Malaysian General Insurance Marketing Systems

Marketing tactics and strategies are developed by all insurer to increase sales and sustain marketplace positions by targeting at customer needs as well as future market trend.

Database development

The gathering and analyzing of data is important prior to marketing decision. Insurance companies develop a database to identify their current customers. Companies use this information, referred to as customer relationship management data, to gain an understanding what types of policies are leading in sales and to identify growth opportunities to expand and increase sales.

Besides, the database serves to include the rating factors of each of the exposures, claim counts and claim costs for the purpose of risk classification. In motor insurance business for instance, vehicle’s cubic capacity (c.c.) may be considered as a rating factor while the claims may be divided into several types such as Own Damage (OD), Third Party Property Damage (TPPD) and Third Party Bodily Injury (TPBI) (Pan, Jemain, & Ismail, 2008).

As motor insurance sector in Malaysia is expected to be completely liberalized, large customer database with accident or no claim history would help insurer to price the premium. Premium rates would be differentiated in accordance with the risk profile of individual customer. Drivers with good claims experience would enjoy much better premium rates than those with a higher risk profile (Dhesi, 2014).

Competitive Analysis

Companies continually assess the marketing efforts of competitors. They conduct competitive analysis efforts to identify what other companies are doing in terms of pricing, product offerings, target consumers, advertising creative works and brand positioning.

Malaysia general insurance companies come out with different marketing and branding strategies to actively reach out the community. Community service would be one of the common way adopted in conjunction with recognizing the importance of corporate social responsibility. For instance, in Allianz Malaysia, Allianz4Good is the brand name for their Corporate Responsibility (CR). It focuses on 4 main pillars, namely Road Safety, Financial Literacy, Community and Environment.

However, as the influx of marketing initiatives, it is becoming harder and harder for companies to stand out. Some insurance companies go further to invest in sponsorships. Tokio Marine Malaysia for instance, announced their sponsorship of the Muar City Badminton Club for the 2015-2016 season (Lim, 2015).

The concept of dual branding is new to the Malaysian insurance market, however it is widely practiced in mature markets overseas. In 2013, AmBank Group came out with the first dual branding in the market when it announced a new name for its general insurance subsidiary, AmGeneral Insurance Bhd, following its acquisition of Kurnia Insurans (M) Bhd. The company aim to retain the strong values their brands hold and what they mean to the loyal customers (KINIBIZ, 2013).

Product Development

Marketing helps insurer to identify opportunities for developing new insurance products that cater for customer needs.

As tourism is booming in Asia, insurance firms are capturing this business opportunity and reaping the benefits as demand for travel insurance grows alongside. In year 2010, Tune Money Sdn Bhd took the initiative by launching the Tune Travel Insurance plan which provides practical and economical travel insurance product and designed to cater all types of travelers, either leisure or business (JOHNYTIM.COM, 2012).
Figure 1. Malaysia: Direct contribution of travel & tourism to GDP.The direct contribution of travel and tourism to GDP primarily reflects the economic activity generated by industries such as hotels, travel agents, airlines and other passenger transportation services (excluding commuter services).

Source: World Travel and Tourism Council
Retrieved from https://www.wttc.org/-/media/files/reports/economic%20impact%20research/countries%202015/malaysia2015.pdf

Figure 2. AIG travel trend survey

Source: THE STAR ONLINE
Retrieved from http://www.thestar.com.my/business/business-news/2014/01/20/aig-malaysia-sees-at-least-20-travel-insurance-growth-yearly/

Besides, according to AIG Malaysia senior vice-president of consumer insurance Ganeswaran Subramaniam, AIG Malaysia Insurance Bhd sees good growth potential in the travel insurance business and expects the segment to expand at least 20% each year. In year 2013, travel insurance accounted for about 6% to 7%, or about RM30mil, of AIG Malaysia’s total portfolio. The company carried out The Travel Trend survey and take it as an annual exercise for better understanding of their customer.

Leveraging Marketplace Opportunities

Insurance companies leverage opportunities to plan their marketing efforts.

The world is rapidly shifting from analogue to digital. Digital turn out to be a new market force that is driving a massive change in consumer expectation. Despite the low level of digital maturity, Malaysia insurance firms had started to invest more in digital technologies to deliver new product and services. Insurers will need to drive innovation with the new channels and rethink how they interact with customers.

Figure 3. Malaysia E-commerce Market Size

Source: Malaysia Crunch
Retrieved from http://www.malaysiacrunch.com/2012/03/malaysias-e-commerce-statistics-updated.html#more

Beside online insurance, web aggregator is made available for consumer. It refers to online platforms that allow consumers to compare wide variety of insurance products in Malaysia in one go, from the premiums to key terms and conditions. There are web aggregators which provide 100% free consultation, Insurance Finder for instance.