An evaluation of marketing strategies in international insurance companies, with a view to identifying successful strategies for future use within the industry
Issues relating to the marketing of insurance companies have been the subject of many discussions, often focusing particularly on one jurisdiction and the ways in which organisations can become more internationally successful. The financial sector has become considerably more competitive, in recent years and, as such, it is now important for those involved in the marketing of insurance companies to think more strategically about establishing a strong position for themselves, both within their home jurisdiction and also when looking to impact on the international market.
One paper of interest is that of Shameem and Gupta, in 2012, which focuses specifically on marketing strategies used in life-insurance companies with a global approach, offering relevant information which can potentially be draw upon for the purposes of this wider research. In this proposed paper, the author is going to examine the marketing strategies employed by insurance services to ascertain which of these marketing strategies is likely to result in the success of the organisation and the longer-term factors that will lead into this success.
It was found in this research that innovation was one of the key factors associated with successful marketing strategies. By looking at the various strategies, such as pricing, advertising, improving quality control, personal selling and image, it was argued in this research that innovation needed to consider not only the product which is being provided, but also the approach taken to engaging with the markets. This recognises that providing strong customer services is often a secondary marketing strategy which is successful in its own right, without necessarily going down the additional route of advertising and engaging with new customer groups.
Other marketing strategies that were recognised as being successful in this paper included the use of information technology as a means of changing the internal structure and enabling companies to engage with a broader customer base with considerable ease, as well as allowing the company to increase its use of sales’ promotions to attract the most relevant customers. Crucially, however, this paper argues that developing new and innovative ideas, whether this be in terms of the method of marketing, or the nature of the products being offered, needs to be continuously at the forefront of the insurance industry, particularly in the current climate where organisations are subject to increased costs, including additional regulatory requirements. These proposals contained within the paper offer an interesting point of discussion for the purpose of this proposed area of research as it looks at the underlying ethos of the strategy rather than the precise strategy itself.
Another interesting paper for the literature review is that of Saaty, 2011, which looked specifically at the marketing strategies employed by insurance companies in Saudi Arabia, both in terms of their domestic success and in terms of making international inroads into new markets. This paper looks at the individual strategies being employed within one individual jurisdiction and by drawing on a broad range of primary users that and identifying the factors that ultimately encourage them to engage with a particular organisation. Saudi Arabia is also seen as being a relevant jurisdiction, as it is going through a dramatic period of growth and is therefore encouraging organisations and consumers to think about new ways of working and engaging with their customer base. This research looked at a wide variety of insurance products (unlike the previously identified literature that focussed on the life insurance sector only). Interestingly, this research showed that factors relating to regulatory and social issues were the most likely to influence the individual decision as to which insurance companies would be chosen by the individual consumer. Crucially, however the paper also showed concern about the general acceptance of the need to insure at all, indicating that for a developing region, marketing strategies need to concentrate more on the generic issue associated with why insurers would be important in the first place.
This presents an important argument that an international insurance company will need to take into account the fact that some jurisdictions will not necessarily have the same desire and understanding relating to the benefits of insurance and therefore their marketing strategies may need to be adapted, in order to deal with this lack of understanding. It becomes apparent, therefore, that the marketing strategies will need to take into account the way in which the jurisdiction itself is likely to react to the insurance market, in its entirety.
Objectives and Importance of the Research
The insurance industry is undergoing a dramatic period of change and evolution, with many organisations facing increased costs due to regulatory pressures, as well as the market becoming somewhat saturated in the more developed regions, particularly as consumers look to reduce their daily spending. With this in mind, the way in which international insurance companies can evolve and develop in an increasingly competitive market becomes of particular relevance, as the economy looks to recover and to better engage with its customer base, as well as dealing with the changing dynamics within the economy. There are also increasing opportunities being made available to international organisation to engage with a broader range of consumers, often through the use of information technology which provides those additional opportunities and also additional competition, thus changing the entire dynamic of marketing for the industry.
The key objective of this research is to identify marketing strategies that an international insurance company can use to its advantage when establishing itself more firmly within its existing jurisdiction, but also identifies strategies that are likely to be successful when entering into new markets.
This is perceived to be particularly important, due to the fact that many international companies may be looking towards entering new jurisdictions that have potentially greater opportunities; therefore, identify marketing strategies that will enable these international organisations enter these new jurisdictions, successfully, is a key objective of this overall research proposal.
The first objective will be to explore the challenges being faced by international insurance companies, with specific reference to opportunities that may present themselves to increase the revenue base and to enter new markets as a means of gathering new customers.
This will then enable the research to go on to look at the business strategies and marketing strategies which may be appropriate for achieving this aim and looking at the relative merits of various different strategies, from the consumer’s point of view. By looking at various different strategies that may be employed by an insurance company and identifying the demands of the precise market that is being targeted, it is anticipated that a suitable framework can then be suggested for international insurance companies, in the future.
Data Collection Methods
Marketing, by its very definition, involves engaging and encouraging customers to become (or indeed remain as) customers. Therefore, it is suggested that the most appropriate method of gathering information is through primary research, focusing on surveys (questionnaires) and interviews with insurance customers. Surveys can be sent out to a much broader range of individuals, enabling the researcher to collect a large amount of data in a relatively short space of time and with relatively little cost. This will enable quantitative analysis through SPSS or excel as appropriate to offer graphical representation. However, surveys can potentially create difficulties when it comes to gaining full answers, as individuals will be encouraged to provide an answer to a specific question raised based on the set of answers provided which may or may not fully reflect the feelings of the consumer. By encouraging the respondent to select the “best fit”, this may be an unfair reflection of the situation and could result in key findings going unidentified. It is for this reason that interviews will be undertaken alongside the surveys, to allow for a greater exploration of key issues and to allow respondents to voice their opinions more fully and freely. This method will supplement the survey, but can be difficult to produce theories, as each individual is likely to respond slightly differently, thus making it harder to analyse the results in a quantitative manner.
By combining the two approaches, it is expected that a greater understanding of consumer decision-making can be ascertained. It can then be used in order to meet the overall objective of this research.
Ethical Implications of the Research
Care needs to be taken when undertaking this research due to the fact that the research involves collecting a large amount of data from individuals. This means that consideration will have to be given as to how personal data will be secured, to ensure that anonymity will be maintained throughout. Any concerns in this regard could result in inaccurate results. Furthermore, any interviews with insurance executives will need to be undertaken with anonymity guaranteed, as individuals working within the insurance industry may be reluctant to provide open and frank discussions, if there are any concerns that the information being provided is going to be made public, as this could jeopardise their long-term career. Ultimately, this will impact on the accuracy of the information that will be provided. This is particularly relevant within the insurance industry which is facing increasing challenges and is therefore potentially going to create difficulties for those looking to progress their careers. With this in mind, anonymity and security needs to be assured to all respondents.
Saaty, A. (2011). Factors Critical in Marketing Strategies of Insurance Companies in Saudi Arabia. International Journal of Marketing Strategies Vol. 3. Issue 3.
Shameem, B., and Gupta, S. (2012). Marketing Strategies in Life Insurance Services, International Journal of Marketing, Financial Services and Management Research Vol 1. Issue 11.