Over the years, the insurance marketing has changed drastically. The monopoly of Life Insurance Company of India and General Insurance Company has came to an end in the year 1999, when Govt. of India opened up the insurance sector by allowing private insurance companies to work in the market by depositing 100 crores rupees in the reserve of government and allowing FDI up to 26%.
This has encouraged many overseas Insurance companies, having a required amount in the reserve to open up their branch in the country. The entry of the foreign players in the market has changed the prospective of Insurance Marketing in India.
Let’s go to flash back (Before 1999), here when we talk about Insurance Marketing, LIC traditionally was using the FEAR FACTOR for marketing. What is FEAR FACTOR ? Let me explain you by sharing a funny story: Once an LIC Agent went to his prospective customer. The approach to customer was, you invest for yourself in the policy and if you die, your wife will get the claim money. If you take policy for your wife and if she dies, you will get the claim money and if you both die, your kids will get all the money. Now its customer’s chance to ask the question, he asked the agent that, do you have any policy where Agent dies and we get the money.
To make client worried about its own death is not the right way to sell the insurance. It is off late when LIC has realized this and then they started their campaign of Zindagi ke Saathi bhi aur Zindagi ke Baad bhi.
Insurance has many other benefits which you can capitalize while doing marketing. The other benefits are Security for future, old age pension, as an investment or saving mechanism, as collateral for loan and for tax benefits. And when the private sector has rolled in India, they have capitalized on these benefits to sell their services in India.
Today, its due to privatalization of the insurance sector, individuals and corporate consumers are getting competitive environment that can deliver products and services in tune with their requirements. LIC is still the market leader in the country with majority market share but industry as whole has grown substantially in last decade. Today, there are 21 companies giving competition to LIC. LIC has been forced to change its angle of marketing, improve its services and go aggressively against this competition.
The 6 steps in Insurance sales are as follows :
1) List the prospect
2) Contact the prospect
3) Meet the Prospect and Explain him the product
4) Object Handling
5) Closing
6) Collecting Premium Money
This article is dedicated to all my friends into Insurance Sector – Rutvik Trivedi
