The company I choose is MetLife China. MetLife is a life insurance giant operating in over 60 countries and provide services to over 90 million customers in the world. 1. The MetLife insurance agent in China need to get at least 80 hours pre training before they get the qualification to sell insurance product. The trainer will teach all kinds of insurance sells knowledge to the agent. After the agent pass the qualification exam, then the agent could enter the market to sell insurance. 2.
The agent will contact a potential customer, if the potential customer interest in insurance, the agent will set up a appointment to meet the customer. 3. When the agent meets the customer, the agent will help customer to do the financial analysis, to let the customer know what kind of insurance product maybe needed by customer. 4. The customer decide to buy the insurance, then the agent will help the customer to fill in the policy application, then hand in the application to company.
If the application passes the underwriting process, then the company will debit the premium from the customer’s bank account. 5. The agent will contact the customer and deliver the policy to the customer. 6. The agent will keep in touch with the policy holder to help the customer to process any requirement, such as changing address or claims. 7. Company customer service department will help the agent to service the policy holder, provide many services to customer, such as body check, investment salon and so on.
This sales process is highly consistent with the relation marketing. 1. The sales process focus on customer retention. The insurance business is always focusing on customer retention, the agent need to provide professional service to the customer to make them satisfied. The customer may buy different insurance products from this agent, and the customer may introduce other potential customers to the agent. For the company, customer retention means the customer keep to pay renewal premium to the company, which is important to the company as well. 2.
Orientation on customer value. To help the customer buy the best suitable insurance is always a MetLife agent primary mission. The sale process focus on the customer value instead of product features. 3. Long timescale. The selling process is always not easy for an agent, many of them need to meet the customer for several times, to try to make friends with the customer, persuade the customer to buy the insurance, and also make sure the customer know the insurance product very well. 4. High customer service emphasis and high customer commitment.
The insurance company is all about commitment and services, then the sales process is about introduce customer service to the customer, to let them know what kind of service and commitment the company will provide to the customer. 5. High customer contact. Many agents need to be friends of the customers, to create the trust between the agent and the customer. The agent will send birthday or holiday greetings to the customer. Altogether, the MetLife agent sales process is high consistence with characters of the relationship marketing.
The MetLife China do has competitive advantage through this sales process. Compare with other insurance company operating in China, most of them always focus on the insurance product features, to tell the customer how good the insurance product. But MetLife sales process will put the customer needs for the first position, to analyze what kind of insurance the customer need instead of selling insurance product. The good reputation of this sales process practice gives the MetLife agent more opportunities to contact the potential customer, and then help the business growing rapidly.
For the traditional insurance agent channel and insurance, the external environment will impact on the sales process, or its effectiveness in selling. The PESTEL analysis indicate that external environment include Political, Economic, Social, Technology, Environmental and Legal. There are three major external environment elements influences the insurance industry mostly, which is Economic, Technology and Legal. As we know, China economic was in high speed growth in last two decades, the result is the Chinese citizens income was in high speed growth as well.
The insurance industry was new industry in China twenty years ago, and the large number of population attracted many foreign insurance companies to start business in China, at the mean time, the domestic capital also interested in the insurance market, there are average three new life insurance companies was set up in last ten years, and there are over 50 life insurance companies in China currently. The market competition becomes cruelty, the traditional agency channel to sell insurance product become more difficult.
Many banks enter the insurance industry to set up their own insurance company, since the bank have already had their large number of customer, and the bank know their customer’s financial situation very well, so the bank staff is easier to contact the customer and sell the insurance product. So the traditional agent sales process is getting effectiveness. As we mentioned above, due to the market competition, some of the insurance companies’ agency sales team recruit lot of agent to sell insurance, the new agent did not get enough professional training, and become annoying to lots of customer.
They obtained the potential customer information illegally, which cause the complaints number to the insurance regulator growth very quickly. The insurance regulator issued many new regulations to strength monitor of the market conduct for the traditional agency channel, such as prohibit the agent make cold call to potential customer, company need to conduct customer contact to ensure policy holder clearly understand their own interest. The purpose of these new regulations is to protect the interest of the policy holder, but somehow they also affect the effectiveness in selling insurance.
Technology is influencing all kinds of industry in past two decades. For the life insurance sector, internet also influences the effectiveness of selling insurance product by agency channel. There are few advantages for selling insurance online, such as no commission for the agent, which means insurance product could be cheaper than selling by agent, the customer initiates the buying process, which can reduce the complaints for agent services, no need to put training costs to the agent anymore and so on.
But compare with the online business, the traditional agency channel also have advantages, such as the customer may feel closely to the company, many customers became friends to the agent, the agent could provide more services to customer as well. But the trend of online selling have already affected the traditional agent selling process. Based on the current market circumstances, there are few recommendations maybe helpful to MetLife China.
1. Keep the high standard of the current agency channel selling process. Since the agency channel selling process is one of the major characters of MetLife insurance, the image of the MetLife agent is professional, customer care, focus on customer needs, all of these images are quite positive and welcome by the customer. Furthermore, the traditional agency channel is still the most profitable channel within insurance industry.
The reason is the products sold by agents are profitable, and the customers will continue to pay the renewal premium. Therefore, company should continue the currently agency channel strategy, strength the training for the agents, try to make the MetLife agent distinguish to the normal insurance company agents. 2. Diversify the sales channels. Obviously, company stick with one sales channel is not good enough for the current insurance market.
In order to enhance the market share and new policy premium income ranking, company should diversify the sales channels, such as bancassurance channel, telemarketing channel, and e-business channel. As we mentioned in part two, since the bank is very interest in the insurance industry, so the company should cooperate with the banks, use the bank sales channel to sell insurance product. But for the previous experience, the bancassurance channel contributes just little profit for the company but large amount premium income.
The reason is the banks will charge very high commission rate for they selling insurance product, and another risk is the banks will take control to the selling process, insurance company lost control in the selling process, and then insurance company cannot guarantee the sales quality of the policies. For the telemarketing channel, one of the major issues is the legal issue. The customer information privacy is protecting by laws, and the call centers need to use the customer information to contact the potential customer.
The source of the customer information is vital to the telemarketing channel, and to ensure the information source is legal are also important to company. Another decision the company needs to make is invest to the call center, set up a call center need large amount capital investment, the company need to make investment appraisal, to test the investment is worthwhile or not. To set up an e-business channel also need to invest large amount capital. One of the major expenditures for setting up the e-business channel is the technology investment.
Company need to hire more IT experts to enhance system power. Another major expenditure is to let the customer know now they can buy insurance online, the advertising expenditure for the e-business cannot be ignored. But once the customers know about the e-business channel, then the company will get large amount of premium income from this channel. 3. To enhance the brand image. For the China insurance market, the branding is very important to the customer. But in the MetLife China, the brand image is not as good as other insurance company.
MetLife has 143 years history in US insurance market, and during the 2008 financial crisis, MetLife not only survived, but also getting stronger. MetLife purchased ALICO from AIG, this acquisition make MetLife become the largest life insurance of the world. To let the China customer know about the background of MetLife is getting more and more important in now days. For this purpose, company need to do more adverting for the MetLife branding, which means put more advertising expenditure in the business planning. 4. Compliance is important to the insurance company.
For the rapid business growing, compliance to the legal requirement and regulation is important to the company. The China regulator is very sensitive to any unethical market conduct, any unethical market conduct will cause heavy penalty. Furthermore, beside money penalty, new branch will be prohibited to open in new area if the insurance company breaches the laws or regulations. Any penalty information will be published in newspaper or TV news channel, which will cause the reputation damage to company. So finding the balance between the business and compliance is an important mission for the management.