Intermediary sales as the most massive distribution channel. Intermediary sales of insurance products and direct sales of insurance products, accident insurance
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- 1) mono-sales (sale of one type of insurance service);
- 2) multi-sales (sale of complex insurance services). For example, for banks this is a comprehensive bank insurance policy - Bankers
- a) mono sales;
- b) multi-sales;
- c) cross-selling
- a) new sales technologies;
- b) technologies for prolonging contracts
- a) manually using paper directories;
- b) automated with the participation of the seller;
- c) fully automated
- a) direct sales technologies;
- b) intermediary (indirect) sales technologies
- - for manual sales using paper directories (the policyholder manually fills out an insurance application and questionnaires)?, and an insurance company employee issues him an insurance policy, which sets out the essential terms of the insurance contract. This technology is extremely time-consuming);
- - automated sales with the participation of the seller (the seller draws up documents in a computer program that automatically calculates the insurance premium, the policy is printed and handed over to the policyholder);
- - fully automated sales (the seller does not take part in direct contact with the policyholder. This technology is implemented by online stores. By going to the insurance company’s website, the client fills out an application, and the computer program calculates the insurance premium. Then he pays for the policy by non-cash payment using a plastic card or electronic wallet).
- 1) personal sales (office and out-of-office);
- 2) key account management;
- 3) direct mail and electronic mailings;
- 4) telemarketing and fax marketing;
- 5) Internet marketing.
- 1) intermediary network sales;
- 2) sales of policies in the workplace;
- 3) bank insurance;
- 4) agency sales;
- 5) brokerage sales.
- - specialized insurance intermediaries for whom insurance operations are the main activity (agents and brokers);
- - companies in various fields of activity not related to insurance, which offer insurance as an additional, related service in the sale of goods and services.
- - search and consultation of policyholders;
- - preparation and signing of documentation;
- - servicing the policyholder under the contract.
- 1) employees of the insurer, whose remuneration consists of wages and agency commissions. These include direct insurance agents, who are on the staff of the insurance company and have a permanent salary. In this case, they have the right to represent only their insurance company, from which they receive authority and commission. Their activities are completely managed and controlled by the insurer through an employment contract and job responsibilities. The insurance company incurs constant costs for the maintenance of agents: for training, payment of wages, regardless of labor productivity;
- 2) independent individuals and legal entities who represent the interests of the insurer on the basis of an agreement with it. Such intermediary agents are not full-time employees of the insurance company and receive a commission for their work. These include:
- - general insurance agents. The task of these sellers is to contact clients and transfer completed transactions to the insurance company;
- - monomandate insurance agents. They are associated with only one insurance company under a special contract and, as a rule, serve private clients. Their payment consists only of a commission in proportion to the collected insurance premium. Such agents have constant contacts with clients, strong relationships with whom allow them to quickly convey information about a new service to the client;
- - multi-mandate insurance agents who have the right to work for several insurance companies, receiving mandates from them for their activities. These agents specialize in one or more types of insurance. The convenience for the policyholder when working with them is that the agent can offer insurance products from different insurance companies, thereby providing the policyholder with an alternative choice.
- - acts as a guarantor of transactions;
- - provides a guarantee of concluding an insurance contract with a reliable company;
- - significantly reduces the client’s time and money when choosing optimal insurance conditions;
- - provides savings when paying fees due to the selection of minimum tariff rates and discounts;
- - provides assistance in preparing documents and receiving insurance payments;
- - offers legal support for the contract, as well as ongoing consultations in resolving controversial issues.
- 1) goal:
- - the insurance agent aims to sell the policy to his insurance company;
- - the insurance broker aims to represent the client’s interests and offers the most favorable insurance conditions based on an analysis of offers from different insurers;
- 2) information:
- - the agent appeals with information that is beneficial to his insurance company;
- - the broker provides objective information about different insurance companies;
- 2) insurance premium:
- - the agent cannot manipulate the cost of the policy, he offers standard insurance conditions;
- - the broker reduces the client’s expenses when paying the insurance premium by offering a discount;
- 3) contract support:
- - the agent cannot guarantee the fulfillment of the insurance contract, not being directly a party to the contract;
- - the broker accompanies insurance payments and offers legal protection to clients.
- 1) geographically:
- - federal (for example, the system of Sberbank of Russia, Russian Post, etc., which sell insurance policies);
- - regional, city, regional (post offices, communication shops);
- 2) according to the organizational form of mediation:
- - the sale of contractual services is based on the relationship between the intermediary and the insurance company;
- - joint venture;
- - organization of captive insurance (for example, a bank creates its own insurance company or the company of its intermediary: a bank, a leasing company);
- 3) by market segment:
- - sale of services to legal entities (insurance of property of enterprises, insurance of liability of directors and managers - Directors and officers liability insurance, business interruption insurance, liability insurance, etc.);
- - sale of services to individuals (insurance products for different categories of policyholders: insurance for children reaching the age of majority, animals, insurance for marriage, insurance against job loss, etc.);
- 4) by type of insurance:
- - property insurance (for example, car dealerships, banks that sell MTPL, CASCO or credit insurance policies);
- - personal insurance (for example, travel companies selling insurance policies for tourist medical and transportation expenses).
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The sales channel refers to the method of communication between the insurance company and the client through which sales are made. There are two types of sales channels: direct channels and intermediary ones (Fig. 1.1.).
Rice. 1.1. Types of sales channels of insurance companies
Currently, insurance practice uses direct and indirect (intermediary) distribution channels. Direct channels include sales through the central office, representative office, company branch and the Internet. Direct sales means the sale of company policies to the client - without intermediaries. According to research, 15% of the population uses the Internet when researching and comparing insurance companies. At the same time, 35% of clients turn to the company’s office personally for information, and 33% of clients turn to relatives and friends. Sales via the Internet are quite small, since only consumers who are familiar with the features of insurance services use the Internet.
The advantage of forming customer relationships through the direct channel, in addition to its cost-effectiveness for the insurance company, is that this channel is completely manageable. However, its disadvantage is the limited audience: in order to come to the company’s office, call the phone, or order a policy on the website, the consumer must already go through a number of decision-making stages and demonstrate a high degree of readiness to purchase a policy. This category of consumers makes up a small number of clients, since insurance is mainly a product of passive demand; it should also be noted that employees have low motivation to attract clients.
Therefore, the key role in the promotion of insurance products is played by free agents and intermediaries, offering clients products and services for which insurance is a related product: travel packages, cars, loans, etc.
Indirect channels include sales through insurance intermediaries (brokers), non-insurance intermediaries (companies for which the sale of insurance products is not the main activity - banks, travel agencies, car dealerships, etc.) and sales through an agent network (insurer representatives, being his full-time/non-staff employees).
Agency networks offer clients products and services for which insurance is a related product: travel packages, cars, loans. Agent networks are currently one of the most effective sales channels. A.N. Zubets notes their effectiveness when working with both active and passive consumers. This applies not only to training and motivation, but also to technology. That is why companies are striving to develop an agent network. For example, the agent network of the Rosgosstrakh company includes more than 65 thousand people. An important factor in the effectiveness of an agent network is its support. This applies not only to training and motivation, but also to technology. For example, the Rosno company has implemented a CrM system that allows an agent to view client data directly from a personal computer and, depending on his needs, offer him additional products.
However, the agent network also has a number of disadvantages. Firstly, this is a very expensive sales channel. In addition to the agent commission (which can reach up to 30% of the insurance premium), a significant amount of resources is required to maintain it. The second disadvantage of the agent network is that the client’s relationship is built not with the company, but with the agent. thus, loyalty is also formed not to the insurance company, but to the agent. Therefore, it will be much more difficult for the insurer to establish communications with the client. For example, the development of cross-selling bypassing the agent may be perceived by the latter as an attempt to take away his portfolio. Also, if the insurance agent considers continued cooperation with this insurer unprofitable for himself, he can transfer the entire portfolio from one insurance company to another. If an insurance company does not have clear distinctive features and cannot offer a unique value to the client, it will be more difficult to retain such a client than a policyholder who came through the company's office/website.
Non-insurance intermediaries - car dealerships and banks - developed in Russia as compulsory motor liability insurance was introduced and the development of car lending and mortgage lending, where the presence of an insurance policy became an integral condition for obtaining a loan. Thus, insurers initially focused not on policyholders, but on insurance intermediaries (banks and car dealerships) and imputed insurance, which ensured quick collection of insurance premiums, significant sales volumes and savings in resources for the promotion of insurance products. However, despite such significant advantages, this sales channel is problematic. For these sales channels, the sale of insurance products is a related service. Cooperation between an insurance company and a car dealer is built on two pillars: the amount of commission and ensuring the repair flow. Dealers sell insurance products, receive commissions and provide auto body repair discounts to insurance companies. Insurance companies receive new customers from car dealers and, therefore, insurance premiums, and in return they provide a repair flow (i.e., load of body shops).
Despite the fact that in theory the interaction between an insurance company and a car dealer is mutually beneficial, in practice partnerships are complicated by many internal contradictions. For example, the insurance company may put pressure on the dealer by demanding additional discounts on the cost of parts, materials and repairs, reducing the number of cars sent to the dealer and delaying payment of bills for repairs performed. The car dealership can respond by increasing the cost of repairs, standard hours and spare parts, and reducing the sale of policies to this particular insurance company. Considering the imputed nature of insurance, the position of the car dealership is dominant in its interaction with the insurer. Therefore, such complaints from insurance companies as delays by the dealer in transferring collected premiums, poor quality of insurance policies, poor quality of repairs, inflated costs of work and spare parts, etc. have not yet found an adequate response from dealers.
Another problem in the interaction between the insurer and the dealer is the development of cross-selling. The root of this problem lies in the business development model chosen by insurers: the dealer provides a large flow of clients for comprehensive insurance, but the dealer’s employees do not have enough knowledge and motivation to sell other types of insurance. Of course, the insurer can sell additional types of insurance on its own, but this may be fraught with the fact that the client “at the same time” will renew the comprehensive insurance contract not at the dealer, but at the office of the insurance company - which means that a conflict of sales channels may arise.
Thus, the main sales of insurance products are carried out through channels that contain low potential for customer relationship management. On the one hand, this leads to the need to develop partnerships and form loyalty of intermediaries; on the other hand, it requires the introduction of special measures to form and manage relationships with clients, so that loyalty is formed not to the insurance intermediary, but to the insurance company. These activities should also be aimed at increasing the client's awareness of the insurance products available in the company, so that the client takes the initiative and enters into more contracts with the company directly.
Before the 2008 crisis, a significant part of dynamically developing companies relying on retail insurance collected premiums mainly through non-specialized insurance intermediaries - banks, car dealerships, travel agencies, sometimes with the help of insurance brokers. Only a few companies could afford to have an agent network, since investments in an agent network pay off only over time. The direct sales channel in the Western sense began to actively develop only from the beginning of 2008. The crisis led to a sharp reduction in revenue from new business from banks, car dealers and other non-specialized insurance agents, and increased the operational risks of working with insurance brokers. During the crisis, companies with developed agent networks and a more client-oriented marketing policy benefited.
Today, we can distinguish the following main categories and sales channels used by most insurance market operators. The allocation of these channels and subsequent delimitation are quite arbitrary and may vary depending on the size, goals of the company and other factors:
retail sales;
sales to corporate clients.
Retail sales include all sales to individuals. Consider the following retail sales channels:
1. Agent. Within the agency channel, we can distinguish sellers who can sell both all possible products for which they are trained, as well as one type of product.
2. Office. Office sales can be called sales carried out by the organization itself. They can also be called “personal” or “internal”. Most often, there are two main types of sales offices: stationary or mobile (for example, a car), where you can purchase insurance products.
3. Alternative channels. Other sales channels imply the initiative and innovation of the seller: some alternative sales channels, insurance brokers, non-insurance intermediaries, or quite profitable forms of alliances, for example.
Corporate sales refer to sales to legal entities. Like retail, corporate sales can also be divided into several channels, for example:
1. Agency. Carried out by agents - individuals.
2. Direct sales. Analogous to office or “personal” retail sales.
3. Affiliate sales. An analogue of “alternative” channels in retail sales.
Conventionally, this structure can be depicted in Table 1.
Table 1
Main sales channels for insurance products
Agency sales are the most common, with an average commission of 16.6%. Almost 70% of property insurance contracts for individuals and more than half of MTPL contracts are concluded with the help of agents. A feature of the Russian market is the work of agents without being tied to a specific insurer.
Large contracts are mainly concluded directly to insure the property of legal entities, water and air transport and civil liability of their owners, and compulsory personal insurance. For financial risk and life insurance, as well as auto hull insurance, the share of direct sales does not exceed 15%.
In 2013, the banking sales channel significantly outpaced other methods of distributing insurance products in terms of growth rates. More than half of life and accident insurance contracts, as well as 76% of financial risk insurance contracts, were concluded through the intermediation of credit institutions. This was facilitated by an increase in retail lending volumes. Nevertheless, the positive effect of the growth of the bancassurance market is largely “eaten up” by very high commission rates. Bank commissions average 42%, which is almost 2 times more than the average commission for the market as a whole (22.4%). 45% of premiums for life insurance, 53% for accident insurance, 57% for financial risk insurance go to commissions.
Such sales schemes require a serious increase in the load in the tariff rate structure (60-65%). Thus, the bulk of the insurance premium is spent not on the formation of insurance reserves, but on paying for the services of intermediaries. Such schemes cannot be called illegal, but the economic meaning of insurance is changing. The main goal is not to obtain insurance protection, but to quickly capitalize profits through a parallel structure.
One of the reasons for this imbalance is the desire to increase the volume of premiums, rather than to increase the financial result. To achieve this, insurance companies compete for the right to work with banks, and they increase commissions.
Only large insurers have the opportunity to create and maintain their own agent networks, while small and medium-sized companies prefer to “outbid” ready-made agents, so migration of agent networks with a low-quality portfolio is common among them. Insurers are involved in the “commission race”; as a result, the net premium is not enough for risk-adequate reserves; after the agents leave the portfolio together for another insurer with a declining volume of premiums, financial stability drops sharply.
The brokerage sales channel is quite weak: even in traditional brokerage segments (in insurance of aviation risks, marine risks and insurance of other property of legal entities), the share of this channel does not exceed 7%. The exception is DS OPO (share of brokers - 16.84%) and compulsory life and health insurance of a patient participating in clinical trials of a medicinal product for medical use (22.08%). The volume of insurance compensation received by brokers in 2012 amounted to only 4.79 billion rubles. The main reasons for the underdevelopment of this sales channel are the lack of regulation, the problem of using other people's databases and the high rate of fraud. Its future development depends on changes in the regulatory framework and legislative recognition of the responsibility of intermediaries.
The main sales channels remain direct and agency, while the banking sales channel is the most actively developing.
Depending on the number of intermediaries in the sale of insurance products, the following types of sales channels are distinguished:
1. Zero level - without intermediaries (direct sales):
insurance company > client;
2. Single-level - there is one intermediary:
insurance company > retail intermediary > client
3. Two-level - includes two intermediaries:
insurance company > wholesale intermediary > retail intermediary > client
4. Three-level - sales are carried out with the help of 3 intermediaries:
insurance company > large wholesale intermediary >
> small wholesale intermediary > retail intermediary > client
When selling insurance products through one or another sales channel, the insurance company incurs large expenses.
According to the rating agency Expert RA, which conducted a survey among 25 insurance companies in 2013, asking them to evaluate various aspects of the effectiveness of existing sales channels in retail insurance on a five-point scale - the average score for the effectiveness of sales channels for insurance products is presented in Table 2.
table 2
Comparative effectiveness of various retail sales channels
insurance products based on the results of a survey of insurers in 2013.
Sales channel |
Price |
Prospects |
Controllability |
Stability and loyalty of the client base |
Operational risks and insurance fraud |
Direct sales through the central office |
|||||
Direct sales through other offices |
|||||
Direct insurance |
|||||
Sales through an agent network (except for banks, car dealerships, travel agencies and other non-specialized insurance agents) |
|||||
Sales through car dealerships, travel agencies and other non-specialized insurance intermediaries (except for banks and other financial institutions) |
|||||
Sales through banks and other financial institutions |
|||||
Sales through brokers |
The most cost-effective and profitable sales channels are direct sales. They maintain a leadership position throughout all the analyzed years, from which we can conclude that more and more people prefer to purchase insurance services not through intermediaries, but directly.
According to data for 2013, the second most profitable sales channel is agent networks, however, there is a downward trend in the profitability of sales through agent networks, since within 4 years they are losing their positions and are inferior to other more profitable sales channels.
Selling through brokers is quite profitable, but also has low profit margins due to the commissions paid to brokers: for insurance companies, this is part of the company's lost profits.
The most dynamically developing and most expensive sales channel is banking. According to agency forecasts, the share of this sales channel could grow from 11 to 20% in three years. Banks themselves are actively planning to increase sales of insurance products. According to the results of a survey conducted by Expert RA, almost half of banks expect that no later than 2015 they will receive more than 10% of their profits from insurers; currently only 6% of banks have this figure.
In terms of the structure of sales channels, Russia is similar to France and Spain. The key difference is that in Russia there is no competition between sales channels, but rather competition between insurers for intermediaries. This situation does not stimulate insurance intermediaries to develop qualitatively. The situation can be changed from the outside by regulating intermediaries, or from the inside through the development of sales offices of insurance companies and direct insurance.
According to agency analysts, commissions to banks are almost 2 times higher than the average commission to insurance intermediaries (36% versus 20%), the share of this sales channel will only increase. Growth drivers are the development of life insurance and traditional insurance of borrowers for consumer and mortgage loans. Currently, banks are actively developing and adopting strategies for selling insurance products, as stated by 2/3 of credit institutions surveyed by Expert RA, and are planning a significant increase in income through commissions. In 2013, the amount of commission paid to banks amounted to 16 billion rubles.
It is worth noting that sales channels such as the Internet and through remote locations have developed. The Internet is very profitable because it incurs almost no variable costs when operating through this channel.
Sales channels such as car dealers, banks and travel agencies are not very profitable, but require a large amount of costs.
The specifics of insurance activities involve the use of insurer intermediaries when conducting insurance and concluding contracts: insurance agents and insurance brokers. Insurance agents are individuals or Russian legal entities permanently residing in the territory of the Russian Federation and operating on the basis of a civil law contract, who represent the insurer in relations with the policyholder and act on behalf of the insurer and on his behalf in accordance with the powers granted.
The activities of insurance agents are regulated by the terms of the employment contract or agreement with the insurance company and the Insurance Rules. An insurance agent can represent one or more insurance companies and, under the terms of contracts with them, acts only on behalf of these companies. Based on the agreement concluded between the insurance agent and the insurance company, he is issued a power of attorney, which indicates his powers. In its activities, the agent performs a number of functions (Figure 2).
Intermediation services of insurance agents are paid as a percentage of the volume of work performed. Each company has different systems for motivating agents, but most of them have the same meaning: new agents are given low commission rates, and as sales volumes increase, the rate increases. There is also additional motivation when fulfilling plans or when selling certain types of products in the form of additional gifts, mobile reimbursements, etc.
Figure 2 - Functions of an insurance agent Compiled by the author based on:
There are three main types of agent networks:
1. A simple agency represents an organization for the sale of insurance products in which the agent enters into an agreement with an insurance company and works independently under the control of the company’s full-time employees. For each concluded insurance contract, the agent receives a commission (Figure 3).
Figure 3 - Simple agent network Compiled by the author
2. The pyramidal structure is built on the following principle: the insurance company enters into an agreement with the general agent - an individual who has the right to independently form a system of subagents; subagents recruited for work, in turn, can also recruit subsubagents, etc. .
Figure 4 - Pyramid agent network
Such a sales system has one significant drawback for an insurance company: at any moment this entire structure, headed by a general agent or subagent, can go to another insurer.
In practice, not all policyholders who try themselves in this capacity turn out to be successful agents. The insurance company thus receives second-level policyholders practically free of charge
3. Multi-level network. The agents are the policyholders themselves - individuals. By purchasing an insurance policy, usually long-term personal insurance, they simultaneously acquire the right to sell policies to other policyholders. The latter also receive this right of sale. In this case, the policyholder, after purchasing his policy, can find another client, who can find the next one, etc. However, the policyholder will receive a commission only from the third policy, i.e. All levels are paid, starting from the second (Figure 5).
Figure 5 - Multi-level agent network
The average European company has 4-6 such sales levels. The commission from concluding a contract is evenly distributed among all sellers according to the principle: the higher the level (the closer to the top of the pyramid), the lower the commission rate. The highest commission rate is for the agent who directly concluded the insurance contract, but the general agent can receive earnings several times higher than the salary of the primary agent due to the large size of the network of sellers subordinate to him.
Insurance brokers are individuals or Russian legal entities permanently residing on the territory of the Russian Federation and registered in the manner established by the legislation of the Russian Federation as individual entrepreneurs who act in the interests of the policyholder or insurer and carry out activities to provide services related to the conclusion of insurance contracts, as well as with the execution of these contracts. When providing services related to the conclusion of these contracts, the insurance broker does not have the right to simultaneously act in the interests of the policyholder and the insurer. Insurance brokers are not entitled to carry out activities unrelated to insurance. According to current legislation, an insurance broker is required to undergo state registration and must be included in the register of insurance brokers formed by the Russian Federal Service for Supervision of Insurance Activities. The broker must be an expert in insurance law and practice. It is believed that he, as a professional, should know everything possible about insurance, and that his knowledge should help ensure the best insurance conditions for the policyholder. Insurance brokers are recommended to enter into contracts of insurance for their professional liability to clients. Payment for the services of an insurance broker is made in the form of a commission, which he has the right to deduct from the premium in his favor for the intermediary services provided by him. Regulation of the activities of insurance brokers in Russia is carried out on the basis of the Regulations on Insurance Brokers.
Insurance of individuals in Russia was formed mainly under the influence of two factors:
1) the introduction of compulsory motor liability insurance in 2003, when the appropriate infrastructure was created and the country’s population en masse began to gain experience in communicating with insurance companies;
2) development of car lending. Thus, insurers initially focused not on policyholders, but on insurance intermediaries (banks and car dealerships) and imputed insurance, which ensured rapid collection of insurance premiums, significant sales volumes and savings in resources for the promotion of insurance products.
Cooperation between an insurance company and a car dealer is built on two pillars: the amount of commission and ensuring the repair flow. Dealers sell insurance products, receive commissions and provide auto body repair discounts to insurance companies. Insurance companies receive new customers from car dealers and, therefore, insurance premiums, and in return they provide a repair flow (i.e., load of body shops). The interaction between the insurance company and the car dealer is mutually beneficial.
With banking intermediation, cross-selling of insurance policies is carried out through an extensive network of bank branches and branches. The creation of joint products is very promising for both insurance companies and banks. The mechanism for implementing such insurance is the presence in bank loan agreements of the obligation of borrowers to insure collateral. Basically, with the participation of banks, contracts are concluded to insure the property, life and health of borrowers when lending, and also provide insurance for business and financial markets.
For example, to obtain a mortgage loan, property insurance (the collateral object) is required; in some cases, life, disability, and property rights (title) may be additionally insured. To select an insurance company, the borrower is offered a list of 6-10 insurers that have received official accreditation. The criterion for the Bank to select an insurance company is its financial stability, experience in the insurance market, etc. Some banks have affiliated insurance companies, whose representatives can issue mortgage insurance directly at bank branches.
In mortgage lending, in most cases, clients themselves insist on insurance: some borrowers are afraid of possible legal disputes regarding an apartment purchased on the secondary housing market; other clients, receiving a loan for a considerable number of years, want to receive a reliable guarantee of protection in the event of an inability to repay the debt due to illness or injury.
In addition to those listed, there are a number of traditional sales channels that have been used by insurers for a long time and more or less successfully. Thus, insurance policies for those traveling abroad are mainly sold through tour operators, accident insurance for passengers - through ticket offices, etc. At the same time, the need to expand the client base is pushing insurance companies to search for new sales routes, which has been done recently.
The organization with one of the largest branch networks (42 thousand branches) in our country is Russian Post. It is not surprising that insurers are eager to establish cooperation with such a giant.
This year, a new way to purchase insurance policies has appeared - through mobile phone stores. It appears that completely unrelated activities - telephone sales and insurance - have merged into one company, thereby providing insurers with a new sales channel. Only simple products (mainly MTPL) can be purchased this way.
Due to the simplification of standard insurance products, as well as the improvement in the quality of services provided on the market, traditional sales channels are gradually reducing their market share, as opposed to the development of new directions for selling insurance services, however, agency sales remain the most popular throughout the long history of insurance, and are not yet going to give up their leading positions.
Sales technology represents an orderly and consistent set of actions and activities for the sale of insurance products.
The developers of a particular sales technology are asked the question “how to sell?”, the answer to which involves developing and following a certain algorithm of actions to bring the product to the consumer.
In theory and practice, all sales technologies are conventionally divided into four groups: by product, in relation to the insurance contract, by level of automation, by sales channels (Table 3.6).
Depending on the product sales technologies include:
Blanket Bond; for borrowers - mortgage insurance, including title insurance, mortgage insurance and borrower life insurance;
3) cross-selling (i.e. selling additional services to the buyer of their main product). For example, insurers offer the car owner, along with a compulsory motor liability insurance policy, to purchase voluntary motor third party liability insurance with an extended liability limit, as well as CASCO insurance and passenger life insurance.
Table 3.6
Classification of sales technologies
Classification criteria |
Types of sales technologies |
1. By product |
|
2. In relation to the insurance contract |
|
3. By level of automation |
|
4. By sales channels |
|
By in relation to the agreement insurance, the insurer resorts either to the technology of new sales (to attract new clients, he uses advertising, agents, brokers, mailing lists, presentations), or to the technology of prolongation of existing insurance contracts (for this, the insurer directs all efforts to retain existing clients, which in itself not easy, because, as statistics show, the percentage of clients leaving the insurance company in the second year of the contract is very impressive).
By level of automation Sales technologies are divided into:
If we're talking about direct sales channels, then insurers resort to the following technologies:
When intermediary sales technologies used:
Let's look at the main types of intermediaries. There are two main categories of insurance intermediaries:
The classification of insurance intermediaries is presented in table. 3.7.
Table 3.7
Classification of insurance intermediaries
Specialized intermediaries |
Non-specialized intermediaries |
||
Insurance |
Agents - individuals |
Car dealerships, travel agencies, sports organizations, organizations working in the leisure and entertainment industry, banks, communication shops, real estate companies |
Post offices, car dealerships, supermarkets, notary offices, medical organizations, carrier companies, leasing companies, etc. |
Agents are legal entities specializing in retail |
|||
Insurance |
Brokers specializing in corporate insurance |
||
Brokers included in the holding |
Tasks insurance agents are promoting insurance services from the insurer to policyholders, assisting in concluding insurance contracts, and facilitating their implementation. The main functions of agents are implemented through:
Based on the table data, we can highlight:
1) insurance agents - individuals. More often they perform intermediary activities in small transactions in retail types of insurance.
The circle of people with whom they work is small, and the range of services, including additional ones, is very narrow;
2) insurance agents - legal entities. They specialize in retail insurance, with predominantly small and single transactions with individuals or legal entities. As a rule, being a representative of several insurers, they receive remuneration from them, and the range of their services is much wider.
All agents can be divided into two groups:
Along with agents, the insurance company also cooperates with insurance brokers.
Brokers may be independent legal entities or individual entrepreneurs who represent the client or insurer. If an insurance agent acts on behalf of and on behalf of the insurer, then the insurance broker independently places insurance risks on its own behalf on the basis of instructions from the policyholder or the insurer. The insurance broker independently selects the insurance company if the policyholder does not object. Next, he submits the proposal on behalf of the client to the insurance company, which analyzes it and gives its consent to conclude an insurance contract. Brokers, as a rule, work with legal entities, often reinsurance companies become their clients.
The broker performs the following functions:
However, as a rule, in international practice, the broker does not bear legal responsibility to the insurer. On the other hand, it also does not guarantee the solvency of the insurer (reinsurer).
Insurance brokers can specialize in working with corporate clients (see Table 3.7). In this case, they offer intermediary services in corporate insurance and become a representative of the policyholder, receiving remuneration for their services from him. The same functions are performed by brokers working in holding companies. However, they are engaged in serving the interests of companies that are part of a single holding. And then they are characterized by a single information space, a single information system, which contains information about those insurance objects of all enterprises of the holding that are already insured by brokers.
Summarizing the characteristics of agents and brokers, one should especially focus on their distinctive features:
Table 3.7 gives us an idea of the wide variety of not only insurance agents and brokers, but also non-insurance intermediaries. Go to category non-specialized intermediaries include enterprises and organizations in various fields of activity, the sale of goods and services of which may require the provision of insurance services.
Since their list is huge and is not limited to the above list, it became necessary to classify non-specialized intermediaries:
Recently, banks have been very active in the sale of insurance products. In practice, this is called bancassurance ( bancassurance). Banks thus diversify their activities. Often banks gain additional coverage of the financial services market by not only collaborating with an insurance company, but also by creating their own structure - an insurance company. In both cases, the policyholders are the bank's clients. Thanks to the combination of banking and insurance services, it becomes possible to organize a “financial supermarket” that simultaneously provides insurance, banking, and investment financial services to individuals and legal entities.
In addition to banks, vehicle sellers (manufacturers, dealers, car dealerships) are active distributors of insurance policies among non-insurance intermediaries. Vehicle sellers can offer insurance products (CASCO, OSAGO) for direct sales of vehicles, as well as condition a loan for the purchase of cars on the need for CASCO insurance.
Combining insurance with lending is also very popular. For enterprises in need of short-term and long-term loans to replenish working capital and investments, the insurer can provide financial credit services and, as an option, insurance services. Since the insurance company does not issue loans, it attracts its affiliated bank and provides comprehensive financing, which is secured by the insurance company's reserves.
Thus, insurance is attached to a non-insurance product and acts as an addition to it. Insurance can be implemented in different ways. Thus, an insurance policy can be sold as a package with the main service or with a product at full cost - for example, the sale of already insured property, a plane or train ticket with passenger accident insurance; delivery of cargo with paid insurance during transportation. The second option is to sell insurance in a package with the main product at a discount. In this case, the consumer is explained that if he buys insurance separately, he will pay more. This motivates him to purchase the entire package. Finally, insurance can be a free option for the main product, and then the presence of an insurance policy will increase its consumer attractiveness. For example, a bank may provide its depositors with a free travel insurance policy when traveling abroad or additional deposit insurance if the deposit volume is appropriate.
Topic 1. Technologies of active sales in insurance activities
Portrait of an insurance agent. Psychologists of the policyholder. Psychology of an insurance agent. Ways to attract a client. Rules for conversations and telephone calls. Appearance, emotional mood of the insurance agent when contacting the client. The art of negotiation. Rules for breaking up.
Topic 2. Development of the insurance market in Russia
The origin of insurance in ancient times. Development of insurance in Western Europe in the Middle Ages. The main stages of the insurance business. History of Russian insurance.
Organizational forms of reserve funds in Russia: centralized insurance fund, insurers' fund, etc. The concept of functions and characteristics of insurance. Insurance as a service industry.
The role of insurance in a market economy.
Topic 3. Analysis of the features of the functioning and management of an insurance company.
The structure of Russian insurance legislation. General legislation. Special legislation. Departmental legislation.
Classification of regulations of the Russian Federation on insurance. General insurance issues. Licensing of insurance activities. Insurance supervision.
Legal concept of insurance activities. The procedure for licensing the activities of insurance organizations. Licensing terms. The role of insurance supervision in state regulation and control of insurance activities on the territory of the Russian Federation. The procedure for issuing orders, restrictions, suspension and revocation of a license to carry out insurance activities. Legislative definition of liquidation of a legal entity. Insolvency (Bankruptcy) Law; bankruptcy procedure. Features of the bankruptcy procedure for insurance companies
Topic 4. Organizational basis for the activities of insurers.
Subjects of the insurance obligation: policyholder, insured person, beneficiary. Legal status of the insured. Responsibilities of the policyholder. Property interest of the insured.
Insurer: specifics of an insurance company as a special organization. The purpose of the insurance company. Licensing of insurance organizations. Foreign insurers. Tasks and forms of associations of insurers. Unions of insurers. Insurance pools.
Insurance companies as part of the economic system. Monopolization of the insurance business. Bankossurance. Insurance trusts. Multinational insurance companies. Diversification.
Forms of organization of insurance companies. Joint-stock insurance company. Agencies and branches of insurance companies. Affiliated insurance companies. Reinsurance companies. Mutual Insurance Society. Government insurance companies. State insurance companies. Private insurance companies. Captive. Concerns. Economic organizations. Consortium.
Insurance agents and brokers. Agent's commission. Agent agreement. Insurance broker. Insurance inspector.
Topic 5. Tariff policy of insurers in a competitive environment.
The essence and tasks of actuarial calculations. Insurance statistics indicators.
Features of the tariff policy of insurers in a competitive environment. The probability of an insured event occurring and determining the amount of expected insurance payments.
Methodological issues in constructing insurance tariffs. The concept of an insurance tariff, the structure of the rate and the purpose of its individual parts. General principles for calculating net and gross rates. Loss of the insured amount. Mortality table. Rate of return. Concept of insurance premium. Information base for calculating tariff rates. The influence of inflation factors on the calculation of tariff rates. Insurance tariff as an element of ensuring the recoupment of insurance operations.
Load calculation. Classification of insurance company expenses. Profit in the structure of the insurance tariff. Factors affecting the profit of an insurance company and the possibility of taking them into account in calculating premiums.