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Insurance Distribution System

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Insurance Distribution System

Publié dans : Économie & finance, Business
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Insurance Distribution System

  1. 1. INSURANCE DISTRIBUTION SYSTEM By Deepa Jagmohan Suman Swathi
  2. 2. CHALLENGES FACED BY THESE INSURANCE COMPANIES • Designing of products suiting the market. • Using the right distribution channel to reach the customer
  3. 3. WHY DISTRIBUTION CHANNEL ?
  4. 4. INSURANCE IS SOLD … NOT BOUGHT
  5. 5. DISTRIBUTORS ?  It is the distributor who is makes the difference in terms of the quality of advice for choice of product, servicing of policy post sale and settlement of claims.  The distributors have to become trusted financial advisors for the clients and trusted business associates for the insurance companies.
  6. 6. CHANNELS IN THE DEVELOPED MARKETS  Personal distribution systems  agencies of different models and brokerages, bancassurance, and work site marketing.  Direct response distribution systems  Client purchases the insurance directly.  Internet, telemarketing, direct mail, call centers, etc.,
  7. 7. CHALLENGES !!!! Building faith about the company in the mind of the client Intermediaries being able to build personal credibility with the clients Insurer Distributor
  8. 8. TRADITION DISTRIBUTION Agents
  9. 9. DRAWBACKS OF THE TRADITIONAL APPROACH  They may not have been sufficiently knowledgeable about the different products offered.  May not have sold the best possible product to the client.  The customer trusted the agent and company.  This arrangement worked adequately in the absence of competition.
  10. 10. PRIVATE VS PUBLIC  Identity is well established, but the perception of " poor service providers" is a stigma.  Products are not attractive and flexible enough but expensive.  Have to build their identity in a market where the public does not distinguish them.  Remove the perception that anything that looks good is expensive.
  11. 11. DISTRIBUTION CHANNELS  Agents  Formal Banks  Regional Rural Banks  Cooperative Banks  SHGs & their Federations  NGOs & MFIs  Post Offices  Internet & Rural Kiosks & Rural Knowledge Centers
  12. 12. AGENTS  Favours the insurer  Educating and training these agents is a serious challenge for the insurance company.
  13. 13. BANKS  Bancassurance model
  14. 14. ADVANTAGES  High credibility (as trustworthy caretakers of money) with the public  A ready customer base  Low cost channel for selling simple vanilla products  Extensive reach including the rural pockets
  15. 15. DISADVANTAGES  Economic viability for the banks to take up as bancassurance is a volume business.  Training of people and lack of vision and awareness  Useful for selling only certain lines of products  Initial investment in systems and processes and people in training
  16. 16. BROKERS  Favours the clients.
  17. 17. WORK-SITE MARKETING  Human resources management polices and compensation packages.  Group products or work site products do have a definite market that cannot be ignored  Advantages  Captive customer base  Potential to sell individual insurance and group insurance  High trust factor  High hit ratio for the intermediaries
  18. 18. INTERNET  Urban Vs Rural  Online banking, still a small fragment  Insecurity associated with transactions over the net.  In the Indian market, where insurance is sold after considerable persuasion even after face-to-face selling, the selling over the net, which must be initiated by the client, would take some more time.  Improvements in bandwidth and infrastructure are needed.
  19. 19. INVISIBLE INSURER  In this model, the insurance company or its representative is not the entity marketing the products.  Suitable Product - Group creditor insurance  The insurance cover is sold by an automobile /credit card company as an add-on product leveraging the brand of the retailer.  Arrangements attractive  Low distribution cost  Captive customer base  Repeat business or renewal of business cannot be assured.
  20. 20. CONCLUSION  success of marketing insurance depends  understanding the social and cultural needs of the target population.  matching the market segment with the suitable intermediary segment.  intermediaries need to be empowered with the right learning, training and sales tools and technology enablers.

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