CHAPTER FIVE
Insurance Marketing
Chapter contents
✓The marketing concept
✓Benefits of marketing
✓Marketing of insurance products
✓Critical success factors for insurance players
✓Distribution channels
✓Banc assurance
The marketing concept
❖Marketing is the process of communicating the value of
a product or service to customers.
❖It is a critical business function for attracting customers
❖Marketing is the science of choosing target markets
through market analysis and market segmentation, as
well as understanding consumer buying behavior and
providing superior customer value.
What Activities are Included in Marketing?
❖Basic activities Included in Marketing are:
❑marketing research,
❑Promoting the product : letting potential customers
know about your product by advertising, and
marketing communications
❑ making it available to them.
Benefits of marketing
1. Establish brand recognition
✓ help to imprint a brand in the minds of Customers.
✓ This ensures that customers seek a particular brand of
a product, rather than the brand seeking out its
customers.
2. Gain and retain customers:
• Once a brand has gained its ground and established its
customers, marketing enables it to retain its customers.
3. Identify real customers:
• Marketing strategies allow a business to identify
potential and actual customers.
4. Provide information:
• Marketing a product is the best way to provide
information about it.
• Knowing a brand better ensures that customers will
come to trust it better.
5. Save time:
• Marketing, and more so, effective marketing will help
reduce the break-even period of a business.
• By promoting a product or service through effective
marketing, a business can promote its sales and reach its
intended client faster.
6. Establish trust:
• Repeated and effective marketing ensures that a product
remains in the minds of its intended customers.
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7. Encourages referrals:
• Marketing encourages new customers to seek information about
the brand.
• By making a product seen and heard frequently, a business also
increases the chances of word-of-mouth referrals.
8. Address issues:
• means of clearing misunderstandings about the quality or
nature of a product or service.
Marketing of insurance products
❖ The main function of Insurance is to provide protection
against the possible chances of losses.
❖ It eliminates worries and miseries of losses by
destruction of property and death.
❖ The term Insurance Marketing refers to the marketing of
Insurance services with the aim to create customer and
generate profit through customer satisfaction.
Marketing -Mix for Insurance Companies
1. PRODUCT
• A product means what we produce. Thus, Insurance company
sells services and therefore services are their product.
2. PRICING
• The pricing in insurance is in the form of premium rates.
• The three main factors used for determining the premium rates
under a life insurance plan are mortality, expense and
interest.
3. PLACE
This component of the marketing mix is related to two important facts
I) Managing the insurance agents, and
ii) Locating a branch.
4. PROMOTION:
❑ The insurance services depend on effective promotional
measures.
❑ In promoting insurance business, the agents and the rural
career agents play an important role.
5. PEOPLE:
• Training the employees, both at the staff and agent level, is one
of the important areas to look into.
6. PROCESS:
• The process should be customer friendly in insurance industry.
• The speed and accuracy of payment is of great importance.
• The processing method should be easy and convenient to the
customers.
7. PHYSICAL DISTRIBUTION:
Distribution is a key determinant of success for all insurance
companies.
Critical success factors for insurance players
❑ Financial stability:
❑ Skilled actuaries
❑ Adequate rates and forecasting
❑ Skilled agents
❑ Quality underwriting
❑ Conservative overhead expenses - no wasteful spending
❑ Treat your employees very well - offer a professional
stress-free environment
Distribution channels
A). Direct: Insurance distributed by insurance companies,
without intermediaries, through the use of direct marketing.
This channel is split into:
1) Employee: The Company’s own sales force
operating from branch networks
2) Distance selling: Call centers (telesales), the
internet, mailing, etc.
.
B) Intermediaries (indirect)
1) Agents: Intermediaries who represent the interests
of the insurer.
❑ Tied agent :Intermediary acting as an agent of the
insurer and under exclusive agreement to one insurer
❑ Multi-tied agent: Intermediary acting as an agent for
several insurers and with multiple insurer agreements
2) Brokers: Intermediaries who represent the interest
of the client
Banc assurance
• The bank insurance model (BIM), also sometimes known as banc
assurance, is the partnership or relationship between a bank and an
insurance company whereby the insurance company uses the bank
sales channel in order to sell insurance products .
• BIM allows the insurance company to maintain smaller direct sales
teams as their products are sold through the bank to bank customers
by bank staff and employees as well.
The end of the course!