This document discusses positioning and the role of life insurance agents. It explains that positioning is how customers perceive a product or service in their minds. For life insurance agents, they must decide how customers will perceive them - as a seller, supplier, financial advisor, or trusted individual. To influence this perception, agents must design their communications accordingly. The document argues that agents provide value by professionally assessing customer needs, designing suitable policies, and assisting with the policy process. They are not just vendors but professionals helping customers meet financial needs. For customers to justify paying commissions, agents must prove their expertise is more than impressive presentations.

1. MARKETING MANAGEMENT FOR LIFE INSURANCE AGENTS
PART- 8
(TARGET MARKETING- POSITIONING)
“WHEN AN INDIVIDUAL GROWS BIGGER, HE BECOMES AN ORGANISATION”
POSITIONING SELF “EVOKING A SENSE OF REPAYMENT”
Positioning: The place the product or the services occupy in the minds of the customer.
For example a face cream is positioned as a “ray of hope” for young girls seeking a
suitable bride. A dress material is positioned as a “Status provider” in some cases and as
an “attracter” in some cases. A camera is positioned as “easy to operate to capture
memories” in some cases and in some other cases, another camera, as “highly
sophisticated tool to capture speed and action”. A detergent is positioned as “pure White”
result sometimes, “soft hands” at times, retain the quality of the fabric at times. The
manufactures would like their customers to think about the products this way. Their
communication in the market be it television ads or radio jingles or paper ads or product
brochures or fliers, all will focus on this aspect.
Let us now look at life insurance agent, how should he position himself in the market?
What should his customers think about him?
As a person who is selling life insurance for his living? or
As a supplier, who makes home delivery of the policies chosen by the customer? or
As an expert financial advisor? or
As a trustworthy individual? or
as whom?
The impression the customer will make in his mind about this agent, will depend upon the
communication of the agent. The communication through emails, tele-calls, personal visits
all of these will help the customer to form a image about the agent. So the agent must
decide as to how he wants his customer to perceive him or his services and the design
communications accordingly.
When a patient goes to the doctor for consultation, he knows that this person can add
value to him (in pain relief or avoid pain). When a client seeks an advocate to take up his
case he is aware that this person (advocate) can add value to him. While it comes to
paying the fees to these professionals, there is a sense of repaying for the value availed.
Let us look at a life insurance agent:
The product he sells is designed by the Life insurance company. The price and the
benefits are decided by the company. The company assures services as mentioned in the
policy conditions (policy document). The customer therefore, prima-facie need not feel a
sense of repaying for any value added to him. If however the agent is able to demonstrate
professionalism (not just salesmanship) in assessing the needs, designing the right
solutions at the right cost, and save time and efforts in interacting with the company to
avail even those services mentioned in the policy conditions, then there is a justification for
the “sense of repayment”.

2. Leave alone the customers, many times the insurance regulators themselves, are seeking
a justification, for the commissions paid to the agents. That is why, agents must
concentrate on the proving their professional expertise to their prospects even more than
impressing them with their vocabulary or a few colourful power-point presentations.
A good life insurance agent makes a Himalayan difference to the customer. No
technology or devices or gadgets can effectively replace the services of an agent.
Agents are more than suppliers of products. Agents are not just vendors (or
vending machines) of life insurance policies.
Agents are professionals engaged by the company to provide appropriate assistance to
the clients to fulfill certain financial needs.
A life insurance policy has three aspects. 1) Mathematical 2) Legal and 3)
Administrative. There are two hidden sides to this product a) Psychological and b) Social.
Let me explain this further.
Selection of a suitable policy (or a package of policies) involves certain mathematical
estimations. When it comes to insuring a car or motor cycle or a machine, the tag value of
the thing is obvious, so not much of estimation is required. (I have simplified this
purposely, but in fact there will still remain Risk management process).
In determining the insurance cover for a person there are mathematical models:
1) Capital need analysis
2) Human Life Value
3) Net-Worth.
In determining Retirement solutions there are mathematical models:
1) Replacement Ratio Method
2) Expenses Provision Method
These calculations involve Future value calculations, IRR calculations, NPV calculations
and a few more formulas. This also involves a understanding of various financial
instruments available in the market.
One can argue that computers or internet web sites can provide online support for such
calculations, and an agent is not required. This can be far from truth. It is like saying fill up
answers in a pre-designed questionnaire and send it by email, and you will receive
medical prescriptions from a super computer.
Let us take the legal aspects related to life insurance, an agent in India must be aware
about various laws:
Laws related to formation of contracts, contracts of utmost good faith,
The succession acts pertaining to various religions in India.
The transfer of property act.
Married Women property Act 1874
The formation of Trusts.
The income tax act and rules.
The laws involving employees and their employments.
Insurance Act 1938
The jurisdiction of various regulators.

3. Important decisions by courts in cases relating to insurance claims, heirs, non-forfeiture
conditions, materials facts etc.
Let us take administrative aspects, an agent must be thorough with the policy conditions
printed on the policy conditions and their implications on the continuance of the policy. The
various types of revival schemes available, the forfeiture conditions, the alterations
permissible on the policies, the claim procedures, the forms to be submitted to and from
various authorities. Must enjoy good relations with various authorities to get the forms
submitted quickly. Most of the pending (outstanding) claims in Life insurance relate to
incomplete paper work. The company is eager to settle the dues, the claimants are in need
of those monies, but want of some papers and documents these claims are held up. Such
delays will not happen in cases handled by professional life insurance agents, because
they are well equipped and also connected to execute such documents promptly.
There is much more a professional life insurance agent can provide to the client. But the
million dollar question is that, “Are the customers aware about this?”. Do they see an agent
in that silhouette? And if they do not perceive it that way, then an agent need to “position”
himself better.
How to do that? Wait for the next issue.