Brief Context of Abu Dhabi National Insurance Company
Discuss about the Distribution Channels of Abu Dhabi National Insurance Company.
The assignment concentrates on providing a brief context of Abu Dhabi National Insurance Company (ADNIC) in terms of its products and services. The focus of this assignment is to provide critical evaluation of the existing channels of distribution of the organisation and its contribution towards increasing the revenue margin. Along with this, the effectiveness of the current distribution channels of the organisation has been critically evaluated to find out the growth in the UAE insurance industry. Finally, the assignment sheds light on developing suitable recommendations to improve the existing channels of distribution and explore new ones for generating new customers into the organisation.
ADNIC have trusted itself as an insurance partner with the expertise in providing various types of insurance and service products related to specific fields of areas of providing both individual and corporate support. The company aims to provide a specialized service in order to manage unpredictable health conditions, general risks and life risks. The company mainly leads in proving a multiline solution with its branch spread across 400 insurance professionals. The company has varied range of individual as well as corporate insurance products. The individual products include home insurance, wedding insurance, personal accident insurance, motor insurance, medical insurance and travel insurance. Some of the corporate insurance products of the company includes aviation insurance, liabilities insurance, group medical insurance, motor fleet insurance, financial lines insurance, energy sector insurance and various types o the insurance products given in the marine cargo and engineering products.
The services of the company mainly include claims services (both for individual claims services and corporate claims of the services), risk engineering, mobile application support, assisting of America, MSH international, IGP partnership. It has been also observed that the company is transparent in providing the latest circulars with a clear intention of maintaining the highest amount of the services and transparency for the changes occurring on real time basis. The latest circular of the company is easily available in the websites of the company. The insurance company further aims provide leading underwriting solutions all over Middle East and North Africa (Adnic.ae 2016).
ADNIC, have several distribution channels which mainly includes distribution of the previously insurance products via Banc assurance, Reinsurance and affinity programs. The company has taken several types of the partnership programs done with the help of leading partnership program, in the leading banks based in UAE, which are operating since 2010. The banc assurance program of the company aims to provide a tailor made services related to the commercial insurance products, health insurance products and the various types of the insurance services provided in the protection of the commercial health insurance solution. At present, the bank seen to o a tie up with National Bank of Abu Dhabi and this types of the distribution service is also seen with distribution of the insurance services via online portal (Adnic.ae 2016). The different types of distribution diversification of the company are further seen with the service provided to both the individuals and the corporate customers, and thereby meeting the necessary needs of the individual customers (Olsson, Gadde, and Hulthén 2013). The customized services provided by ADNIC aims to provide distribution via banc assurance in the fields such as:
- Credit insurance products
- Products related Motor vehicle Insurance
- Different of the products related to the home rentals and the insurance for the home owner’s insurance
- The company also aims to provide a varied range of the service in the critical illness products and the travel insurance products
Current Distribution Channels of Abu Dhabi National Insurance Company
The second most important distribution channel of the company is seen with the distribution of the services in the various types of the affinity program offered by the company. The affinity programs are aimed provide the required amount of the benefit in the selected communities which are seen to operate in the varied range of professional societies, sports leisure groups, expat communities, business councils and the varied range of the employees operating in the corporate society (Wang 2016). ADNIC further offer various typed of the service related to the distribution of the insurance products with wide range of the corporate and the consumer products.
The product of the company further shows the customization of the products in order to meet the needs and the requirement of customers and include the combination of the different types of the preferential terms. The affinity program shows the different types of the value added service, which are being distributed among the consumers which is seen to enhance the satisfaction among the members of the company. The affinity program is further seen to include the offer the required set of the essential services of the organization and the inclusion of the combination of the both preferential and the value added services in the specified set of service of the company (Sharma, Kolath and Sharma 2016).
The different types of the secondary distribution channels of the company are seen with distribution of the products through direct marketing, online internet portals and insurance brokers. The company has taken several initiatives to communicate directly with the different types of the customers of the company. The company has maintained the new developments through the methods of research and the buying of the different types of the marketing products in the channel of directing marketing. The various types of the initiatives in the online portal distribution are seen with the transaction of the insurance services and the banc assurance products of the company found in the respective online portal of the company. For instance, ADNIC has maintained the online portal of National Bank of Abu Dhabi for the distribution of the banc assurance services of the company (Soleimani, Meshkani and Naami 2013).
The company is further seen to take the different types of the developments seen in the mobile application and web portal development for providing the varied range of the insurance service both to the consumers are well as the corporate. It has been further observed that the insurance brokers has taken significant amount initiatives for viewing and the comparing of the policy details, making the necessary changes in the policies of the company, assisting in the payment of the premium of the insurance products (Vyas 2016).
Effectiveness of the Current Distribution Channels of the Company in Marketing its Products and Services
The main activities of the distributional services carried out by the brokers are related to interacting communicating and transacting the varied range of the available insurance service and products of ADNIC. It has been further seen that the company has taken the necessary initiative for social distribution in platforms such as Facebook and Twitter. The company offers the distribution of the several types of the products via the live chat support available in Facebook (Watkins and Diacon 2016).
The different distribution channels of ADNIC identified above and their effectiveness are briefly demonstrated as follows:
As commented by Genetay and Molyneux (2016), bancassurance is the association or partnership between a bank and an insurance firm, in which the latter utilises the sales channel of the former for selling its insurance products and services. In this context, ADNIC has established a partnership with the Abu Dhabi National Bank in 2010 for marketing its products and services. It has been observed that the organisation provides a series of protection, commercial and health solutions to corporate as well as individual customers. The major services promoted through bancassurance include “credit life insurance”, “travel insurance”, “critical illness insurance”, “motor insurance” and “home renters and home owner’s insurance”.
With the help of this channel of distribution, ADNIC has been able to extend its customer base through reaching the customers in rural areas, which have difficult before. In addition, the company has managed to reduce the excessive reliance on a single network through bancassurance. However, Christopher, Payne and Ballantyne (2013) argued that the insurance organisation could use the details related to the customer identity for marketing its products, which could result in data insecurity.
It has been assessed that National Abu Dhabi Bank holds a positive and strong image in the UAE market and involving in partnership with the same has enabled ADNIC to reduce its business risk through diversification. In this context, Gonulal, Goulder and Lester (2012), remarked that the insurance organisations benefit from the corporate image and reliability, in which people are likely to attribute to the banks. In addition, ADNIC has been able to diminish its cost of distribution in opposition to the conventional sales representatives. This is because the network of sales is identical for both banking and insurance solutions.
In the words of Gadde (2014), the affinity programs are comprised of partnerships between two or more firms by accumulating persons having identical interest. This is mainly practiced to increase the consumer base of the opposite party. ADNIC has developed affinity program as a major distribution channel to offer advantages to the different communities of UAE. These communities include business councils, expat communities, professional societies and the staffs of the business partners.
The voluntary insurance of ADNIC provides diverse range of consumer as well as corporate products to maximise the satisfaction level of the staffs, customers, members and the businesses. In this regard, Hsu, Lin and Shao (2014) advocated that increase in satisfaction level of the stakeholders helps an organisation to develop positive brand image and enhanced customer loyalty. The affinity programs offered on the part of ADNIC could be customised to suit the organisational requirements. The customisations include a mix of preferential terms and value-added characteristics on the sets of products.
Under this distribution channel, ADNIC sells its products and services at cheaper prices, since the expenditures in marketing research could be minimised. Thus, with the help of affinity programs, the organisation could gain from the increase in customers in fidelity (Kiragu 2014). Hence, by entering into partnership with the professional communities, ADNIC has strengthened its reputation. Along with this, ADNIC could be able to identify the target audience of its business by accessing the information of the affinity partners for undertaking research programs.
Furthermore, the affinity groups seeking help from ADNIC would be able to prevent and enhance goodwill by avoiding any risk and cost associated with direct merchandising of the product or service. Finally, with the help of affinity programs, ADNIC provides maximum value to the end consumers. However, Kumar and Srivastava (2013) argued that the advantages to the consumers rely on the nature of the affinity partner and the services sold. In addition, ADNIC is engaged in providing discounts to the customers like “Multi Motor Policies Discount” of 5%. Thus, it could be inferred that ADNIC has been able to accomplish its business strategy largely by initiating Affinity Programs in marketing its products and services.
As commented by Mols (2013), knowing the target audience is the key to success forb any industry, which necessitates the development of distribution channels. In order to ensure such success, the role of social media in insurance industry is immense. ADNIC has created a special page in Facebook to provide information and promote its services to the customers. With the help of this social media tool, ADNIC has been able to identify the target audience by tracking their age groups and gender. Hence, the company has gathered knowledge about the potential customers to plan for marketing campaigns and product offers to earn higher return on investment. It has been observed that ADNIC uses geo-targeting to deliver messages to the customers or demographic depending on the location. For instance, the organisation has marketed its products and services through Hootsuite for targeting the audience by age, gender and location. In addition, the organisation has been able to revise its marketing strategies based on the feedback received from the customers. Furthermore, ADNIC has adopted learning method for obtaining the perspectives of the customers regarding their product usage and ideas.
Social media insurance helps an organisation to enhance the market intelligence and enjoy competitive advantage (Olsson, Gadde and Hulthén 2013). It has been found that the market capitalisation of ADNIC is 918.75 million AED, a part of which has been generated through its distribution channel of social media. Thus, ADNIC has formed strategic business decisions for maintaining competitive advantage in the market. For instance, the organisation has formed search streams in Hoot suite to monitor the new launch of the products and services of the competitors. Thus, ADNIC has introduced VIP level benefits and services to its customers by designing a platinum insurance policy to stay ahead of its competitors in the UAE market.
As stated by Sharma, Kolath and Sharma (2016), the direct marketing could be defined as selling products to the customers directly by using different sales media. IN order to apply the direct marketing strategy, ADNIC has employed sales representatives to accumulate customer information. The accumulated data are then stored in the database of the organisation to reach the target audience. ADNIC applies direct mail and telemarketing as the direct marketing strategy to generate customers. The direct mail sent to the customers could be personalised to suit the customer requirements (Brophy 2013). In addition, the direct mail helps in saving additional cost in contacting the customers.
Moreover, ADNIC also uses telemarketing strategy to interact with the customers. This task is mainly handled on the part of the marketing executives of ADNIC, in which the persons aim to address the customer issues and queries for convincing the customers. Since, the response rates are lower in direct mail, telemarketing has been chosen as another direct marketing strategy to reach the customers (Eling and Kiesenbauer 2014).
The organisation has also been involved in keeping regular touch with the policyholders to find out if its coverage suits the needs of the latter. This has been done through cross selling to the portfolio and integration of value services. In addition, ADNIC contacts the policyholders, who want to lapse by convincing them to keep the policy over phone. Lowering the premiums on insurance policies is another marketing strategy to attract the customers. Hence, the direct marketing strategy of ADNIC is highly effective in nature owing to the methods deployed.
The online portal is another tool to link with the suppliers and buyers all over the world to generate new business partners and increase the sales revenue every year (Soleimani, Meshkani and Naami 2013). With the application of online portal in the organisation, ADNIC has been able to receive full access to the contacts of the buyer coupled with characteristics of online trading. Hence, by implementing the online business portal, the organisation has been able to save additional sum of money each year to penetrate deeper into the target market.
Direct Marketing, Online Internet Portals, and Insurance Brokers
Moreover ADNIC has been able to automate its sales process by configuring alerts related to certain keywords and triggers to provide notifications to the customers. In this regard, Vyas (2016) cited that the online portals enable the organisations to obtain notifications about the activities of the other businesses. The online portal of ADNIC has provided the organisation with an added advantage to examine the products and services of the rivals in detail. Along with this, ADNIC has used this online portal as a gateway to add innovation in the current products by studying the competitors’ products in detail. Therefore, the organisation has not applied additional resources to gain competitive edge in the UAE insurance industry due to the use of this powerful channel of distribution in expanding its network.
Insurance brokers are those persons that sell or negotiate insurance for compensation on behalf of the organisations (Wang 2016). ADNIC has appointed special insurance brokers to identify insurance cover for the organisation. These persons play major roles in generating strong relationships between ADNIC and its customers. In addition, the organisation often utilises its insurance brokers to schedule and attend meetings with the customers along with collecting the insurance premiums. In addition, the insurance brokers of ADNIC contribute to identifying the type of business risks faced.
These risks include the natural hazards like weather conditions, fire and floods. Based on the information provided, the organisation selects its coverage area in the UAE market for distributing its products and services. However, the insurance brokers need to be utilised more, as direct interaction with the customers would help in increasing the revenue margin of the organisation.
The advent of online banking and money transfers provides larger opportunities for ADNIC to streamline the payment pertaining to insurance premium. However, in terms of social media presence the company lags behind other corporate houses. The introduction of a Smartphone application can result in improving the level of engagement to its current and prospective consumers. A Smartphone application can convey the introduction of new insurance products by ADNIC; moreover, any changes in amount of premium can be communicated by a notification in the application. Moreover, the company needs to install separate set of analytics team in order benefit from different degrees of development in Big Data analytics to ascertain the insurance requirements of different sectors in the economies that ADNIC operates in.
For instance, ADNIC can benefit from data analysis on road accidents to identify which regions are more prone to accident. Moreover, the company can also synthesize information regarding the income levels of certain region. Thereby, through targeting specific segments and geographical regions, the insurance company in turn can benefit from such customized form of marketing. A large proportion of health insurance arises from the migrant workers employed workers deployed in UAE through work permit visa. ADNIC can capitalize upon the large influx of workers through associating itself with the different employment contractors and thereby accepting employment insurance in bulk lots at a time. Moreover, the company can reduce overall degree of brokerage through higher level of accessibility to its end consumers by tying up with different sets of service providers in order to connect with the consumers. The company inadequately utilizes the insurance agents; thereby, the company requires introducing more performance based incentives for such the brokers in order to engage them further. Thus, following these series of recommendations would help the organization to increase its market reach and generate additional customers in future.
Mobile Application and Web Portal Development
Based on the above discussion, it has been found that ADNIC has developed itself as an insurance partner having relevant expertise in various types of insurance and service products related to specific fields of areas of providing both individual and corporate support. The organisation uses different channels of distribution to increase its customer base and revenue generation. The major channels of distribution identified for ADNIC comprise of bancassurance, affinity programs, direct marketing, social insurance, insurance brokers and online internet portals.
These channels of distribution have been found to be highly effective; however, the insurance brokers need to be utilised properly for generating maximum revenues. Additionally, it has been found that the organisation uses the online portals to accumulate customer information at lower cost and with minimum resources. Accordingly, the recommendations have been provided to the organisation to improve its channels of distribution further.
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