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Insurance Marketing: Creating a successful marketing strategy for the insurance industry in Sierra Leone

DESCRIPTION GENERAL:

A common perception about security in most African countries is that companies often do not meet contracts with the policy when insured losses occur, and often use these fine prints embedded in insurance contracts to deny claims or substantially reduce claims payments. Such is the refrain heard not only among policyholders and customers, but with alarming regularity from the general public thus resulting in the penetration rate of adverse and under insurance products and services in most African countries.

Although several factors can be easily identified as drivers of this perception as the lack of proper understanding of the insurance contract, its terms and conditions, limitations, coverages, deductibles and exclusions including legal and regulatory framework in different countries, the focus of this article is the role of marketing and sales of insurance including technological, regulatory and management strategies can be used as an effective educational vehicle to change the perception not only previous but to make the claims process more transparent and beneficial to the insured.

There is therefore a direct consequence between the commercialization of safe, the expertise of the agent, the types of coverages and policies available and if a claim is denied or underpaid in the case of an insured loss.

THE SIERRA LEONE CASE STUDY:

For decades, marketing Insurance products and services in Sierra Leone has revolved mainly in the agency "direct" method, where companies work with salaries of agents or contractors independent commission on sales care to sell only its products and the market. The marketing of life insurance products, property and policies liability, such as fire, marine, accident and the policies were always allies on all marketed by these agents of the company.

For example, while I worked at the National Insurance Company (NIC) from 1981 to 1985, sales of the company of pictures was the Bureau of marketing sometimes with little or no technical knowledge of the complexities of risk management and insurance coverage for products sold only political and goods. The often unpleasant task in advising policyholders that their claims were not covered in the terms of the insurance contract was generally our responsibility for the claims department. By then, it had become too late to remedy as adequate coverage is not sold to the insured agents or alternative policy "umbrella" that could have covered all that there were shortcomings in the policy are not available to sell or explained to the policyholder. Especially the lack of coverage issues, adequacy of coverage of the claimed losses resulted in the denial or underpayment of claims.

The sales function of these agents focused mainly on the marketing of products or policies of differentiation products with little or no creativity in design and marketing to meet the contemporary risks faced by a country like Sierra Leone, emerging from decade-long civil war and the longing for creative policies to address their development aspirations.

For example, the old "Kebbay" Insurance syndrome, is practiced in Sierra Leone, where an insurance company became so famous in the practice of charging premium car customers without type of claims for payment when the accident occurred concomitantly. This practice is so prevalent in the market for Sierra Leone of Insurance of the decade of 1970-1990 more avoided raising its ugly head in today's market.

Marketing as defined by the American Marketing Association (AMA) is carrying out activities business that direct the flow of goods and services from producer to final consumer. Victim's property and liability insurance market, however, includes not only sales of the traditional marketing function but incorporates services such as customer needs analysis, market segmentation, development and distribution of products to be incorporated into a successful marketing mix.

INSURANCE MARKETING:

A fundamental principle of insurance marketing dictates that insurance products and policies should be marketed and sold primarily on the basis of need security and the ability of the insurance product and policy suitable to provide financial security for casualty losses. In addition, new sources of production business, including new ways to sell insurance policies of age and traditional products in connection with the marketing of new services, such as management risk, loss control and loss adjusting services should be pursued by the insurance companies.

However, in some lines of insurance, a compulsion governmental law or regulation to ensure the driving factor. For example, the purchase of auto liability insurance is required by law in most jurisdictions around the world. The requirement proposed recently advocated a policy of title insurance on property transactions roots in Sierra Leone and a national health insurance policy or workers' compensation insurance are all examples of this legal requirement mandatory.

To a large extent they have, and continue the services principles and absent in the marketing mix of insurance products in Sierra Leone, resulting in the recent spectacular failures in the introduction of new products and or failures in market penetration of alternative policies on the market several new insurance. For example, the failure of several insurance companies including the spectacular failure of the country's largest insurance company, National Insurance Company (NIC) in order to introduce and market effective national policy for social security (Nicaro) since 2004 is a case study of a monumental failure that requires a marketing analysis future article.

The sales function:

To succeed, however, an insurance producer / agent has to develop other skills, in addition to sales skills including:

1) Technical expertise in insurance principles and coverages, such as customers tend to rely on their agents for guidance in selecting the combination appropriate insurance products and identification of gaps in coverage.

2) Skills in the analysis of consumer needs through techniques identifying risk management and adaptation of insurance programs are a prerequisite.

The first step in managing the risk of a consumer needs is through the identification and analysis of risks to which the loss of a client or subject is exposed through a survey of insurance. The agent must be able to educate and sufficient knowledge of the impact of loss exposures and coverages available client and other unsafe transfer mechanisms for client.

SALES MANAGEMENT:

In general, the concept of management insurance sales involved the active participation and direction gives the sales force by management to ensure the nature and quantity of the desired business insurance company. This involves the determination of the direction:

1) The segments of the market available that can be reached more effectively by agents of the company.

2) The nature of the product or policy will be more attractive to the market segments and more profitable to the insurer.

3) How best to select, train and motivate the producers and agents to sell to the market segments.

The selection of geographic, demographic and / or industrial market segments to target in the marketing of insurance products guarantee effective market segmentation and use resources effectively. Demographic groups can be defined by such characteristics as age, income, occupation and sex.

With the use of this technique, for example, various insurance coverages for the health, medical, accident, disability and workers' compensation to name a few, could be adapted and offered to segments such as government officials, parliamentarians, teachers, academics, health care providers, brokers Okada and farmers around the country. The same could apply to the security sector, including policies specifically designed to meet the needs of military and police forces.

Moreover, by using techniques of product differentiation in their marketing mix, a company Insurance may maintain and increase market share. These can be done to modify the standard coverage provisions in the contract, charge a different price and providing a different level of service than the competition.

TECHNOLOGIES:

With the progressive installation of computers in insurance companies in Sierra Leone, new technologies are poised to play an important role in the coordination of marketing strategies, planning and studies, including new products and services, consumer attitudes, market potential and sales forecasts. The use of computers for not taking into account only the statistical analysis marketing and pricing and issuing policies and endorsements, but also insurance should be followed by individual firms.

The establishment of a marketing database of insurance companies separately and apart from the underwriting and claims databases is a step in the right direction in the implementation of the new marketing strategy.

CHALLENGES OF MARKETING:

The challenge therefore facing the local industry is the need for diversification insurance products best suited and appropriate to meet the needs and development. Because while the insurance industry can play an important role and criticism of the development process of a nation, the challenge currently facing is the way our insurance professionals respond creatively introducing insurance policies, marketing tools and techniques to provide the basis for the country's sustained economic development.

In the U.S. there are four systems distinguished by marketing the 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 system mail.

The system mainly used in the insurance market in Sierra Leone is the direct writing system in which individual companies employ its agents and employees paid exclusively market only its policies. However, if the insurance market in Sierra Leone is to survive and grow, as new players and products such as national health insurance and national identity scheme Title insurance is entering the market, then the development of a new breed of producers, agents and marketing systems must be pursued to avoid the failures of recent presentations of the new policy. These should include and incorporate direct mail agencies and technology systems.

For purposes of this objective should be a new marketing sales force recruited and trained in the complexities of insurance business and policies being introduced and marketed under actual production objectives, policies and marketing strategies and implementation of an ad and promoting the 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.

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