MARKETING MANAGEMENT FOR LIFE INSURANCE AGENTSPART- 8

(TARGET MARKETING- POSITIONING)

“WHEN AN INDIVIDUAL GROWS BIGGER, HE BECOMES AN ORGANISATION”

POSITIONING SELF - “EVOKING A SENSE OF REPAYMENT”

Positioning: The place the product or the services occupy in the minds of the customer.

For example a face cream is positioned as a “ray of hope” for young girls seeking a suitable bride. A dress material is positioned as a “Status provider” in some cases and as an “attracter” in some cases. A camera is positioned as “easy to operate to capture memories” in some cases and in some other cases, another camera, as “highly sophisticated tool to capture speed and action”. A detergent is positioned as “pure White” result sometimes, “soft hands” at times, retain the quality of the fabric at times. The manufactures would like their customers to think about the products this way. Their communication in the market be it television ads or radio jingles or paper ads or product brochures or fliers, all will focus on this aspect.

Let us now look at life insurance agent, how should he position himself in the market? What should his customers think about him?

As a person who is selling life insurance for his living? orAs a supplier, who makes home delivery of the policies chosen by the customer? orAs an expert financial advisor? orAs a trustworthy individual? or as whom?

The impression the customer will make in his mind about this agent, will depend upon the communication of the agent. The communication through emails, tele-calls, personal visits all of these will help the customer to form a image about the agent. So the agent must decide as to how he wants his customer to perceive him or his services and the design communications accordingly.

When a patient goes to the doctor for consultation, he knows that this person can add value to him (in pain relief or avoid pain). When a client seeks an advocate to take up his case he is aware that this person (advocate) can add value to him. While it comes to paying the fees to these professionals, there is a sense of repaying for the value availed.

Let us look at a life insurance agent:

The product he sells is designed by the Life insurance company. The price and the benefits are decided by the company. The company assures services as mentioned in the policy conditions (policy document). The customer therefore, prima-facie need not feel a sense of repaying for any value added to him. If however the agent is able to demonstrate professionalism (not just salesmanship) in assessing the needs, designing the right solutions at the right cost, and save time and efforts in interacting with the company to avail even those services mentioned in the policy conditions, then there is a justification for the “sense of repayment”.

Leave alone the customers, many times the insurance regulators themselves, are seeking a justification, for the commissions paid to the agents. That is why, agents must concentrate on the proving their professional expertise to their prospects even more than impressing them with their vocabulary or a few colourful power-point presentations.

A good life insurance agent makes a Himalayan difference to the customer. No technology or devices or gadgets can effectively replace the services of an agent. Agents are more than suppliers of products. Agents are not just vendors (or vending machines) of life insurance policies.

Agents are professionals engaged by the company to provide appropriate assistance to the clients to fulfill certain financial needs.

A life insurance policy has three aspects. 1) Mathematical 2) Legal and 3) Administrative. There are two hidden sides to this product a) Psychological and b) Social. Let me explain this further.

Selection of a suitable policy (or a package of policies) involves certain mathematical estimations. When it comes to insuring a car or motor cycle or a machine, the tag value of the thing is obvious, so not much of estimation is required. (I have simplified this purposely, but in fact there will still remain Risk management process).

In determining the insurance cover for a person there are mathematical models:1) Capital need analysis2) Human Life Value3) Net-Worth.

In determining Retirement solutions there are mathematical models:1) Replacement Ratio Method2) Expenses Provision Method

These calculations involve Future value calculations, IRR calculations, NPV calculations and a few more formulas. This also involves a understanding of various financial instruments available in the market.

One can argue that computers or internet web sites can provide online support for such calculations, and an agent is not required. This can be far from truth. It is like saying fill up answers in a pre-designed questionnaire and send it by email, and you will receive medical prescriptions from a super computer.

Let us take the legal aspects related to life insurance, an agent in India must be aware about various laws:Laws related to formation of contracts, contracts of utmost good faith,The succession acts pertaining to various religions in India.The transfer of property act. Married Women property Act 1874The formation of Trusts. The income tax act and rules. The laws involving employees and their employments.Insurance Act 1938The jurisdiction of various regulators.

Important decisions by courts in cases relating to insurance claims, heirs, non-forfeiture conditions, materials facts etc.

Let us take administrative aspects, an agent must be thorough with the policy conditions printed on the policy conditions and their implications on the continuance of the policy. The various types of revival schemes available, the forfeiture conditions, the alterations permissible on the policies, the claim procedures, the forms to be submitted to and from various authorities. Must enjoy good relations with various authorities to get the forms submitted quickly. Most of the pending (outstanding) claims in Life insurance relate to incomplete paper work. The company is eager to settle the dues, the claimants are in need of those monies, but want of some papers and documents these claims are held up. Such delays will not happen in cases handled by professional life insurance agents, because they are well equipped and also connected to execute such documents promptly.

There is much more a professional life insurance agent can provide to the client. But the million dollar question is that, “Are the customers aware about this?”. Do they see an agent in that silhouette? And if they do not perceive it that way, then an agent need to “position” himself better.

How to do that? Wait for the next issue.