Features of marketing insurance companies
The goal of any economic entity is profit. Depending on the direction and specificity of the industry in which enterprises operate, the creation of profits occurs at the expense of satisfying the needs of consumers. Knowledge of the laws of satisfying consumer needs and interaction with the market is the key to the successful operation of any business entity.
Such interaction is realized through a mechanism called marketing. The organization of marketing is the most important task of any company as "the activity to promote their goods, works, services to the buyer through the formation of demand for them."
Here are some definitions of marketing that will give us an idea of what is its subject.
Marketing is a kind of human activity aimed at meeting needs and needs through sharing. "
"Marketing in its broadest sense is a social and managerial process through which individuals and groups of people, through the creation of products and their exchange, receive what they need."
"Marketing is the process of planning and implementing a plan, pricing, promoting and implementing ideas, products and services through an exchange that satisfies the goals of individuals and organizations."
Thus, marketing is an effective mechanism for the development of an economic entity, focused on promising effective work.
Insurance company is no exception. She is also interested in promoting her services, attracting consumers, forming a positive image in the eyes of buyers, the public, the state. To do this, she uses the tools of insurance marketing, which are implemented through the marketing service.
In insurance, marketing can be viewed as an integrated approach to the organization, management and development of the insurer's activities, which is aimed at providing certain insurance services in the quantity and quality that correspond to potential demand. To this end, the marketing department performs a number of functions, including analysis, planning, pricing, advertising, promotion of services on the basis of real and potential demand for insurance products.
The peculiarity of the sphere of insurance services is that it does not belong to the sphere of material production.
Insurance companies create and provide insurance services to clients. K. Marx formulated the definition of service as a specific type of activity and defined two types of services: services embodied in goods and services, on the contrary, leaving no tangible results existing separately from the performers of these services; in other words, the result is not embodied in a commodity that is suitable for sale. The insurance service can be attributed to the first type: it is embodied in the product that is the subject of trade in the insurance market. The main criterion for assigning an activity to the service sector is the intangible nature of the product produced in this field. In other words, the service industry does not create wealth.
Service is the change in the state of a person or product belonging to an economic unit that occurs as a result of the activity of another economic unit with the prior consent of the first.
Such a definition allows us to treat a service as a specific result of an economically useful activity, manifested either in the form of a product or directly in the form of activity. Economic utility makes the service a subject of trade.
The insurance service really changes the client's condition, giving it a sense of security against dangers and providing confidence in the future. In addition, insurance relations (other than mandatory) are built on mutual consent and on a voluntary basis, when the policyholder is consciously paying money for insurance services.
Specificity of insurance activity is characterized by a long life cycle of the insurance product, and an integral part of the insurance product is its risky nature. This is expressed in a significant gap between the moment of the conclusion of the contract and the moment of occurrence of the insured event, which, in turn, determines the long-term nature of the relationship between the insurer and the insured.
Since the insurance market is a sphere of relations that mediates the purchase and sale of insurance services as a specific commodity, its specificity lies in the fact that the insurance service is both consumer and financial. Consequently, insurance marketing also has a number of features. The consumer nature of the service is expressed in the fact that in the process of selling the insurance policy to individuals and legal entities, the service is consumed for its own needs. The financial nature of the insurance service is expressed in the redistributive function of insurance as such. Insurance reserves, formed from insurance premiums of all insured, are spent for payment to a limited number of policyholders. That is, payments are financed by a larger number of participants. So, money resources are redistributed between participants in time and on the territory of insurance. In addition, the funds of insurance reserves are directed to investments, for which both the insurance company and clients can receive investment income. That is, the policyholder gets the opportunity to participate in the insurer's profits.
Thus, for a successful interaction, the insured and the insurer need a special language, approach, a set of concepts and tools that take into account the specificity of their interests. In this regard, insurance marketing should be built so that the insurer could offer the client a quality insurance product that takes into account the consumer and financial component. The insurance product should take into account the needs of the client as much as possible and be accessible and attractive. For this, marketing in insurance should perform functions to study the needs of potential insurers and the competitive environment; on planning, development and implementation of insurance services; on the organization of the sales system and promotion of its services. The main links in it are sellers and intermediaries.
In general terms, the purpose of insurance marketing is to increase the number of consumers of insurance services by achieving the highest possible degree of satisfaction of their needs by introducing new and changing existing insurance products. >
There are four main goals of marketing as such and insurance marketing; in particular, this maximization:
1) consumption, which results in the expansion and development of production, employment growth, increased consumption and welfare of society;
2) the degree of customer satisfaction, which is not expressed in a simple increase in the number of goods and services consumed, but in the degree of customer satisfaction;
3) the choice of consumers, which is based on the production of such a variety of goods and services that could best correspond to the preferences and taste of each consumer;4) the quality of life, which aims to improve the quality of life of society, affecting the quality of the cultural, social, physical, material, spiritual and other spheres of human life.
Regardless of the hierarchy of goals, insurance marketing is aimed at solving a whole set of tasks. So, a number of tasks lie in the field of market research, where the company conducts activities on the complex study and forecasting of the insurance services market, the development of strategy and tactics of the insurance company's behavior, taking into account the actions of competitors, identifying potential demand and unmet consumers. From the point of view of developing insurance services as such, marketing is aimed at identifying consumer preferences, finding a niche and forming a competitive advantage, developing a line (assortment) of insurance services, developing a tariff policy, forming and stimulating demand. In the implementation of services, tasks are planning and organizing sales, attracting intermediaries and sellers, using various sales channels. Insurance marketing is also directly aimed at managing insurance reserves, investing and earning income, and developing measures to improve the management and organization of the company's operations.
The functions of insurance marketing include:
1) analytical function - is to collect, process, analyze, systematize marketing information. For example, the study of the market, competitors, consumers, analysis of the internal and external environment of the insurance company;
2) production - is implemented in the creation of new and the development of existing services in accordance with changes in the needs of policyholders and the market. For this purpose, the insurer can create new services based on innovative technologies, change the organization of logistics, manage the quality of its services;
3) sales (sales function) - is expressed in the organization of work of the marketing channels of insurance services and the marketing communications system. For this purpose, the marketing department is engaged in setting up a system for promoting services, organizing services, creating demand and stimulating sales, and developing product and price policies;4) management function (control) - is embodied in the implementation of strategic and operational planning in the insurance company, ensuring marketing control (feedback, situational analysis), information management of marketing.
Today it is no longer possible to treat marketing as a tool for expanding sales of previously created insurance products without detailed consideration of market requirements and changing demand. Insurers understand that to develop and provide insurance services without a deep study of the market is a short-sighted strategy. Therefore, the attention of insurers to the improvement of relationships with consumers, in particular through the use of insurance marketing, has steadily increased. At the same time, the main task of marketing management is to reduce the cost of marketing procedures with increasing their specific efficiency. Thus, at the present stage of development of insurance marketing, United States insurers will have to integrate it into all stages of the production process: from creating an insurance product to providing the insurance service to the consumer.
Speaking about the further development of marketing, the following directions of the evolution of marketing in insurance are supposed: a greater focus on the client; the appearance of new competitors in the form of non-insurance companies; the emergence of new channels for the sale of insurance services; development of marketing and information technologies; preference for competence and knowledge; and others. At a new stage, marketing tools will also change: advertising, discounts, promotions, prize draws, lotteries, aggressive advertising will be replaced by more effective methods of promoting insurance services. Increasingly, remote and Internet sales will be attracted to traditional channels for the dissemination of information and services.
Another important feature of modern business is its social orientation. The prestige of companies practicing social responsibility before society and the state through integration into public structures is growing. Insurers become more transparent to customers, and clients are treated as equal partners. Thus, insurance companies begin to implement socially-oriented marketing, which becomes the key to long-term success and a favorable image of a reliable company.
Marketing has at its disposal a certain set of tools that allows you to achieve the company's goals for demand management. In other words, marketing tools include a set of measures and actions aimed at impacting the market and consumers. Marketing tools serve to ensure the relationship between the insurance company and market participants. They are realized through the procedures of the marketing complex, or, as it is also called, the marketing mix.
The marketing mix (4P - with the first letters of English words) in insurance includes:
• product (product) - insurance services designed to meet the needs of potential and real insured;
• the price (juice) - the amount of money that the policyholders must pay to the insurance company to receive the service (insurance premium, fee calculated on the basis of the tariff)
• distribution (place) - activities to bring the insurance product from the insurer to the client;
• promotion (promotion) - means of communication between the seller and the buyer.
Each of the listed elements of the marketing complex uses their own tools. For example, the product policy deals with the assortment, the development of innovations, the line of insurance products, customer service. The price policy implies the definition of the base tariff, the calculation of the insurance premium, discounts, installments of payment, the development of the bonus-malus system. The distribution system uses tools such as advertising, public relations. Finally, the marketing policy of the insurer includes marketing research, sales channels, personal and intermediary sales, development of new markets.
The evolution of the marketing mix led to the emergence of the 5P concept, specifically for the service sector, where one more P-people (people). This is due to the fact that the quality of the provided services plays a key role in the development of the insurance company. Therefore, it is not only the implementation of the service that becomes important, but how it is realized: how competent the staff is, how competently the contracts are formed and concluded, what is the quality of customer service. And then there was the concept 7R product (product), price (pri & eacute; e ), promotion (promotion), distribution (place), people (people), processes (processes), external design, design, customer service ( provision).
The structure of insurance marketing can be divided into two areas: commodity, or market, marketing, and structural or organizational.
Market Marketing is aimed at improving the activities of the insurer and increasing the profitability of the company through analysis of the external environment and the company's orientation in the market. This involves changing the commodity and marketing policy in accordance with the characteristics of the external environment and the changing needs of participants in the insurance market. Market marketing consists of studying and segmenting the market and concentrating efforts on the most priority areas; developing requirements for the insurance product) 'on the basis of determining the needs of consumers; the choice of the insurance sales system, as well as the activation of sales, etc.
Organizational Marketing aims to increase the efficiency of the insurance company by building and optimizing its internal structure, including the insurance sales system. So, among the problems of structural marketing can be identified: the choice of the optimal sales system based on the characteristics of consumer preferences and properties of the insurance product; measures to stimulate sales; the organization of the organizational structure of the company and the establishment of processes of cooperation and division of labor horizontally and vertically.
Both directions - market and organizational marketing - are two sides of one process aimed at establishing effective and long-term relations between the participants of the insurance market, one of which is directed inside, and the other - outside the insurance company. As a result, their combination creates a comprehensive tool aimed at ensuring the profitability of the company in combination with the maximum satisfaction of the needs of policyholders. Thus, developing an insurance product, an effective sales system and optimizing the company's structure are interrelated tasks. A competent combination of market and organizational marketing tools is a practical implementation of the company's marketing strategy, which includes the selection of the market for the activities of the insurer, the formation and promotion of products in this market, the selection of a sales system for each segment, and the organization of information support for sales.>
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