TOMER-CENTRICITY IN INSURANCE INDUSTRY

sunandaC

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An article by U Jawarharal and Sarthak Kumar Rath “CUSTOMER-CENTRICITY IN INSURANCE INDUSTRY” FROM THE ICFAI UNIVERSITY PRESS has given an overview of how the demands of customers are the main competitive factor for all the insurance industries. A brief of the article is given below:


Life insurance is a unique financial product. It deals with variables that are emotional and, within the context of our own individual lives, completely unpredictable. Since the 1850’s when the modern life insurance was created, insurance companies have consistently kept their contractual “promise to pay”.

This in turn has made it possible for millions of men and women in this country to keep their promises to their families, building a plan of foundation of life insurance protection. Although no amount of protection can be substituted for the loss of the person, millions of families have been protecting themselves under life insurance, thereby affording them the confidence that their families would continue to lead a decent life.

It need not be emphasized that Life insurance is basically governed by the universal twin objectives of risk coverage and savings for the future. Life insurance will protect the family and /or specified dependants in the event of the policy holder’s death. In general, it is an essential component in planning for the future.


With liberalization of the insurance sector and the emergence of the internet, the insurance industry is facing enormous challenges. The entry of additional distribution channels has stirred up more completion. Customers are now having a wider choice of insurance selection.

Today, they are occupying a prime position, which was denied to them for years. Besides, customers are fully aware of the insurance policies and are well-equipped with modern gadgets such as cell phones, laptops and various financial websites giving the insured the choice and information about the policies.


Services in the insurance industry are different from that of the other financial services. While, the insurance industries only hear from the customers when certain events happen, it is not the case with other financial peers where interaction is continuous.


Therefore, insurance companies need to leverage interaction with each and every customer to build a level of service quality leading to customer satisfaction, increasing customer retention and finally increased profits.


Potential customers are attracted to buying a policy for one or more of the following reasons viz. , security of the money invested, saving for one or more purposes, and most importantly for tax benefit. The main aim for the potential buyer is that the savings should be a painless process and the money deposited with the insurance company should be absolutely safe.


The challenge is not only to provide convenient payment options, but also mechanisms that would at least provide partial leverage and protection to the customer once he is forced to discontinue the policy due to unforeseen reasons. To address the issue of customer security a few important things need to be taken care of.


First issue to be addressed is whether the policy is endowment or unit-linked. Secondly, the dependability of the new insurance company needs to be addressed.
 
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