Enhancing productivity, quality insurance sales in Bangladesh

The insurance industry in Bangladesh has tremendous potential, and in recent years, the industry has witnessed steady growth and generated a lot of interest among the various stakeholders. However, it is also true that the development of the insurance industry has not been incommensurate with the overall national growth.

The insurance penetration rate in Bangladesh is still the lowest among South Asian countries. This article analyses the problems and prospects of the Bangladeshis insurance industry. According to our understanding of the insurance sector in Bangladesh, low qualification and lack of technical or sales knowledge of our sales personnel is the leading cause of the drawbacks of performance and productivity of the sector. The common people, who are our customers (individuals/entities), generally lack understanding of insurance terms and policies. Unhealthy competition is yet another obstacle hindering quality insurance sales. On a more positive note, the country’s economy is witnessing sustained growth, and consequently, the prospects for the insurance industry look very positive. People are becoming increasingly aware of the benefits of insurance for their life and properties, thus raising the demand for insurance services. Effective marketing initiatives with ethical competition need to be undertaken to stimulate the sector.

The recruitment of more qualified employees at the management level, proper training and orientation of the agents/employees, integration of information technology, digitalization of services, innovation and diversification of products within the industry, fully functioning regulatory system, etc., are essential for augmenting productivity and quality of insurance sales in Bangladesh. 

Insurance–which is classified as an unsought good– is defined as a contract, represented by a policy, in which an individual or entity receives financial protection or reimbursement against losses from an insurance company. The company pools clients’ risks to make payments more affordable for the insured. On the other hand, marketing involves managing a profitable relationship with customers. As a marketing offer, insurance consists of several product levels which may include risk coverage against a particular financial loss, marketing activities of formulating the insurance contract and designing the insurance policy, the settlement of the claim if any loss occurs, fulfilling the investment needs of the customer as it provides a specific benefit against the insured amount of the policyholder, providing various financial facilities to the customer such as getting tax exemption, acting as a guarantor, and so on. 

According to industry experts, the marketing of insurance products consists of both direct and indirect channels. A recent study identified some the problems of insurance marketing in Bangladesh. The problems include low per capita income, poor knowledge-level of agents and lack of awareness about insurance among prospects (target customers). Added to these are religious superstition, low savings of target market, lack of continuity, lack of reminder, negligence of policyholders, poor services to policyholders, low return to the consumers, lack of reliability and many other things. To overcome the setbacks and improve the performance of insurance marketing, the sector needs to take several steps. There is a need for efficient training of salespersons, building awareness among the target customers, diversified policies, more marketing research for designing improved strategies, improving commitment of salespersons, new legislation, improving professional ethics, quick settlement of claims and expansion of coverage.

 To increase insurance sales figures, the salesperson can adopt the following habits 

• Establish trust with prospects and customers

• Listen first and then speak

• Let your data do the talking

• Turn to loyal customers and enhance relationships

• Stay connected with the industry

• Personalize incentives to boost sales performance

• Optimize planning to improve sales performance

• Keep company values at the centre of your sales organization: Industry insiders refer to these as

C.A.R.E. values—Customer Focus, Accountability, Respect and Excellence.

Productivity is the efficiency of production of goods or services expressed by some measures. Measurements of productivity are usually expressed as a ratio of aggregate output to a single input or an aggregate input used in a production process, i.e., output per unit of input, typically over a specific period of time. The most common example is the (aggregate) labour productivity measure, e.g., such as GDP per worker. With respect to the insurance industry, each sales employee’s number of policies and contracts is called sales productivity.

 It is a measure of how effectively the sales targets are being met for an insurance company.

 To ensure the sales productivity of an insurance company, we must ensure the following things

• Proper job training 

• Proper motivation (both self and organization wise)

• Make ongoing sales coaching a priority

• Advance prospects faster with value

• Evaluate and re-evaluate sales processes

• Embrace automation and technology

• Use analytics to keep improving

• To ensure quality sales outcomes, the company must ensure

• Recruitment of new finance associates (Fresh blood into the business)

• Retention of sales forces and policies 

• Sustained sales activity

• Creating trust in the company

• Proper branding of the organisation

• Better insurance plan in the process of enrollment

• Facilitating the automated settlement process

 Frontline insurance professionals or salespersons will continue to play a critical role in reaching customers. So, insurers must embrace the integration of physical and digital channels once the recent pandemic crisis subsides. Insurance companies can direct leads to the channel or financial associates that best serve each customer’s needs. Further, salespersons should be armed with advanced analytics on their customer base as well as centrally provided digital leads. Throughout the customer life cycle, i.e., individuals or entities, insurance companies will engage in multichannel, personalized customer interactions to promote cross-selling and proactively reach out to customers who are likely to lapse. Such interactions can reduce customer acquisition costs by up to 50 per cent, generate 5 to 10 per cent of new premiums, and reduce customer churn by up to 30 per cent.

Productive field forces can more effectively use digital tools such as Apps or other digital means, which will be critical to the pending distribution shift and will result in quality sales. Indeed, a recent McKinsey survey found that “generating leads” and “building initial client relationships remotely” were the two biggest challenges faced by insurance sector field forces or distribution channels. In conclusion, we can say, foreseeing the ample opportunities in the coming days, the insurance companies will have to invest more in building digital infrastructure and place analytics at the core of distribution for the future productivity, quality and growth of insurance sales in Bangladesh.

The writer is the CEO of Chartered Life Insurance Company Limited