The generation of systematic processes that allow insurance companies to create marketing strategies that transform relationships with current clients into new business opportunities is one of the mechanisms that will allow the industry to grow and increase its level of penetration.
How to define strategies, other than the purchase of new companies and taking advantage of the organic growth of the sector, that allow growth of the insurance business ?; This is the question around which the conference given by Dr. Phillipe Danileski, during the XVI International Insurance Convention, was developed. During his speech, the Vice President of the Consumer Office of the AIG Group, defined two strategies that allow insurance companies to generate a process of continuous growth and an increase in the level of penetration of their premiums.
The first, which can be defined as the traditional strategy and which is carried out by many of the insurance companies, consists of the consecutive application of the following activities: definition of a client prospect, search for the new client, offer and sale of the products and, in the event of a claim, honor the commitment made.
The second, which could be defined as the continuous value generation strategy, not only includes the activities previously defined, but additionally, seeks to integrate into the normal development of the company's commercial activities, processes that allow better use of the relationships you already have with customers.
These other activities can be grouped into the “five stages that allow increasing the value of the insurance for the client” scheme:
1. Making new offers
During this stage, the aim is to generate a systematic process that allows the company to offer products again to those potential customers who, despite not having purchased the product, showed some interest in it. What is sought with this activity is to take advantage of the high potential of potential clients who are interested in some way in insurance and who have some knowledge of the company.
2. Generation of additional income
Stage in which it seeks to undertake a systematic process that allows a better understanding of the situations in which the client could be in a position to acquire new products or to modify the conditions of the policies in force. Ultimately, it is about identifying those moments that present themselves as business opportunities for the company.
3. Obtaining references
Clients, who already know the company, who feel that insuring is a good choice and who have witnessed the benefits that assurance provides, are an important source of information about potential new clients. Therefore, the company should develop systematic processes that allow it to collect this type of information.
4. Retention
Having programs that allow understanding the reasons why clients want to cancel policies and that incorporate mechanisms to make them stay with the company; point on which it will delve further.
5. Renewal
People who have been customers of the company for some time, who have paid the premiums and have a recognition of the brand and value of the insurance, have a high probability of renewal of the policy; which must be taken advantage of by companies by incorporating, within the company's business practices, a systematic process whose objective is to provide them with incentives to do so.
Now, the important point of this whole process is to identify the key moments that mark the moment in which each of these activities must be started. The answer to this is found in what can be defined as the moments of interaction in the relationship with customers, that is, the marked moments or the development of an action related to the existence of a contact between the company and the client or, on the other hand, of a possible change in the client's needs, and therefore, in the level and type of risks he is assuming.
These points of interaction with the customer can be classified into two types: those events that are related to the product, and those that are related to the customer. As part of those events that are related to the product are: The time when the offer is made, which is the right time to offer more products and collect references.
When the customer accepts the offer, it is the time when the customer not only expresses an interest in insurance but is also willing to buy it, and therefore this is a favorable time to offer more products. When the policy is renewed, it appears as an opportune moment for the review, to offer more coverage or to offer a new type of product that is better suited to the risk conditions that the client assumes. When the tax declaration is made, it is a great opportunity for those products that are exempt from paying taxes. In these cases, it can be brought to light how these deductions or exemptions can be used and maximized in their favor.
The moment of the claim, is when the company honors its promise to pay in the event of a claim, it is an opportune time to interact with the client. In general, the consequences of a claim have the effect of generating new needs, which can be used to offer new products that cover them, or to modify or expand the coverage currently available.
The more time elapses, the less likely the new customer is to purchase another product.
Administrative communications are another source that allows creating a dialogue with the client and, therefore, they are presented as an important source of resources; that is, take advantage of the administrative communications that the company makes to request references, inquire about the possibility that customers require greater coverage or other types of products.
And finally, another event that is related to the product is when the customer calls the company to request a service. This occasion should not be used solely to provide a good assistance service, but should also be used to market new products or coverage as well as to request references. Keep in mind that when the customer makes the call, they are willing to talk about insurance and are free from any other activity and therefore will not feel uncomfortable when hearing new offers.
The second classification includes those events that are related to the client. Specifically, these are occasions that are presented as important sources of information about possible changes in the client's current situation and, therefore, that are showing a possible change in their needs.
This implies that there are instants related to the activities that the client carries out in his daily life, which must be taken into account by the company for the conduct of new business. For example, when the client notifies the company of the change in residence address or if the client's age is between thirty, it could be inferred that the client now has a family or is planning to do so; if, on the other hand, they were among the fifty, it is possible that there is a high probability that the children have moved and therefore, the couple lives alone.
In conclusion, these lifestyle changes may reveal new reasons for buying insurance and companies must be able to exploit it. In this same sense, events such as the acquisition of credits, purchase of new cars, opening of bank accounts, and all this information that can be acquired through business partners, are accounting for possible changes in people's lives, and therefore, possible new reasons that lead the client to the purchase of new insurance or the modification of existing coverage.
One of the most important sources for the growth of insurance companies is found in the clients it currently has.
Therefore, it is not just about having the infrastructure that allows access to information about events that in any way may affect the customer's life, it is also about having a systematic program that allows the company to take advantage of these circumstances to apply the activities defined in "the five stages that allow increasing the value of the insurance for the client" and, in this way, generate a process of continuous growth and an increase in the level of penetration of its premiums.
Finally, two aspects that must be taken into account when designing a strategy are: defining the right moment to make a new offer to new clients and, consolidating systematic processes that allow those clients who want to cancel the policy to remain in the company.
In relation to the first, in general, it is assumed that a considerable time must elapse between the moment in which a new client made a purchase and the moment in which a new offer is made; what is commonly believed is that this strategy ensures that the customer does not bother with the company.
What studies carried out worldwide by the AIG Insurance Company show is that the more time elapses, the less likely it is that the new client will purchase another product. There is an inverse relationship between the days elapsed from the first purchase of a policy by a new client and the sale of a second product to the same client. Regarding the second aspect, insurance companies normally do not have a process that allows a client who wants to cancel the policy to remain with the company.
One of the reasons argued by clients when canceling a policy is the high value of the premium, which should not become a reason for the client to end his contract with the company, given that in the hands of the insurer There is offering a cheaper product, with a lower number of covers or another product that better suits your particular situation. But what AIG has found is that another important reason that leads to the cancellation of the policy is that the client does not remember the initial reasons that led him to purchase the product; solution, which, like the previous one, is in the hands of the insurer, that is: the company must be able to make the client remember the reason why insurance is important to him and, with it,they get him to keep the contract or renew the policy.
In summary, one of the most important sources for the growth of insurance companies is found in the clients it currently has, therefore, and in order to take advantage of the full potential that this presents, the company must define systematic procedures, that take into account the different circumstances in which the client is at different moments in time, that implements the activities identified in "the five stages that allow increasing the value of insurance for the client".
