Marketing and Promotion 市場行銷及促銷

The Role of Marketing 市場行銷的角色

Marketing is more than selling. It starts with understanding customers' needs, then makes sure the insurer offers suitable products at a sensible price through convenient channels, and tells the market about them effectively. Modern insurers generally take a customer-oriented (market-led) approach rather than a product-oriented approach of simply selling whatever products they already have.

Market research is the foundation. It gathers information on customer needs, competitors, and economic and demographic trends. For example, Hong Kong's ageing population has increased demand for medical and retirement products. Insurers also segment the market into groups with similar needs, such as young families, retirees or small and medium-sized businesses, and then choose which groups to target.

Marketing has to work closely with other functions. It passes customer insight to product development, works with underwriting so that the business it brings in fits the insurer's risk appetite, and works with customer servicing to keep existing clients. Marketing decisions are usually analysed through the marketing mix: product, price, place (distribution) and promotion.

Distribution Channels 分銷渠道

Insurance intermediaries: since 23 September 2019 the Insurance Authority (IA) has licensed insurance intermediaries directly under the Insurance Ordinance (Cap. 41). Licensed insurance agents (individual agents, agencies and their technical representatives) act on behalf of the insurer or insurers that appoint them. Licensed insurance brokers (broker companies and their technical representatives) act on behalf of the policy holder (the client) and can compare products from different insurers.

Direct marketing: the insurer sells to the public without an intermediary, for example through its own staff, telemarketing, direct mail, newspaper coupons, websites or mobile apps. It suits simple, standardised products such as travel, home and motor insurance. Distribution costs are lower, but customers get less personal advice.

Bancassurance: banks distribute insurance to their customers through their branch networks and customer bases. In Hong Kong, a bank that distributes insurance must be licensed by the IA, usually as a licensed insurance agency and sometimes as a licensed insurance broker. The Hong Kong Monetary Authority carries out frontline supervision of banks' insurance intermediary business.

Which channel an insurer uses depends on how complex the product is, the target market and the cost. More complex long-term products usually need advice from an agent or broker. Simple general insurance products are better suited to direct or online sales.

Methods of Promotion 促銷方法

Promotion means communicating with existing and potential customers to raise awareness, build trust and encourage them to buy. Insurance is intangible: it is essentially a promise to pay in the future. That makes a strong brand, and a reputation for financial strength and fair claims handling, especially important.

The main promotional tools are: advertising (television, press, outdoor, online and social media), which reaches a mass audience and builds the brand; sales promotion, meaning short-term incentives such as a premium discount or a gift for buying within a set period; public relations and publicity, such as sponsorships, community events and press coverage, which the insurer controls less directly but which carry more credibility; and personal selling, where an agent or broker deals with the customer face to face.

Insurance is often said to be 'sold, not bought', because most people do not actively look for cover. Personal selling therefore remains very important, especially for complex products such as life insurance, where the customer's needs have to be analysed.

Responsible Marketing 負責任的行銷

Promotional material must be accurate, clear and not misleading. It should set out benefits and the main limitations and exclusions in a balanced way, clearly separate guaranteed from non-guaranteed benefits (such as projected bonuses), and name the insurer providing the cover. Exaggerated or untrue promotion leads to mis-selling, complaints, damage to reputation and regulatory action.

An insurer is responsible for what its appointed agents do on its behalf, so it should control promotional material produced by agents, for example by requiring company approval before it is used. The IA's Codes of Conduct for licensed insurance agents and licensed insurance brokers require intermediaries to act honestly and fairly and in their clients' best interests, to give accurate information and to assess whether a product is suitable. Under the Insurance Ordinance, carrying on a regulated activity without a licence is an offence.

Treating customers fairly is a core principle of marketing: products should match each customer's needs and financial position. For example, an investment-linked assurance scheme should not be pushed on a customer who only needs simple protection.