Week 8 Flashcards
Insurance marketing what are the two key goals?
To attract new customers through promising superior value to the competition
Keeping customers through delivering upon those promises efficiently and through great satisfaction on the customers behalf
What are 3 competitive risks/ cost pressures insurance companies face?
Bancassurers which is when banks offer their own insurance such as when people take out mortgages they offer house insruance
Supermarkets/ retailers for example if you buy a £500 laptop they may suggest you pay £35 now, if the laptop is damaged or break, they will replace or fix it for free
Online comparison sites are a problem because it compares all insurers, it shows what each policy may give a customer, as well as the prices, these tend to be on the one page meaning the insurer with the lowest price and greatest value policy will most likely be picked first and without the customers consideration of other insurers, this is especially so with new first car drivers taking out insurance on their car
Although Bancasurrers, supermarkets/ retailers and online comparison sites are a problem for insurers, who might be a non-insurance who could also be a problem?
Non-insurance tech firms. They have many advantages over insures such as:
Large customer base
Usually large tech firms such as Apple, Microsoft, HP have very well established and recognised names
Access to large amount of data
Are experts in their field
What is the statistic to policy holders who want cheapest to most expensive policies and what do they look for?
around 35% of customers seek the lowest price, with 1-2% looking the buy the most premium insurance that they can. These customers look for value in policies which the insurance companies add, thus costing the insurer more money
What is the basis of the issue of insurance marketing?
Insurance is sold, not bought
This means, because insurance is not tangible, most people will be reluctant to buying it and will grudge buying insurance. So insurers have to sell their product to people who essentially dont want to buy something they cant actively use, feel or see.
What are the problems with trying to sell insurance to potential customers? (4)
People grudge buying insurance because its not tangible and can cost a lot of money
Insurance is generally seen as a complex matters with hidden sections within the policy
Overall image of insurance/ their brand imaging is very poor
People like the instant gratification of buying something that has tangibility, that they can actively use, whereas insurance is not tangible, not actively used, its more so a safety net that people dont think they will need.
What should market analysis if done successfully reveal to a insurance company?
Who- Who are the customers that we are looking for, who is our competition
What- What is our competition doing, what do they offer, how are they marketing, what do customers want
Where- Where in the market is there a gap for us to take an advantage, how far do we want our insurance to go
What does brand management set out to achieve?
Brand management wants to differentiate themselves from other brands, they want to improve their brands recognition and brand recall
What is segmentation?
Segmentation is an insurance company dividing their customers and potential customer base to manage and deliver to their needs. They could be segmented through age, health, gender, it also allows to see what for example people in certain parts of America will want more hurricane protection, others may want more flooding protection.
Discuss insurance mergers?
Insurers may decide to merge, when two companies become one, often keeping the name with the better brand recognition
This is beneficial as it means they have
Combined customer base
larger financial capacity
Access to shared data
more diversified portfolio of risk, especially if they insurance companies specialised in different fields
Not how are the two ways insurance should be distributed, what are the two ways insurance can be distributed?
Direct distribution where the insurer sells straight to the customer no middleman, 100% profit retained
Intermediates distribution where there is a middleman who distributes the insurance product on behalf of the insurance such as an insurance broker or partnership with a bank. Shared profit
What are some ways an insurer could distribute insurance (I dont mean talk about direct and intermediate distribution)
Insurance broker
Financial advisor
Financial companies
Retailers
Online
Underwriters
