7PS IN INSURANCE

What is mean by insurance?

Whenever there is uncertainty there is risk. We do not have any control over uncertainties which involves financial losses. The risk may be certain events like death, pension, retirement or uncertain events like theft, fire, accident, etc. Insurance is financial service for collecting the saving of the public and providing them with risk coverage. The main function of insurance is to provide protection against the possible chances of generating losses. It elements worries and miseries of losses by destruction of property and death. It also provides capital to the society as the funds accumulated are invested in productive heads. Insurance comes under the services sector and while marketing this service due care is to be taken in quality product and customers satisfaction. While marketing the services, it is also patients that they think about the innovative promotional measures. It is not sufficient that you perform well but it is also important that you let others know about the quality of yours positive contributions. The creativity in the promotional measures is the need of the hour. The advertisement, public relation world of mouth communication need due care and personal selling requires our intensive care. The insurance business is based on the skill and excellence of agents and this makes a strong case in favor of personal selling.

DEFINITION
A promise of compensation for specific potential future losses in exchange for a periodic payment. Insurance is designed to protect the financial wellbeing of an individual, company or other entity in the case of unexpected loss. In exchange for payments from the insured (called premiums), the insurer agrees to pay the policy holder a sum of money upon the occurrence of a specific event. In most cases, the policy holder pays part of the loss (called the deductible), and the insurer pays the rest. Insurance can also be defined as:-Insurance is a provision for the distribution of risks; that is to say, it is a financial provision against loss from unavoidable disasters. The protection which it affords takes the form of a guaranty to indemnify the insured if certain specified losses occur.The insurer, in accepting risks, so distributes them that the sum total of all the amounts paid for this insurance protection will be sufficient to meet the losses that occur.

Insurance, then, indicates divided responsibility. This principle is introduced in most stores where a division is made between the sales clerk and the cashier's department, the arrangement dividing the risk of loss. The insurance principle is similarly applied in many other cases of divided responsibility. As a business, however, insurance is usually recognized as

some form of securing a promise of indemnity by the payment of a premium and the fulfillment of certain other stipulations.

HISTORY OF INSURANCE
Forms of insurance were known to the Romans and to some extent were practiced among the Collegial. In certain respects these bodies resembled our benefit societies. For example, they provided for burial and also made some form of provision for promotion among the soldiers in their organizations. In reality, then, they were based on the insurance principle since they accepted from their members a certain stipulated sum and in return agreed to perform certain services. Demosthenes describes marine loans made to the ancient Greeks; we also have record that insurance existed among the Chinese 2500 years ago. In none of these early instances, however, did insurance reach anything like large proportions. In fact, so far as we know, it entirely disappeared, many centuries passing before there was a revival. It is true that certain laws among the Romans governing annuities necessitated a mortality table, but it was, however, for this sole purpose and apparently not in any sense an insurance matter. The business of insurance is divided into four main branches: marine insurance, fire insurance, life insurance and casualty insurance. The first three state the form of disaster against which insurance is provided. The fourthoriginally accident insuranceincludes all forms not embraced in the other three .An idea of the variety of events against which insurance is offered.

Marine insurance antedates every other form, its history dating back over seven centuries. It appears to have been practiced in the Mediterranean, and at least one old policy has come down from the thirteenth century, proving that marine insurance was an established practice among the commercial countries of that time. A broad gap exists between that period and the continuous history running back now some four hundred years, but since that time insurance has been an established business among those engaged in maritime adventures. Fire insurance, the second oldest form to become permanently established, dates from the great London fire of 1666. Life insurance followed a little later, although not until 1760 was a company founded on a modern basis. Casualty insurance owes its origin to the application of steam to railway travel; its more common name of accident insurance was due to the fact that the first events to be insured against were those of accidents to the person on a railway journey. It originated in England in the first half of the nineteenth century.

ADVANTAGES OF INSURANCE
1. Removal of uncertainties Insurance company takes the risks of large but uncertain losses in exchange for small premium. So it gives a sense of security, which is real gift to the business man. If all uncertainty could be removed from business, income would be sure. Insurance removed many uncertainties and to that extent is profitable. 2. Stimulant of business enterprise Insurance facilitates to maintain the large size commercial and industrial organizations. No large scale industrial undertaking could function in the modern world without the transfer of many of its risks to insurer. It safeguards capital and at the same time it avoids the necessity on the part of industrialists. They are therefore free to use their capital as may seem best. 3. Promotion of saving Saving is a device of preparing for the bad consequences of the future. Insurance policy is often very suitable way of providing for the future. This type of policy is found particularly in life assurance. It promotes savings by making it compulsory which has a beneficial effect both for the individual and nation. 4. Correct distribution of cost Insurance helps to maintain correct distribution of cost. Every business man tries to pass on to the consumer all types of costs including accidental and

losses also. In the various fields of Insurance such losses are correctly estimated keeping in view a vast number of factors bearing on them. In the absence of insurance these losses and costs would be assessed and distributed only by guess work.

5. Source of credit Modem business depends largely on credit; insurance has contributed 'a lot in this regard. A life insurance policy increases the credit worthiness of the assured person because it can provide funds for repayment if he dies. Credit extension is also obtained by means of various kinds of property insurance. A businessman who stock of goods has been properly insured can get credit easily. Similarly marine insurance is an essential requirement for every transaction of import and export. 6. Reduction of the chances of loss Insurance companies spend large sums of money with a view to finding out the reasons of fire accidents, theft and robbery and suggest some measures to prevent them. They also support several medical programme in order to make the public safety minded. Without such losses preventive activities of insurance companies, the chances of loss would have been greater than they are at present days. 7. Solution of social problems Insurance serves as a useful device for solving complex social problems e.g. compensation is available to victims of Industrial injuries and road accident

while the financial difficulties arising from old age, disability or death are minimized. It thus enables many families and business units to continue intact even after a loss. 8. Productive utilization of fund Insurer accumulates large resources from the various insurance funds. Such resources are generally invested in the country, either in the public or private sector. This facilitates considerably in over all development of the economy. 9. Insurance as an investment A life policy is a combination of protection and investment which serves a useful purpose. The premium that the insured pays go on accumulating in a fund every year. The sum so accumulated by the insurance company earns interest. Under life assurance a person may also invest his capital in a annuity which will pay him an income every year till death. Therefore, insurance may be regarded as an investment. 10. Promotion of international trade The growth of the international trade of the country has been greatly helped by shifting of risk to insurance company. A ship sailing in the sea faces some miss-fortune. A fire breaks out and burns to ashes all the merchandise of a business man. But insurance is one of the devices by which these risks may be reduced or eliminated. So industrialists and exporter may devote their full attention toward the promotion of business which may increase the export activities.

11. Removing fear Insurance helps to remove various types of fear from the mind of the people. The insured is secured in the knowledge that the protection of the insurance fund is behind him if some sad event happens. It thus creates confidence and eliminates worries which are difficult to evaluate, but the benefit is very real. 12. Favorable allocation of factors of production Insurance also helps in achieving favorable allocation of the factors of production. Capital is usually shy in the risky business. People hesitate to invest their capital where financial losses are great. If protection is provided against these risks by means of insurance, several investors will become ready to invest their funds in those fields. 13. Growth of Business competition Insurance enables the small business units to compete upon more equal terms with the bigger organization. Without insurance it would have been impossible to undertake the risks themselves. On the other side bigger organization could absorb, their losses due to great financial strength. Moreover insurance removes uncertainty of financial losses arising out of the certain causes. It thus increases knowledge which is one of the most important preconditions of perfect competition. 14. Employment opportunity Insurance provides employment opportunity to jobless persons which is helpful for the improvement and progress of social condition

15. Miscellaneous benefits (i) It establishes the relation between the employed and employer by providing various facilities i.e. group life insurance, social security scheme, retirement income plan, and workmans compensation insurance. (ii) Insurance creates the confidence and sense of security among the policy holder. (iii) Insurance company provides valuable services of skilled and expert persons to industries and business in order to eliminate various risks. (iv) It promotes economic growth and development. This would be impossible in the absence of insurance. (e) It contributes to the efficiency of business and also industrial and commercial executives. (f) Security of dependents is made possible through life assurance. It gives relief to helpless families after the death of the earning member of the family.

The six principles of insurance are:

1. Indemnity Insurance is a contract of indemnity where the insurance

company indemnifies the insured against certain risks for a consideration known as premium.
2. Insurable interest means the loss of which will directly affect the

insured.
3. Utmost good faith means that the insured and the insurance

company will not willfully hide anything from each other.

4. Mitigation means the insured will not behave irresponsibly and will

take due care so that the risk of loss or the loss is minimized.
5. Subrogation means the insurance company acquires legal rights to

act on behalf of the insured i.e. the insurance company steps into the shoes of the insured.
6. Causa Proxima or Proximate Cause means the proximate cause of

loss to ascertain whether the loss is covered under the policy.

Purpose and need of insurance

Assets are insured, because they are likely to be destroyed, through accidental occurrences. Such possible occurrences are called perils. Fire, floods, breakdowns, lightning, earthquakes, etc are perils. If such perils can cause damage to the assets, we say that the assets. Risks are the consequential losses or damage. The risk to an owner of a building, or a few cores of rupees, depending on the cost of the building and the contents in it.

The risk only means that there is a possibility of loss or damage. The damage may or may not happen. Insurance is done against the contingency that it may happen. There has to be an uncertainty about the risk. Insurance is relevant only if there are uncertainties. If there is no uncertainty about the occurrence of an event, it cannot be insured against. In the case of a human being, death is certain, but the time of death is uncertain. In the case of a person who is terminally ill, the time of death is not uncertain, though not exactly known. He cannot be insured. Insurance does not protect the assets. It does not prevent its loss due to the peril. The peril cannot be avoided through insurance. The peril can sometime be avoided, through better safety and damage control management. Insurance only tries to reduce the impact of the risk on the risk on the owner of the assets and those who depend on the assets. It only compensates the losses- and that too, not fully. Only economic consequences can be insured. If the loss is not financial, insurance may not be possible. Examples of non-economic losses are love and affection of parents, leadership of managers, sentimental attachments to family heirlooms, innovative and creative abilities, etc. By conceptualizing modern marketing principles, the insurance business can be improved, the profitability can be increased and the quality of service can be matched with other companies or new demand of people. Along with world class core services, they would be in a position to innovate the peripheral services adding attraction to their service mix.

While marketing the services, it is also pertinent that they think about the innovative promotional measure. It is not only important to perform well but also that you let other know about your quality of your positive contribution. The advertisements, public relations, sales promotions, word-of-mouth communication and telemarketing need dew care and the personal selling requires intensive care. It is right to mention that the business of insurance is based on skills and excellence of agents this makes a strong advocacy in favor of personal selling. We cant negate that while promoting business the foreign insurance companies have been found creative Vis--Vis innovative in their approaches. The public sector insurance organizations have to learn a lesson. The insurance business is concerned with the guaranteeing compensation in the event of loss, damage of property or death. The present day insurance or the protection as provided by the Life Insurance corporation of India and the general insurance corporation of or other companies and agencies in the private sector pertaining to life, fire and marine has its basic concepts that the individual and groups of companies seeking protection must earn a surplus over the cost of maintaining and then pay a premium out of the income. For this purpose the insurance business is based on a basic desire to protect the loss of ones property and loss due to death of an individual. What do we produce are known as our product. If we produce goods our emphases is on tangible product and when we produce or generate services our emphasis is on intangible service product. The insurance organization produces or generates service in different form. A product is what a seller has to sell and what a buyer has to buy. In the insurance business, the insurance organization are found selling services and therefore, we find

services as their product. Thus a product is also called a bundle of utilities consisting of various product features and services. When a individual or an organization a policy from the insurance organization , not only the policies are bought but the agents assistance and advise, the prestige of the organizations, the facilities of the claim and compensations are also bought. In the Indian perspective, the Life Insurance Corporation of India and the General Insurance Corporation of India are the two leading organizations engaged in offering insurances services to the concerned users. We call them public sector insurance organization. The General Insurance Corporation through its four main subsidiaries offers fire and marine insurance services. The owner of the asset and those who depend on that asset. Only economic consequences can be insured. If the loss is not financial, insurance may not be possible. Moreover insurance is backed up with many economic benefits which can be enlisted as follows. Life insurance provides financial security to the family in case of untimely or premature death.

Life insurance is also a potent instrument for saving. Life insurance provides financial independence in old age. Organizations or individuals, who are in credit business, can ensure for themselves recovery of loan in case their debtor dies. A partnership firm can insure partners to the extent of capital invested by each in the business.

Under key man insurance, an organization can insure the lives of their executives, whose expertise greatly contributes to their profits.

Organizations can purchase group insurance policies as a part of their employee- welfare program.

Life insurance also provides tax benefits to the holder. Life insurance policies create an estate. Life insurance policies also create thrift. I.e. a compulsory saving. A policy of life insurance can b used as a collateral security for procuring loans from the market.

DEFINITIONS OF MARKETING
According to Brech 1953, Marketing is the process of determining consumer demand for a product or service, motivating its sale and distributing it into ultimate consumption of profit. According to William Stanton, Marketing is a total system of

interacting business activities designed to plan, price, promote and distribute want satisfying product and service to the present and potential customers. According to the American Marketing Association in 1985Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational activities.

What is marketing?
1) Marketing is a process of exchange between individuals or organization which is conducted for mutual benefits satisfaction of the parties. Marketing is a process of identifying the need of customer developing the product and passing down the product to the customer in order to satisfy the needs with the desirable profit. 2) Marketing involves two or more social units i.e. buyer and seller. This unit may be individuals, groups, organizations or nations. 3) A marketer can alter the response of a market towards its product with the help of certain actions like advertising, price, discount or better service. 4) Marketing is getting the right goods to the right quantity and at the right place and at the right time and wailing the profile out of the goods sold. 5) 6) Marketing is a bridge between production and consumption. Marketing activities are concerned with demand stimulating and demand fulfilling activities of the company. 7) Marketing starts with the identification of a specific need on the part

of the consumer is found both at the beginning process.

INSURANCE MARKETING:
The term Insurance Marketing refers to the marketing of Insurance services with the aim to create customer and generate profit through customer satisfaction. It means knowing the market and developing a need oriented product, formulating the product mix, marketing suitable pricing decision, designing sensitive promotional strategies and effective distribution. It also involves a scientific approach to management of agents, who distribute insurance product, so that qualitative improvements are made possible. The Insurance Marketing focuses on the formulation of an ideal mix for Insurance business so that the Insurance organization survives and thrives in the right perspective.

The marketing process:

A firm will gather information about the marketplace (e.g. whether house prices are rising or falling), and then research consumers' needs. From this, it will identify who its market is, and then put together a marketing plan based on the findings. The marketing mix will be central to this, and finding the right balance in each of the 4Ps is very important. The firms can then review and adapt their plan when they need to. You should remember the following points: Although marketing is consumer-orientated, the main aim is still to be profitable.

A good marketing manager will try to differentiate their product (ie make their product stand out against similar competitive brands).

Whatever pricing decision is made, the most important factor is to break even. Making it as easy as possible for the customer to buy the product will help sales to increase.

Marketing Mix
Marketing mix is one of the key concepts in the modern marketing theory. IN practice the marketing mix is considered to be the core of marketing. Neil Borden, while quoting from an

article of James Cullion, wrote that a marketer is viewed as a decider, or an artist or a mixer of ingredients who plan various means of competition. He may follow a recipe prepared by others, prepare his own as he goes along, or adopt a recipe to the ingredients immediately available, or experiment with or invent ingredients no one else has tried, if a marketer was a mixer of ingredients, what he designed was a marketing mix According to William Stanton Marketing-mix is the term that is used to describe the combination of the input that constitutes the core of a companys marketing system: the product, the price structure, the promotion activities, and the distribution system. According to Philip Kotler Marketing mix is the set of marketing tools that the firm uses to pursue its marketing objectives in the target marketing. The combination of marketing activities that an organization engages in so as to best meet the needs of its targeted market. The Insurance business deals in selling services and therefore due weight age in the formation of marketing mix for the Insurance business is needed. The marketing mix includes sub-mixes of the 7 Ps of marketing i.e. the product, its price, place, promotion, people, process & physical attraction.

The above mentioned 7 Ps can be used for marketing of Insurance products, in the following manner:

1. PRODUCT:

A product means what we produce. If we produce goods, it means tangible product and when we produce or generate services, it means intangible service product. A product is both what a seller has to sell and a buyer has to buy. Thus, an Insurance company sells services and therefore services are their product. In India, the Life Insurance Corporation of India (LIC) and the General Insurance Corporation (GIC) are the two leading companies offering insurance services to the users. Apart from offering life insurance policies, they also offer underwriting and consulting services. When a person or an organization buys an Insurance policy from the insurance company, he not only buys a policy, but along with it the assistance and advice of the agent, the prestige of the insurance company and the facilities of claims and compensation. It is natural that the users expect a reasonable return for their investment and the insurance companies want to maximize their profitability. Hence, while deciding the product portfolio or the product-mix, the services or the schemes should be motivational. The Group Insurance scheme is required to be promoted, the Crop Insurance is required to be expanded and the new

schemes and policies for the villagers or the rural population are to be included. The Life Insurance Corporation has intensified efforts to promote urban savings, but as far as rural savings are concerned, it is not that impressive. The introduction of Rural Career Agents Scheme has been found instrumental in inducing the rural prospects but the process is at infant stage and requires more professional excellence. The policy makers are required to activate the efforts. It would be prudent that the LIC is allowed to pursue a policy of direct investment for rural development.

Investment in Government securities should be stopped and the investment should be canalized in private sector for maximizing profits. In short, the formulation of product-mix should be in the face of innovative product strategy. While initiating the innovative process it is necessary to take into consideration the strategies adopted by private and foreign insurance companies. Life insurance products are usually referred to as plans of insurance. These plans have two basic elements. One is the Death Cover providing for benefit being paid on the death of the insured person within a specified period. The other is he survival benefit providing for the benefit being paid on survival of a specified period. If the bread earner dies, the income of the family ceases. If the breadwinner does not die, but retires from services, even then the regular income of the family ceases. Thus, life insurance has to cover both the contingencies of death or survival. They are mutually exclusive. The needs

for life insurance are different. They vary according to contingency provided for according to age, family, etc. each plan for insurance provides for a kind of need.

Importance of insurance product

Among the elements in the marketing mix i.e. product, price, place and promotion; product play key role for two fundamental reason. A typical product hierarchy consists of seven levels ringing from the basic needs of the family to the items that satisfy that basic need 1. THE PRODUCT IS THE FIRMS REASON FOR BEING All companies (including bank and insurance companies) aim to satisfy their customers need and they do this with their products, a companys existence will be in trouble if it does not deliver a needsatisfying product. 2. ALL THE OTHER ELEMENTS OF THE MARKETING MIX REVOLVE AROUND THE PRODUCT This statement does not mean that the other elements of the mix are not vital. But all of them are equally contributing while marketing the product. Every other element in the mix: price, place, promotion is planned on the basis of the product strategy. Pricing strategies are meant to make the product available to the customer at attractive price and bring reasonable profits to the seller. Distributing strategies will make the product available when and where the customer wants it. Promotion strategies are developed to maintain communication with target market by explaining the potential benefits of the product that

are accrued from its design, distribution and price strategies. The other reason is increasing insurance awareness among public and customer sophistication. 3. INCREASING INSURANCE AWARENESS AND CUSTOMER SOPHISTICATION The growth of the middle-income class and the rising risk in the day to day activities has increased risk awareness among public. This can be seen from recent developments. The financial crisis the world Life insurers have been gearing up their efforts to educate the public on the need to protest against event risks and old age poverty. Some governments re also considering changing their welfare provision, so that individuals are forced to seek their own protection. in most countries, the socio-political turmoil associated with it and, growing terrorist activities across

PRODUCT HIERACHY
Each product has some relation with other products. Atypical product hierarchy stretches form the basic needs to particular items that

satisfy those needs the following are the seven level of the product hierarchy: Need family: Need family includes core needs on which the existence of a product family depends, For example, security is the core need for the existence of the insurance product. o Product family: Product family includes all the product classes that can satisfy a core need with reasonable effectiveness. For example, saving and income. o Product class: A product class consists of group products within the product family and performs certain functions. For example financial institution. o Product line: A product line consists of a group of products that fall within a product class and are closely relates to one another. They perform similar function targeted at the same customer grouped; they are marketed through the same channels and have less price differentiation. For example life insurance polices. o Product type:

Product type includes a group of items with in a product line that features one or more of several possible forms of the product. For example term life and money back polices. o Brand: A name prescribed to one or more items in the product line that is used to identify the source or character of the items. o Items: An item is a distinct unit includes in the brand or product line that is distinguishable by size, appearance, price or other attribute, for example ICICI Prudential save n protect Endowment Assurance plan, LICs Money Back Policy. Classification of Insurance Products Insurance business is classified into long term and short term insurance. Example of long term insurance business includes industrial life, ordinary life, annuities, insured pensions and permanent health. Short term insurance such as general and non-life insurance policies are issued for 12 months or shorter duration. But there also exists some long term agreements in this business where the duration does not normally exceed five years,

Convertible plans: Convertible plan of assurance are plans, which state in their terms and condition, that they can be changed to other plans after or within a certain

period after commencement. For example, a convertible Term Assurance plan can be converted into a Whole life policy or an Endowment policy, within a period specified in the original plan. This period may be not later than two years before the expiry of the original term. With-profit and without profit policyWith-profit or non-participating policies are not entitled to bonuses declared after valuations. With-profit or Non-participating policies pay a slightly higher premium for the right to participate in the progress of the insurer. Joint life policies: Two or more lives are covered under one policy. Such policy usually covers married couples or partners. The SA is paid on the death of ay of the insured persons during the term or at the end of the term. Some plans also provide SA on the death of one life and the policy is continued to cover the second life till maturity without payment of future premium.

Childrens plan there is insurance plan which cover the lives of children, who are not major. Here, the proposal for insurance cover will have to be made by a parent or a guardian. In this plans, risk on the life of the insured child will begin only when the child attains a specified age. There is no insurance cover during the deferment period. If the child dies during the deferment period, the premium will be returned. Risk will

commence automatically on the deferred date, without any medical examination. These policies have conditions whereby the title will automatically pass on to the insured child, on his attaining the age of majority. The process is called vesting. The policy anniversary corresponding to the age of majority, or any later date, as may be chosen; of the insured child is the Vesting date. After, vesting, the policy becomes a contract between the insurer and he insured person. Annuities Annuities are particularly the same as pensions. They provide regular periodical payments (usually every month) to employees, who have retired. They are paid as long as the recipient is alive. Sometimes the pension is also paid to the dependents after the pensioners death. Annuities are paid by insurers in monthly, quarterly, half-yearly or annual installments, as may be preferred by the annuitant.

TERM INSURANCE PLANS i.

ii.

Two-Year Temporary Insurance: Risk is covered for a short period of 2 years Convertible term Insurance: This is a term insurance plan for a period of 5 or7 years. The policy owner has the option of converting it into a limited payment Whole Life

Insurance or an Endowment Assurance at the end of the term.

iii.

Bima sandesh: This is a term assurance with a provision for return of premiums if the life assured survives the policy term.

WHOLE LIFE PLANS i. Whole Life policy: Premium are payable for a period of 35 yeas or up to the age 80 of the life assured whichever is higher. Insurance money is payable on the death, whenever that occurs. Once the policy owner reaches the age of 85, the policy will be treated as matures abs insurance money will be paid to the life assured. ii. Limited Payment whole Life policy: This variation of the pure whole Life policy except that premium is payable foe a limited period at the choice of the insured.
iii.

Convertible Whole Life policy: This is a limited payment while life policy where premium are payable up to the age of 70 of the insured. But the insured has an option to convert it at the end of5 year from commencement, into an endowment Assurance for a selected period.

ENDOWMENT PLAN i. Endowment Assurance Policy: the face value of the policy will be paid either on the death of the insured during the period of insurance or on maturity if the insured survives up to the end of the term.
ii.

Bhavishya Jeevan Policy: this is an endowment Assurance under which premiums during the first five year is very high and from the sixth year they are scaled down to almost 1/3rd of the original premium. This is ideal for professionals with a limited span of the high income, or cine actors or those going to the Gulf for employment.

iii.

Jeevan Griha: This is a low cost, without profit Endowment Assurance. Risk coverage is two or three tunes the face value of the policy. The face value of the policy is paid on maturity. This plan is ideal as collateral security for housing loan is provided

2. PRICING: In the insurance business the pricing decisions are concerned with: i) The premium charged against the policies, ii) Interest charged for defaulting the payment of premium and credit

facility, and iii) Commission charged for underwriting and consultancy activities. With a view of influencing the target market or prospects the formulation of pricing strategy becomes significant. In a developing country like India where the disposable income in the hands of prospects is low, the pricing decision also governs the transformation of potential policyholders into actual policyholders. The strategies may be high or low pricing keeping in view the level or standard of customers or the policyholders.

In the tangible product we find fixation or setting of prices on the basis of the cost of production. Even in the insurance business it is found to be an important consideration and a dominating base. This makes the cost of insurance a devise factor for charging premium. The important base for determining the cost are of rate of death, rate of interest and the expenses incurred on the insurance business. The mortality table helps the determination of death rate. It is such data which record the past mortality and is put in such a form that can be used in estimating the course of future data. It is to predict future mortality. A majority of person selected and observed for death and survival rates. The best method for construction of mortality table is to select a large number of persons at attained age which in known as age close to birth rate. The second important element is the rate of interest. In this insurance business, the pricing decision are concerned with the premium charged against the policy interest are charged for defaulting the payment of premium and credit facilities, commissioned charged for

underwriting and consulting services. The formulation of pricing strategies becomes significant with the view point of infusing the target market or prospects. to be more specific in the India context where the disposable income in the hand of prospects is found low, the increasing inflationary pressure has been instrumental in contracting the discretionary income, the increasing consumerism has been making an assault on the saving potential of masses, it is pertinent that the insurance organization in general and public sector organization in particular adopt such a strategy for that it makes it a motivational tool and paves the way for increasing the insurance business. Of course the motivational pricing strategy is required to be given due weight age. This necessitates a new vision for setting premium structure and paying the bonus and charging the interest. Therefore we find the pricing decision occupying a place of outstanding important in the marketing of the insurance business. The strategy may have a new vision in the sense that the insurance organization prefer to make a mix of high and low pricing strategy. For weaker section the pricing strategy is rationalized to cater to the low paying capacity segment. However the insurance organization would be required to think in favor of a high pricing strategy for the affluent section of the society. The motive is to make the premium structure commercially viable so that the insurance organization succeed in having a sound a product portfolio decide fuelling development orientation. Price is one element in the marketing mix that produces revenue; all the other elements produce costs. Prices are easiest marketing mix elements to adjust; product features, channels and even promotion take more time. Price also communicates to the market the companys intended value positioning

of its product or brand. In the insurance sector, every company has to deposit an initial fixed capital of about Rs. 100 crores with Insurance Regulatory Development Authority, which is considered as the apex body of Insurance sector. The company gets periodic interest on this amount. With this interest amount, the company pays for the recruitment, training and development of the agents. The price in case of insurance sector refers to the premium charged on the policy. The Tariff advisory committee fixes the price for each policy. Hence all insurance companies have to charge approximately similar premium on similar policies. However, different elements affect the rate of premium to be charged on each policy. The price for the same policy is different for different companies. The company must set its price in relation to the value delivered and perceived by the customer. If, the price is higher than the value received, the customer will not be willing to pay so high and the company will lose potential profits. If the price is less than the value received then, the company will fail to receive the profit that it deserves for providing a good service.

The pricing in insurance is in the form of premium rates. The three main factors used for determining the premium rates under a life insurance plan are mortality, expense and interest. The premium rates are revised if there are any significant changes in any of these factors. Mortality (deaths in a particular area): When deciding upon the pricing strategy the average rate of mortality is one of the main considerations. In a country like South Africa the threat to life is

very important as it is played by host of diseases.

Expenses: The cost of processing, commission to agents, reinsurance companies as well as registration are all incorporated into the cost of installments and premium sum and forms the integral part of the pricing strategy.

Interest: The rate of interest is one of the major factors which determines peoples willingness to invest in insurance. People would not be willing to put their funds to invest in insurance business if the interest rates provided by the banks or other financial instruments are much greater than the perceived returns from the insurance premiums.

3. PLACE:
This component of the marketing mix is related to two important facets i) Managing the insurance personnel, and ii) Locating a branch. The management of agents and insurance personnel is found significant with the viewpoint of maintaining the norms for offering the services. This is also to process the services to the end user in such a way that a gap between the services- promised and services offered is bridged over. In a majority of the service generating organizations, such a gap is found existent which has

been instrumental in making worse the image problem. The transformation of potential policyholders to the actual policyholders is a difficult task that depends upon the professional excellence of the personnel. The agents and the rural career agents acting as a link, lack professionalism. The front-line staff and the branch managers also are found not assigning due weight age to the degeneration process. The insurance personnel if not managed properly would make all efforts insensitive. Even if the policy makers make provision for the quality up gradation, the promised services

Hardly reach to the end users. It is also essential that they have rural orientation and are well aware of the lifestyles of the prospects or users. They are required to be given adequate incentives to show their excellence. While recruiting agents, the branch managers need to prefer local persons and provide them training and conduct seminars. In addition to the agents, the front-line staff also needs an intensive training programmed to focus mainly on behavioral management. Another important dimension to the Place Mix is related to the location of the insurance branches. While locating branches, the branch manager needs to consider a number of factors, such as smooth accessibility, availability of infrastructural facilities and the management of branch offices and premises. In addition it is also significant to provide safety measures and also factors like office furnishing, civic amenities and facilities, parking facilities and interior office decoration should be given proper attention.

Thus the place management of insurance branch offices needs a new vision, distinct approach and an innovative style. This is essential to make the work place conducive, attractive and proactive for the generation of efficiency among employees. The branch managers need professional excellence to make place decisions productive.

Today you have to run faster to stay in the same place Place mix can be defined as the Physical distribution i.e. the delivery of goods/ services at the right time at the right place to the customers... Place decisions involve building relationships with the wholesalers, retailers and through these intermediaries building relationships with the customers. Products and services must be at the right place, at the right time in order to be consumed. Probably the best way to perceive place is to think of the flow of products from manufacturer through intermediaries to the consumer or user. This flow can be thought of as a channel used to move goods and services. The channel of distribution is a component of the place mix: Channels: According to Philip Kotler: Channels are sets of interdependent organizations involved in the process of making the product or service available for use or consumption Marketing channel decisions are among the most critical decisions facing the management. The channels chosen intimately affect all the other marketing decisions.

4.

PROMOTION:
The insurance services depend on effective promotional measures. In a country like India, the rate of illiteracy is very high and the rural economy has dominance in the national economy. It is essential to have both personal and impersonal promotion strategies. In promoting insurance business, the agents and the rural career agents play an important role. Due attention should be given in selecting the promotional tools for agents and rural career agents and even for the branch managers and front line staff. They also have to be given proper training in order to create impulse buying. Advertising and Publicity, organization of conferences and seminars, incentive to policyholders are impersonal communication. Arranging Kirtans, exhibitions, participation in fairs and festivals, rural wall paintings and publicity drive through the mobile publicity van units would be effective in creating the impulse buying and the rural prospects would be easily transformed into actual policyholders.

1Advertising

Advertising a paid form of persuasive communication is found important to promote insurance business. Insurance industry have sophisticated device of advertising along with world class professional excellence. The advertising professional bears the responsibility of making the advertising slogan, appeals, campaign creative so that the process of sensitizing the prospects is found proactive. We talk about a group of target audience found unconscious, unorganized, illiterate, incentive or so. This increases the functional responsibilities of advertisement professionals.

Telecast mediaInsurance Company can advertise through telecast media, broadcast media and the print media. So far as the vulnerable sections of the society are concerned, we find the telecast media more effective in the sensitive process. With the help of audio/ visual exposure, the rate of acceptability of the message can be increased sizably. If the advertising professionals are well aware of the receiving capacity of the prospects, they can make the advertising slogan, and message creative. Being a big organization, the Life Insurance Corporation of India is found efficacious in having its own advertisement wing for the purpose. However they can seek the corporation of other agencies if they find it essential. The motive is to make the slogan creative. We cant deny that the telecast media is expensive but to promote the insurance business we have no option but to assign due weight age to the same.

Broad cast media-

This can be used for promotion purpose since they have big transmission network and a well developed system, the insurance organization are supposed to use even the broadcast media. If we find the message sensitive, the rate of acceptability would also be high. Another benefit of this media is to reach the messages even to the remotest part of the country. It is responsibility of the insurance professionals that they with the support of advertisement professionals make possible creativity in the messages and slogans and increase the effectiveness of broadcast media.

Print mediaThis can also be used for promoting the insurance business. Being economic in nature and impressive in expression, the print media of late has been found gaining popularity. The sophistication in the print technologies has made the media more attractive. The insurance organization need to promote the print media since this would simplify their task of making the appeals effective while using regional languages. The detailed explanation is another property that requires due place while making decisions related to the selection of a suitable vehicle for traveling the message. An important consideration while making the decision is the budgetary constrain. Since we find insurance organization working on the large scale, we dont find this constrain standing as an obstacle. They cant effort even the expensive telecast media and therefore they should assign top priority to the acceptability factor. Of course, we find the public sector insurance organization advertising properly, but there must be a close relation between the service offered and service advertised. If we find a gap or an

exaggeration, the sensitive rate of our messages would go down. This focuses our attention on building up of a positive image by offering the promised services to the users. Advertisement helps in projecting a positive image The LIC of India the leading public sector organization bears the responsibility of offering the promised services to the users. We cant deny the fact that the private insurance companies are found instrumental in building up a positive image since, the quality of services is found of world class. It is unpleasant to comment that he public sector organization have not been assign due weight age to the quality up gradation and therefore whatever they advertise are not positive in effects. Of course, they need to advertise but their advertisement message should have a close link with the professional with the quality of services they offer. It is against this background that the insurance professional while advertising services need to make the advertisement message realistic. It is right to mention that advertisement, an important dimension of the promotion mix requires due attention of senior executives so that whatever the lapses we find in the advertisement programming are sorted out. We need to use this tool in the right fission avoiding the misuse.
.2 Publicity

In addition to advertisement, the insurance professional should also think in favor of publicity since this component of promotion if used in a right fashion makes our promotional efforts proactive. The advertisement may be insensitive, but we find publicity effective since the messages, views,

opinions, facts, figures are publicized by media or the vocal leaders. It is devised to promote business without making any payment and therefore we also call, it an unpaid form of persuasive communication bearing high rate of sensitivity. It is against this background that we make a strong advocacy in favors of strengthening and innovating the public relation activity so that our positive contributions reach to the prospects in time. Developing report with media is an important aspect of publicity. This makes it essential that the public relation officers working in their organizations or the branch manager or even the senior executives develop rapport with the media people, organize a press conference, distribute them small gift, offer to them small gift, offer to them lunch/dinner and persuade them to write them some positive things in their favor by making a story or in the form of news cover. We find coverage newspapers, magazines; the prospects are to be influenced. Strengthening the public relations activities is another dimension requiring due attention of the senior executive and the branch managers. At the apex levels, the public relation officer bears the responsibility of projecting a positive image of the organization and at the branch level, we find this responsibility upon the shoulder of branch managers. The PRO is considered to be a professional having a world class excellence in influencing the prospects. He bears the important responsibility of informing, sensing and persuading. He is found responsible for sales dialogues. This makes it essential that we find selection of suitable persons for the said purpose and in addition also intensify training programmers, refresher courses, capsule course to educate and train them in tune with the changing business conditions. The receptionists, secretaries, frontline staff,

publicize your business with style, gesture and posture. They should look smart and attractive and should also have quality communication ability. It is an art which is found based on certain properties. We need to educate and train them properly so that they with the help of their dialogues and body communications succeed in impressing upon the precepts. If they are well aware of the changing level of expectations of customers, the task is made easier Therefore it is right to mention that this dimensions of promotions needs due care of senior executive of the insurance organizations the foreign insurance companies have quality public relations officers but in the public sector organizations, we dont find public relation activities of world class which makers our task of publicizing insensitive.

.3 Sales promotion
We find sales promotion a device to promote sale to meet a certain target. It is temporary device which is withdrawn after a particular period. It is meant for both the user of the service and the channels found instrumental in promoting the service. Almost all the organization is found using the tools of sales promotion in a different way. Since the business environment is likely to be more competitive, it is pertinent that the insurance organization offer innovative tools of sales promotion and increase or decrease the duration depending upon the business conditions vis--vis the emerging trends in business. It is upon the senior executives and the policy makers to think in favor of innovative tools.

Incentives to the end users for taking a policy play an incremental role in promoting an insurance business. Therefore we need to think about the tools of sales promotion for the policyholders. Since the insurance business is also related to the achievement of a particular target, it is pertinent that the policymakers assigns due weight age to the same and the senior executives as well as the branch managers as well as agents should also accept the responsibility of making this component of the promotion mix popular vis-vis proactive. The offering of small gifts during a particular period, the rebate, discount, and bonus can be instrumental in increasing the business of insurance organization. It is right to mention that such incentive to the policyholders would be successful in increasing the business. It is responsibility of the insurance professional that they keep on activating the process of innovation so that the foreign insurance companies find it difficult to compete with the public sector organizations. We cant deny the fact that the government support to the public sector insurance organizations, especially in the shape of income tax exemption makes the business conditions a bit different. The moment such an exemption is withdrawn; the task of public sector organization would be much more difficult. Agents role in getting a business is crucial; therefore we need to promote them for getting more business. The promotional tools for agents, branch manager and front line staff need due attention of the senior executive so the insurance organization. Since they bear the responsibility of promoting the insurance business, it is logical that the promotional tools for them are frequently innovated. If we feel that rural segment needs an intensive care, they should be given more incentives for promoting the business in the rural areas. This makes it clear that the incentives to the

policy users as well as to the agents would be instrumental provided the insurance professional innovate the same, much earlier than their competitor.

.4. Personal

selling

The insurance business is substantially influenced by the instrumentality of the agent. If they are aware of the art of informing, sensing and persuading the potential policy holders, the task of insurance organization is done. Personal selling is based on excellence of individual. This focuses our attention on the ability of an individual to influence the impulse by activating the persuasion process this makes it significant that the agent have certain outstanding properties or attributes, such as patience, communicative ability, attractive personality and commitment to the profession. They need to provide due incentives to the agents so that they work satisfactorily and keep on moving the process of informing and persuading the policy holders/ prospects. While recruiting the agents, the insurance professionals need to be careful so that person with high communicative ability, an attractive physique and everlasting patients are assigning the responsibility of acting as an agent. The branch manager bears the responsibility of managing and developing the agents by monitoring their contribution to the process of increasing the insurance business. They are supposed to organize the refresher courses to develop the agents so that the emerging trends in the investment potential of the command area are transmitted to them in the right area.

Since we find the rural segment likely to emerge as a portfolio segment in the near future, it is prime responsibility of the rural career agents that they perform the responsibility of informing, sensing and persuading the rural prospects. It is quite natural that the business condition in rural segment is to be a bit different. The rural prospects in majority of cases are found illiterate, unorganized and ill-informed.

.5WORD OF MOUTH PROMOTION

If you serve well, if believe well, if you behave well, if you performer well the customers / users have no option but to assign due weight age to your contribution may be not today, may be not even tomorrow but must a day after tomorrow. If the organization serves well, the user has no option but to appreciate their contribution and to adopt them. Therefore we talk about this component of promotion mix in the context of insurance service. The word-of-mouth communications result into wider publicity which substantially sensitizes the process of infusing the impulse of users / prospects of the insurance service. The satisfied group of customers, the opinion leader, the social reformist, and the popular personalities act as word-of-mouth communicators. The insurance organization like the banking organization should concentrate on quality of services made available to the users so that the satisfied groups of customers accept the responsibility of promoting the services. The insurance professionals are also supposed to

seek the cooperation of opinion leader, vocal persons for promoting the business and for that the offering of small gifts to them is required essential. The branch managers bear the responsibility of identifying the popular personalities in their area and to motivate them to promote their business. The word-of-mouth of communicators is also known as the hidden sales force who promotes the insurance business sizably. This is why we talk in favor of this component of promotion mix. Another dimension of this component of the promotion mix is to seek the cooperation of users who are satisfied with the services. They are habitual users and therefore it is natural that they talk to their friend and relatives about your positives contributions. The advertisement slogans may be insensitive, the publicity measures may also be insensitive, even the sales promotion measures may be insensitive but the positive feeling of your friends and relations communicated to you can't be ineffective. This makes it clear that the most important thing in the promotion of any business is the quality of service that you offer to your users/customers. Thus the word-of-mouth promotion makes it significant that the senior executives, the branch managers keep on moving the process of improving the quality of services and at the same time also identify the opinion leaders and vocal persons in a command area. In all the segments and command areas, we find such persons having domination on the behavioral profile of the select segment, command area. The hidden sales force become very much instrumental in publishing your services for which you need to develop a rapport with them. It is essential that you organize a meeting of opinion leaders and offer to them small gift that may activate the process of

promoting your business. Thus with a nominal investment, you succeed in getting a big business. It is therefore right to opine that this component of promotion of marketing of marketing mix need due care of professionals. Today it is seen that the insurance companies are increasing their business by the word-of -mouth or hidden sales force. The public sector organizations need to assign due weight age to this component of the promotion mix which till now is found neglected.

6.TELE MARKETING
Today we find telemarketing as an important component of the promotion mix. This dimension of promotion of marketing mix promotes business with the help of two communication devices, viz. telephone and television. The foreign banking and insurance companies have been seen assigning due weight age to this component of the promotion mix and they have also received a positive response. This makes it essential that the public sector insurance organization also thinks in favor of component. The telemarketing is a devise to promote a business a in which person with a high communicative ability acts as a telemarketer and keeps on moving the process of informing, sensing and persuading the customer/users/prospects. The queries asked by customers/ users are suitably answered and the telemarketers attempt to convince them. With the development of satellite communication facilities and to be more specific with the expansion of television network, we find telemarketing gaining popularity world over. This would help them in many ways. Of late we find the sharp fall in the

quality of services of public sector insurance organizations. The customer complains grievances are not given due weigh age and redressed measure remains unnoticed due to the deficient management. This makes it essential that the public sector organization promote telemarketing to intensify the complain /grievance Redressal. We can't deny the fact that telemarketing may help the insurance professional substantially. In this context, it is pertained that they recruit a person or a group of persons bearing the potential of communicating effectively, he is supposed to be awarded to be well aware of the telephonic code so that the task of satisfying the customer/users or answering to the queries/question of the users/ prospects or even others is not to consume much more time. This is found helpful in informing and sensing the users and therefore, the telemarketers are required to talk intelligently and professionally so that the projection of a positive image is also possible. Today we have advance communication network and therefore it is presumed that almost all the branches of insurance organization have the sophisticated telephonic devices to promote telemarketing. We can't deny the positive contribution of sophisticated system in getting the desired results. Hence it is right to mention that telemarketing an important component of the promotion mix is required to be promoted and for that purpose public sector organization, are required to recruit efficient personal that can discharge their personal responsibility in right fashion. Since for getting the best output, it is pertinent that efficient personal and sophisticated technologies are available, it is essential that the insurance organization thinks in favor of developing the same on a priority basis. The foreign insurance companies have seen developing telemarketers

since they have realized the outstanding contribution of this component of the promotion

5. PEOPLE:
Understanding the customer better allows to design appropriate products. Being a service industry which involves a high level of people interaction, it is very important to use this resource efficiently in order to satisfy customers. Training, development and strong relationships with intermediaries are the key areas to be kept under consideration. Training the employees, use of IT for efficiency, both at the staff and agent level, is one of the important areas to look into. Employees The various employees involved in providing service to the customer in insurance sector are: 1 Customer service representatives: They, process insurance policy applications, changes, and cancellations. They review applications for completeness, compile data on policy changes, and verify the accuracy of insurance company records. They may also process claims and sell new policies to existing clients. Nowadays, these workers are taking on increased responsibilities in insurance offices, such as handling most of the continuing contact with clients. A growing number of customer service representatives work in call centers that are open 24 hours a day, 7 days a week, where they answer clients questions, update policy

information, and providing potential clients with information regarding the types of policies the company issues. More than 28 percent of insurance workers are in management or business and financial operations occupations. 2. Marketing and sales managers: They constitute the majority of managers in carriers local sales offices and in the insurance sales agents segment. These employees sell insurance products, work with clients, and supervise staff. Other managers who work in their companies' home offices are in charge of functions such as actuarial calculations, policy issuance, accounting, and investments.

3. Claims adjusters, appraisers, examiners, and investigators: Decide whether claims are covered by the customers policy, confirm payment, and, when necessary, investigate the circumstances surrounding a claim. Claims adjusters work for property and liability insurance carriers or for independent adjusting firms. They inspect property damage, estimate how much it will cost to repair, and determine the extent of the insurance companys liability; in some cases, they may help the claimant receive assistance quickly in order to prevent further damage and begin repairs. Adjusters plan and schedule the work required to process claims, which may include interviewing the claimant and witnesses and consulting police and hospital records. In some property-casualty companies, claims adjusters are called claims examiners, but in other companies, a claims examiners primary job is to review claims to ensure that proper guidelines have been

followed. Only occasionallyespecially when disasters suddenly increase the volume of claimsdo these examiners aid adjusters with complicated claims. In the offices of life and health insurance carriers, claims examiners are the counterparts of the claims adjuster who works in a property and casualty insurance firm. Examiners in the health insurance field review health-related claims to see whether the costs are reasonable based on the diagnosis. Examiners check claim applications for completeness and accuracy, interview medical specialists, and consult policy files to verify information on a claim. Claims examiners in the life insurance field review causes of death and also may review new applications for life insurance to make sure that the applicants have no serious illnesses that would prevent them from qualifying for insurance. Insurance investigators handle claims in which companies suspect fraudulent or criminal activity, such as suspicious fires, questionable workers disability claims, difficult-to-explain accidents, and dubious medical treatment. Investigators usually perform database searches on suspects to determine whether they have a history of attempted or successful insurance fraud. Then, the investigators may visit claimants and witnesses to obtain a recorded statement, take photographs, inspect facilities, and conduct surveillance on suspects. Investigators often consult with legal counsel and are sometimes called to testify as expert witnesses in court cases. Auto damage appraisers usually are hired by insurance companies and independent adjusting firms to inspect the damage to a motor vehicle after an accident and to provide unbiased estimates of repair cost. Claims

adjusters and auto damage appraisers can work for insurance companies, or they can be independent or public adjusters. Insurance companies hire independent adjusters to represent their interests while assisting the insured, whereas public adjusters are hired to represent the insureds interests against insurance carriers. Loss control representatives assess various risks faced by insurance companies. These workers inspect the business operations of insurance applicants, analyze historical data regarding workplace injuries and automobile accidents, and assess the potential for natural hazards, dangerous business practices, and unsafe workplace conditions that may result in injuries or catastrophic physical and financial loss. They might then recommend, for example, that a factory add safety equipment, which a house is reinforced to withstand environmental catastrophes, or that incentives are implemented to encourage automobile owners to install air bags in their cars or take more effective measures to prevent theft. Because the changes they recommend can greatly reduce the probability of loss, loss control representatives are increasingly important to both insurance companies and the insured. 4. Underwriters Underwriting is another important management and business and financial occupation in insurance. Underwriters evaluate insurance applications to determine the risk involved in issuing a policy. They decide whether to accept or reject an application, and they determine the appropriate premium for each policy.

5. Insurance sales agents About 15 percent of wage and salary employees in the industry are sales workers, selling policies to individuals and businesses. Insurance sales agents, also referred to as producers, may work as exclusive agents, or captive agents, selling for one company, or as independent agents selling for several companies. Through regular contact with clients, agents are able to update coverage, assist with claims, ensure customer satisfaction, and obtain referrals. Insurance sales agents may sell many types of insurance, including life, annuities, property-casualty, health, and disability insurance. Many insurance sales agents are involved in cross-selling or total account development, which means that, besides offering insurance, they have become licensed to sell mutual funds, annuities, and other securities. These agents usually find their own customers and ensure that the policies sold meet the specific needs of their policyholders. 6. Lawyers The insurance industry employs relatively few people in professional or related occupations, but those who are so employed are essential to company operations. For example, insurance companies lawyers defend clients who are sued, especially when large claims may be involved. These lawyers also review regulations and policy contracts. Nurses and other medical professionals advise clients on wellness issues and on medical procedures covered by the companys managed-care plan. 7. Actuaries:

They

represent a relatively small proportion of employment in the

insurance industry, but they are vital to the industrys profitability. Actuaries study the probability of an insured loss and determine premium rates. They must set the rates so that there is a high probability that premiums paid by customers will cover claims, but not so high that their company loses business to competitors. 8. Strengthening relationships The agent is the main intermediary between the customer and the insurer. The customer-agent link is stronger than the agent-company link; customer loyalty to the insurer depends on how strong the agents link with the customer is. A death claim provides a tremendous opportunity to strengthen this link The agent is expected to keep in constant touch with his policyholders to become aware of the changes in his situation including marriages, deaths of relatives, releases change like title to policy moneys or more insurances policyholders and the family. An agent who is likely to be perceived as selfish, not concerned about the policy holders interests and therefore, not believed. The agents show of concern could also be interpreted as not genuine and therefore, his promises not very dependable. A study made by insurance institute of India in 1987, by interviewing 2510 policyholders in 26 cities, had the following observations.

Agents do not maintain regular contact with policyholders, although they are seen as available whenever necessary

50% said that if they had any work to be done, they would go to the office directly rather than get in touch with the agent Agents are perceived as knowledgeable, but also as concerned more with their own benefits than those of policyholders.

These observations reflected badly on the agents. They dont know about the insurance business. The public sector insurance organization bear the responsibility of promoting the rural segment and therefore, it is pertinent that they develop and promote the rural career agents. The rural career agents should have high communicative ability and hero of regional languages. This simplifies their tasks of influencing people. The rural career agents lack patients. They avoid going to villages and dont knowing art of influencing the rural prospects and even lacking rural orientation. They are not personally committed and these negative traits as a barrier, specially while persuading rural prospects. It makes a strong advocacy in favor of developing the rural career agents in a different way. They need special training programs, refreshers courses and special incentives to stay and work in villages like a professional. Almost all the segments in the rural areas have tremendous potentials, and the rural career agents are suppose to capitalize on the opportunities optimally. Personal selling thus requires an intensive care. It is high time that THE CAREER AGENTS SCHEME and the RURAL CAREER AGENTS SCHEME are promoted

6. PROCESS:
The process should be customer friendly in insurance industry. The speed and accuracy of payment is of great importance. The processing method should be easy and convenient to the customers. Installment schemes should be streamlined to cater to the ever growing demands of the customers. IT & Data Warehousing will smoothen the process flow. IT will help in servicing large no. of customers efficiently and bring down overheads. Technology can either complement or supplement the channels of distribution cost effectively. It can also help to improve customer service levels. The use of data warehousing management and mining will help to find out the profitability and potential of various customers product segments. Process plays s a vital role in the production and delivery of a service and essentially comprises the procedures and patterns involves in it. Insurance business too is a service and in this concept, we shall discuss the actual impact of a process upon a services and the importance of having a welldeveloped process in place. A process is the sum total of the procedures, mechanisms and routines that are involves in the generation and delivery of a services to a customer. Policy decision pertaining to issues of customer involvement and employee discretion also forms a part of process. Thus, process involves three concepts, these are: i. ii. iii. A series of procedures Creation and delivery of product Customer participation and involvement

In order to determine the marketing program for insurance product, it is necessary to have an understanding of process characteristics, the types of processes and decision factors in insurance process planning. The marketing manager of an insurance company has to design an insurance blueprint and ensure a balance between insurance marketing and insurance operation in order to use the insurance process as a tool for competitive

7. PHYSICAL DISTRIBUTION:
Distribution is a key determinant of success for all insurance companies. Today, the nationalized insurers have a large reach and presence in India. Building a distribution network is very expensive and time consuming. If the insurers are willing to take advantage of Indias large population and reach a profitable mass of customers, then new distribution avenues and alliances will be necessary. Initially insurance was looked upon as a complex product with a high advice and service component. Buyers prefer a face-to-face interaction and they place a high premium on brand names and reliability. As the awareness increases, the product becomes simpler and they become offthe-shelf commodity products. Today, various intermediaries, not necessarily insurance companies, are selling insurance. For example, in UK, retailer like Marks & Spencer sells insurance products. The financial services industries have successfully used remote distribution channels such as telephone or internet so as to reach more customers, avoid intermediaries, bring down overheads and increase profitability. A good example is UK insurer Direct Line. It relied on

telephone sales and low pricing. Today, it is one of the largest motor insurance operators. Technology will not replace a distribution network though it will offer advantages like better customer service. Finance companies and banks can emerge as an attractive distribution channel for insurance in India. In Netherlands, financial services firms provide an entire range of products including bank accounts, motor, home and life insurance and pensions. In France, half of the life insurance sales are made through banks. In India also, banks hope to maximize expensive existing networks by selling a range of products. It is anticipated that rather than formal ownership arrangements, a loose network of alliance between insurers and banks will emerge, popularly known as banc assurance. Another innovative distribution channel that could be used is the nonfinancial organizations. For an example, insurance for consumer items like fridge and TV can be offered at the point of sale. This increases the likelihood of insurance sales. Alliances with manufacturers or retailers of consumer goods will be possible and insurance can be one of the various incentives offered for insurance companies

A distribution channel is the route by which the product prepared by the producer reaches the ultimate consumer. The distribution channel bridges the distance between the producer and the consumer. In case of goods, the product manufactured in the factory passes through wholesalers, stockiest

and retailers, before it reaches the consumer, in case of life insurance, agent is the primary component of the distribution channel. He is the equivalent of the retailer. The supervisor of agents, by whatever name called, is an important part, because it is he who, by creating and training agents, makes the channel effective. New agents widen the channel Equally important would be the other intermediaries, like brokers and insurance consultants. Some life insurers are trying to eliminate intermediaries to save cost. Direct selling is one such attempt. This is increasing in foreign countries. In India, people, by and large known life insurance, but still have a lot of wrong notions about it. Personal contacts by agents may continue to be necessary for quite some time. Another method being attempted is the use of the extensive network of banks and life insurers are practically from the same segments of population. Through the same contact, the prospect can be helped to arrange for both bank deposits to access vast areas. It may be possible to develop composite products having the elements of both life insurance and banking. These trends have to develop.

MARKETING INFORMATION SYSTEM FOR INSURANCE ORGANIZATIONS

The emerging multi-dimensional changes in the socio-economic and business condition make it essential that like other organizations, the insurance organization also manage information with the help of

sophisticated information technologies. The technology driven marketing information system has already been promoted by the foreign insurance companies and this had helped them in making the marketing decision creative. There is need to promote information based decision and the senior executives and the policy planner have to think about the well developed technology-driven information system. A continual surveillance over the MIS would be effecting in preparing an initial design. Here it is pertinent to mention that designing of blue print is a difficult task and if it is done satisfactorily, the system analyst would find it convenient to finalize the growing and changing information requirements of insurance organizations. It is high time that the system designer is vigilant so that the nature of information required is studied in the right perspective.

The insurance business is done with many branches. This makes it clear that MIS is to be useful at all the three level e.g. corporate level, Regional level, and Branch level. At the apex level there a number of measures of collecting informational but to be more specific at the branch level, where the business comes from, the management of information are found very poor. This makes it essential that branch manager realize importance of the situation and enrich their information bank related to his her command area. The marketing planning and budgeting cant be productive unless the branch manager is well informed.

Segment-wise data

It is natural that segment-wise collected data simplifies the task of branch manager, especially while identifying the profitable segment. In this context the important source are the commercial banks where the branch manager can get the detailed information regarding the current income of existing employees, retired persons, pension holders retired person, pension holders, small and big business holders etc. a direct link with the concerned organization will also serve the purpose. At branch level manager prepare a salaried persons, employees working in the formal and the informal sectors and different categories of agriculturist with the support of related organization and village level committees. The agents and rural career agents, the electoral roll, district census would also help the process of enriching the informational bank. The management of information of particularly with a view point of making creative marketing decision simplifies the task of branch manager. With the support of the agents and rural career agents and front line staff the branch manager can be efficacious in collecting information related to his command area. At the branch level the management of information becomes important since the multidimensional developments in the command area can be studied and the necessary information can be transmitted to the senior executives and the policy maker. Even at the regional and the corporate level, the management of marketing information is found significant since the changes required in the policy decisions cant be made possible unless the branches and region make available the necessary information. To be specific when we find the intensity of threats and challenges moving upward , it is pertinent that the insurance organization in general and the public sector in particular enrich the information bank and keep

themselves engage in innovative their marketing decisions. This would have a far reaching effect on the service mix of the insurance organization since they can offer innovative service or scheme and can add attraction to their services by innovating the peripheral services. The formulation of an attractive package would also be possible which would act as a mutation tool. In additional, the decisions related to other mixes of the marketing, such as promotion, premium and bonus, offering of services, instrumentality of insurance professionals, development of dedicated and professionally committed personnel would also be made creative to sensate the prospects. It is against this background that the management of marketing information with the help of a technology driven system needs due attention of the insurance organization.