VEHICLE / MOTOR INSURANCE - DETERMINANTS | CLAIM PROCEDURE | RELEVANT TOPICS

DETERMINANTS OF MOTOR INSURANCE

Determinants of Risk Premium for Motor / vehicle insurance are as follows:

Cubic capacity of the engine: The vehicle which  runs on diesel, normal high premium will be changed due to its higher IDV (insured declared value) and also the capacity of the engine influences the premium rate.

Age of vehicle: The year of manufacturing of the vehicles is one of the factors to determine the premium amount. If the age of the vehicle is more, then premium amount will be lesser.

Geographical zone: The geographical location where the person lives and buys an insurance policy is one of the factors on premium rates. It the person resides in metros / big cities, normally the premium will be high and vice versa.

Type of model: High end cars available in the market will also be insured at a higher premium because of the cost involved in maintaining and repairing cars in case of any eventuality.

Insured declared value (IDV): IDV is calculated on the basis of the manufacturer’s listed selling price of the vehicle including price of accessories after deducting the depreciation for every year as per the schedule provided by the Indian Motor Tariff. This IDV is one of the factors considered when calculating premium.

Other factors: Other factors like personal factors, types of coverage, security systems installed also influence the premium amount.

CASHLESS SYSTEM AND CLAIM PROCEDURE

Cashless:

The first step: The accident / breakdown should be reported to the company.

Insurance companies provide cashless repairs across a wide network of garages in order to ensure a smooth ride and free pick-up, towing facilities, wash benefits at selected garages.

Loss assessment survey of vehicle within 4 hours by dedicated Relationship Manager provided the company is informed before 2 pm on a working day. This facility is not provided on Sunday and National holidays.

Six month quality assurance on all repairs provided subject to maximum usage of upto 6000 kms post such repairs.

If the vehicle is serviced in a garage outside the network, the same can be reimbursed from the company.

In case of accident:

Note the number of the other vehicles involved in the accident

Note the name and contact details of witnesses if any.

Inform the insurance company

Representatives from the company will inform you about the next step i.e. documents needed for claim and preferred cashless garage.

File an FIR in the nearest police station in case of accident, theft, and major damages.

After the registration of claim, company’s Customer Service Manager (CSM) will contact you within 24 hours. He will verify the document and after the estimation give spot approval for repair and claim.

Documents

In case of accident claim, following documents are required:

-      Claim form duly signed

-      RC copy of the vehicle

-      Copy of driving license

-      FIR Copy/Police Copy

-      Original repair bill

-      Any other document as required to investigate the claim.

In case of theft claim:

Along with the above documents, RTO transfer papers duly signed along with Form 28, 29, 30 and 35 and final report

 

Documents required for Third Party Claims

-      Claim form duly signed

-      FIR copy / Police copy

-      Copy of driving licence

-      RC copy of the vehicle

Further documents may be required according to the claim.

 

RELEVANT TOPICS

Road side assistance – One of the services provided by certain companies is road side assistance(RSA)

Breakdown support over phone

Minor repairs

Flat tyre

Battery jump start

Arrangement of keys

Towing on breakdown / accident

Arrangement of rental vehicle

Arrangement / supply of fuel

Message relay

Arrangement of accommodation

 Garage cash plan: If the vehicle is under repair after an accident, the insurance company will give a fixed daily allowance to the policy holder for the period that the vehicle will be in the authorized garage for repair, or for number of days as mentioned in the schedule, whichever is less. In case of total loss of the vehicle, a lump sum amount as mentioned in the schedule shall be paid.

Long Term Two Wheeler Insurance (LTTW): The IRDA has introduced a long term policy for two wheelers which means, the policy holders do not need to renew the policy annually. Instead of one year, he / she can opt for three years. This insurance taken for three years is called the LTTW Insurance.

No claim bonus (NCB): It is a benefit accrued to an insured for NIL claims during previous policy period. As per the current norms, it ranges from 20% to 50% on the own Damage Premium based on successive claim free years. If a claim is made during the policy period, then NCB is lost in the subsequent policy period. NCB is given to insured (policy holders) and not to the insured vehicle, which means, if vehicle is transferred to other person, then the insurance policy can be transferred to the new owner but NCB cannot be transferred. However, the original car owner can use NB for his / her newly purchased car.

BRANDING RESEARCH

Manufacturers, traders and consumers support branding practice as it is useful to them in different ways. Large number of products are sold in the market by brand name as consumers develop affinity to such brands and refer to them when they visit retail shops.

In order to secure these advantages, brand selected should be promising. An ideal brand needs certain qualities. For example, it should be brief, simple and easy to remember and pronounce.

Similarly, it should be suggestive, decent, attractive and as per the current tests and fashions accepted by consumers. Research department suggests appropriate brand names to the products of the company. For this, surveys are conducted and information is collected through interviews, etc. Such studies offer suitable guidance to management for the introduction of appropriate brand name for the product.

The research team will provide necessary information on the basis of which the management will have to take final decision regarding brand name. This decision is critical as the results (good or bad) will be available only when the brand is actually introduced in the market.

Branding Research can be done at every stage of Brand building process, the various researches related to Brands are:

1. Brand Character Research: The brand character research can be done using both qualitative and quantitative techniques.

Qualitative research involves the understanding of:

 Personality of each option

 Fit with the name of each option

 Fit with the brand association of each option

 Fit on the pack

 Fit with the proposed role in advertising of each option

 Comparison among the character options

 Fit with specific brand extension options

 Quantitative research focuses on ascertaining the following information:

 Thoughts evoked by each options, and grouping of these thoughts as positive and negative

 Likeability of each option

 Specific likes and dislikes of each option

 Uniqueness of each option

 Comparison of each option with the symbols of the competition

 Rating of each option’s fit with the pack

 Preference amongst symbol options

 Preference amongst name options

2. Brand Logo Research:

When a new logo is to be chosen it is always advisable to evaluate it among two independent sets of people one to evaluate the logo in isolation and the other to evaluate the logo on the pack.

Evaluation of logo in isolation looks at its likeability, distinctiveness, comprehension of message conveyed, by logo options, preference among logo options, and preference of logo among key competition. Evaluation of logo on the pack also looks at the same alternatives along with the speed with which the respondent would identify the test logo pack among a clutter of other similar packs. This helps to evaluate how the logo would stand out in the shelf.

3. Brand Name Research:

A Brand name research is important for any brand throughout its lifecycle. It involves personal interviews in which some basic concept statements may be exposed to respondents along with the name. then the respondent are asked to recall the name after having read the same. This indicates the names notice ability and ease of recall. Then spontaneous responses are ascertained to name in terms of:

Latent Association

 What thoughts come to mind upon hearing this name?

 What negative and positive associations exist with new corporate name, product name or service name? What barriers have to be overcome with negative latent associations? How does sound symbolism or phonosemantics (the meaning of sounds) affect the evaluation of a name's latent association?

 What does the name mean to you?

 How would you pronounce this name?

 What do you particularly like/dislike about this name?

 Which product the name suit? Or not suit?

 Which name you like the most and why? 

After the ascertaining the responses to these, a preference ranking is done of the names and the best among them is chosen. This method also helps in ascertaining the names ability to communicate to the respondent, the barriers to comprehension, descriptiveness of the name etc.

4. Brand Association Research:

For existing brands or existing competition of new brands, respondents mind would already have brand associations. In such cases, the evaluation should include the following questions:

 Ascertain the current state of affairs, without exposing the respondents to the new concepts

 Expose new concepts

 Ascertain the response to new concepts

 Compare the responses generated before and after exposure of new concepts to understand their effects.

5. Brand Loyalty Research: Brand Loyalty research explore the relationship among brand trust, brand affect, and brand performance outcomes (market share and relative price) with an emphasis on understanding the linking role played by brand loyalty.

Brand Loyalty research generate both statistical and qualitative data — benchmarked, comparative and evaluative measures. These, combined with specific diagnostic data, provide the tools to effect improvements:

 Overall satisfaction

 Ratings of performance on specific aspects of the product/service

 Reasons for lack of satisfaction/poor ratings

 Salience and hierarchy of needs/preferences/expectations

 Gap Analysis/Strategic Priority Analysis

 Loyalty and propensity to recommend/re-purchase

 Drivers of satisfaction and loyalty

 Reputation/image of the brand

 Value for money

 Customer Segmentation

 and include, where feasible, lapsed and potential customers

6. Brand Health research:

The health of a brand is measured by its brand equity. Brands with high equity can command and sustain price premiums and are more successful with line extensions and new category entries.

Brand Health research allows companies to set competitive brand strategies and provides brand with a Brand Equity Index. The BEI can be analysed in relation to the brand’s market share and will help determine whether the brand’s share gain is at the expense of long-term brand equity or whether the brand has the potential to expand its market share.

7. Brand awareness research:

Market awareness and perceptions of brand can rise and fall quickly in a changing market. The first step is to obtain a systematic understanding of the shape of market perception of brand through survey research.

Typical Brand Awareness Research questions include:

 Which single company comes to mind first as a provider for IT solutions?

 Which other companies come to mind?

 What qualities does the market leader possess that the other companies do not?

 What factors drove your decision to select your primary vendor?

 To what degree are you aware of the company’s capabilities in the area of IT solutions?

 What three words best describe the company’s position in the industry?

 What is your perception of the company’s products? Experience? Technology? Service? Sales processes?

Based on understanding of the company’s direction how do it perceive its position over the next 12–24 months?

In the fast moving technology industry in which companies are launched, merged, acquired, and morphed into new business, Brand Awareness research is critical to establishing and maintaining the desired market awareness and perceptions of your company.

GLOBAL CULTURAL FLOWS

Global cultural flow is a result of the process of globalization.

The five ‘Scapes’ of Globalization

Globalization refers to the increasing pace and scope of interconnections crisscrossing the globe. Anthropologist Arjun Appadurai has discussed this in terms of five specific “scapes” or flows: ethnoscapes, technoscapes, ideoscapes, financescapes, and mediascapes.

Thinking of globalization in terms of the people, things, and ideas that flow across national boundaries is a productive framework for understanding the shifting social landscapes in which contemporary people are often embedded in their daily lives.

Questions about where people migrate, their reasons for migration, the pace at which they travel, the ways their lives change as a result of their travels, and how their original communities change can all be addressed within this framework. Questions about goods and ideas that travel without the accompaniment of human agents can also be answered using Appadurai’s notion of scapes.

Ethnoscape refers to the flow of people across boundaries. While people such as labor migrants or refugees travel out of necessity or in search of better opportunities for themselves and their families, leisure travelers are also part of this scape.

According to the World Tourism Organization, a specialized branch of the United Nations, tourism is one of the fastest growing commercial sectors and that approximately one in eleven jobs is related to tourism in some way. Tourism typically puts people from developed parts of the world in contact with people in the developing world, which creates both opportunities and challenges for all involved.

Technoscape refers to flows of technology. Example - Apple’s iPhone an example of how the movement of technologies across boundaries can radically affect day-to-day life for people all along the commodity chain. Sales records are surpassed with each release of a new iPhone, with lines of customers spilling out of Apple stores and snaking around the block. Demand for this new product drives a fast and furious pace of production.

The revenue associated with the production and export of technological goods is drastically altering the international distribution of wealth. As the pace of technological innovation increases, so does the flow of technology.

This is an entirely new phenomenon; earlier technologies have also drastically and irrevocably changed the human experience. For example, the large-scale production and distribution of the printing press throughout Europe (and beyond) dramatically changed the ways in which people thought of themselves—as members not only of local communities, but of national communities as well.

Ideoscape refers to the flow of ideas. This can be small-scale, such as an individual posting her or his personal views on Facebook for public consumption, or it can be larger and more systematic.

Missionaries provide a key example. Christian missionaries to the Amazon region made it their explicit goal to spread their religious doctrines. Local people do not necessarily interpret the ideas they are brought in the way missionaries expect. In addition to the fact that all people have agency to accept, reject, or adapt the ideologies that are introduced to or imposed on them.

Financescape refers to the flow of money across political borders. Like the other flows discussed by Appadurai, this phenomenon has been occurring for centuries. The Spanish, for example, conscripted indigenous laborers to mine the silver veins of the Potosí mines of Bolivia. The vast riches extracted from this region were used to pay Spain’s debts in northern Europe. The pace of the global transfer of money has only accelerated and today transactions in the New York Stock Exchange, and other such finance hubs have nearly immediate effects on economies around the world.

Mediascape refers to the flow of media across borders. In earlier historic periods, it could take weeks or even months for entertainment and education content to travel from one location to another. From the telegraph to the telephone, and now the Internet (and myriad other digital communication technologies), media are far more easily and rapidly shared regardless of geographic borders.

For example, Bollywood films are shown in Canadian cinemas, and people from around the world regularly watch mega-events such as the World Cup and the Olympics from wherever they may live.

An example of the working of all the scapes: Clothing industry – it is found that the average American might be wearing clothes made in Honduras, Bangladesh, Cambodia, and China. Something as seemingly simple as a T-shirt can actually involve all five of Appadurai’s scapes. The transnational corporations responsible for the production of these shirts themselves are part of capitalism, an idea which has become part of the international ideoscape. The financescape is altered by a company in the U.S. contracting a production facility in another country where labor costs are cheaper. The equipment needed to create these T-shirts is purchased and delivered to the production facility, thus altering the technoscape. The ethnoscape is affected by individuals migrating from their homes in rural villages to city centers, often disrupting traditional residence patterns in the process. Finally, the mediascape is involved in the marketing of these T-shirts.

Ref: https://courses.lumenlearning.com/suny-culturalanthropology/chapter/globalization/

DETERMINANTS OF HOME RISK PREMIUM | CLAIM PROCESS | CATASTROPHES

DETERMINANTS OF HOME RISK PREMIUM

Home risk premium is calculated based on various factors. The factors that majorly influence the determination of premium are:

Location: The location / area of the home is an important factor. Based on the postal code, insurance companies can track claims made in that location and use that information to calculate premium.

Amount and type of coverage: If insurance coverage is purchased for a higher amount, then premium will also be high. The premium amount also depends on the type of coverage taken by the policy holder.

Add on coverage: Different insurance companies provide different add on coverage with building and content. This also has an impact on the premium amount.

Replacement cost: Value of home and content - The premium also depends on the amount required to rebuild the home in the event of a total cost. This includes cost of structure, replacement of contents and covers additional living expenses.

Age of building: The risk associated with old buildings is high. Usually low premiums are charged to the newest buildings and high premium is charged to old building due to the high risk factor. If the old building is in a renovated condition, this will be considered when calculating premium.

Let-out: If the policy holder lets out the home on rent, the premium will be expensive. This is because insurance providers believe that tenants are less likely to look after the property as well as the owners.

Claims history: Claim history of the policy holder is one of the deciding factors of the premium amount. If the policyholder has made a claim in the past, he / she is more likely to claim in the future too and thus the insurance provider increases the premium amount.

Other factors: Other factors like how close or far the house is to the fire station, type of wiring, use of marble / granite stone, valuables, interiors, etc. also play a role in deciding premium amounts.

 

HOME INSURANCE CLAIM PROCESS

Intimation of damage: The first step upon damage due to peril, is to immediately inform the insurance company about the same.

Providing information: The policyholder has to provide all information and policy details

Authentication: After that authentication of the claim message will be communicatied to the applicant by the insurance company.

Appointment of Surveys: A survey is appointed usually in the next 48 hours. The applicant has to submit all the relevant documents to the surveyor

-      Duly completed and signed claim form

-      Photocopy of policy

-      Copy of FIR

-      Final Report of policy

-      Copy of all invoices, price lists and repair estimates.

FSR: The surveyor submits the Final Survey Report (FSR) to the company along with the documents. This happens within 7 days of the incident.

Settlement: The claims department process the claim within 7 days from date of receipt of FSR

 

CALCULATION OF SUM INSURED

The value called ‘reconstruction value’ is considered while calculating the value of the home for insurance. Market value of the home is not taken into consideration when assess the value of the home.

The sum insured will be calculated by multiplying the built-up area of the home with the construction value per square feet. Rate of construction can be revised due to expensive material like marble flooring, garden surrounded by wall, etc.

E.g. Square feet of home is 1000 and construction rate is 2000 per sq ft. the sum insured for the home structure thus is Rs. 2000000 (1000 x 2000).

CATASTROPHES & HOME INSURANCE

Insurance protects homes from natural disasters like earthquake, floods, hurricanes, man-made disasters, etc. Generally, insurance polices exclude these risks and hence the policy holder has to take catastrophe insurance to protect the home from these risks.

Catastrophe insurance is different from other types of insurance as it is difficult to estimate the total potential cost of insured loss in the event of a catastrophe. Reinsurance and retrocession are used along with catastrophe insurance to manage catastrophe risk.

Reinsurance is also known as insurance for insurers or stop-loss insurance. Reinsurance is the practice whereby insurers transfer portions of their risk portfolios to other parties by some form of agreement to reduce the likelihood of paying a large obligation resulting from an insurance claim.

Retrocession is the reinsuring of a risk by a reinsurer. Reinsurance companies cede risks under retrocession agreements to other reinsurers, for reasons similar to those that cause primary insurers to purchase reinsurance. Retrocession is the reinsuring of a risk by a reinsurer.

PRODUCT RESEARCH

 The purpose of product research is to develop a product line which meets the needs of consumers in general.

Product research facilitates the process of making products more attractive, useful and agreeable to consumers.

Meaning of Product Research:

Product research is one major area of MR. It is concerned with different aspects of a product which include name, features, uses, package used, brand name given, price, consumer support and so on.

The term product research covers all aspects relating to manufacturing and marketing of a product. Product planning and development, product innovation and modification, product pricing, product life cycle studies branding, labelling, packaging, etc. are the different areas aspects) of product research.

Packaging and branding are treated as two components of product research. This is because they are closely connected with the product itself. Moreover, sale depends on the product as well as on its packaging and branding. In product research, existing products of the company are made superior (in quality) and agreeable to consumers.

In addition, new products with promising market demand are developed. This is called new product research.

Product research is directly related to product-mix which is one component of basic marketing mix.

There are four components of product mix. These are:

1. Product range

2. Brand,

3. Package and

4. Service after sale.

Product research has two important aspects. These are:

a. Technical aspect of a product, and

b. Marketing aspect of a product.

Technical research of a product is conducted in the laboratory in order to develop a product with latest design and features at the lowest possible cost. Products marketing research relates to the attitudes of consumers and their preferences towards the specific product.

Product research is necessary at the product planning stage. This is because marketing will be easy and quick when the produce manufactured is as per the needs and expectations of consumers. For this, product opportunities must be studied and product must be adjusted accordingly. Marketing efforts will not be rewarded if the product to be sold is not as per the needs and expectations of consumers.

This suggests that marketing research should start at the product promotion stage.

The researcher should suggest the details of product (nature, features, packaging, etc.) which can be marketed effectively. This creates proper background for success in marketing efforts.

 

IMPORTANCE/ADVANTAGES OF PRODUCT RESEARCH:

Product research is important as it offers the following advantages:

1. Product research helps to explain the features of the product.

2. It helps to simplify the product line.

3. It enables a manufacturer to develop new products with good market demand in the existing product line.

4. Product research brings best sales returns.

5. It widens market for the product and also creates goodwill for the product and its manufacturer.

6. It facilitates appropriate price fixation of the product. Product research brings to the limelight the different uses of the product for effective publicity for sales promotion.

7. It facilitates modification and renovation of existing products so as to make them highly competitive and agreeable to consumers.

8. It enables a manufacturer to introduce attractive package and brand name to the product for sales promotion.

 

METHODS OF CONDUCTING PRODUCT RESEARCH:

There are three methods used for the conduct of product research as explained below:

Product Testing

1) Paired Comparison Testing – Consumers are not told about the brand being tested and are given a new and an old product and are asked to choose. The samples know that they are testing and are therefore aware about a probable difference.

FMCG’s would often do this since there are so many products. This is like the Classic Coke Test Case. This kind of testing tells us about branding – the strength of branding – are consumers aware of product variations?

Do people really understand the style that a fashion house stands for. Response rates for distinctions would be high because people know that there is a test happening. Placebo Testing also has an effect here because the palette assumes that there are differences – and thus the palette expects change and there is a false perception of things being different.

2) Staggered Comparison Test – Respondents Test 2 Brands with a time lag with the identities masked. One half of the respondents receive Brand A and the other half receives Brand B. The respondents are then given the same products in reverse and are asked to note any difference in the brands. This kind of comparison tests the ideas of respondents with respect to their influence by peer pressure and their association with a product with respect to how their choices are dictated.

3) Disguised Comparison Test: This duplicates the actual market where for different brands, the same packaging is used and the respondents are told that they will be asked about their reactions later. In this case, the respondents are studied in order to recognize if they have noticed any difference at all. Further, they are not aware of the test being taken and believe the products to be free samples

This is the opposite of the 2 above. The sample does not know they are part of the test. They are just given free samples. They just think that they are getting 2 free samples. They don’t know that they are getting test. Sometimes they don’t realize that its different. They think it’s the same product.

MARKETING RESEARCH

 Introduction to marketing Research

Understanding market research and using it to your advantage is vital in reaching out to your target audience and increasing your sales.

Understand the needs of existing customers and why they chose your service over competitors.

Identify new business opportunities and changing market trends.

Market research is one of the key factors used in maintaining competitiveness over competitors.

Market-research techniques encompass both qualitative techniques such as focus groups, in-depth interviews, and ethnography, as well as quantitative techniques such as customer surveys, and analysis of secondary data.

Need and Importance of Marketing Research

The most important task of a marketer is to get the right product at the right place with the right price to the right person. Besides, it was also necessary to go back and find whether consumer is getting optimum satisfaction, so that consumer remains loyal. These aspects made it imperative for the marketers to conduct marketing research.

The following points explain the need for and importance of marketing research:

1. Identifying problem and opportunities in the market: It helps in identifying new market opportunities for existing and new products. It provides information on market share, nature of competition, customer satisfaction levels, sales performances and channel of distribution. This helps the firms in solving problems.

2. Formulating market strategies: Today, markets are no more local. They have become global. Manufactures find it difficult to contact customers and control distribution channels. Competition is equally severe. The consumer needs are difficult to predict. Market segmentation is a complicated task in such wide markets. The marketing intelligence provided through marketing research not only helps in framing but also in implementing the market strategies.

3. Determining consumer needs and wants: Marketing has become customer-centric. However, large-scale production needs intermediaries for mass distribution. Due to prevalence of multi channels of distribution, there is an information gap. Marketing research helps in collecting information on consumers from structured distribution research and helps in making marketing customer oriented.

4. For effective communication mix: In an era of micro- rather than mass-marketing, communication plays a vital role. Marketing research uses promotional research to study media mix, advertising effectiveness and integrated communication tools. Research on such aspects will help in promoting effectively a company’s product in the market.

5. Improving selling activities: Marketing research is used to analyse and evaluate performances of a company within a market. It also studies effectiveness of a sales force. It helps in identifying sales territories. Such information helps the companies in identifying areas of shortcoming in sales. It also examines alternative methods for distribution of goods.

6. For sales forecasting: The most challenging task for any production manager is to keep optimum levels of inventory. However, production is undertaken in anticipation of demand. Therefore, scientific forecast of sales is required.

Marketing research helps in sales forecasting by using market share method, sales force estimate method and jury method. This can also help in fixing sales quotas and marketing plans.

7. To revitalize brands: Marketing research is used to study and find out the existing brand position. It finds out the recall value of brands. It explores the possibilities of brand extension or prospects of changing existing brand names.

The main purpose of marketing is to create brand loyalty. Marketing research helps in developing techniques to popularize and retain brand loyalty.

8. To facilitate smooth introduction of new products: Marketing research helps in testing the new products in one or two markets on a small scale. This helps in finding out consumer response to new product and develop a suitable marketing mix. It reveals the problems of the customers regarding new products. Thus, it controls the risk involved in introducing a new product.

9. Determine export potentials: The development in transport and communication has helped in globalization and digitalization of world trade. This has helped in boosting the growth of international markets. Marketing research helps in conducting market survey for export. It. collects information on marketing environment prevailing in a country. By collecting data on consumers from different countries, it indicates export potentials.

10. Managerial decision-making: Marketing research plays a vital role in the decision-making processes by supplying relevant, up-to-date and accurate data to the decision-makers. Managers need up-to-date information to access customer needs and wants, market situation, technological change and extent of competition.