CHAPTER 13

LIFE INSURANCE MARKETING

-SUBODH B BHALERAO, AAO (INVESTMENT),CO

PRESENTATION DEVELOPED BY

SUBODH B BHALERAO A.A.O., INVESTMENT DEPARTMENT, CENTRAL OFFICE.

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INTRODUCTION
PURPOSE OF ALL BUSINESS - TO CREATE AND RETAIN CUSTOMERS. TO DO THIS IT IS NECESSARY TO CREATE CUSTOMER AWARENESS MAKE THE CUSTOMER INTERESTED IN THE PRODUCT BY MAKING THE PRODUCT AVAILABLE AT AFFORDABLE COST &
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 SUITING HIS CONVENIENCE CUSTOMER SATISFACTION FOR CONTINUATION AS CUSTOMERS.

 BUSINESS HAS TO REACH CUSTOMERS BY MAKING THE GOODS AND SERVICES AVAILABLE AT CONVENIENT OUTLETS, ENSURE CUSTOMERS EXPERIENCE SATISFACTIONS WHILE USING THEM. MARKETING COMPRISES OF ALL THESE FOCUSSING ON CUSTOMER
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 Products and distributions are designed to match peoples needs. Studies in the past have developed ideas and concepts that help marketers become more effective in their functions.
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 Marketing concepts are different for tangible products and that for services. Every service caters to different type of needs of the customers.

THE DISTRIBUTION CHANNEL

 Route by which the product prepared by the producer reaches the consumer. Bridges the distance between the producer and consumer. In life insurance , the agent is the primary component. Supervisor of agents (Development Officer or Agency Manager) is important

 He makes the channel effective by creating and training agents. New agents widen the channel.

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 Brokers and Insurance Consultants are equally important. Direct selling saves costs. In India, personal contacts by agents may continue to be necessary.

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 Another method is the use of network of branches of banks. This will save in cost of infrastructure and overheads. It may be possible to develop composite products having elements of both banking product and life insurance.

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SOLD, NOT BOUGHT

General Insurance is bought because it is compulsory under the law in some cases e.g. Motor Insurance. In Life Insurance there is no compulsion. The possibility of death is either ignored or not considered imminent. People have priority on today over tomorrow.
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 There is tendency to leave everything to fate. Yields are low. Time value of money is also low. When the need for life insurance is realised, the person may not be in good health and insurer may refuse to grant the cover. Hence need to sell.
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 The person met by an agent at his normal place of work or residence is a better risk than the one who comes to the office and asks for insurance. The agent is the primary underwriter who studies and reports to the insurer. The moral hazard must be looked at more carefully.

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THE CUSTOMER
Experience of service at the time of claim. Customer in Life Insurance is the person who buys the policy and make a claim too. Two mind sets - Anxiety and fear of death at the start
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- Satisfaction for settlement of claim or disappointment for money could have been utilised elsewhere better at the end.

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 Claimants of death benefits are different from the Life Assured and know very little about the terms/conditions of policy and the reason of taking out a policy. Agents may help claimants in completing the formalities which will provide customer satisfaction.

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STRENGTHENING RELATIONSHIPS.

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 Agent is link between the customer and the insurer. Customer Agent link is stronger than company customer link. Customer loyalty to the insurer depends on how strong agent customer link is. Death claim provides opportunity to strengthen this link.
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 Agent should keep in touch with his policyholders to become aware of their insurance needs, policy servicing aspects etc. Contact with customers conveys that agent cares for the customers. An agent who does keep in touch is not trusted by the customers.

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IMPORTANT OBSERVATIONS.
It is important for agents to: Maintain regular contacts with policyholder. To build trusting relationship To help keep the policy in force by continuous follow up & Always place the customer interest above their own.
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FUNCTIONS OF AN AGENT

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 Solicit and procure life insurance business for the insurer. Advise prospect suitably keeping his circumstances and needs in mind. Complete the formalities necessary to get the policy expeditiously. Keep in touch with changing circumstances relating to insurance.

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

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CODE OF CONDUCT
As per IRDA Regulations: Agent will identify himself and the Insurance Company of which he is an agent. Display the licence to the prospect. Explain all available options to the prospect.

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 Recommend a suitable plan taking into account the needs of the prospect. Disclose the scales of commision if asked for by the prospect. Explain the nature and importance of the information required in the proposal form. Make all enquiries about the prospect.

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 Impress upon the prospect the need to disclose all information. Inform insurer about any material facts that may affect underwriting decision. Convey to the prospect about the status of the proposal. Advise policyholders to effect nomination.

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 Render necessary assistance to policyholders/claimants/beneficiaries in complying with requirements asked for by the insurer. Make every attempt to ensure remittance of premiums by the policyholders within stipulated time by giving notice orally and in writing.

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 Not to induce prospects to submit wrong information. Not to interfere with the proposals introduced by the other insurance agents. Not demand or receive from beneficiary, share of proceeds under insurance contract.

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

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ADVERTISEMENTS

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Advertisements are effective: As reminders to intimate change of address, pay premiums, make nominations etc. As information on bonus declaration, special campaigns for revivals, concessions, new plans etc.

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

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IRDA Regulations state that: Claims made about the benefits should not be beyond the ability of the policy to deliver. Benefits described should match policy provisions. Words or phrases should not be used in such a way as to hide or minimize the cost of hazards.
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 Important exclusions, limitations and conditions of the contract should be disclosed sufficiently. Information should not be misleading. Illustrations about future benefits or assumptions should not be unrealistic or unrealisable in the light of current performance.

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 Benefits that are not guaranteed should not be referred to in ways that they are not noticed. There should be no implication of sponsorship, affiliation or approval that does not exist. There should not be any unfair comparisons with products of the competitors.
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Settlement of death claim at the earliest forms a sort of an advertisement. Satisfied claimants are powerful and effective as word of mouth media. The word of mouth endorsement helps life insurance, agents and insurer.

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KEEPING CUSTOMERS HAPPY

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 Customer is satisfied when the product meets his needs. This happens at the time of claim which is far off. It is important to keep him happy during this period to avoid COGNITIVE DISSONANCE.

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 This arises because of doubts about the decision to buy. In Life Insurance it may easily arise as others will talk about alternative plans, better insurers, etc. In such cases the agent should reassure him at every possible opportunity that the purchase he made was not a mistake.
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 Studies show that people are happy when they are recognised, respected and not taken for granted. Recognition happens when ones feelings are understood. Agents can do a lot in recognition of people. One way is clarify policyholder when he is in doubt.
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 Other way is to avoid denying the validity of his thoughts. Respect other persons views. This is important while handling objections during during a sale. Recognition is high when the thoughts of other person are anticipated and attended to.

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 Two other factors which make customers happy are Responsiveness and Ease of Access. This can be done by agent easily . It is difficult for an office to be warm and personalised when dealing with anybody.

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 Some agents do not let the policyholders go to the office at all. They get everything done. Such agents are reinforcing the impression that the agent is trustworthy and can be depended upon to fulfill his promises. The image of insurer remains high.

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