Insurance Business For Sale
Insurance Business For Sale
Get Instant Health Insurance Quotes!
Insurance Marketing: Creating a Successful Marketing Strategy for the Insurance Industry in Sierra Leone
OVERVIEW:
A common perception about insurance in most African countries is that carriers generally fail to honor policy contracts when insured losses occur, and in most cases resort to fine prints embedded in these insurance contracts to either deny claims or substantially reduce claim payments. Such is the refrain heard not only among insurance policyholders and customers but with alarming regularity from the general public, thus resulting in the adverse and low penetration rate of insurance products and services in most African countries.
Though several factors can be readily identified as drivers of this perception including the lack of adequate understanding of the insurance contract, its terms and conditions, limitations, coverages, exclusions and deductibles including the legal and regulatory framework in various countries; the focus of this article is how the role of insurance marketing and sales, including its technological, regulatory and management strategies, can be utilized as an effective educational vehicle in changing not only the above perception but making the claims process more transparent and beneficial to the policyholders.
There is thus a direct corollary between the marketing of insurance, the technical knowledge of the agent, the types of coverages and policies available and whether a claim is denied or underpaid in the event of an insured loss.
THE SIERRA LEONE CASE STUDY:
For decades the marketing of insurance products and services in Sierra Leone has hinged primarily on the “direct agency” method, wherein companies employed agents earning salaries or as independent contractors being paid commissions on sales to merely sell and market their products. The marketing of life insurance products, property and liability policies such as fire, marine, accident and allied policies were always mostly marketed by these company agents.
For example, while I was employed at the National Insurance Company (NIC) 1981-1985, the company’s sales cadre was its marketing officers who sometimes with little or no technical knowledge of the intricacies of risk management and the insurance products coverages merely sold policies as commodities. The unpleasant task most often in advising policyholders that their claims were not covered under the terms of the insurance contract generally was our responsibility in the claims department. By then, it had become too late to remedy as the right coverage was not either sold to the policyholder by the agents or alternative umbrella policies that could have covered whatever gaps existed in the sold policy were not made available or explained to the policyholder. Mostly issues of lack of coverage, adequacy of coverage for the losses claimed resulted in denial or underpayment of claims.
The sales function of these agents revolved mainly around the marketing of products or policies with little or no product differentiation or creativity in their design and marketing to meet the contemporary risks confronting a country such as Sierra Leone, emerging from a decade long civil war and longing for creative policies to address her developmental aspirations.
For example, the old “Kebbay” insurance syndrome, practiced in Sierra Leone where an insurance company became so notorious in the practice of collection of motor premiums from customers without any concomitant claims payout when accidents occurred. Such a practice as prevalent in the Sierra Leone Insurance marketplace of the 1970’s through 1990’s most be prevented from rearing its ugly head in today’s marketplace.
Marketing as defined by the American Marketing Association (AMA), is the performance of business activities that direct the flow of goods and services from the producer to the ultimate consumer. Property, casualty and liability insurance marketing however not only includes the traditional marketing sales function but incorporates services such as customer needs analysis, market segmentation, product development and distribution that must be incorporated into a successful marketing mix.
INSURANCE MARKETING:
A fundamental principle of insurance marketing dictates that insurance products and policies must be marketed and sold primarily on the basis of the need for security and the ability of the insurance product and policy to provide adequate financial security from fortuitous losses. Moreover, new sources of production of business that includes new ways of selling old traditional insurance policies and products, in conjunction with the marketing of new services, such as risk management, loss control and loss adjustment services should be pursued by insurance companies.
However, in some lines of insurance, a governmental-legal or regulatory compulsion to insure is the driving factor. For example, purchase of automobile liability insurance is required by law in most jurisdictions the world over. The recently advocated proposed requirement of a title insurance policy in real estate transactions in Sierra Leone and a national health insurance or workers compensation insurance policy are all examples of such a legal mandatory requirement.
To a large extent these have and continue to be the principles and services absent in the marketing mix of insurance products in Sierra Leone, thus resulting in recent spectacular failures in the introduction of new products and or failures in the market penetration of various new diverse policies into the insurance marketplace. As an example, the failure of various insurance companies including the spectacular failure of the country’s largest insurance company, the National Insurance Company (NIC) to effectively introduce and market a national health insurance policy (NICARE) since 2004 is a case study of a monumental marketing failure requiring analysis in a future article.
THE SALES FUNCTION: To be successful however an insurance producer/agent must develop other skills in addition to the sales skills to include:
1) Technical expertise in insurance principles and coverages- as customers usually depend on their agents for guidance in selecting the proper combination of insurance products and identification of gaps in coverages.
2) Skills in the analysis of consumer needs through risk management identification techniques and the tailoring of insurance programs are a prerequisite.
The first step in managing a consumer’s risk needs is through the identification and analysis of the loss exposures to which a customer is exposed or subjected to through an insurance survey. The agent must educate and be able to impact sufficient knowledge of the client’s loss exposures and available coverages and other non-insurance transfer mechanisms to the customer.
SALES MANAGEMENT: Generally, the concept of sales management in insurance involves the active participation and direction accorded the sales force by management in ensuring the nature and amount of business desired by the insurance carrier. This entails the determination by management of:
1) The segments of the available market that can be reached most effectively by the company’s agents.
2) The nature of the product/policy that will be most appealing to the selected market segments and most profitable to the insurer.
3) How best to select, train and motivate producers/agents to sell to the selected market segments.
The selection of geographic, demographic and or industrial segments of the market to target in the marketing of insurance products ensures effective market segmentation and effective use of resources. The demographic groupings may be further delineated by such characteristics as age, income, occupation and sex.
With the utilization of such a technique for example, diverse insurance policy coverages covering health, medical, accident, disability and workers compensation to name but a few, could be tailored and offered to such segments as civil servants, parliamentarians, teachers, college lecturers, healthcare providers, Okada riders and farmers throughout the country. The same could apply to the security segment including policies specifically designed to meet the needs of the military and police forces.
Moreover, through utilization of product differentiation techniques in its marketing mix, an insurance carrier can maintain and increase its market share. These can be accomplished by changing the standard coverage provisions in the contract; charging a different price and by providing a different level of service than the competition.
TECHNOLOGIES: With the gradual installation of computers in insurance companies in Sierra Leone, new technologies are poised to play a major role in the coordination of marketing strategies, planning and studies including new products and services, consumer attitudes, market potentials and sales forecasting. The use of computers for not only accounting, statistical analysis and rate making and issuance of policies and endorsements but also insurance marketing must be vigorously pursued by individual companies.
The establishment of a marketing database by insurance companies separate and apart from the underwriting and claims databases must a step in the right direction in implementation the new marketing strategy.
MARKETING CHALLENGES: The challenge thus facing the local industry is the need for diversification of insurance products better tailored and suited to meet the needs and development of the country. For while the insurance industry can play a very significant and critical role in a nation’s developmental process, the challenge currently being faced is how our insurance professionals respond by creatively introducing insurance policies, instruments and marketing techniques to serve as a basis for the country’s sustained economic development.
In the United States there are four distinguishable systems for marketing property and liability insurance. These include:
Independent agency system.
The exclusive agency system (also known as the captive agency system).
The direct writing system.
The direct mail system.
The system primarily in use in the Sierra Leone insurance market is the direct writing system wherein individual carriers employ their paid agents and employees to exclusively market only their policies. However, if the insurance market in Sierra Leone is to survive and grow, as new players and products such as the national health insurance scheme and the national title insurance scheme are introduced into the marketplace, then the development of a new bred of producers, agents and marketing systems must be pursued to forestall the failures of recent new policy introductions. These must include and incorporate the direct mail, agency and technology systems.
To effectuate this new marketing goal a sales force must be recruited and trained into the intricacies of the insurance business and policies being introduced and marketed with realistic production objectives, marketing policies and strategies and implementation of an advertisement and promotion campaign.
About the Author
The author, Mr. Kortor Kamara has over 25 years experience in the insurance industry both in Sierra Leone and the United States. He is a Chartered Property & Casualty Insurer and holds the Workers Compensation Claims Professional (WCCP) designation. He is a Member of the Chartered Insurance Institute (London); Certified Self-Insurance Claims Administrator-State of California; Registered World Bank Consultant and has served as a Consultant on various Insurance initiatives in Sierra Leone, including design of the country’s first Title Insurance Policy.
In addition, Mr. Kamara is a graduate of Fourah Bay College, University of Sierra Leone, 1978-1981; studied Law at both the Univerisity of West Los Angeles School of Law and the California Southern School of Law in Riverside. He is currently a Doctoral Candidate in Insurance and Risk Management.
Through association with Saddleback Re, were he serves as the Regional Manager, Africa Division, Mr. Kamara is intimately involved in the provision of reinsurance coverage, policy design, loss control, training and risk management services to the African Insurance marketplace. Mr. Kamara can be contacted at KortorKamara@yahoo.com.
www.saddlebackre.com.
what insurance companies offer base + commissioned pay in life and health sales/ or a book of business?
I am looking to do insurance sales with a company that has paid training and offers a book of business- this is for life and health-could someone give me some names of companies that do this -oh and I live in Va
Yes, there ARE insurance companies that offer a base book of business which pays service fees, in addition to your commissions and bonuses. Also, you can qualify for All-Expense-Paid Convention Trips to some fantastic places around the world.
Some answerers on YA! who just work in an agency do not know all the ins and outs of the insurance business. BTW, Your First Year Commission, Increase Bonuses, Existing Service Fees, and other perks could be more than commissions alone in an agency. All your benefits are worth something.
These companies offer paid training, a guaranteed income to start, base book of business, life/health/dental/disability insurance, matching 401-K, company-paid retirement, and all expense-paid trips.
American General Life Ins. Co.
Met Life
Monumental Life Insurance Co.
Western-Southern Life Ins. Co.
All these companies at one time were known as “debit” companies, where the agent was assigned a debit, and went out and made collections. This was called “home service”. Some of the agents still do this type of business, but it is not as common in today’s market.
The home service, or debit, agents were in most of their homes on a monthly basis. They kept up on family members who graduated from high school or college, marriages, births, new home purchases, new jobs, etc. A great source for sales.
“Mom and Dad had this agent or company, so that’s who I’ll buy my insurance from”. (Trust)
These companies still have these books of business, and when someone retires or quits, the company assigns the books to new agents for service. Most of the business on the books are either on automatic bank deduction, or direct mail.
These existing books of business are great resources for additional sales and referrals.
Best wishes.
|
|
United Solutions Snap and Lock Plastic File Tote, Black $13.99 Whether you need to organize files for easy access or you want to store the old ones, this durable file box from United Solutions will handle both tasks. Can accommodate hanging files, letter and legal size documents. The streamlined design of the patented Snap and Lock lid, keeps your valuable documents safe and secure. Multiple file boxes stack nicely and slide effortlessly. Black file box with … |
|
|
I LOVE INSURANCE 1.25 MAGNET Heart Progressive Flo $0.79 These magnets are manufactured from the highest quality materials… made of a hard metal base, thick mylar, strong magnet and true to life vibrant colors. Put them on your refrigerator, locker, file cabinet or any metal object you can think of! Magnets are great party favors for your next gathering and also make great prizes/giveaways. They are wonderful gifts for everyone!… |
|
|
I HEART FLO Coffee Mug $15.95 Get your big tricked out mug!… |
|
|
Prevacid 24HR Capsules Lansoprazole delayed-release capsules 15 mg / acid reducerMay take 1 to 4 days for full effect, although some people get complete relief of symptoms within 24 hours Clinically Proven To Treat Frequent Heartburn Sodium Free14 CapsulesOne 14-Day Course of TreatmentQuestions or comments? Call 1-800-452-0051Prevacid® is a registered trademark of Takeda Pharmaceuticals North America, Inc., and is used… |
|
|
One Touch Ultra Blue Mail Order Test Strips, 50 CT $14.99 The One Touch Ultra Test Strips 50 helps keep your blood glucose under control. With diabetics being very common, these One Touch blue test strips will allow you to constantly check the level of your blood sugar from home. It is very user friendly as it just requires a one touch function. You can comfortably view your blood glucose levels before and after meals. The blood glucose test strips requi… |
|
|
One touch Ultra 100 Count $47.95 May substitute with two 50ct boxes, same strips inside… |
|
|
INSURANCE ID WALLET $1.99 Insurance & Registration Holder, Protective Case For Insurance Certificate & Registration, Blister Card…. |
|
|
I LOVE INSURANCE Pinback Button (((LARGE))) 2.25 Pin / Badge Heart Progressive Flo $0.40 These buttons are manufactured from the highest quality materials… made of a hard metal base, thick mylar, and true to life vibrant colors. Put them on your bag, t-shirt, jacket, guitar strap, or anywhere else you can think of! Buttons are great party favors for your next gathering and also make great prizes/giveaways. They are wonderful gifts for everyone!… |
|
|
Insurance Is Fun T-Shirt, Kiss Me I’M ALL RISK. Slogans Light T-Shirt by CafePress Spring Sale Price reflects 15% off regular price… |
|
|
Similac Alimentum Hypoallergenic Baby Formula, Ready to Feed … |
