The need to market insurance products before selling

Emmanuel OWUSU

Organizations now more than ever are taking the customer first idea much more seriously in their strategic planning. This has translated into the development of new executive positions geared towards customer satisfaction. Customer service centers, call centers and relationship officers are to mention a few of the efforts made by organizations at embracing the customer as the source of its existence.

Businesses that may have taken the customer for granted in times past are waking up to the new realities of the insurance marketplace and this is especially the case with the advent of the internet of things (IoT). Things might never be the same in the insurance industry if customers are now more than ever, informed about products and services before they decide to engage the broker or contact the underwriter for a quote. Technology as an enabler has also come to play a vital role in the evolution of the Ghanaian insurance market place and space over the years.

From the days of manually written motor insurance stickers, manually modified fire policy wordings, invoices, little records on customers and having insured to pick up documents from the insurers premises to the introduction of the motor insurance database which has created premium openness and eliminated fake moor insurances in the motor insurance pool, electronically verifiable motor insurance stickers and cover, global positioning service (GPS) enabled address tagging, insurance delivery via email and enhanced ability to collect data on any risk before inception due to the availability of many data storage, retrieving devices and cloud services. This notwithstanding has also modified the everyday customer.

The customer we used to know before is now information driven and highly price elastic. They are highly sophisticated in their needs and the revenue or profit of any insurance company is at risk if the organization fails to adapt to the new norm of information abundance in its decision making. If the customer is at the heart of the insurance products and services decision making and delivery, then there is a need to critically position insurance companies to ensure the customer is always satisfied and the insurance company continues in its bid of generating wealth for all stakeholders through prudent risk management techniques. This article will reflect on how marketing of insurance products before selling will help the insurer achieve its target of satisfying the customer, drive upwards the premiums and finally enhance the insurance penetration agenda.

Insurance products and its allied services have long been misunderstood. Insurance continues to be the most publicly misunderstood industry tasked with serving the general public with risk transfer and risk management solutions. It has over the decades recorded poor public trust, always needed governmental and regulatory intervention in order to function effectively and to ensure all participants are fairly treated. This poor record could be attributed to the ill in the marketing of the insurance products and its allied services. An X units invested in insurance related marketing is expected to lead to a more than proportionate increase in revenue. The process of satisfying the needs of a customer describes the act of marketing. Marketing is the skill that informs and attracts a customer to the business; it is the skill that retains the customer and the skill that entreats the customer to bring in many other customers.

Due to low insurance product knowledge amongst the populace, businesses and individuals do not know the essence of the insurance product they purchase. They are sometimes misinformed of the type of product they may need based on the business they operate or their risk exposures. Instances of this kind, paying premiums become a challenge year after year because the essence of insurance is not known and this is worsened when the insured does not suffer a loss in the immediate years.

When sales lead the agenda, insured are led to believe they are being cheated, they are led to believe they must benefit from the premium they have paid immediately and they always raise the question, what if nothing happens in the year, what do I get? This is a negative effect of forcing a product down the throat of customers without the necessary education on the essence of the product or service they are purchasing. When insurers make known the essence of their products, customers learn about the product and are able to identify why they may need a product at this time and which product or service may be deferred for the future. The interest of the customer does not lie in understanding the law of large numbers neither does it lie in the fact that, the existence of the insurance company is to manage a pool for the contribution of the many to cater of the losses of the few. This is because, the wants of mankind is unlimited but our resources are limited. We are forced to make do with the little resource we have by reducing the premium we pay for services rendered by society.

Premium is the oil that lubricates an insurance entity. Strategies surrounding premium mobilization has always been focused on a sales strategy. Selling is the final means by which the insurance products and services are expected to be converted into monetary units. With a selling attitude, insurers may invest in sales managers who are tasked with the duty to generate premiums. Sales managers as a strategy may grow their business portfolios by identifying people at vantage points who may be in the position to sell to the target group. These agents are tasked with selling the products of the insurer to the general public in return for commission. The majority of these agents have little knowledge of insurance products.

The agent has little time to invest in product knowledge, little time to make a sustaining contribution to the business of the customer of whom a product or service is being sold and little time to identify whether there is a consensus ad idem. Such a standalone sales strategy certainly leads to growth in insurance premium but leaves the insurer with potential gaps such as poor customer satisfaction; increasingly high claims ratio and high customer turn over. An insurance industry fully occupied by a sales strategy is likely to experience a low insurance penetration and this is because, such an industry expects the regulator to make all the necessary efforts at educating the general public on the need to purchase insurance. But the question remains, how far can the regulator go on its education agenda? There is little the regulator can really do to an industry in which market leaders are justified by the quantum of premium they are able to mobilize in a given year. The onus lies with insurers and law enforcement agencies to enforce the compulsory products.

Customers are rationale beings; they will appreciate commitment and reward commitment with loyalty to the brand. In an economy where insurance penetration is low and many will agree there are lots of opportunities to grow the industry, insurers could cast their net wide by organizing training programs to populations of interest, offer free risk management advice to prospective institutions and a relationship officer to the group of trainees. Members of the group may later at their comfort and understanding of the need to get insured, purchase the product. Investments of this nature may not yield returns immediately as with the case of a sales orientation, but in the immediate future it will be noticed sales will increase. It gives the insurer the opportunity to attract into its pool, an acceptable type of risk profiles because of the areas marketing investments were channeled.

Marketing of the insurance products and rendering of its services in Ghana are exceptionally difficult. It requires unconventional and conventional methodologies to arrive at a reliable portfolio. It therefore requires the support of management and the willingness of the marketing officer to persist in a market that may not reward immediately.


The writer is an Associate Member of the Chartered Insurance Institute, United Kingdom, a Chartered Insurer and holds a Master of Business Administration in Finance, Bachelor’s Degree in Economics from the University of Ghana, Legon

Email: [email protected]

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