Product strategy and distribution strategy of financial services

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  • 1. Product Strategy and Distribution Strategy of Financial Services Group 8
  • 2. Financial Services The various services that are created and delivered by the financial system are known as Financial services. Financial services constitute an important component of the financial system. Financial services, through the network of elements such as financial institutions, financial markets and financial instruments, serve the needs of individuals, institutions and corporate.
  • 3. Insurance For the customers, the most important function of an insurance company is; Product design. Distribution services. Delivery performance. Investment performance.
  • 4. Marketing Strategy of insurance company influenced by: The convergence of financial services. Rise of E-commerce. Emergence of new distribution channel. Value proposition of time. Cost reduction. Effective CRM. Profitability.
  • 5. Issues In Insurance Marketing Insurance is unpatented, subjective, requires prior experience. Physical evidence is difficult to establish. Mass production is impossible. There is an involvement of customers in production of services.
  • 6. Success Factors Of Insurance Players Change n the Attitude of the Population. Open and Transparent Environment Created Under the IRDA. Well Established Distribution Network. Trained Professionals to Build and Sell the Product. Rationale Approach to the Investment Criteria. Stringent Accounting Practice to Prevent Failures Amongst the Insurers. Level Playing Field at all Stages Of Development in the Sector For all the Players.
  • 7. MARKETING STRATEGIES OF INSURANCE PLAYERS IN INDIA Develop customer relationship that retains the loyalty of existing customers and enable new customer segment and market areas to be served effectively and efficiently. Introduce new innovative products and services desired by targeted customer segment. Produce customized high quality products and service at low cost and with short lead times. Mobilize employee skills and motivation for continuous improvements in process capabilities, quality and response times. Deploy information technology, databases and systems in an optimum manner.
  • 8. Punch line of Some Players Insurance Company Punch line Life Insurance Corporation of India "Life is Beautiful Jindgi ke sath bhi jindgi ke baad bhi" Birla Sun Life Insurance "Your Dreams. Our Commitment" ICICI Prudential Life Insurance "We cover you at every step in life" HDFC Standard Life Insurance Making life Easier for you OM Kotak Mahindra Life Insurance "Jeene ki Azaadi" ING Vysya Life Insurance "Adding life to insurance" TATA AIG Life Insurance "With you always Max New York Life Insurance Company "Your partner for life" Bajaj Allianz "We cover almost everything" AMP Sanmar "Creating better futures"
  • 9. Market Strategies of Some Insurance Policies Tied up with Corporation Bank and Vijay Bank for distribution. Launch customized and focused insurance products for various sections of the society. Customer retention, it has launched a highly optimistic campaign of revival of lapsed policies. One of biggest advertiser of its products utility a wide large of products viz. print and electronic media, sponsoring events, road shows etc.. Following both mass marketing and segmentation strategy. Promotion activities is on tax benefit and returns from insurance
  • 10. Achieve scale in premium income and distribution force in shortest time. Using tools like workstation marketing, corporate marketing, road shows, stall in trade fair, loading etc.. Mostly pro-active in nature. The focus is more on direct selling apart from communication and building personal relations.
  • 11. Direct market tactics Marketing at worksites and corporate customers Customized product offerings. To sell the products as long term investment plans.
  • 12. Many flexible products with options and riders that can be customized to over 250 combinations. Using direct marketing like advertisement and event sponsorship.
  • 13. Tied up with Geojet Info fin Technologies. Strategy of phase-wise introduction of products. Following the bundle method of product offerings to enable meticulous investment planning by analyzing the needs, requirements risk profile of the customers.
  • 14. Mass marketing To build its brand by stressing on the 'creditworthiness of the company and its partners.
  • 15. Cashless insurance products Advertising in local newspapers, television and hoarding for generating awareness. Highly cautious in underwriting risks.
  • 16. Simple Products. Branch-wise segmentation and product offerings. Smaller Average size of policies.
  • 17. New Trends in the Insurance Industry As per the 7th April 2010 Outlook Money ICICI Prudential ACE Type 1 Ulip No Premium allocation charge Only 2 charges; o Policy Administration Rs.60/- o Fund Management 1.35%
  • 18. ` AEGON Religare Start Child Child Plan with lowest cost Auto-rebalancing and invest protection features
  • 19. IDBI Fortis Retiresurance Pension Plan with lowest cost No premium allocation charge in any year
  • 20. Reliance Life Basic Plan Type II Ulip Low Premium allocation of 6% first year and nil thereafter.
  • 21. Types of Insurance Universal Life Products Offer flexibility by allowing a policy holder to make changes in premium. Can change the policy amount if the holder is not able to make the payments. Demographic Plans In-built Riders Inflation Based Products More Thematic Funds
  • 22. Distribution Channel Traditional Agents Most companies in India use Called as insurance advisors/planners
  • 23. E.g.: LIC It has more than 6,51,000 agents around the country
  • 24. Brokers Professionals who assess risk on behalf of a client, advise on the mitigation of that risk, identify the optimal insurance policy structure, bring together the insured and insurers, carry out work preparatory to insurance contracts and where necessary, assist in the administration and performance of such contracts, in particular when claims arise.
  • 25. Benefits of Brokers Improvement in Customer Service. Transfer of Technology and Managerial Know-how. Benefits to Insurance Companies. Foreign Exchange Considerations.
  • 26. New Distribution Channels D

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