CB Life Insurance Company LTD

CB CB
Life Insurance Company Ltd.
Learning Outcomes
1. Understand, Who is an Insured

2. Understand, the Different Types of Customers, and How they Differ
3. Understand, Customer Mind-Sets and Customer-Satisfaction
4. Discuss, the Importance of Ethical Behaviour
Page 2 CB Life Insurance Company Ltd.
CB CB Life Insurance Company Ltd.
1. Understand, Who is an Insured (1)
• Marketing is all about segmentation between the various customers.

• The aim of marketing is to identify niche customers and approach
them with the products or solutions relevant to them.
Categories of the
Insured/ Customers
Retail: Small and

Retail: Individual
Medium Enterprises Corporate Customers
Customers
(SME)
1. Retail: Individual customer

• Individuals in their personal capacity.
• Major products bought by individuals are
o Personal Accident policy
o Motor Insurance; Third-party cover is a compulsory insurance in most countries
o Health insurance; vary from hospitalization treatment cost to full reimbursement
o Building and contents; not so common in India but fast catching up
• In the past, individual products are purchased either directly from insurer or through
agency network.
• In UK market, individual market is almost totally served remotely by call-centers/
web-selling.
2. Retail: Small and Medium Enterprises (SME)

• Similar to Individual Market with major share of sales is being via the web
• Much of its sales are seen as a commoditized market via a packaged
product.
• Risks are grouped into relatively simple underwriting sectors such as
o Small shops
o Offices
o Restaurants and cafes
o Hotels
• Many insurers are expanding this market into Small Manufacturing Sectors
but excluding heavy risks such as Wood Working, Fire-Works, Risks with
International links.
• Under this market, underwriting is simplified and terms and conditions are
common across most covers.
3. Corporate Customers
• In major markets like USA, Europe, Australia, this is almost exclusively the
province of professional insurance brokers.
• Over 90% of the corporate market is in broker province.
• This can be subdivided on the basis of sectors such as
o Energy
o Finance
o Leisure markets etc.
• On the basis of size such as Mid-size companies, companies having national foot-
print, multi-national corporations (MNCs)
• In this Corporate Market, classes are big enough to require and warrant the
individual underwriting and pricing.
2. Understand the Different Types of
Customers and How they Differ (1)
What is Customer?
• A customer is a person who buys goods or services that a business has to offer.
• Customers are the people who are not a part of the business.
• Businesses must produce goods or services that meet the needs of its customers.
• Businesses must keep in mind the interests and concerns of the customers.
Customer Differences
• Not all customers are outsiders
• Internal Customers is when the work output of one department becomes
the input of another department in the same organization.
• Internal Customer is for inter-relationship of departments.
• No purchase of goods or services when providing output to internal
customers.
2. Understand the Different Types of
Customers and How they Differ (2)
Differences of Insurance Customers

• Purchasing tangible goods provides immediate
sense of gratification from the purchase
Purchase of insurance
• Is based on the likelihood of tragedy and not on the expectation of immediate
pleasure.
• Customers must forego a current need in order to meet a need that may arise in
the distant future.
• Customers have to visualize the possibility of a tragedy before seeking insurance.
• Insurance customers do not have any current dis-comfort.
• Insurance sales-person has to create the un-pleasant images and anxiety for the
customer.
• Attrition rate among insurance agents is high since insurance sale person’s job is
more difficult than other sale persons
3. Understand Customer Mind-sets and
Customer-Satisfaction (1)
Changing Mind-set of Customers

• Customers’ mind sets are different during the course of a policy – at
the time of taking policy and at the time of making a claim.
Life Insurance Customers

• In life insurance, customers buying the policy are not the same as
the customer making a claim.
• Real value of life insurance is only experienced at the time of claim.
3 Types of Life Insurance Customers
The person who The person who

The person who
collects the received the death
buys the policy
maturity proceeds claim
• Has the mind set of • Is happy that she/he • Feel relieved from
reluctance to set has survived anxiety knowing that
aside the money • Regret that she did she receives the
• May doubt the not put the money money
wisdom of his to better use
choice at the start of
the policy
General insurance Customers

• In GI, customers who buy the insurance is the same as the claimant.
Mindset is different at two different times
At the time of purchase

• Set the minimum amount of insurance cover
• Do not see the need for insurance
• Reluctant to buy it
At claim time
• Distressed and insecure about the claim procedure
• Wants the maximum claim amount possible
• May be angry because loss is not fully compensated
Role of Intermediaries
• Agents and brokers are responsible to make sure the customer is
satisfied when policies are taken.
• Servicing activities (SA) are when the agents are keeping customers
satisfied during the policy-in-force, not just at the time of claim.
• SA make sure customers are not attracted to another insurance
company.
• SA are more important in Life Insurance due to the amount of time
polices run for.
• SA help to reduce the inner conflict of the policy-holder.
• Surveyors and TPAs play a major role in keeping customers happy.
• They are more inclined to technically correct.
• Customer orientation and customer service is more important in life
insurance business than any other business.
• Insured product is just a promise and so customer centricity is critical.
4. Discuss the Importance of Ethical Behaviour
Importance of Ethical Behavior

• Being ethical in Business is about doing the right thing such as being honest.
• Accountability and Corporate Governance which together are called Ethics in Business.
• Foundation of Good Governance is Ethical Behavior.
• Insurance business is based on Trust.
• Mis-selling is when in-correct information is given to potential policy-holders in an
attempt to get them buy insurance.
• Unethical behavior happens when the benefits of self are considered more important
than the benefits of policy-holders, when the officers of insurers are more concerned
with targets of the business than the needs of policy-holders.
Free-Look Period
• IRDAI has prescribed a free-look period of 15 days for life insurance, general insurance,
and health insurance policies to mitigate the compromise of ethics.
• During free-look period, a refund of premium will be made to the insured after deduction
of morality charges for the risk-cover, medical expenses and stamp-duty charges.

CB Life Insurance Company LTD

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

CB Life Insurance Company LTD

Uploaded by

Copyright:

Available Formats

CB CB

1. Understand, Who is an Insured

• Marketing is all about segmentation between the various customers.

Retail: Small and

1. Retail: Individual customer

2. Retail: Small and Medium Enterprises (SME)

Differences of Insurance Customers

Changing Mind-set of Customers

Life Insurance Customers

3 Types of Life Insurance Customers

The person who The person who

General insurance Customers

Mindset is different at two different times

At the time of purchase

Importance of Ethical Behavior

You might also like