Chapter 3: Insurance Marketing and Distribution Flashcards
Customer Groups
- Individuals
- Small businesses
- Middle markets
- National accounts
Distinguishable Traits of Insurance Customers
- Insurance needs
- Knowledge of the insurance markets
- Methods of accessing the insurance markets
- Negotiating ability
- Access to alternative risk financing measures
Marketing Differentiations
- Customer focus
- Products and Services
- Size
- Geographical Area
- Distribution System
Unique Factors in the Insurance Market
- Economic forces
- Regulatory controls
- Demands for technology
Marketing Activities
- Marketing research
- Market development
- Marketing information
- Marketing planning
- Product development
- Advertising and promotion
- Customer and public relations
- Sales fulfillment
Market Research
Primary vs Secondary Data
- Primary is more expensive, but addresses specific issues
- Secondary is available immediately at little or no cost
Predictive Analytics in Marketing
- Cross-selling
- Target marketing
- Individualized customer support
- New agent contracting
- Designing and evaluating marketing campaigns
Market Segmentation
- Behavioristic segmentation
- Geographical segmentation
- Demographic segmentation
- Psychographic segmentation
Market Development
When an insurer enters a new market (new territory, new customer type, or a new product)
Market Development Requirements
- Training program
- Problem resolution
- Process documentation
- Funding assistance
- Technical assistance
- Public relations campaign
Marketing Information
- Internal accounting
- Market monitoring (external)
Marketing Planning
- Product proposal and sales goals
- Situational analysis- a SWOT (strengths, weaknesses, opportunities, threats)
- Marketing goals
- Marketing strategies
- Projected outcomes
Main Insurance Distribution Systems
- Independent agency and brokerage marketing systems
- Exclusive agency marketing system
- Direct writer marketing system
Independent Agency and Brokerage Marketing Systems
- Independent agents and brokers
- National and regional brokers
- Independent agents networks
- Managing general agents
- Surplus lines brokers
Surplus Line Brokers
Place business with unlicensed insurers. Might be required to certify that a specified number of licensed insurers have refused to provide the coverage needed.
Common Distribution Channels
- Internet
- Call centers
- Direct response
- Group marketing
- Financial institutions
Mixed marketing systems include more than one distribution system or channel
Group Marketing
- Affinity marketing
- Mass marketing or mass merchandising
- Worksite marketing or payroll deduction
- Sponsorship marketing
Mixed Marketing System Challenges
- Maintaining consistent customer communications
- Providing a consistent customer experience
- Matching the type of Insurance with an appropriate distribution system and channel
Functions of Insurance Producers
- Prospecting
- Risk management review
- Sales
- Policy issuance
- Premium issuance
- Customer service
- Claim handling
- Consulting
Producers represent one or more insurer.
Customer Needs and Characteristics
- Products and services
- Price
- Response time
Insurer’s Profile
- Insurer strategies and goals
- Insurer strengths
- Existing and target markets
- Geographic location
- Degree of control required
Premium Collection
Item Basis: Premium is forwarded to the insurer when producer collects
Statement Basis: Producer is obligated to pay the premium indicated
Account Current Basis: Producer is obligated to pay the premium. When premiums are due is based on the agency contract.
