SCOPE OF LIFE INSURANCE MARKETING

In the present day insurance marketing scenario, the LIC and GIC play the role of an encouraging and supporting force to the entrepreneurs, corporate sector, investors, Government, Co-operatives, individuals and general public. There is vast scope for LIC to enlarge its operations both in domestic and international market. The following areas are identified for the scope of insurance marketing :

1. Changing policy of LIC : With the opening up of the insurance sector at the dawn of the 21st century, LIC has revised its objectives and has focused its vision, mission, values and culture. By constantly analysing the challenges and opportunities, and also considering its strength and weakness. LIC is designed to plan, price, promote and distribute want satisfying products and services to present and potential consumers.

2. Evolying Consumer Needs : Insurance today has emerged as an attractive and stable investment alternative that offers total protection in life, health and wealth. In terms of returns, insurance products today offer  competitive returns ranging between 7% and 9 %. Besides returns, what really increases the appeal of insurance is the benefit of life protection from insurance products along with health cover benefits. Consumers today also seek a variety of insurance products that offer flexible options, prefer insurance schemes with benefits unbundled and customizable to suit their diverse needs. This offers good opportunity to insurance marketers to extend the area of operations.

3. Distribution Gains Importance : The intermediaries in the insurance business and the distribution channels used by carriers  will perhaps be the strongest drivers of growth in the sector. Multi-channel distribution and marketing of insurance products will be the smart strategy for the Nepali Mrket. While tied agents will continue to play an important role in distribution of insurance products, alternative channels like Development Officers, Inspectors, Executives will assume a greater role in distribution of insurance schemes. The trend is expected to continue in future.

4. Innovations in Insurance Marketing : The Nepali insurance market has witnessed innovations in the constantly explored avenues to increase the number of distribution channels through a variety of distribution patterns, given the rapidly changing customer profile. Internet and telemarketing is also expected to play an increasingly critical role in customer relationship. Rational intermediaries have played an important role as a distribution outlet for insurance services and products. This is likely to provide good business to insurance marketers in future.


5. Development of Rural Markets : Nepal is a predominantly rural country of more than one million people, mass marketing is always a profitable and cost effective option for gaining market share. The rural sector is a perfect case for mass marketing. The predominant insurance market leader, the LIC of Nepal, feels that the lion's share of its new business comes from the rural and semi-rural markets. The development of rural insurance market offers tremendous opportunity to insurance market.


6. Entry of Public Sector Banks : The Insurance Regulatory and Development Authority Act 1999 seeks to open up the insurance sector for private companies with a foreign equity of 26 percent. It is also aimed at ending the monopoly of the Life Insurance Corporation (LIC) and General Insurance Corporation (GIC) in the insurance sector of the country. LIC entered into strategic alliance with corporative banks at the corporate level to improve its reach and also take advantages of mutually beneficial competencies. It also tied up with several other banks and organizations for marketing its insurance products and rendering  services like collection of premium.


7. Pension Plans: As a result of liberalization and globalization the competition in the insurance sectors is becoming intense. To survive in the competition, the Insurance Regulatory Authority is permitting insurance companies into the pension business without forming separate companies for the purpose. As the Hindu joint family concept intended to disintegrate the social security cover it has thus far provided was no longer available to  a population increasingly adding numbers to the old generation. This is likely to provide good business to Insurance companies in future.


The above discussion highlights, that the scope of insurance business is vast and there lie immense opportunities ahead of insurance companies.