Companies already deals with this type of a scenario,
what one can do is to change the public perception about the Life insurance companies.
One can connect himself or herself with companies whose workers need a plan for Life
Insurance. One can also go to crowded places and advertise for the Life insurance
company. The Life insurance companies also offer fliers and hanging banners. One can
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The impact of internet marketing in insurance company
also offer free Life check in a reputed place to the insured for at least once. One should
always give the life insurance policy holders existing a chance to prefer the marketing
techniques that the insurance company is presenting.
If the policy holder does this at a regular basis then the company has a high chance of
succeeding.
This is making the competition much tougher for the Life insurance companies as most of
the companies offer similar types of premiums and facilities. So it has become very
important for the life insurance companies to concentrate on Life Insurance Marketing
and attract as many people as possible towards their company.
The Life Insurance Companies prefer to go for Group Life Insurance for a group of
people from a particular company or a family so that they get a group of customers and
even if they compensate for some of them for various reasons they usually make it up
with other's premiums. They also get less papers to control and also they provide better
facilities for their clients. So to promote this type of policy they need to have social and
industrial connections. Life Insurance market helps developing that. Even for other
policies like term life insurance and permanent life insurance one needs to be aware of
making people realize the profits of the policy by various means provided by marketing
agencies.
So before going for a Life Insurance Marketing one actually needs to know the market
target and the desires of the people who are actually seen as potential insurance
customers. The confusion about the way a Life Insurance Marketing conductor can
draw the potential Insurance holder's attention evaporates fast if he knows his targets and
aims clearly. So, it is important to conduct a sound survey and then attract people.
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The impact of internet marketing in insurance company
Telephone marketing is another way of Life Insurance Marketing. One can see the
telephone companies send messages about various offers and they even make phone
calls. Web Insurance Marketing is another good strategy to promote insurance policies.
The pop ups that one sees while using Internet are actually a very effective way of
sending messages across the potential insurance customers.
One should listen to the existing Life Insurance Policy Holders as well as the
potential Life insurance policy holders and listen to what people who actually matters
have to say. One common problem that the insured persons face is that the insurance
companies do not inform its clients about the hike in the premium rates. These things
should be kept in mind. Not only that, a client should be informed about everything
related to his policy and the Life insurance company should keep the transparency as
much as possible.
Community Life Insurance Marketing is another different way to get
promotion and a high recognition for the Life insurance company. Eminent workers
join local community institutions, such as Chamber of Commerce, and by signing up
there one can help out various projects that take place. These kinds of activities and
social works on behalf of the Life insurance company helps the company to get free
publicity as their names are published in news paper and in media also. Doing charity
works also helps the Life insurance companies to come across various people who act
as volunteers and can act as their potential Life insurance clients. People also like to
deal with like minded people and companies and this is how many deals are made.
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The impact of internet marketing in insurance company
A Life Insurance Company should not charge different Life insurance client
different charges for the same policy. This kind of policy gives the Life insurance
policy holders the feeling that they are being treated unfairly and also that the Life
insurance companies are only looking for profits and not the betterment of customer
welfare.
When a Life insurance claim is filed, especially for a very big hefty amount, the
Life insurance company should help out the policy holder in processing out the
paperwork. One should not let bureaucracy enter and make it so difficult for the one
making the claim so that he gives his claim .This has always been a common tactic on
the insurance company's part to avoid paying claims claimed by the policy holder. This
though makes a short term profit for the company but it hurts in the long run as the
reputation of the company is hampered severely.
People in this Life insurance industry should always try to keep in constant
contact with the existing customers as well. The competition in the insurance market is
so fierce today that no company wants to loose out on a customer to another company.
Clients who are not contacted for a longer period of time normally fail to remain loyal
to the insurance company and look for a different Life insurance company. The
company can keep the records of the client's birthday and days like anniversary and
sent him or her small tokens of love or loyalty at a regular basis. If the company can
afford a little more it can send dinner coupons to the Life insurance policy holder.
These things play a major role and can be considered as an effective Life Insurance
Marketing strategy.
May be the most crucial thing in insurance marketing is to always speak about
unity and honesty while dealing with a business. A Life Insurance Holder can find so
many frauds in various life insurance companies today, that life insurance customers
are going for products and services which are trustworthy to them. Feeling safe is
about insurances and other things are most important as far as the insurance holder is
concerned. So, if a company remains loyal to its customers it will itself do Life
Insurance Marketing for itself. So, only by remaining loyal to its customers the
company can do a world of good to its reputation and this would in itself bring more
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The impact of internet marketing in insurance company
potential Life Insurance Holders to the company, because the customers prefer safety
more than anything else these days.
As the Health Insurance Marketing Companies already deal with this type of a
scenario,one can have an alternative view of the health insurance companies. One can be
associated with companies whose workers need a plan for health. One can also go to
crowded places and advertise for the health insurance company. For the purpose of
advertisement the health insurance companies offers fliers and hanging banners. They
also offer free health checks in reputed places to the insured. One should always give the
life insurance policy holders, existing or potential, a chance to understand the gifts and
opportunities the insurance company is presenting to make them comfortable and make
them feel that they care for the clients. If this is done regularly by the company then there
are high chances of success in attracting customers on the part of the company.
This has invited tough competition for the health insurance companies as most of the
companies offer similar types of premiums and facilities. So it has become very
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The impact of internet marketing in insurance company
important for the life insurance companies to focus on Health Insurance Marketing and
attract as many people as possible towards their company.
It is hence mandatory for one to know about the market target and the desires of the
customers before going for health insurance marketing.
The confusion about the way a Health Insurance Marketing conductor can draw the
potential Insurance holder's attention evaporates fast if he knows his targets and aims
clearly. So, it is important to conduct a survey and then aim at attracting people.
Telephone marketing is another way of Health Insurance Marketing. One can see
the telephone companies send messages about various offers and they even make
phone calls. Web Insurance Marketing is another good strategy to promote insurance
policies. The pop ups that one sees while using Internet are actually a very effective
way of sending messages across the potential insurance customers.
One should listen to the existing Health Insurance Policy Holders as well as the
potential health insurance policy holders and listen to what people who actually
matters have to say. One common problem that the insured persons face is that the
insurance companies do not inform its clients about the hike in the premium rates. This
things should be kept in mind. Not only that a client should be informed everything
related to his policy and the health insurance company should keep the transparency as
much as possible.
A Health Insurance Company should not charge different health insurance client
different charges for the same policy. . This kind of policy gives the health insurance
policy holders the feeling that they are being treated unfairly and also that the health
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The impact of internet marketing in insurance company
insurance companies are only looking for profits and not the betterment of customer
welfare.
When a health insurance claim is filed, especially for a very big hefty amount, the
health insurance company should help out the policy holder in processing out the
paperwork. One should not let bureaucracy enter and make it so difficult for the one
making the claim so that he gives his claim .This has always been a common tactics on
the insurance company's part to avoid paying claims claimed by the policy holder. This
though makes a short term profit for the company but it hurts in the long run as the
reputation of the company is hampered severely.
Community Health Insurance Marketing is another way to get promotion and a
high recognition for the health insurance company. Eminent workers join local
community institutions, such as Chamber of Commerce, and by signing up there one
can help out various projects that take place. These kinds of activities and social works
on behalf of the health insurance company helps the company to get free publicity as
their names are published in news paper and in media also. Doing charity works also
helps the health insurance companies to come across various people who act as
volunteers and can act as their potential health insurance clients. People also like to
deal with like minded persons and companies and this is how many deals are made.
People in this health insurance industry should always try to keep in constant
contact with the existing customers as well. The competition in the insurance market is
so fierce today that no company wants to loose out on a customer to another company.
Clients who are no contacted for a longish period of time normally fail to remain loyal
to the insurance company and look for a different health insurance company. The
company can keep the records of the client's birthday and days like anniversary and
sent him or her small tokens of love or loyalty at a regular basis. If the company can
afford a little more it can send dinner coupons to the health insurance policy holder.
These things play a major role and can be considered as an effective Health Insurance
Marketing strategy.
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The impact of internet marketing in insurance company
Most of the big insurance companies prefer branded agents because the bigger ones have
better resource and better employees than the smaller ones. It is important to choose a
suitable Insurance Agency Marketing because more than anything else the insurance
products would be sold on the basis of its presentation.
Any customer today give special emphasis on proper information. Most of the Insurance
customers or the potential insurance holders are well informed today and that is why
Insurance Agency Marketing should depend mainly on the media that provide
information. So the marketing agency should concentrate on providing information in the
media like news paper , television magazines and through Internet as well. These
Insurance Agency Marketing can also put banners in crowded place so that it attracts
the eyes of the people walking on the road. This is a very easy and cheap way to make
people aware of one's company. Awareness increases trustworthiness and that increases
sales for the insurance company. Another way the Insurance Agency Marketing can go
on which is by employing good salesman who can work as individual agent for the
company. The agent has to be smart and well spoken and he needs to know most of the
things that the insurance company offers.
So, when a company sits to evaluate or choose an Insurance Agency Marketing, the
company actually needs to look at one particular and important aspect. They should look
at the means and results of a particular company and the possibility in them to make the
life insurance company a big success and a brand in itself. In a single sentence, the
insurance company would look the extent of bang it can create in the market.
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The impact of internet marketing in insurance company
Insurance Agency Marketing can also be done through committing social works. The
Insurance Agency Marketing can use the brand name of the company in various social
works in the society. This brings them publicity via media and other means. This also
brings the company closer to people who can act as their potential Insurance holders.
Gone were the days when the customers were forced to take up the kind of products
whatever coming from LIC's and GIC's stables. But now, the customer has been
portrayed as the king and to his delight, the products are redesigned and customized
suiting his need taking into account his paying capacity and multiple benefits.
Let us look at the strategies adopted by the players in the market.
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The impact of internet marketing in insurance company
the companies resort to educate the customers about the salient features of the products.
* MetLife India Insurance Company has recently launched a Charitable Trust Policy in
Kolkata, which has evoked a lot of interest especially among the Marwaris business
community who want to set up a temple in their name after their death. Similarly a Buy &
Sell Agreement cover from the same company permits a business enterprise to take out a
life plan on each of its partners, to ensure that the company continues.
* The other segments, which have attracted almost all the players, are the women and the
children segments. Though the State insurer has had a chunk of products sufficiently for
a longer time, it faces stiff competition from the private players in these segments.
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The impact of internet marketing in insurance company
The rural obligation on part of the new private insurance companies is incremental in
nature. It goes from 5% to 15% over the period of 5 years for life insurance and from 2%
to 5% in case of general insurance.
* Towards serving the society in a better way, LIC has adopted a novel way through
its Bima Grams policy. Accordingly, LIC pays 25% of the premium collected from
the villagers or Rs.25000 whichever is lesser for undertaking developmental work in
the villages provided,
The population of the village is between 1000 and 5000
Life insurance coverage for atleast one person in 75% of the households
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The impact of internet marketing in insurance company
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The impact of internet marketing in insurance company
INTRODUCTION
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The impact of internet marketing in insurance company
The Insurance sector plays a vital role in the economic development of our nation. It acts
as a mobiliser of savings, financial intermediary, promoter of investment activities,
stabiliser of financial markets and a risk manager. India is still an under-insured country
in the world. It is at the 18th position among Life Insurance markets and 28th in Non-Life
Insurance markets in the world. This indicates that there is a huge potential, yet to be
explored.
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The impact of internet marketing in insurance company
A consultant is willing to forego short-term gains to achieve greater long – term benefit
to him and to the customers he serves. He builds relationships on a foundation of trust,
respect and performance. Moreover, consultants don’t sell – they’re specialists who make
recommendations to help the prospect to buy. They act as a professional and offer real–
world solutions that make sense to the customer. Today, the insurers adopt this technique
and thereby go on increasing their market share.
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The impact of internet marketing in insurance company
Product mix
Price mix
Place mix
Physical evidence
People mix
Process mix
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The impact of internet marketing in insurance company
Promotion mix
Product Mix
A product is anything that can be offered to a market to satisfy a want or a
need. A product mix is the set of all products and items that a particular seller
offers for sale. In case of insurance sector, the product mix comprises of Life and
Non – life insurance policies that are offered to the customer by the company. A
company’s product mix has certain width, length and depth.
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The impact of internet marketing in insurance company
The term general insurance essentially applies to the insurance risk that is
not life insurance or health insurance risk and so the term covers familiar forms of
personal insurance motor vehicle insurance, fire insurance and travel insurance.
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The impact of internet marketing in insurance company
INSURANCE
Motor Insurance
Joint Life Endowment Policy
Jeevan Saathi
Burglary Insurance
Money Back Policy
Annuity Plans
Bima Sandesh
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The impact of internet marketing in insurance company
Whole Life with Profit Limited Payment Whole Single Premium Whole
Policy Life Policy Life Policy
These product mix dimensions permit the company to expand its business.
E.g.: It can add new product lines thus widening its product mix.
Product Mix of LIC:
(Product Width)
(Product Length)
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The impact of internet marketing in insurance company
Up to 90% of the Surrender Value for policies, where the premium due is
fully paid-up, and
Up to 85% of the Surrender Value for policies where the premium due is
partly paid-up.
The minimum amount for which a loan can be granted under a policy is
Rs150. The rate of interest charged is 10.5% p.a., payable half-yearly. Loans are
not granted for a period shorter than six months, or on the security of lost policies
(the assured must have the duplicate policies) or on policies issued under certain
plans. Certain types of policies are, however, without loan facility.
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The impact of internet marketing in insurance company
Price Mix
Price is one element in the marketing mix that produces revenue; all the
other elements produce costs. Prices are easiest marketing mix elements to adjust;
product features, channels and even promotion take more time. Price also
communicates to the market the company’s intended value positioning of its
product or brand.
In the insurance business, the pricing decisions are concerned with the
premium charged against the policies, interest charged for defaulting the payment
of premiums & credit facilities, commission charged for underwriting &
consultancy services.
Premium:
Premiums are the periodic payments usually monthly or quarterly that the
policy holder pays to the insurance company to purchase and keep a policy in
force.
For example in case of life insurance according to the policy it may be the
amount payable during the endowment term of the policy or until the death of the
life assured whichever is earlier.
The common query raised by clients with their insurance agent is – why
does his insurance company charge more premium for the same cover and tenure?
We have tried to address this query below.
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The impact of internet marketing in insurance company
Mortality Tables:
All insurance companies refer to different mortality tables. These tables
differ from country to country. The mortality table indicates the probability of a
person dying in a particular age group. For e.g. in an age group of 25-30 years,
the probability might be just two, but this probability would increase for a higher
age group of 45-50 years.
Expected Surplus:
The premiums collected by the insurer are invested in capital markets.
There is a fixed investment pattern for the insurer. Out of the surplus earned on
the premiums invested, 95% is distributed to the policyholders and the insurance
company retains the balance 5%.
If an insurer expects to earn more return on his investment then he would charge
more premiums to his investor. It also depends on the nature of return
(compounded or simple) the insurer is planning to give to his policyholders. A
compounded return would mean higher premium for the life to be assured.
Expenses:
An insurance company has to incur expenses in the form of commission
to agents, office expense, advertising expense, salaries to employees. These
expenses are to be managed by the company in the 5% surplus earning which
they earn as mentioned above. In order to meet the above expenses the insurer has
to collect more premiums so that there is more surplus from which expenses can
be met.
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The impact of internet marketing in insurance company
Place Mix
Place mix can be defined as the “Physical distribution i.e. the delivery of
goods/ services at the right time at the right place to the customers.” Place
decisions involve building relationships with the wholesalers, retailers and
through these intermediaries building relationships with the customers. Products
and services must be at the right place, at the right time in order to be consumed.
Probably the best way to perceive place is to think of the flow of products from
manufacturer through intermediaries to the consumer or user. This flow can be
thought of as a channel used to move goods and services.
Distribution channels:
The distribution channels are as follows:
Channels:
According to Philip Kotler, “Channels are sets of interdependent
organizations involved in the process of making the product or service available
for use or consumption” Marketing channel decisions are among the most critical
decisions facing the management.”
The channels chosen intimately affect all the other marketing decision
In case of insurance sector, the following channel of distribution is followed
according to the target market:
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The impact of internet marketing in insurance company
CHANNELS
Direct Selling Agents
Financial Advisors
Call Centers
Partner Selling Bancassurance
Postal Department
Selling through Corporate
Direct Selling:
Agents:
The agents are selected and recruited by the development officer of the insurance
company. These agents inform the customers about the various insurance policies
offered by the company and convince them to buy these policies.
Financial Advisors:
The financial advisors are also consulted by the customers regarding their
financial matters. These advisors suggest their clients to get their goods insured
against any calamity or risk. Hence they act as a channel in distribution of
insurance.
Call centers:
The people who require insurance call up the call centers. These call centers send
their direct marketing agents who go to the customer’s place and sell the
insurance policy.
Bancassurance:
With the evolution of interconnected financial services, banks are converting
themselves into ‘one stop financial supermarkets’. This has promoted two big
classes of financial institutions: banks and insurance companies to combine and
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The impact of internet marketing in insurance company
Postal Department:
India has an extremely well developed postal network, which is even stronger
than the network of banks in the country. Post offices have been established even
in the interior parts of the country. Insurance companies can tie up with the postal
department to sell and distribute various insurance covers. This would certainly
require upfront training costs, as the postal employees in turn need to educate and
sell the concept and benefits of insurance to the people in rural areas. Such a tie
up with the postal department would open up India’s rural areas, which are
largely untapped for insurance sector. This can prove to be a sustainable source of
growing revenues.
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The impact of internet marketing in insurance company
Physical Evidence
Physical evidence is the environment in which the service is delivered and
where the company and the customers interact and any tangible goods that
facilitate the performance and communication of the service. Services are
intangible and heterogeneous. Intangibility means that services cannot be
displayed, physically demonstrated or illustrated; heterogeneity means that
consumers cannot be certain about performance on any given day. It plays a
major role in enhancing customers’ perception of the service quality.
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The impact of internet marketing in insurance company
People Mix
Employees:
Employees are very crucial because:
They are the service
They are the brand
They are the marketers
They are the organization in the eyes of the customers.
The various employees involved in providing service to the customer in insurance
sector are:
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The impact of internet marketing in insurance company
in some cases, they may help the claimant receive assistance quickly in order to
prevent further damage and begin repairs. Adjusters plan and schedule the work
required to process claims, which may include interviewing the claimant and
witnesses and consulting police and hospital records. In some property-casualty
companies, claims adjusters are called claims examiners, but in other companies,
a claims examiner’s primary job is to review claims to ensure that proper
guidelines have been followed.
Underwriters:
Underwriting is another important management and business and financial
occupation in insurance. Underwriters evaluate insurance applications to
determine the risk involved in issuing a policy. They decide whether to accept or
reject an application, and they determine the appropriate premium for each
policy.
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The impact of internet marketing in insurance company
Lawyers:
The insurance industry employs relatively few people in professional or related
occupations, but those who are so employed are essential to company operations.
For example, insurance companies’ lawyers defend clients who are sued,
especially when large claims may be involved. These lawyers also review
regulations and policy contracts. Nurses and other medical professionals advise
clients on wellness issues and on medical procedures covered by the company’s
managed-care plan.
Customers:
People mix not only includes employees but also customers. The customers are to
be treated with respect and courtesy. Customer is the king of the market.
Satisfaction of the customer is the primary motive of the insurance industry as
well as all the organisation
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The impact of internet marketing in insurance company
Process Mix
In case of insurance sector, the process mix includes the various
interactions that take place between the insurance agent and the customer in the
process of selling the policy to the customer till the settlement of claims.
1. The insurance agent calls up the customer and informs him about the different
policies offered by the company and the price mix of all the policies. If, the
customer seems interested in taking the policy then, he fixes an appointment
with the customer.
2. The insurance agent meets the customer and gives him some information
about the insurance company and also about the benefits of the policy.
3. The customer is then asked to fill a financial review form (FRF) and the agent
is asked to find out the standard of living of the customer so that the insurance
company gets a clear picture about the financial condition of the customer and
what kind of policy he can afford.
4. The insurance company offers various policies but they might not be suitable
for the customer hence, on the basis of his requirements and financial status,
the insurance agent suggests two or three policies to the customer, which will
be suitable for him.
5. The insurance agent explains the different policy plans in detail to the
customer i.e. the amount of premium to be paid, the time interval at which the
premium is to be paid, the benefits of each of the policy etc. A brochure is
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The impact of internet marketing in insurance company
also provided to the customer wherein the entire description of all the policies
is given.
6. Then, the insurance agent provides a feedback form to the customer and asks
him to give his feedback regarding the policies that he has been informed
about. This feedback is taken in order to find out whether the customer is
satisfied with the plans of the policy or whether the company needs to make
the policy plans more attractive so that it may appeal to its future customers.
7. Then, the next appointment is fixed by the insurance agent with the customer
and in this meeting; the customer selects the policy plan, which appeals to
him. The customer is then asked to fill up the proposal form which contains
various details of the payment and he is asked to make the first premium
payment.
8. Then, the insurance agent submits the duly filled and signed form in the
insurance office along with the other necessary documents. E.g.: Medical
Reports in case of Life Insurance.
9. Then, a reconfirmation is taken by the agent from the customer that he agrees
with the terms and conditions of the policy.
10. The insurance agent then regularly collects the premium from the customer
whenever the premium becomes due.
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The impact of internet marketing in insurance company
Promotion Mix
‘Promotion’ is a descriptive term for the mix of communication activities,
which a service organization carries out in order to influence the target customers
on whom their sales depend. It is an element in an organization’s marketing mix
that serves to inform, persuade, or/ and remind people about an organization or
individual goods, service, image, ideas, community involvement or impact on the
society. It is used in hopes of influencing the recipients feeling, belief or
behaviour through any form of communication.
The types of promotional methods used in insurance sector are as follows:
Advertising
Public relations
Sales Promotion
Personal Selling
Word of Mouth.
Advertising:
It is a paid form of non-personal communication. It is used to create awareness
and transmit information in order to gain a response from the target market.
Forms of advertising are as follows:
2. Electronic media:
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The impact of internet marketing in insurance company
3. Internet (Websites):
Companies like LIC (www.licindia.com), ICICI
(www.iciciprudential.com) all have websites from which people can get
the information about their products, prices, various schemes, and lots of
other information. People can also purchase the product through this
website.
4. Television:
Companies like LIC, Met Life India, advertise on television to make
people aware of their products and services.
5. Radio:
ICICI Prudential advertises on 92.5 red Fm.
6. Hoardings:
LIC put its hoardings where there is a mass flow of people, especially
outside the railway station or at the backside of the bus. When Met Life
was introduced it has put his hoardings on the side of the train, to target
huge number of people.
7. Brochures:
Companies provide brochures to the customers so that they can have a
look on various schemes and their prices. Eg: LIC have brochures of
various schemes that are available different languages i.e. Hindi, Marathi,
English, and other regional languages. They provide the brochure of the
scheme the customer has chosen, in the language which they understand.
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The impact of internet marketing in insurance company
Brochure will provide the customer the information like features of the
scheme, amount of premium to be paid, rebates (if any), etc.
Public relations:
Public relations are helpful for the companies to build their brand image, to
maintain good relationship with customers, to make the people aware of its recent
happenings, etc. Mediums of Public relations are:
1. Press releases:
This helps the company to convey its message to its customers and other
people.
2. Seminars:
These are held to provide information about the new product launched,
position of the company in the market, etc.
Sales Promotion:
1. Gifts:
LIC provides diaries, pens, booklets, etc to its customers.
2. Sponsoring Events:
Eg: Max New York Life Insurance Company has sponsored the recent
India-Zimbabwe-New Zealand tri series.
Personal selling:
Agents:
It is the most widely used method of promotion by all insurance companies.
They recruit, train and motivate the insurance agents to convince the
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The impact of internet marketing in insurance company
It helps to create awareness about the brand among the target audience. It
also helps the company to convey its message to the customer.
Oriental Insurance Prithvi, Agni, Jal, Aakash, Sabki suraksha hamare paas
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The impact of internet marketing in insurance company
FLOWERS OF SERVICES
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The impact of internet marketing in insurance company
Information:
A marketer needs to provide adequate information to his employees and
his customers. This information is general information provided through various
communication channels. In the insurance industry information is provided to the
customers with the help of:
o Agents
o Seminars
o Web sites
o Print media
o Radio, Television, etc.
Consultancy:
This is additional customized information provided to the potential
customers by the service provider. In the insurance industry it is provided by
company’s staff and agents.
Example: In LIC when a customer enters asking of information about the policy,
he is directed towards the assistant sales manager. Assistant sales manager will
listen to the customer’s requirement and as per his requirement list the number of
policies that are available. He will also ask the customer about the price and limit
the number of options for the customer, so that he can easily choose the policy
without confusion.
Order taking:
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The impact of internet marketing in insurance company
Hospitality:
Hospitality is a very pretty petal, reflecting pleasure at meeting new
customers and greeting old ones when they return. Hospitality finds its full
expression in face-to-face encounters.
In LIC customers directly come in contact with the sales manager. The
customers are treated as guests. The sales managers of LIC are given special
training of how to sell the policies to the clients. It is only in LIC that a customer
can meet the chairman directly without any appointment.
Safe keeping:
It is in the process and procedures used by marketers to safe guard and to
maintain secrecy. In LIC the data of the customers is very important. They feed
the data of the customers in their Front and Application Program Software
which is connected with all the branches of LIC. The data is only available with
the sales people and not shown to any person.
Exceptional:
Exceptional service means service over and above customer’s expectations.
LIC has the fastest claim settlement in the world thereby providing exceptional
service. LIC also solves complains of the customers within 7days.
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Payment:
The payment of premium is normally through cheques. Customer can make
payment in LIC through:
o Agents
o Loans
o Web sites
o Standing instruction to banks:
In this the account holder will give standing instruction to his bank to pay the
amount of premium every month without his consent on the given date
directly to LIC.
Billing:
The billing should be done in such a way that there are no mistakes and if there
are any they must be immediately rectified. The billing should provide break-ups
of premium charged, service charges, etc.
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In case of insurance sector, the main objectives of a promotion campaign will be:
To make all or maximum population aware of the various insurance
policies of the company.
To promote the advantages of all the insurance policies.
To make the people aware of the risks involved and the importance of
taking insurance.
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Example: LIC (India) conducts seminars and mass marketing campaigns in order
to make the customers aware of insurance and why it is needed.
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Company:
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The impact of internet marketing in insurance company
The company makes various promises to its customers through External Marketing.
The external marketing function relates to anything that is communicated to the customer
before the service is delivered. There are many factors beyond the traditional marketing
mix that communicate to the customers in case of LIC.
The Marketing Mix i.e. the product, price, place and promotion of LIC is been already
explained the 7 P’s. However, the important role of Agents in LIC cannot be neglected.
Agents:
LIC is a kind of organization where Agents play one of the most prominent roles. No
customer could get an insurance policy without the help of an Agent. In fact, LIC has rule
of getting policies of the customer only through its Agents.
So in the above diagram the Agents are considered on the both the levels (Company &
Employee level) as per their role.
In LIC, the customer may come to know about the different polices through the
External Marketing conducted by the Company as well as the agents, the customer has
major interactions only with the Agent rather than the company itself. The Agents
explain various types of policies available to the customer and convince them to purchase
that. Even an aspect of the Company is not covered through External Marketing; it’s
finally the Agents that convey different aspects through their own personal efforts and
contacts.
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It is very clear that LIC would be handicapped without the Agents and the Agents not
only work as the employees of the Company but also as the representatives of the
Company as well.
Employees:
The agents and the development officers act as the front-line staff and they are in
direct contact with the potential or existing customers. They are the ones who keep or
satisfy the promises made by the company. The marketing of insurance basically comes
under concept selling. The agents are thus given various incentives, rewards,
commissions and all the necessary training required.
These incentives provided to the Agents and other employees are a part of
Internal Marketing. Internal Marketing relates to meeting the needs of the employees so
they can meet the needs of their customer. As explained above, the company tries to meet
the needs of the employees or try to motivate them through their needs there by satisfying
customer needs.
Internal Marketing plays a very important role in LIC as the Agents are the heart of the
company without whom the Company can’t get a single policy.
Consumers:
The consumers are the policyholders. Apart from the routine life insurance policies
other services like housing finance, mutual funds, pension and group insurance. Thus the
range of consumers is far and wide.
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The impact of internet marketing in insurance company
As explained earlier, the LIC Agents try to convince the customers to get the
appropriate policy provided by the Company. Word of mouth promotion and Personal
Approach is one of the major aspects of Interactive Marketing in any Insurance
Company.
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MARKET SEGMENTATION
Thus market segmentation is the process that segments a market into smaller
sub-markets called segments. Segments are homogeneous within and desirably
heterogeneous in between. The rationale of intra-group homogeneity is that
people with similar attributes are likely to respond somewhat similarly to a given
marketing strategy. So that they can develop special marketing strategies for
particular segments. Segmentation is normally performed along with
demographic, geographic, psychographic, and behavioural variables;
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The impact of internet marketing in insurance company
geographical census data. Note that this information can come from national
census data.
Psychographic variables describe life style, personality, values, attitudes, and so on.
Behavioural variables include product usage rate and end, brand royalty; benefit
sought, decision making units, ready-to-buy stage, and so on. This information can be
extremely useful for marketing purposes.
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of product complexity, insurance products can be categorized into low complexity and
high complexity products.
Low complexity products: These are simple products with a standard set of covered
risks, perils and hazards.
High complexity products: They have a large number of riders and warranties
and do not indemnify certain causes of loss.
2. Marine
Insurance
Mass Market 1. Householder’s 1. Personal
comprehensive Accident
Policy Insurance
2. Medical 2. Pension
Insurance Products
The distribution strategy should vary according to the type of policy.
Insurance products with low complexity can be sold through bank-assurance, but
products with high complexity should not be sold through the same channels, as it
would be very difficult (in terms of time, effort and cost) to train bank employees
in understanding the finer details of the complex policies.
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The impact of internet marketing in insurance company
Helps to understand the need and the requirement of the policyholder and
accordingly helps to cater i.e. the needs and the requirement rural sector is
different from the urban sector
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The impact of internet marketing in insurance company
SERVICE RECOVERY
A disappointed customer does not just go away, but he/she goes away and
might not come back at all. And there are great chances that he might take away
some other existing customers or he may restrict the potential customer to be the
Loyal Customer of the Company. Here lies the need for Service Recovery. It is
quiet possible that at every given opportunity, he might speak about the negative
experience that he had with the Company which finally affects the decision of the
other customers too.
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The impact of internet marketing in insurance company
Apologise or Acknowledge:
Apology rendered in first person is the most powerful tool. The magic
word “I am Sorry” provides authenticity of personal involvement. LIC has
realised the importance of personal involvement and has included it in the
training program itself. Once the Agent is recruited he needs to undergo a
compulsory training program designed by LIC. The Training Program also
explains them the importance of the smallest of the customer .i.e. customer who is
just seeking general information. The Agents and Employees are trained to
Apologise to its customers even if they are not at fault.
“SO IT DOSENT TAKE MUCH OF TIME FOR THE HANDS OF THE LIC
LOGO TO COME CLOSER FOR APOLOGY”
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The impact of internet marketing in insurance company
the payments were not accepted on the same day within office timings and hence
the payment was finally delayed. There are chances that the customer may blame
the employees of the Company for slow clearance of the premium. The Company
could however compensate to the customer by waiving the penalty payable due to
delay in payment of premium.
Follow Up:
This is the most important step in Service Recovery as it ensures that
whether the implemented Service Recovery was Satisfactory or not. It would
include Internal and External Follow-up. Internal Follow-up would be to ensure
that the solutions they put in motion are actually executed and the External part
would be to get feedback from the customer whether he is satisfied or not.
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COMPLAIN HANDLING
In a vast Organization like LIC, catering to the various needs and
aspirations of millions of policyholders, grievances of customers do arise
occasionally. In order to redress these grievances LIC has established elaborate
Grievance Redressal Machinery and the details are as under.
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The impact of internet marketing in insurance company
Citizens' Charter:
LIC has adopted a Citizens Charter through which it reiterates its
commitments to the customers and the standards for general procedures, the
standards for policy servicing, the standards for easy access to information for
customers and the standards for fairness in dealing with the customers have been
laid down.
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Overview
ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank - one of
India's foremost financial services companies-and Prudential plc - a leading international
financial services group headquartered in the United Kingdom. Total capital infusion
stands at Rs. 47.80 billion, with ICICI Bank holding a stake of 74% and Prudential plc
holding 26%.
ICICI Prudential is the first life insurer in India to receive a National Insurer Financial
Strength rating of AAA (Ind) from Fitch ratings. For three years in a row, ICICI
Prudential has been voted as India's Most Trusted Private Life Insurer, by The Economic
Times - AC Nielsen ORG Marg survey of 'Most Trusted Brands'. As we grow our
distribution, product range and customer base, we continue to tirelessly uphold our
commitment to deliver world-class financial solutions to customers all over India.
ICICI Prudential is a case study in the role of marketing in reshaping an industry. It
highlights how an industry where “sell” and “push” were often used words and consumer
was nothing more than a file no., has changed to one where “consumer preference” and
“consumer pull” rules the roost. Here’s a look at how ICICI Pru changed the rules of the
game and emerged a leader in the process.
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Background:
When the insurance sector was liberalized in 2000, the private players had to contend
with a few issues. Ratio of premium to GDP was low: 1.3% of GDP was invested in
insurance. Insurance penetration was at an abysmal 22% of the insurable population.
Besides the above the private players were faced with: Attitudinal Barriers, Perception of
insurance as a tax saving tool and lack of a consumer centric approach in service and
product offerings.
The challenge therefore was to change established category drivers (death payment & tax
saving) and to get the consumer to evaluate insurance on a more emotional platform
(protection) rather than a mere rational decision (tax savings).
A) Reposition the category in the consumer's mind. Influence the consumer to view it as
a protection instrument and not a tax saving product alone.
B) In the process, create differentiation for the ICICI Pru brand as a provider of social
security and family protection.
C) Achieve leadership status in saliency, image & product parameters.
D) Build credibility and trust.
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Representing an ideal mix of medium to high net worth individuals: The consumers most
disposed towards buying life insurance. Middle-aged professionals, primarily male,
salaried and self employed, age group: 28 - 45 years, household income: Rs.20, 000 and
above.
Creative Strategy:
The essence of the creative strategy: To get the consumer to look at Insurance as a means
to lead a worry free life and not as a necessary evil. To this effect the core brand insight
highlighted was "As head of the family it's my responsibility to take care of my loved
ones and protect them from the uncertainties of life", summed up in the advertising idea:
‘We cover you at every step in life (Suraksha… Zindagi ke har kadam par, as
interpreted in Hindi ). ICICI Pru was positioned as an enabler of protection relevant to
the needs of the life stage that you are in. At the core of the communications strategy was
appropriating the generic category benefit (protection) through its greatest metaphor –
Sindoor.
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The impact of internet marketing in insurance company
TVC: Building image and creating a differential in the most creative and compelling
manner. The creative execution heightened the emotional connect with the ICICI Pru
brand - Indian; satisfaction of knowing that one’s loved ones are protected. Symbolic
representation of the protector of the family through situations showcasing various life
stages and creating endearing imagery of protection and familial bonding.
Press: Gave the consumer a rational and tangible reason to buy insurance first and
secondly from ICICI Prudential. The product specific advertising focussed on changing
the prevalent perception about insurance and breaking a few myths: non- affordability,
insurance not being good investment option and the myth that insurance was good only
for tax saving.
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Other Communications:
Other programs included direct mail, PR of communications campaign in press & TV,
website marketing; and database generation through Banc assurance channels.
Media Strategy:
In a market likely to be cluttered, we used multiple touch points to reach the consumer.
The role for each medium was envisaged. The TV medium was used to enhance the
emotional link with the brand. Strategic use of 15 sec. edits facilitated high frequency
levels. In print, cost per response rather than cost per thousand as responses were
measured in form of call-ins. Radio FM, Cinema, Internet were used to create a media
multiplier effect.
Being no: 1 in awareness and saliency. Awareness: ICICI Pru showed a significant
jump in awareness between Feb and Sept 2001. Image: Highest score among all
Insurance players including LIC, on image parameters like safety, modernity, service,
good returns etc. Intention to invest: Next only to LIC as per research (All Source:
Research by ORG Marg). No. of calls and emails: There were 70,000 calls at the call
center and 6582 emails in the year 2001.
Sum up:
In just over a year ICICI Pru has emerged as India’s no.: 1 Private Life Insurance
Company with almost 50% market share of the private players. Has sold highest
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no. of policies both in volume and value. Major Milestone - Over 100000 policies
on Mar 31, 2012.
Awards
Silver Effie for Effectiveness of the ‘Retire from Work not life’ advertising
campaign Effies 2018
Best Life Insurer 2018. Outlook Money Awards 2018 & 2004
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ICICI Prudential Life won the ICICI Group Marketing Excellence Award 2019 in
three key categories for its marketing initiatives
ICICI Prudential Life was awarded the Life Insurance Company of the Year at
the12th Asia Insurance Industry Awards 2019.
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ICICI Prudential currently has the largest number of bancassurance tie-ups, which
include ICICI Bank, Bank of India, Federal Bank, South Indian Bank and Punjab and
Maharashtra Co-operative Bank.
Does an individual receive any additional benefit, if he buys the risk cover through
his bank rather than from the insurance advisor?
We believe that customers should have the option to approach life insurance companies
from any channel that they want - be it through advisors, banks, direct mailer, etc. Since
customers transact frequently with their bank, purchasing life insurance through the bank
is yet another value-added service they can avail of through a channel with which they
are already familiar and comfortable with
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The impact of internet marketing in insurance company
How does ICICI Prudential differentiate itself from other insurance companies?
The ICICI Prudential edge comes from our commitment to our customers, in all that we
do - be it product development, distribution, the sales process or servicing. Our key
differentiators can be summarised as under:
Our products have been developed after a clear and thorough understanding of
customers' needs. It is this research that helps us develop unique products to cover
our customers in every step of their life.
Having the right products is the first step, but it's equally important to ensure that
our customers can access them easily and quickly. To this end, ICICI Prudential
has an advisor base across the length and breadth of the country, and also partners
with leading banks, corporate agents and brokers to distribute our products.
Robust risk management and underwriting practices form the core of our
business. With clear guidelines in place, we ensure equitable costing of risks, and
thereby ensure a smooth and hassle-free claims process.
Entrusted with helping our customers meet their long-term goals, we adopt an
investment philosophy that aims to achieve risk adjusted returns over the long-
term.
What is your advertising budget and how do you plan to take on competition?
Our advertising spends last year were Rs 14.8 crore. This year we are looking at
maintaining our share of voice and spending accordingly. While we were not the largest
spender last year, we were the most efficient. Cost per saliency point (i.e money spent per
awareness unit) as per the ORG Marg survey, is the least for ICICI Prudential. Our media
planning and buying has been smarter than that of our competition. Our brand is already
one that is well recognized, so we already have a lead over the competition.
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We will continue to build our brand and drive consumer awareness through advertising,
seminars, direct marketing, etc.
While awareness has been increasing it is still observed that the slant is towards LIC
products. When do you think a situation will come when customers will ask for
private insurers' products by name?
Customers today are becoming more discerning and evaluate life insurance policies based
on their specific benefits. We frequently launch new, innovative policies with wide
customer appeal. Such efforts not only build the brand, but also drive customers to
purchase life insurance from us. So customers are already beginning to seek alternatives
to LIC and are asking for policies from specific life insurers, based on the brand,
customer service and value proposition.
Life insurance is the most ‘mass market’ of all savings instruments available in the
country (Average Sum Assured Rs 75000). In addition it also provides a security in
country where there is complete absence of any state funded social security system and is
an ideal long term investment. Despite its versatility, it constitutes only 7 percent of the
Gross Domestic Savings (GDS) of the country. Given the current socio-economic
situation there is a strong case to encourage long term savings coupled with protection
through Life insurance.
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The impact of internet marketing in insurance company
instance, the service tax on Banks is confined to services like credit card services,
merchant banking, securities and foreign exchange broking and not on the deposits
collected by them. Further the service tax on credit card services is levied on the fee and
not on the actual spends on the card.
Post budget, what changes in strategy do you plan to adopt in marketing risk covers
considering the reduced benefits for policyholders?
Our strategy has always been to help the customer assess his/her need for a policy and to
subsequently sell him a policy based on that need, through our team of trained advisors.
ICICI Pru Life offers a range of policies to meet needs at every step in life and our
communications strategy complements this by reinforcing that life insurance is not
merely a tax saving tool, but a means of protecting life. This strategy helps consumer to
recognize the true value of their policy. We will continue with this strategy, despite the
changes that the budget has imposed.
LIC plans to change tack and sell insurance harping on the 'pure risk' element. But
considering that most individuals purchase policies for tax benefits, post budget how
far will it be easy to sell insurance.
ICICI Pru Life has observed that consumers are now realizing the holistic benefits of life
insurance - that it is not merely a tax saving tool, but an important financial instrument
that serves as a stable investment vehicle offering consistent returns, and above all
protects life against uncertainties that face us all.
ICICI Prudential Life Insurance will reach the 100,000 policy mark in a few weeks,
making it the No. 1 private life insurer in the country.
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While official figures are not yet out, it is estimated that private players have captured 3-
4% of the market (in value terms) in the top 5-6 cities.
What percent of your policyholders buy policies strictly for tax benefits?
As mentioned earlier, customers are increasingly recognizing life insurance for the
multidimensional financial product that it is, and more and more customers are
purchasing life insurance for reasons beyond section 88 namely the protection benefit.
It has been over a year and private insurers have only been able to make a dent in
the market. What are the roadblocks you face in marketing?
In the one year that ICICI Pru Life has been operating in the Indian market, it has made a
considerable impact by introducing innovative life insurance policies that meet customer
needs as well as setting new levels in customer service. The key task is to grow the
distribution network and tap the huge potential in an underinsured, underserviced market.
What is the recently introduced 'Code of Conduct all about? Has your company
already enforced it? If not, when do you plan to enforce it?
The ‘Life Insurance Self Regulation Standards of Conduct and Sound Practice’ aims to
protect consumers’ interests by giving them the necessary information pertaining to their
policy in an accurate and understandable manner.
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The impact of internet marketing in insurance company
This includes giving out benefit illustrations that meet specific guidelines such as
projected rates of return, keeping them updated about the status of their policy, etc. The
code comes into force for all life insurance companies from January 1, 2004.
The code of conduct sets out two rates of return – 6% and 10% - both of which all
companies must use for their benefit illustrations. This standardization across companies
will enable customers to make a better comparison of products of different companies
and select one that suits them best.
The greater amount of information given to a customer will give him/her a clearer idea of
the features and conditions of the policy, what he will put into the policy, the benefits that
accrue to him. Standardization of the rates of return in the benefit illustrations will
facilitate easier comparisons of different products. Other aspects, like informing a
customer when the policy proposal has been accepted, depending on the medical tests,
will ensure that customers are more aware of their rights and responsibilities.
How difficult will it be to market risk products now with the code of conduct
making it mandatory to project earnings that will have to be based on standardized
rates of return laid down by the Life Insurance Council?
We firmly believe that the customer must have choice and transparency when it comes to
selecting his/her life insurance products, and this code is a step in that direction. Our
benefit illustrations have long since featured two different rates of return to give the
customer a better idea of the possible earnings on his policy, and we will soon be
bringing these rates in line with those that are being prescribed by the Life Insurance
Council. In fact, our benefit illustrations have so far proven to be an effective sales tool.
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The impact of internet marketing in insurance company
Also illustrations projected by insurers will now have to project two scenarios. How
far will this step benefit/affect insurance sales?
Because life insurance products are long-term in nature, it is difficult to predict the rates
of return over the period of the policy. Hence life insurance companies will project two
scenarios of investment returns to for the customer, so that they have a clearer idea of
what the likely returns for their policy are, depending on how the markets and economy
performs. This increased disclosure gives greater confidence and information to the
customer.
What steps have you taken to educate the rural folk about the importance of
insurance?
We have set up a dedicated team to target the rural business in a focused way. We are
developing products specifically designed for the rural segment; establishing channels
to reach out them; and setting up customer service processes to service their needs in
a cost effective manner. Only once these are set up, will we start active awareness
building programs.
Awareness about the importance of health insurance is low. What steps have to
taken to improve the awareness in the urban as also rural areas?
We have begun by introducing group health products. At present we are in the
process of finalising our plans for the retail health segment.
Your company had plans to capitalise on the internet distribution channel to sell
insurance products over the web. How far has it materialized?
We are in the process of building this functionality. There are regulatory issues that
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The impact of internet marketing in insurance company
need to be ironed out especially for issuing policies over the web and for accepting
online credit card payments.
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The impact of internet marketing in insurance company
CONCLUSION
In this paper, the researcher identified that the insurance companies offers the value to
the customers
through on-line marketing. Unlike conventional marketing, Customers learn about the
product details, special features, market conditions, competitive products, vision,
mission, goal of the company can be understand. Customer delivered value should be
done better by the company in online insurance marketing. E-insurance stimulates the
customers to create need and to recognize those needs, search for alterative information
about insurance industry, evaluation those alternatives from the digital information
has given in the insurance websites, making decisions to purchase and providing the
post purchase support to the customers. Companies have to educate the customers about
the usage of online insurance by effective means of communication. They should insist
the customers to learn the usage of online insurance and if possible nationwide
campaigns have to be arranged through IRDA in all the states and the districts and
encourage the customers to use e-insurance for the faster and better communication.
Finally the online insurance marketing creates new path to the companies to yield
greater profits.
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The impact of internet marketing in insurance company
Thus it is clear, that insurance sector is booming and is one of the most
dynamically growing sectors of the Indian chapter. Growth potentials are
tremendous, and in era of cutthroat competition, the best marketer can
reach to dizzying heights.
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The impact of internet marketing in insurance company
BIBLOGRAPHY
Books
Service Marketing by Ravi Shankar
Insurance by M. J. Mathew
Insurance Plus by LIC
Marketing in Services by Philip Kotler
Journals
Insurance Chronicles
Money Outlook
Newspaper
Insurance Boom – Supplement from Economics Times
Insurance Gazette – Supplement from Financial Times
Websites
www.wikipedia.com
www.licindia.com
www.irdaindia.org
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