Introduction

The race and pace of economic transformation make ways for the development of financial institutions. With the conceptualisation of globalisation, the Indian economy witnessed myriad of challenges and resulting from which new vistas were opened for the development of almost all the financial institutions in which the policy makers assigned due weightage to professional excellence. It was in this context that we find development of insurance sector in which the foreign-based insurance companies played a significant role. Earlier, the government sector dominated the business which was almost working in a monopolistic condition. The traditional product of public sector insurance business witnessed a threat when the leading private sector insurance companies based on worldclass professional excellence and managerial proficiency started establishing an edge over them. They had innovative product and the marketing processes of world-class making the business environment much more challenging for the public sector insurance business. Of course, the governmental regulations provided to them a strong protection but the process of liberalisation gained a rapid momentum and the government had no option but to make the business environment for insurance business much more productive and against this background, the IRDA made liberal provisions for the private sector insurance business.

The IRDA Act 1999, provided for three categories of insurance business in India, such as a public company with two categories of operation public limited and public unlimited companies set up mostly in the USA were not allowed to do insurance business in India and similarly the private limited companies were also not allowed to do insurance business. The second category that we find of a society incorporated under the Cooperative Societies Act 1912 in India or under any other law relating to cooperative societies. And the third category that we find of a body corporate incorporated abroad under the law of that country not being in the nature of a private company. Further, the provision for disinvestment is to allow the fourth category that is Public Unlimited Companies in future which would have a major impact on the insurance business.

Wherever there is uncertainty, there is risk. The risk can't be averted. It involves multi-faceted losses. Risk is uncertainty of a financial loss. We don't have any command on uncertainties. This makes it essential that we think in favour of a device that becomes instrumental in spreading the loss. It is in this context that we think about insurance which is considered to be a social device to accumulate funds to meet uncertain losses. The main functions of insurance is to provide protection against the possible chances of generating losses. It eliminates worries and miseries of losses at destruction of property and death. Further, it provides capital to the national economy since the accumulated funds are invested in the productive heads. The industries, businesses, individuals are considerably benefited by the services of insurance organisations.

The earliest traces of insurance are in the form of marine trade losses or carriers' contracts. In 'Rigveda', the references are made to the concept of "Yogakshema" which is more or less akin to the well-being and security of people. This makes it clear that the traces for sharing the future losses were available even in the ancient India. However, there is no evidence of a particular form or shape, specially before the 12th century. The oldest form of insurance is the 'Marine Insurance'. The travellers by sea or by land very much exposed to the risk of losing their assets, vessels and merchandise required measures to cover risk. The piracy on the open seas, highway robbery or fear of sinking of the vessels in the deep water necessitated a device which spreads the financial losses. The Marine Insurance was found suitable for the purpose.

After the marine insurance, we find development in the field of 'Fire Insurance'. It started from Germany in the beginning of the 16th century. The great fire in England in 1666 which resulted in the burning of 85 per cent of the houses to ashes injected life, strength and continuity to the concept of fire insurance. With the colonial development of England, the fire insurance spread all over the world. In India, the General Insurance started working in 1850. The credibility for the same goes to the Triton Insurance, Kolkata.

The Life Insurance was found existent in England in the 17th century. The policy of life of William Gybbons on June 18, 1633 is the first recorded evidence. Even before this, the annuities were found common in England. The first registered life office was the "Hand-in-Hand Society" which was established in 1696. In USA, the Life Insurance could not flourish mainly due to an abnormal fluctuation in the death rate.

In India, the first Life Insurance Company was established in the Bengal Presidency in 1818 which was known as the Oriental Life Insurance Company. In the annals of Indian Insurance, the year 1870 is a landmark. Experiencing so many ups and downs, the insurance business was found in a changed shape, particularly after the attainment of independence and to be more specific after nationalisation in 1956. Further, the General Insurance was nationalised in 1971. Thus, the insurance business in India is found under the public sector which is managed by a corporation. There is no doubt in it that a number of small companies are working under the private sector but their insignificant contributions to the society right now keep them out of the purview.

The public sector insurance business, of course, made possible numerous changes in the functional areas of the insurance corporations but at the same time it also made ways for a degeneration in the quality of services. We can't deny the fact that after nationalisation, a number of steps have been taken to spread the insurance business much more widely to the rural areas and specially to the socially and economically backward regions with a view to reaching all the potential users of the services. The insurance network has gained the momentum and now even the rural masses are well aware of their contributions.

In India, the Life Insurance Corporation of India and the General Insurance Corporation of India are managed and controlled by the Union Government and therefore, the responsibility of qualitative improvements or even a degeneration in quality is found on their shoulders. For the expansion of insurance business, it is essential that the potential policyholders are identified and marketing resources are used optimally to transform them into the actual users. This naturally requires professional excellence and a strong sense of determination. The over ambitious objectives of the Corporation necessitate a change in its management. This makes a strong advocacy in favour of practising the marketing principles. The formulation of marketing mixes is required to be given due weightage. The quantitative and qualitative improvements are to be made possible.

Insurance Marketing - The concept

The marketing concept in the banking and insurance services emerged with the publication of an article entitled, "Banks and Savings Institutions in the Television Age." The article focused that in the recent past, the banking and saving institutions have assigned due weightage to their austere dignity rather than the friendliness. 

The term 'insurance marketing' refers to the marketing of insurance services with the motto of customer orientation and profit generation. A fair blending of profit generation and customer satisfaction makes the ways for development and expansion. The insurance marketing focuses on the formulation of an ideal mix for the insurance business so that the insurance organisations survive and thrive in a right perspective. The quality of services can be improved by formulating a fair mix of the core and peripheral services. The persuasion process can be speeded up with the support of creative promotional measures. The premium and bonus decisions can be made motivational, the gap between the services-promised and services-offered can be bridged over, the quality and value-based personnel can make possible performance orientation and these developments can make the insurance organisations stronger enough to face the challenges and threats in the markets. It is meant managerial proficiency which makes an assault on unethical and unfair practices by regulating profiteering. The organisations thus are found successful in increasing the market share, maximising the profitability and keeping on the process of development.

In the Indian perspective where rural orientation needs a prime attention, the insurance marketing may prove to be a device for combating regional imbalance by maintaining the sectoral balance. As an investment institution, the rural development-oriented projects make ways for the transformation of rural society. Like the banking services, we find automation playing a decisive role in fuelling the process of devlopment. In a true sense, we find use of sophisticated information technologies in both the services that pave avenues for quality upgradation. It is right to mention that the marketing concept in both the banking and insurance businesses is a matter of recent origin. Marketing is to excite the interest of insurance and stock brokerage companies although they have a long way to go in applying marketing effectively.The marketing concept in the insurance business is concerned with the expansion of insurance business in the best interest of society vis-a-vis the insurance organisations. There is no doubt in it that a few of the insurance companies have effective marketing operations, however, there are a number of typical insurance companies where the marketing function is diffused throughout the organisation with no one executive responsible for the overall marketing performance. The lack of coordination results in overemphasising the marketing activities, such as advertising at the expense of others, providing adequate customer service at teller's windows. On the other hand, it is also found that some of the insurance companies have recognised the significance of marketing concept where executives are made responsible for overall marketing performance. However, it is right to mention that the insurance companies lag behind most manufacturers in recognising the marketing concept in their organisations. Insurance companies tend toward a strong sales orientation, since the services they sell, although certainly necessary ones, rarely sell themselves. Potential policyholders are reluctant to think about the disaster and death. So they postpone planning for these possibilties unless they are contacted and influenced by insurance agents. Thus, the insurance company's mutual orientation is toward sales, not marketing.4 But in the modern business world, the marketing concept insists on fixing of accountability for overall marketing performance.

The selection of risks (product planning), policy writing (customer service) rating or actuarial (pricing) and agency management (distribution) - all marketing activities make up an integrated marketing strategy. We can't negate that during the yester decades, there have been considerable developments in the perception of customer servicing firms like banking and insurance companies. Particularly in the developing countries like ours, the organisational objectives adovcate spreading of insurance services much more widely and in particular to the rural areas and specially to the economically backward classes with a view to reaching all insurable persons. This naturally necessitates an integral marketing strategy. In other words, market orientation in place of sales orientation is need of the hour. Hence, the marketing concept in the insurance business focuses on the formulation of marketing mix or a control over the whole group of marketing activities that make up an integrated marketing strategy.

Product

The formulation of product mix for the insurance business makes it significant that we turn our eyes on the services and schemes of insurance organisations. We know about their product portfolio and assess the process of formulating a package. It is natural that the users expect a reasonable return for their investments. It is quite natural that the insurance organisations want to maximise profitability. Both the dimensions are found interrelated. It is profitability that makes the ways for a reasonable or profitable return to the users. And it is the contribution of policyholders that influence the business of insurance organisations vis-a-vis their profitability.

Of course, to be more specific after the nationalisation of private insurance companies, we find inclusion of a good number of services and schemes by both the Life Insurance and the General Insurance but we can't appreciate their efforts to make the services or schemes motivational. The Group Insurance is required to be promoted, the Crop Insurance is required to be expanded and new policies, schemes having a rural bias are required to be included in the product portfolio. We are aware of the fact that a majority of our population live in villages. The landless labourers, unemployed youths, non-traditional farming, rural artisans, fishermen, potters, etc. deserve due care. It is well-known that the key objectives of the insurance business are mobilisation of savings and channelisation of investments. This makes it essential that the insurance business is made lucrative so that the users/potential users get incentives to buy a policy or to invest in the insurance organisations.

In the context of formulating the product mix, át is essential that the insurance organisations promote innovation and in the product portfolio include even those services and schemes which are likely to get a positive response in the future. In an agrarian economy, the insurance organisations are supposed to play a positive role by promoting Cattle Insurance, Crop Insurance so that the farmers develop their potentials to resist the natural calamities. We can't negate that the product innovation process would require a change in the regulatory provisions. The Life Insurance Corporation Act 1956, the Marine Insurance Act 1963 and the General Insurance Act 1972 need amendments in the face of the recommendations of Malhotra Committee. The corporate objectives indicate that the insurance organisations are required to be careful, specially while launching a new policy It is not only sufficient that the policies generate enough premium but it is also important that our policies cover even the persons working in the informal sector, serving as porters, working as manual labourers, or engaged in the farm sector.

In view of the above, it is right to mention that new policies and schemes are required to be included in the product portfolio of the insurance organisations. In addition, they need to formulate a sound package that proves to be more motivational. While formulating a package, the insurance professionals need to assign due weightage to the interests of rural India. The package if profitable proves its instrumentality as a motivational force and simplifies the task of insurance professionals. In this context, it is also important that the insurance organisations think in favour of eliminating those services which are not getting a profitable return. This would pave avenues for the mobilisation of savings.

Promotion

Advertising

Advertising, a paid form of persuasive communications, is found important to promote the insurance business. 

We advertise through telecast media, broadcast media and the print media. We can't negate that the insurance organisations need to make possible an optimal use of all the three media. So far as the vulnerable sections of the society are concerned, we find the telecast media more effective in the sensitising process. With the help of audio/visual exposure, the rate of acceptability of the messages can be increased sizeably. If the advertising professionals are well aware of the receiving capacity of the prospects, they can make the advertisement slogans, and messages creative. Being a big organisation, the Life Insurance Corporation of India is found efficacious in having its own advertisement wing for that purpose. We can't deny that the telecast media is expensive but to promote the insurance business we have no option but to assign due weightage to the same.

The broadcast media can also be used for that very purpose. Since we have a big transmission network and a well-developed system, the insurance organisations are supposed to use even the broadcast media. If we find the messages sensitive, the rate of acceptability would also be high. Another benefit of this media is to reach the messages even to the remotest parts of the country. 

The print media can also be used for promoting the insurance business. Being economic in nature and impressive in expression, the print media, of late, has been found gaining popularity. The insurance organisations need to promote the print media since this would simplify their task of making the appeals effective by using regional languages. 

Publicity

In addition to advertisement, the insurance professionals also need to think in favour of publicity since this component of promotion if used in a right fashion makes our promotional efforts proactive. The advertisements may be insensitive, but we find publicity effective since the messages, views, opinions, facts, figures are publicised by media or the vocal leaders. It is a device to promote business without making any payment and therefore we also call it an unpaid form of persuasive communication bearing high rate of sensitivity. It is against this background that we make a strong advocacy in favour of strengthening and innovating the public relation activities so that our positive contributions reach to the prospects in time.

Developing rapport with media is an important aspect of publicity. This makes it essential that the public relations officers working in the insurance organisations or the branch managers or even the senior executives develop rapport with the media people, organise a press conference, distribute to them small gifts, offer to them lunch/dinner and persuade them to write something in their favour by making a story or in the form of news cover. All of us are aware of LGD marketing gaining popularity the world over. L (Lunch), G (Golf), D (Dinner) focus on the fact that in the business world, the executives bear the responsibility of managing business favourably, this way or that way. If we find coverage in the newspapers, magazines, the prospects are to be influenced.