Insurance Marketing: Customer Delightment

“Marketing is delivering of customer delightment  at profit”

Goal of market  is  to  target new customers by promising superior value and to keep existing customer by delivering satisfaction.

 

Six stages are suggested in marketing approach

  1. Identify the insurance needs and wants of market
  2. Develop appropriate policy to meet these needs
  3. Determine cost(premium) for those policies.
  4. Advertise and promote these policies to potential customers.
  5. Organize suitable channel for distribution
  6. Research and forecast future needs

In this era of detariffing and deregulation in policy wordings and portability, the direct beneficiary is customer. Now every insurer has started caring of customers. Being customer driven market, there is a change in attitude of insurers. Core insurance solution is the offshoot of detariffing. Customer oriented techniques have been followed e.g. customer delightment, customer relationship management etc.  The detariffing has helped in introduction of customized products, participation of customers in devising cover  and substantial  reduction in premium.

Before opening up the insurance market, corporate governance in general insurance was marked by a maximum principle with respect to employees, bureaucrats & politicians and customer were treated with satisfying principles but now corporate governance has implied company management assuring rate of trusteeship with attendants, checks and balance that creates an organization aiming customer delightment.

Before we go in detail how customer can be delighted, we will look into what are the customers main complaint centers and what the customers wants and what are the expectations of customer.

Customers main complaints are:

  • Communication
  • Complexity
  • Poor product
  • Poor selling practices
  • Claims
  • Costs

Customers main expectations:

  • Choice
  • Better costs
  • Better product
  • Better administration
  • Individual treatment
  • Attention towards their problems
  • To be understood
  • Ethical approach to the business.

In this era of globalization, liberalization & privatization, every insurance company has understood the needs of customer as mentioned above and also appointed consultants  to develop an overall strategic plan and business plan for the organization and to suggest re-structuring needed in key functional areas as a main step in this direction  so that innovative products and value added services accompanied by rigorous efforts in brand promotion, advertising, publicity, public relations may be done and customer can be delighted.

Now we will look into how customers can be delighted:

  1. Accessibility of office or dealing person as per convenience of customer.
  2. Courtesy of promptness in all dealings
  3. Proper response
  4. Fulfillment of commitment within reasonable time.
  5. Correct evaluation of risk to which client is exposed with proper guidance.
  6. Simple, unambiguous insurance policies which were well designed as per need and wants of customer.
  7. Prompt issuance of policies.
  8. Prompt settlement of claims.
  9. Speedy redressal of grievances.
  10. Proper & effective marketing keeping in mind the competition in market.
  11. Act fast to find a solution to the
  12. Be honest with the client.
  13. Be transparent in operation.
  14. If the customer is not satisfied with the quality of work, acknowledge the customer’s feeling and point of view and take corrective action.
  15. If customer is dissatisfied in want of more services, tell customers about your limitations. its add to your credibility.
  16. Handle the customer tactfully in case of any miscommunication/misunderstanding. In case of any conflict, the best course of action is immediate direct apology. If you have a short temper, learn to control it. Force yourself to smile.

Impending competition is a big challenge. At present General Insurance business is Rs 34640 crore and in next 5 years it may cross Rs 1 lac crore.

Out of 34640 crore 33% business is shared by Fire, Marine and Engineering driven by bank and financial institutions, 12% driven by insurer itself and remaining 55% shared by motor & health driven by customer.

As earlier stated that customer wants price reduction, efficient service, wider product coverage, prompt settlement of claims. So good corporate governance in insurance industry is the need of hour. Value additions to customer is not only reduction in price but improvement in quality of product & service is also essential to retain the customers because non life policies are subject to renewal after 12 months so insurer has to deal with changing loyalty of customers.

There is a need to reduce operational cost to make insurance products more affordable  to survive  in customer driven market.

Sentiment to crush competition at any cost should not be sole marketing guide but excellence in execution of assurance given to customer and internal cost cutting should be the goal to pursue for insurance to become more competitive.

Execution of assurance may be achieved by good corporate governance only so that customer may not be left with satisfaction  only but be fully delighted. In coming days the customer is powerful, change agent of market and will decide future of insurance market.

By: Dr. G.M.Garg, FIII, ACII (London), Regional Manager, United India Ins. Co. Ltd., R O , Jaipur., Published in The Insurance Times, July, 2011