BANCASSURANCE

CERTIFICATION
WORKSHOPS
BANCASSURANCE
MARKETING
AND DISTRIBUTION
CHANNELS
 Etymology: historical development

According to etymologists, the term 'marketing' first

appeared in dictionaries in the sixteenth century where it
referred to the process of buying and selling at a
market. The contemporary definition of 'marketing' as a
process of moving goods from producer to consumer with an
emphasis on sales and advertising first appeared in
dictionaries in 1897. The term, marketing, is a derivation of
the Latin word, ”mercatus ”meaning market-place or
merchant

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WHAT IS MARKETING?
› Marketing is the life wire of any insurance organisation.
Insurance without a good marketing team and strategies
is bound to fail
› The process of determining consumer demand for a
product or service, motivating its sale and distributing
for consumption at a profit.
› The creating, promoting and developing goods and
services for consumption by consumers
 Marketing Orientations/Philosophies

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 Exchange orientation/philosophy

Also known as the BARTER concept, this is marketing at

the primitive stage, where goods were exchanged for
goods. It was popular in the medieval periods, where
subsistence farming and production was predominantly
common among virtually all economies of the world. The
challenges of this phase in marketing evolution are
majorly the problems of double coincidence of wants and
the acceptable medium of exchange for goods
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 Production orientation/philosophy
1860 -1930

Emphasis on
Minimal Say’s Law Emphasis on
promotion & “Supply manufacturing
advertising creates its efficiency
own demand”

Research Preaches Assumption

technical- economies of of demand
product scale to exceeds
oriented reduce cost supply

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 Selling /Sales orientation/philosophy
Industrial revolution era
(1930 – 1950)

Emphasis on Deployment of
Mass production aggressive sophisticated
marketing sales strategies

Limited
Popularity of Emphasis on concern for
advertising and selling as the consumer
personal selling goal of a relationship and
company satisfaction

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 Product Orientation/philosophy
early 1950s - late 1950s

Research based
primarily on Emphasis on Assumption of
product Product Quality consumers prefer
improvements innovative products

Assumption of Product
consumers prefer optimum
innovative performance is
products key

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 Marketing orientation/philosophy
Late 1950s – twentieth century

Value Customer
Customer- creation and retention
oriented customer through
marketing satisfaction qualitative
efforts
services
(CRM)

Emphasis on Focuses on
Emphasis customer the need of
market satisfaction in the
research all stages of customer
production to
distribution
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 Societal marketing orientation/philosophy
Emerged in 1970s

Emphasis need
to recognize
Long term
Advocates societal needs Advocates
giving back to
harmonization
business’s
of consumer
immediate
and societal
environment
Preaches a needs by
(CSR)
socially business
responsible organizations
business
behaviour

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 Marketing Vs. Selling
ØMarketing includes selling and other activities like various
promotional measures, marketing research, after sales
service, while Selling is confined to persuasion of consumers
to buy firm’s goods and services.
ØMarketing starts with research on consumer needs, wants,
preference, likes, dislike etc., and continues even after the
sales have taken place, while Selling starts after the
production process is over and ends with the handing over the
money to the seller by the buyer
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 Marketing Vs. Selling
ØMarketing focuses is on earning profit through
maximization of customers’ satisfaction. While Selling
focuses is on earning profit through maximization of
sales.
ØIn Marketing , customer’s need is the central point
around whom all marketing activities revolve. While in
Selling, fragmented approach to achieve short-term
gain.
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 Marketing functions
Distribution of Storage and
Market research
products & warehousing of
& planning
services products

Standardization of Product planning

Marketing
products & services & development

Promotion of
products & Selling and Pricing of products
services exchange & service
Benefits of Marketing
Builds Promotes Facilitates
Company Product Product
reputation appropriateness awareness

Product
Boosts sales availability and
& revenue marketing
accessibility

Satisfaction Breeds
Provides
of wants and competitive
employment
needs edge
opportunities
 Insurance in the “service”
context
Insurance in the “service” context argues that there is special need
to define or understand insurance with special reference to the
concept of “service”
Service was defined as;
ØActivities, benefits and satisfactions, which are offered for sale or
are provided in connection with the sale of goods” (American
Marketing Association , 1960)
ØServices include all economic activities whose output is not a
physical product or construction, is generally consumed at the time
it is produced, and provides added value in forms (such as
convenience, amusement, timeliness, comfort or health) that are
essentially intangible concerns of its first purchaser” (Quinn,
Baruch and Paquette, 1987).
Characteristics of a
service
variability

perishability service inseparability

ownership intangibility
The service industry

education
health insurance

transportation Banking
Legal service
Life insurance products
General insurance products
The Insurance Market

BUYERS

REGULATOR SUPPORT
R
SERVICES
INTERMEDIARIES
SELLERS
The Insurance Market

u Buyers – Individuals, Corporate organizations, Government

u Intermediaries – Brokers (Re/Insurance), Agents
u Sellers – Insurers, Reinsurers
u Support Service Providers - Loss Adjusters, Surveyors,
Motor Assessors, Surveyors, Marine Superintendents
u Regulators – Statutory and Self
Distribution Channels in Insurance
Direct Writing

Insurance distributed by insurance companies, without intermediaries,

through the use of direct marketing. This channel is split into:
q Employees
• The company’s own sales force operating from branch networks
• Distance selling - Call centres (telesales), the internet, mailing, etc.
Distribution Channels in Insurance
Direct Writing (contd.)

q Intermediaries
§ Agents - Intermediaries who represent the interests of the insurer
• Tied agent - Intermediary acting as an agent of the insurer and
under exclusive agreement to refer business to one insurer
• Multi-tied agent - Intermediary acting as an agent for several
insurers and with multiple insurer agency agreements
§ Brokers - Intermediaries who represent the interest of the client
Distribution Channels in Insurance
Direct Writing (contd.)

§ Other intermediaries - Intermediaries such

as affinity groups (aggregators), car sellers,
estate agents, travel agencies, etc.
Marketing Strategy

› Marketing plans are designed to achieve marketing objectives.

› A good marketing strategy should integrate an organization's
marketing goals, policies, and action sequences (tactics) into a
cohesive whole.
› The objective of a marketing strategy is to provide a foundation
from which a tactical plan is developed. This allows the
organization to carry out its mission effectively and efficiently.
›The techniques used in Marketing Strategies of insurance
companies include: Segmentation, Targeting, Positioning.
Components of Marketing Strategies

q Pricing
q Personal selling
q Advertising
q Word of mouth selling
q Institutional image
q Quality control
q Marketing orientation
New Approaches to Marketing Strategy

• Modern tools and techniques used by marketers to boost

insurance sales include:
q Innovation
q Advertising and sales promotion
q Technology
q Distribution channels
 Marketing mix for
Bancassurance products
 BANCASSURANCE BASIC MODEL

Financial
services

Bancassurance

Banks Insurance firms

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 Bancassurance Utilities for
insurers

Competitive High cost

strategy effectiveness

Enhanced
Customer
Rural Satisfaction
penetration Multi-channel
distribution
Targeting
middle
income
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 BANCASSURANCE DISTRIBUTION
MODELS

STRUCTURE BASE PRODUCT BASE

MODELS MODELS

Ø Referral model Ø Stand-alone

Ø Corporate agency model
model Ø Mix/Blend
Ø Joint venture model
model

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 Challenges of Bancassurance
products marketing in Nigeria
Cultural & Poor
Poor industry
image & religious awareness &
reputation barriers enlightenment
Low income
Poor regulatory &
framework poverty
Lack of
Poor claims poor customer
inclination to relationship
records &
patronize management
history
insurance
 Marketing skills for effective
Bancassurance products marketing

Interpersonal Communication
skill skill
Motivational
Product & skill
service Organizational
knowledge skill
skill