This article analyzes the selling strategies that the non-life insurers have followed, prior to the detariffication of premium rates. The insurers had behaved, more as retail sellers of insurance products than as marketers. The insurance covers were pre-packaged and also carried fixed price tags. The detariffication of rates has now raised the bar significantly for insurers to justify the premium rates they quote to customers in terms of risk management expertise and loss control advices offered, in addition to the scope of an insurance cover.

The non-life insurance market, despite its liberalization in 2007 has continued to perform till the end of 2006, under a strict legal regime of price tariffs for over 70% of the market in the segments of fire, engineering, motor and workers' compensation portfolios. The Insurance Regulatory and Development Authority (IRDA) added on new insurance players and new distribution channels during this period, heightening competitive pressures for business generation resulting in unethical and undesirable practices. Since the covers are pre-packaged with fixed price tags, the interaction between the buyer and the seller was restricted to the choice of the insurer and no more.

With detariffing of rates, the marketing scene has dramatically changed involving the buyers of insurance in price negotiation and other value-added elements. It was no more a question of selling covers, but one of marketing involving insurers to evaluate risk exposures, price them as well as offer advice on loss control measures. The marketing process has been activated. But having relied in the past mainly on salaried staff to sell covers directly, insurers have not yet been successful in building a qualified agency force. The corporate governance and the inherited organizational structures and processes are those that rather administered the insurance business procured than one that created awareness for insurance and the need for it among the vast non-customer segment. Affordability, accessibility and acceptability of insurance covers are at the heart of any marketing strategy. The business models of the public and private sector on marketing approach are also different. Detariffication initiative has brought the marketing process into focus highlighting the inadequacies of the present marketing format. Consequent to the detariffication of the market, from January 2007, the marketing strategies earlier employed by the non-life insurers seem to have suddenly become sterile and outdated. In the tariff regime, the insurance covers of the prized portfolios of fire, engineering and motor, constituting about 70% of the total market of Rs. 28,000 cr ($7 bn) were all pre-packaged and sold with a fixed price tag, with no negotiation possible on either. At its very essence, the differentiation among insurers was the mythical element of `customer service', common to all, but which none understood, what it really meant.

Marketing Strategies, Non-Life Insurers, Insurance products, Risk management expertise, Non-life insurance market, Insurance Regulatory and Development Authority, IRDA, Corporate governance, Organizational structures, Decision-making process, Communication strategies.