Insurance in 2020

INSURANCE 2020 THE PATH AHEAD Introduction Insurance is a sociable device which help the public to transfer the sit on the line which is integrated part of the human life. Its been eld this term called redress generated. straightway one of the most emerging and greening sector in India is indemnification. The inevitably and preference of a customer is changing day by day. The pot are more aware about the need for diverting the stake to a third party by taking amends. They also consider amends as an investment. Now days insurance companies are following legitimate market placeing strategies.It includes understanding needs and preference of the customers by conducting marketing interrogation and customizing the crossings and run to the benefit of the society. The companies follow assorted retail and wholesale dissemination impart to reach the customers. Agents, Bancassurance, Brokers and others are some of the distribution channels which prevail in the current mar ket. This paper talks about considering the current facts and features of insurance sector in India, what volition be the insurance scenario in 2020. It also talks about future marketing strategies and distribution channels in 2020.Objectives of the study Primary Objectives o Identify the major changes in the Indian insurance sector on a road to 2020 Secondary Objectives o Analyze the consumer perception of insurance how it behind be tackled by the insurance companies in the upcoming coming(prenominal) o Identify the future marketing strategies of insurance as a business in 2020 o Identify the distribution channels of insurance in 2020 and how the features are contrastingiated themselves from the current distribution channels Research Methodology Descriptive research method is followed in this study Change in Indian insurance industry by 2020Indian insurance is expected to be going done a signifi adviset change of 70% as per the survey conducted by IBM insurance 2020 survey 2006. Among the 30 samples taken 30 % states that insurance industry provide be having an incremental change of 30 % by the end of 2020. pic There are some reasons for saying that the Indian insurance industry will be facing signifi keept change. The customers are living in era of latest engine room and advanced services in which customers are treated not as king, he is the god which decides the outlastence of a company whether it deal with products or services.If the business fails to please their lord i. e. customers then there wont be any existence for that particular business. Because of the latest technologies strengthening the demand and bargaining power of customers the customers are active and well informed about the services that they can get from the insurance companies. Another reason would be the increasing competition among the players in Indian insurance sector. Each company is trying to get a competitive edge over other companies by giving most importance to the wo rd Innovation.The companies cant run their business without presentation because all the businesses believe in survival of the fittest. And more over the customer wants the companies should predict their needs and preference well in advance and to serve them. last(a) but not the least people consider insurance as a strategical investment in life or we can put forward corresponding people consider insurance as life time planning which starts from cradle to graveyard. Now its time for us to call up about the upcoming trend of Indian insurance industry in the coming years. The ultimate users of the insurance services are people.When companies target people for merchandising or marketing of insurance they will think only think about their demographic characters like age, income, family etc. But classifying the customers as per their demographic characters and social characters may not help the insurance companies to survive for future. Insurance companies need to further classify t he people into innovators and non innovators. Innovators are the people who buy the product or service as and when it reaches the market. Innovators are early buyers of the product. Non innovators are late buyers.Now the point to be discussed is what is the relevance of innovators in a service sector like insurance and why people should buy insurance policies or plans as and when it reaches the market. As I mentioned earlier insurance policies are good stage for strategic investments. When a share or a fund of a blue chip companies are announced in the market, people would be demanding those funds horizontal if it is not there in market. In future most of the companies would be designing their insurance plans as a strategic investment plus encounter covering plan, so such companies would targeting high growth funds or shares.So when an insurance company launch their sassy insurance products in market they will be targeting innovators. Another reason for targeting innovators is th at the people who are in the category of non innovators would seek the advices from innovators during purchase of services since innovators are opinion leaders in the market. Another important trend that, the insurance sector would be mostly adopted the c at one timept of virtual office in terms of physical presence. The technology is so updated, now it self a consumer can avail the facilities of insurance companies through the use of internet.Another reason for this trend would be increasing the government issue of insurance companies in the market. This also will pressure the companies to fully adopt the purpose of virtual insurance. The insurance companies in 2020 will be targeting a ultramodern value chain which is the collection of process and services that are linked together to wee-wee, develop, sell, deliver, process and service an insurance policy over the life of the contract. It would be hard to find the paper documents or trend of e-documents are no longer away from the insurance market in 2020.The insurance products that is going to start the markets would be rather known as insurance packages which would cover all the stake of a human being in his life time i. e. once if he is taken an insurance plan it will cover all the risk till his death and investment requirements. The insurance products in 2020 would be concentrating on the concept of Just in Time insurance as a person moves through set of spaces. Each stage of his life would be consisting different set of spaces. The new insurance package policies would be concentrating this set of spaces in human life.Insurance sector is one of the mostly regulated sectors in India. The scotch crisis which struck internationally will be forcing the IRDA and other regulatory bodies to come out with more rules and regulations especially in the foreign institutional investments and foreign lead investment. In 2020 the barriers in availing facilities of insurance with in the boundaries of the respect ed country, would be started to change since the insurance sector itself demands the emergence of a globally accepted standard of global insurance bodies.Another important thing that we can see sometimes before 2020 would the concept of risk to opportunity. Climate change is big capitulum mark for the insurers. We can see a trend of insurer responds to climate change also. Considering the carbon trade and green business development project the insurance sector cant close its eyes towards the natural surround. The insurance packages that are going to be prevailing in the insurance market will have certain features. It would a socially enabled product which would be designed to market through online word of mouth.It would also concentrate the concept of a mess produced, multi component pre-packaged one click solutions which will find a gap in the market place. These packages would be allowing plan conversion exchange which would allow people to convert defined contribution assets into income for life through making into annuities. Another important point to be discussed is that considering the latest technologies that is going to be adopted by the insurance scenario in 2020, most of the insurance companies will have direct tie up with software companies for the use of Information Technology picMarketing strategies of Indian insurance sector in 2020 Indian insurance marketing strategies mainly concentrating on the concept of CRM i. e. customer relationship management. Since insurance sector concentrating on the social and demographic features of customers, future CRM would be all about creating online communities of customers via emerging social media, such as face book, twitter and similar websites. The companies will take curtain raising to create such communities which will increase the customer handling efficiency of the company. Another strategy that the insurance companies started to adopt is 8020 principles.It means retaining the customer who contri butes to the majority of the business and serving him as the primary customer. Concentrating in the existing customers will help to get business through cross selling and decrease of the acquisition cost of a new customer. Another trend in the marketing strategies adopted by insurance would be based on the concept of being with the customer. For example if there is an insurance policy for a corporate is being taken, while providing statements and newsletters the insurer include success stories and pictures that people in that particular corporate works.The future climate of insurance will be forced to emerge new distribution marketing strategies. We can see different strategies for each distribution channels. Banks have long established programs and accounts for young savers, and have made available courses on handling credit for teenagers. In the future insurance arena, a similar program might involve school presentations on the mechanics of risk, or, rather than the typical spons orships of sports, taking a logical next measuring rod with youth organizations.These kinds of steps include activities such as insurance sponsored clubs which will tune the kids mainly in the concepts of risk management and practising safety in their environment where they interact most. One another strategy would be different approaches to people who have different demographic characteristics. For example, old aged customers can be approached with statistical details and promotional campaigns while the younger group prefers the carries like orkut, face book and other online communication devices.The trend show like more and more consumers are increasingly disenchanted with mass marketing and seek individual attention as well as customization of their customer interactions. The next generation of risk management is one where the cogitate is not on simply mechanizing the processing of info, but on modelling and automating the smart processing of risk breeding. The upcoming insur ance industry is going to take advantage of social technologies in two ship canal, like first would be empowering the agents to take advantage of social media as their CRM systems.It is the vanquish way to reach the customers with common interests, while the other is connecting with people engaged in similar occupation. Second would be the extreme widening of products and services. Innovative persuasion needs to be built in existing products around their social ability and connectivity. The life insurance business has innovated in less obvious ways by combining coverages and adding flexibility to standard coverages. Life companies need to attack the oft-quoted maxim that life insurance is sold, not bought and inhibit the negative perceptions that plague this industry.Change in the distribution channel and their features Insurance companies have got different distribution to reach the customers. It would include agents, brokers and Bancassurance. The upcoming trend in case of distr ibution channel has to be compared with each of these levels. An insurance agent is a person who identifies himself and the insurance company of whom he is an insurance agent. Earlier insurance companies were employ this particular distribution channel, they only require people to sell their products.Now days the trend of insurance companies is selecting the agents changed because these are the persons who represent the company in front of the public. By 2020 the concept of virtual office would come into play. And any person dod as agent, he would be having information not only about the product, he will be an expert to advise the customer about how to do the strategic investment and investment options etc. The insurance marketplace is undergoing a transformation that may eventually lead to significant changes in how consumers purchase insurance products.A variety of distribution channels are currently used in this market place and some insurers utilize a combination of distributi on channels. In terms of Bancassurance when the insurance products are sold as a third party products along with banking products. In the new era it would be in a relation with the banking product which functions jointly. Another important trend that you can expect from the market would the concept of hyper efficient direct distribution model. This concept would be working the idea of super low cost of solution.Now days when the insurance companies are using the multiple distribution channels to reach the customers, the cost associated with this purpose is increasing. Because of the non-traditional competitors have much lower distribution be than insurers, insurers face intense pressure to operate more efficiently. Distribution costs are one of the largest expense items associated with life and annuity policies. In the upcoming years we can see the trend of an emerging hyper efficient distribution model which works on low cost. Change in consumer perception of insuranceIndian cons umers have big influence of emotions and rationality in their buying behaviour. There are certain factors which are going to be truly crucial in 2020 in terms of buying behaviour of insurance. They are federation loyalty Services quality Ease of procedures Satisfaction level Company Image Company Client Relationship Initially the Indian insurance sector was in the major hands of LIC. The people didnt have a second name or second thought to think from where they should take the insurance plan or policy. Now the trend is changing.The main proof of the change is that the monopoly entertained by LIC was started to capture shares by other private companies. The private players are also able to provide the services and they are also able to generate the deposit as LIC could create among the mindset of people. The private companies pitch the products in such a way that it was more acceptable to the customers. For example, One of the promotional objectives designed was to create a feel good factor around retirement and change customers perception of retirement as a mark of old age and discharge of financial independence.Todays behavioural patterns are different rather than the traditional ones, but still predictable. The concept of predictive analytics as applied to consumer behaviour follows reaction to control triggers (like marketing campaigns) and thus allows companies to manage their customer portfolio into an optimal spread on a value/ loyalty matrix. The consumers are expecting an insurance product/service like a direct sale of mid market lifetime income solution with a lower premium which also helps to invest for future purpose.Challenges of Indian Insurance Sector on a road towards 2020 One of the big challenges that are going to be faced by 2020 would be estimating topical anaesthetic market potential for insurance products is continual challenge for the insurance industry. One solution for this big challenge would the concept of insurance CLOUT . Based on the actual purchase patterns, the idea like insurance CLOUT provides the most reliable local estimates for all type of insurance products and includes key detailed information like household counts, policy deductibles and premiums.Insurance CLOUT includes both current year estimates and five year projections for all of the data provided. Insurance CLOUT helps you to focus the marketing strategies of a business. Its an indispensable tool for numerous marketing applications like Allocating market dollars against market potential Estimating potential for specific products within local markets Identifying high opportunity areas Measuring agency performance relative to market potential This idea also helps to assess the key market potential data for insurance companies.Conclusion The study was trying to give some information about the picture of insurance preferences and features in 2020. It identifies the factors that are going to be very crucial in terms of consumer buyi ng behaviour with respect to insurance. The marketing strategies and distribution channels are also tried to portray considering the big limit point of the uncertainty of future. The study states that as time passes insurance sector in India will be undergoing through changes which can be giving a new face for the Indian insurance sector in 2020.As the insurance industry will be facing difficulties along with the rest of its financial services brethren to operate in the current global recession, it must consider the actual value of true innovation. No insurance business cant exist in business in the upcoming future with out innovation. Innovation can come in the form of modified process, new business models, distribution channels and simple organizational changes. Innovation with out knowing the consumer buying behaviour would be fruitful.Creating innovative products like energy savings insurance, innovative renewable energy project insurance products, green building insurance and insurance for developing world (Micro insurance) would help the insurance companies to smoothen their road towards 2020. In the upcoming trend of insurance will be focusing on pay as you live and active risk management in which active risk management means where proactive actions are taken to reduce total impact of risk. REFERENCES Insurance 2020 Insurance beyond old models by IBM Ceres underwrite From risk to opportunity 2008 by Evan mills pic