The concept and content of the insurance product
The insurance policy is a complex category. This is an insurance product, which, on the one hand, can be considered a product that has a material form, on the other hand it is a service. Moreover, both components in the aggregate constitute an insurance product, because one without the other will not give a real result either for the insured (protection against risks and compensation), nor for the insurer (money from sale, ie financial result).
We have already found out that the insurance product is a product as a result of the work of all categories of specialists in the insurance industry. It is also supplemented with a service that is to ensure its delivery and sale, where intermediaries (insurance agents, brokers) are often attracted. The insurance service includes a set of operations carried out by the insurance company to work with the client. Therefore, the price of an insurance policy consists of the value of both the insurance product and insurance services.
If you use the phrase insurance product we will mean a set of services of the insurer for the prevention and liquidation of the consequences of a specific list of risks specified in the insurance contract that is provided to the client. Since the main purpose of the insurance product is compensation for damage in the event of an insured event, compensation is possible with a certain set of services. At the same time, it includes basic and additional services, which will subsequently determine its quality and consumer value. The ultimate goal of the insurance service should be an effective guarantee that the policyholder can quickly and in specified amounts eliminate the consequences of the insured event and return to the previous level of welfare. In this case, the quality of the insurance product is expressed in the confidence that the policyholder acquires along with the insurance policy.
Thus, we can distinguish the following components of the insurance product:
- technical characteristics of the product (insurance amount, insurance tariff, raising and lowering coefficients, deductibles, etc.);
- conditions of insurance payment;
- additional services in the event of an insured event (damage assessment, legal advice, evacuation of a vehicle, temporary replacement of the damaged property, etc.).
The basis for determining the quality of the insurance product is its consumer estimate, which most accurately reflects the client's attitude to the services of a particular insurance company. The development of the insurance product includes the following stages:
1) preliminary study of the external and internal environment of the insurer. At this stage, there is a search for the idea of a new or modernization of the existing insurance product. After an economic analysis of the innovation and a financial assessment of the insurer's ability to create and implement it. An important task of the first stage is also the marketing research of the target segment. To do this, it is necessary to collect information about the potential market, the target segment of the future product, the analysis of the level of competition on it, actuarial calculations and forecasts regarding the prospects for the selected segment;
2) development of the technical side of the insurance product. The tariffs, insurance amount, franchise types (conditional, unconditional), coefficients and bonus-malus system, conditions and terms of payment, exceptions from insurance coverage are determined, legal analysis of insurance conditions is carried out. At this stage it is important to clearly determine the degree of attractiveness of the insurance product for a potential consumer. To do this, preliminary testing of the insurance product is carried out on a certain market segment. The company should also assess the available opportunities and time for technical implementation and subsequent commercialization of the new product. She analyzes her financial potential, the level of the staff's competence, including the training of agents, marketing specialists and actuaries;
3) development of a marketing strategy for a new product in its promotion to the market. The insurer plans marketing efforts to commercialize the insurance service: it makes a certain budget for advertising, creates and organizes measures to stimulate sales, provides special training for agents or participants in the insurance sales system. Based on the available preliminary information marketers of the insurance company make a forecast and the cost of promoting the service to the market, and profits from the sale.
When developing an insurance product, insurers often resort to convergence, i.e. formation of a package of insurance products. Packages of insurance products include a set of several related products, which can close several requirements of the policyholder at once.
Insurers can choose one of two approaches to building insurance product packages - integrated and assorted. In an integrated approach, the package consists of a core product that generates profits, and additional and prospective products. Such an acquisition saves the insured's money, as he acquires a variety of insurance coverage in a single policy. In the assortment approach a set of similar insurance products with different properties and different price is formed. Such a set may include a basic product with standard conditions and a base cost. Further, it can be extended to insurance with a wider coverage and, accordingly, a higher price of the policy. Finally, the upper level of this set will be represented by the most expensive insurance with a wide coverage and high guarantees. This is called a line of insurance products.
The insurance product line is the insurance services of the insurance company from the cheapest or even free to the most expensive. The ruler is necessary in order to sell more and satisfy the demand of different categories of policyholders. It is important that a more expensive product is an organic addition to cheap. This will allow you to build sales across the entire product hierarchy.
The classification of insurance products is quite extensive and diverse. The following criteria can be distinguished:
1) for forms of insurance - types of voluntary and compulsory insurance;
2) by type of insurance - personal (life insurance, insurance against accidents and illnesses, medical insurance), property insurance (insurance of land, air, water transport, cargo insurance, insurance of buildings and structures, insurance of financial risks, ), liability insurance (motor third party liability insurance, carrier's liability insurance, civil liability insurance of the owner of a hazardous facility, insurance ofessionalnoy responsibility, liability insurance for the quality of goods and services, etc.);.
3) by customer types (consumers of insurance services) - consumer (insurance of individuals - retail insurance services), corporate (insurance of legal entities), microinsurance services (small business insurance, individual entrepreneurs, households, citizens and microfinance organizations with low income level and corresponding risks, low insurance premiums and small insurance sums and small payments). Depending on clients, insurance programs differ, which offer a range of services guaranteed by the insurance contract. So, for the corporate sector, the programs of medical insurance of employees and their families, pension insurance programs are popular. For individuals, life-saving life insurance programs are in demand;
4) risky - risky types of insurance (most types of insurance from the property insurance industry) and non-risk (life insurance in case of death and for survival);
5) Complexity insurance services are divided into simple (one insurance policy for one insurance object for one client) and complex. Comprehensive insurance offers insurance coverage for several types of insurance, which guarantees one insurance policy;
6) in the spheres of insurance distinguish banking, agriculture, construction, industrial, commercial, leasing, investment, space, aviation insurance;
7) by way of sales, you can identify direct services and services through intermediaries. Insurers can organize sales through insurance (agency and brokerage sales channels) and non-insurance (through car dealers, travel agencies, banks, real estate agencies, etc.) intermediaries.
There are other classifications of insurance products.
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