Current Promotional Strategies In General Insurance Companies Business Essay
|✅ Paper Type: Free Essay||✅ Subject: Business|
|✅ Wordcount: 4113 words||✅ Published: 1st Jan 2015|
It is challenging to make marketing strategies in promoting insurance services. By conceptualizing the modern marketing promotional strategies the insurance business can be improved, the profitability can be increased and the service can be matched as per the customer requirement. The present research is a descriptive in nature and brings out significant difference in the promotional strategies adopted by public and private companies in India. The study reveals about the most remarkable tools to promote insurance services.
Key Words: Insurance promotional strategies
The most important element of marketing mix is promotion. For different industries promotion has different aspects. The promotional strategy adopted by any company is informing, persuading, and influencing in a consumers decision making. It is important for nonprofit and profit oriented organization .The main objective of promotional strategy is:
To expand the market.
To sustain the current market position.
To reach a selected market.
To provide information to customer for differentiating between product and services.
To increase and stabilize the sale.
Different organization have different and multiple promotional strategy. Today all insurance companies rely on promotional strategy as it is one of the important tools to provide competitive advantage in this competitive world. So this increases the need to study the promotional strategies of different insurance companies( public and private companies). The types of promotion strategies adopted are advertising, sales promotion, publicity, personal selling, telemarketing, Direct marketing. One cannot deny this fact that every component of promotional mix need to be given full attention. From previous research done by different researcher we find that public sector organization is going through an image problem so they nee to d to adopt the push strategy to in which all these components of promotion need to contribute to meet the organizational goal and to meet the challenges of this industry. While making promotional decision the insurance professional need to concentrate on creativity so as to enhance profitability.
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Many firms they have advertising as most effective nonpersonal promotion. It is a paid nonpersonal communication usually directing a large number of potential buyer. Advertising expenses vary from company to company and from industry to industry. There are basically two types of advertising product advertising and institutional advertising. Product advertising involves the selling goods and services . Institutional advertising is mainly done for ideas, philosophy, or for goodwill of any company or organizations.
With advertising now insurance company need to think in favor of publicity ,this component of promotion if used in right fashion makes the professional effort proactive. The ad’s can be insensitive, but the insurance sectors find publicity find it more effective , since the views messages, opinion facts and figures a publicized by media. Publicity is a device to promote business without making any expenses and therefore is called an unpaid form of persuasive communication bearing high rate of sensitivity.
Word of mouth promotion
Word of mouth communication results into a wider publicity which sensitise the process of influencing the impulse of prospect in insurance service provided . The satisfied customers, the social reformist , the opinion leaders , act as word of mouth communicator for the company. The organization involved in selling insurance like banks , brokers, need to assign due weightage to the quality of service provided to the user so that they are satisfied and accept the responsibility of promoting the services. The word of mouth is also known as the hidden sales force for the insurance industry. The other component of word of mouth is to seek cooperation and advise from the satisfied customer . Since they are habitual user of the services provided so they talk about this to there friends and relatives about their experience. The other promotional strategies like advertising, publicity, sales promotion may be insensitive and ineffective but the positive feeling of friends and relatives can not be ineffective. So this makes us understand that sevice provided by insurance company to there customer .That is why the most important thing that of promotion of a company product is the quality of service provid by the insurance company.It can not be denyed that private insurance company use hidden sales force , so public insurance organization need to give full concentration on there promotional strategies .
As we find that in insurance company sales promotion is a device use to promote sales to meet certain sales target. This is a temporary device that can be withdrawn after a particular period. It is meant for both the end user of service and the channel found instrumental in promoting service .In insurance business the promoting business is the sales promotion tools .Different organization have been observed using the sales promotion tools in different ways. Since the business environment is more competitive so the insurance company need to innovate new tools of sales promotion to increase and decrease sales. Due to this background it makes a strong advocacy in favor of sales promotion for promoting insurance business. The senior executive of insurance company are the policy maker who thinks in favor of making innovative tools. It is a great responsibility of the insurance company that they keep the innovation process active so that it is not difficult for the private and public company to compete with foreign insurance company.
This fact cannot be denied the personal selling is one of the important component of promotional mix, so we can say that insurance business is substantially influenced by incrementing of agents. If an insurance agent has an art of informing, sensing and persuading the potential policy holder then the task of any insurance company is simplified. Companies are aware of this fact that that personal selling is based on excellence of an individual (who are agents). All this make it significant that the agents have some outstanding properties such as patience , communicative ability, attractive personality and commitment to the profession. This business cannot exist if the agents stop working. Therefore the insurance organization are supposed to assign due weight age to the excellence in an individual who is assigned these responsibility. These agents need to be incentivized satisfactorily to keep moving the process of informing and persuading the prospect policy holder.
Telemarketing is one of the emerging trend in the promotion strategies adopted by the company
It promote the product by using two communication device like telephone and television. Foreign service provider of insurance and banks have find that this is one of the effective tool of promoting a product. It is not always possible for any company to do personal selling face to face with a customer as it incure more cost and time and at one time only one customer is there so as to save time ,money and attract more customer telemarketing is used.. telemarketing is a device which promote business in which telemarketer with high communicative ability keeps on moving the process of convincing a customer. Insurance organization need to promote telemarketing in India more as the opportunities are more. Insurance companu cannot deny this fact that some of the public sector insurance companies branches do not have telephonic services.
World Wide Web
In Financial industries more importance is given to the online facilities provided by the companies .As we find that in Insurance there are many quaries and complaint so if this mechanism is improved by the company to address there customer then there will never be communication barrier . The more communication is easy , effective and cheap it attract the customer. Today online purchase is available for every thing so if the promotion of the insurance product is done on line then it clear the doubts of cutomers.
CURRENT PROMOTIONAL STRATEGIES IN GENERAL INSURANCE COMPANIES IN INDIA
The main objective of differentiating a product is by creating inimitable ,sustainable competitive advantage over the competitors for a period of time. Insurance companies are expected to bring up attractive plan to delight there customer. Insurance companies can be differentiated in these areas:
This project is about the comparative study of promotional strategies of the private and public general insurance companies ,we are going to discuss about the different promotional strategies adopted by the three public and three private insurance company.
The public companies taken for comparison are:
Public Ltd Co
Private Ltd Co
National Insurance Co
New India Insurance Co
United India Insurance Co
NATIONAL INSURANCE CO
About the company and their achievements
NIC was established on 6th Dec 1906 .After, 106 year of incorporation , 37 years of nationalized 10 years delinking from GIC , NIC is the oldest insurance company of India, and among all the life and general insurance companies to be the headquaterd of the eastern region of the country.
NIC has been the market leader in northern and eastern zone of INDIA.
NIC showed an outstanding business performance in the year 2011- 12 by giving growth of 25% .
The profit earned in last five year is 331 Cr.
The Gross premium collected in the year 2010- 11(6246Cr) and 2011-12 (7785 Cr).Which shows substantial growth .
Under served market penetration award
Award for business leadership in nonlife category.
Strategic alliance with top automobile companies.
Bancassurance partnership with leading banks.
373 Business centers.
Office on wheel in two city is launched.
63% market share of motor and health together.
Highest no of Motor policies issued .(16538468)
PROMOTIONAL STRATEGIES ADOPTED
They emphasis main on reaching maximum customer at low cost . They focused more on advertising to target there audience .print media was the main tool .They focused mainly on daily local and regional newspapers which gave a good review
They also did product advertisement through outdoor display .advertisement through print media served dual purpose first for public announcement and send an internal motivation measure for internal customer. Print advertisement with tie up with hero Honda build there brand equity. Electronic Media radio and TV is also used to be competitive in the market. By sponsoring different seminars, conference event like quiz competition, cultural educational, musical, national and international matches, workshops etc they make a good public relation.
Company engaged in large projects and the HO manages all the operations and the policies of these projects. The techno marketing department caries out various functions.
Guiding for new projects and informing for new project.
Keeping touch with brokers, bidder, financiers.
Conducting seminars and work shop for clients.
NEW INDIA ASSURANCE
NIA was founded by Durab TATA in 1919 and got nationalized in 1973. Largest number of office .first Indian non life insurance company to reach 10073 cr gross premium. Received 1st prize in highest customer satisfaction with auto insurance provider.
The company has used various advertising media to reach the urban, semi urban and rural masses. Electronic media print media and outdoor media are used for publicity purpose. Hoardings and glow sign have been placed at major road junction ,highways, railway station ,airports. Ads are displayed on transit media like bus ,train, barricades etc . Banners are displayed at different local events in rural areas. They participate in fairs, exhibition, and also sponsor social gathering, events, sports .Organizing seminars, customer education camps to educate customer. For this year the company ventured into television and radio activities all over India and to all age group.
The techno department of new India assurance co tries to continue to be at number one position by bringing business of large and operational risk policies. New India dominate the market in underwriting Mega risk policies. All the insurance companies try to bring more and more mega risk policies.
Bank assurance and brokers distribution channels.
Brokers channel premium contributed – 790 Cr ,41% growth over last year.
Bank assurance channel premium contributed- 243 Cr
Major public sector banks are involved in selling the policies of New India and after setting up their own corporate agency they have decided to transfer their corporate agency to SBI Genaral insurance co.
UNITED INDIA INSURANCE CO
United India Insurance co was incorporated on 18th February 1938. After nationalization has grown with 18300 workforce 1340 offices and 1cr policy holder. Covering employees of big public sector companies. Been a pioneer in taking insurance to the rural masses by implementing universal health policies.
UII has conducted various publicity campaing in various part of the country through mass contact program , so as to increasethe awareness of rural insurance. They have undertaken publicity campaign which involve TV, radio, banner ,bus pannel advertisement, sponsorship of events, hordings, metro stations , glow ball ad at airports , so that they become the most preffered brand in the non life insurance. To show the co vision they incorporated it on co calendar, diaries, brochures, annual report.
The company is focusing on mainly selling product in rural market ,and social sector and will increase the shares in various social oriented scheme of state and central government. They have started with web marketing by launching their online portal on 18th February 2012 and prpose to upgrade their online marketing capabilities in this year.
Hdfc ergo general insurance company is a joint venture between HDFC and ERGO International AG, the primary insurance entity of Munich re Group. They are present in 71 cities and with 80 branches with an employee base of 1234 proffessional. Awarded by ICRA for higest claim paying ability. ICAI award for excellence in financial reporting.
The company offer different product by mix distribution channels. The company is focusing in strengthening there agency force. They are trying to expand their geographical reach. The online sale of policies through company website ,which started last year is accepted by customers and is now extending to retail products .The Multi channel approach of the company and the distribution model enables to reach wider customer Base .
The promotional strategies adopted by HDFC ERGO is very robust by using the different distribution channels in publicity, radio , TV commercials, print media and electronic media.
ICICI Lombard is the joint venture between ICICI bank and Fairfax financial holding limited a Canada based financial service company. It is the largest private sector insurance company in India .Issued 76 lac policies and settled 44 lac claims and claim disposal ratio of 99%.They recived golden peacock award for CSR, golden peacock innovators award in 2010,ratated highest in customer satisfaction in Auto insurance, customer and brand loyalty award in non life insurance.
ICICI Lombard health insurance ad campaign was honoured at the 2nd CMO Asia award function.
Best marketing campaign for the year.
Brand excellence in BFSI.(increased in terms of brand loyalty and customer reach)
Use of diverse media to reach target audience to improve brand awareness.
To improve the scale of operations and increase channel responsiveness technology has played an important role. To enhance channel service ability and customer connect company has taken various techno marketing initiatives.
Key initiative by them is I partner for the channel partners self service. Retail and SME product were added to this platform which is a benchmark in the industry.
Tata AIG is a joint venture between TATA Group and American international group Inc. They were awarded for best travel insurance in year 2012, best non urban coverage award.
They are into business of various product with the alliance of different channels. They have conducted various publicity campaing in various part of the country through mass contact program , so as to increase the awareness of rural insurance. They have undertaken publicity campaign which involve TV, radio, banner ,bus pannel advertisement, sponsorship of events, hordings, metro stations , glow ball ad at airports , so that they become the most preffered brand in the non life insurance. To show the co vision they incorporated it on co calendar, diaries, brochures, annual report.
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CHAPTER 2:- REVIEW OF LITERATURE
While formulating any marketing strategy, an insurer should focus attention on 1.consumer sovereignty,2. Attitude,3.responsiveness and personal skill of the working staff, 4.revitalizing the marketing department ,5.top management support given to the marketing department , 6.participation of marketing personnel in key company decision (kumar Ashok 1991, with the same perspective , the prime objective of the study was to know about the various promotional tools of private and public insurer.
In India , to make comparative analysis of customers perception for promotional there are few Strategies of private and public” “sector insurance companies to find out key promotional tools for insurance services on the basis of customers response. And they find out that both types of companies take the help of almost all types of media to promote their services in the country . The major difference in promotional start by private sector companies as compare to public sector .The major difference in the promotional strategies adopted by the companies is two techniques of the promotion and they are “personal selling and direct marketing : on the other hand the same are adopted by privates sector companies .The reason for this are high reliability and less profit orientation of public sector company of India does not go for innovative strategies of promotion however they conducts and they go for interactive marketing through internet but that is not promoted so much like private sector companies .Promotions had different aspects for different industries , products and services .
Its final goal to communicate positive word mouth among existing sector .The customer must be ensured that services provided by the advertising but they are better in services, and particular company have been designed to give them a maximum value of there money and adequate risk cover as a whole .In brief ,it can be said that in India whenever the dilemma of private and public sector comes always two things are considered that is Public sector is more reliable but not so good in quality and innovativeness and private sector is not considered so reliable , there may be hidden charges in the services and false an misleading information in the advertising but they are better in services quality. Private sector companies should be more true and reliable first like public company. They have to win the trust of the customer. Private sector companies are adopting more push strategies attract and catch the customers .this creates the difference between Promotional strategies adopted bye public and private sector insurance companies.
Researches discovered the difference in the promotional mix of the companies .Researches notices that the insurance companies have emphatic frequencies for each elements of promotional mix strategies adopted by the different insurance companies .
Companies have emphasized more on telemarketing, advertising in electronic media and print media and advertising companies as additional promotional mix strategies .
Researchers discovered the that respondent have emphasize on public relation and publicity , sales promotion and promotional tools to induce consumers .
The insurance companies believe that the market researcher and survey help advertising manager of insurance companies to choose best combination of media to absorbed more prospective customers .
As there is an association between the market research and survey with flurry of media , it is suggested that efforts need to be diverted by the insurance companies to the established department in insurance companies . Market research provide the precise information for insurance companies and enable them to chose a right mix of promotional strategies to inform and pursued the end user of the insurance products .
Researcher recommended that brand communication should cautiously done by the insurance companies to project the right kind of image in the mind of the customers and the consumer, researchers have already proved that there is a different expectation exist in the mind of customers of insurance.
Since the customers’ expectations from a key element of brand strategy based on which suitable brand positioning is evolved further.
CHAPTER 3:- SCOPE OF THE STUDY
I have done my dissertation in New Delhi from 13.12.2012 to 11.02.2013.This project is on the secondary data available of 2 Public sector and 2 private sector insurance companies .
CHAPTER 4:- OBJECTIVES OF THE STUDY
The proposed research study is to be centered around fulfilling the following objectives:
To compare promotional mix of public sector insurance company with private sector insurance company.
Effectiveness of promotional Mix.
CHAPTER :-4 RESEARCH METHODOLOGY
Hypothesis:- Since The research is on secondary data therefore no hypothesis will be created
Research Design:- Descriptive Research
Sample Size and Design:-
Target Population- Public and private insurance companies
Sample Frame- Data base of companies operating in Delhi and NCR
Sampling Unit- Individual companies
Sampling method – Convenience
Sample size – 6
Method of Data Collection- Secondary data
Gross premium underwritten for the month June 2012
HDFC ERGO General
The Above data shows that the premium underwritten by New India insurance company is 28% which is highest among all the other six companies.
As we know every financial service provided any where include risk and people are bothered about the security of it. Where ever there is uncertainty there is risk. Even the giant in financial service provider takes insurance for their uncertainty. The Government of India has created history by bringing back insurance business to private institution on 24th October 2000 by introducing IRDA. Present situation shows that the organizations are competing in complex business environment. Paul Cox, (2007) revealed a fact that financial service providers are not perceived highly trusted
promote insurance business is quite distinguished affair, increasing competition and efficiency of regulatory environment , complexity in the insurance services This is the time when insurance are offering new and innovative services, frequently in the market.
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