5 Impacts of Globalization on Insurance Markets

5 Impacts of Globalization on Insurance Markets

There’s no stopping the globalization train. It’s already here and it’s going to go further and wider. How has globalization affected the insurance markets and insurance companies all over the world?

 

Competition in the Insurance Markets

 

First and foremost, local insurance companies started facing more widespread competition – not only from within the country, but also from the region and from international conglomerates. Now, this is great news for the customer. After all, they now have the opportunity to choose from a range of products and services that are best suited to their individual requirements.

To sharpen the competitive edge, insurance firms have also tweaked their offerings to make them more tempting. This can range from improving coverage to reducing premiums.

With competition comes greater challenges. Insurance companies now look beyond the local market to acquire customers. In addition to a comprehensive suite of products, they strive to give their brand an international outlook while paying attention to local context and cultural sensitivities.

 

Growth in Opportunities

 

The thing about globalization is that it has caused other industries to expand as well. This has resulted in a plethora of opportunities for insurance companies. Today, a standard insurance firm doesn’t have to limit itself to a limited number of products or services.

With globalization, consumers’ demands change and their needs become more varied. There are also more opportunities for wealth creation and preservation. For instance, more organized labor means more healthcare coverage for employees. Wider globalization means more opportunities for overseas investments, and thus more investment-linked plans.

Globalization has also caused immigration numbers to rise. There are more people within the population who will be looking to sign up for insurance products, and thus more opportunities to do business.

 

New Industry Trends in Insurance

 

Insurance companies are also beginning to experience centralization processes, thanks to partnerships with banks and reinsurance companies, and mergers with smaller or larger competitors.

There’s a growth in the type of insurance services and products as well. For instance, we are seeing insurance products for newer risks such as informational risk, political risk, security risks, and even military risks.

Just as FinTech is changing the banking world, InsurTech is transforming the industry. As the insurance industry starts embracing technological innovation and eCommerce, we’re also looking at more insurance products being sold via the Internet.

 

Increased Consumer Demand for Insurance

 

As more and more foreign insurance companies enter a local insurance market, customers’ awareness tends to grow. Their knowledge of possible insurance and investment plans becomes richer. Needless to say, this creates a demand for more products. Consumers are not willing to make do with what was available anymore. They expect comprehensive coverage plans, low premium rates, and flexible policies.

Some countries are experiencing higher economic output due to globalization and international trade. Economic growth in these countries has boosted affordability, allowing most consumers to go in for high-end insurance and investment-linked plans.

 

Increased Customer Satisfaction

 

With globalization, there’s a renewed focus on customer satisfaction and trust. As customers get savvier and educated about insurance products, the need to gain their trust and build strong relationships becomes imperative to the top line. In the name of competition, insurance firms are putting in extra effort to provide better products and clearer communications driven towards meeting the expectations of both local and international customers.

To borrow the words of Kofi Annan, the Former Secretary General of the United Nations, “It has been said that arguing against globalization is like arguing against the laws of gravity”, globalization has impacted every aspect of our lives and the insurance industry is not exempt from it. The sooner insurance markets embrace the effects of globalization, the better are their chances in ensuring consistent growth in the face of this unstoppable force.

How Insurance Companies can Thrive in the Age of Globalization

How Insurance Companies can Thrive in the Age of Globalization

If you’ve been following the latest headlines on the insurance sector, you would have read that insurers are having a hard time in this Age of Globalization. They’re dealing with regulatory problems, geopolitical risks, demographic shifts, and low bond yields.

However, the good news is, they aren’t backing down. Armed with unique products, reduced handling charges, and technology, they are facing head-on the challenges of surviving in a globalized business landscape.

Is your insurance company just as prepared? If it isn’t, it’s time to start taking the necessary steps.

 

Research New Markets

 

A targeted marketing approach can help insurance firms achieve the intended results, especially if they are on a tight budget. The benefits are tremendous for insurance agents who specialize in a new market and for those who can adapt to the consumer behaviors in emerging markets. Of course, the trick lies in targeting the right market.

Take time to identify new markets that are opening up in your respective regions. Research consumer trends, needs and aspirations in these markets before adopting strategies to target specific customer pools. There are plenty of resources that can help you with this, like the local chambers of commerce, trade associations, business news, and financial research papers. 

 

Localize

 

Localisation plays a key role in tapping into new markets. If you can connect with the local customer base, half your work is done. One way to do this is by understanding the local culture.

When AIG entered China with its subsidiary, AIA, in 1992, they tried to leverage on the Chinese’s moral code on responsibility and love to make inroads. However, this failed because the Chinese do not take well to discussions surrounding premature death.

So, do your research. Interpret the local culture. Pay attention to customs and sensitivities that might affect your strategies. Hire localization and translation experts. 

 

Innovate

 

Whether you’re in a developed market or an emerging market, one essential tool for surviving in the globalization era is innovation. Insurers must focus on research and development, agility, and analytical decision making.

Traditional insurance products don’t have a bright future anymore. Therefore, it is necessary to focus on developing risk management services and value-added loss control. Think about re-engineering your products and evaluating the values they seek to fulfil.

 

Leverage On Existing Capabilities

 

Apart from innovating and creating new products, insurers must focus on making the most of their current capabilities, such as their product portfolios, talent, capital, and customer relationships. These capabilities must be introduced to markets that are identical or similar to your current market. You might even need to reshape certain business processes and retrain your talents to create a positive impact on your overseas markets.

As stated earlier, do not fear localization. Expand into newer territories and customer segments to market your current products. Identify new distribution channels to connect with a fresh customer base.

Whether you are a global insurer, an annuities specialist, or a retirement provider, you need to transform in order to thrive, succeed, and grow in the age of globalization and fast-paced technology disruptions. As you plan for your customers’ future, you need to plan for the future of your insurance company too.

6 Things Tourism Businesses Should Know About Their Destination Marketing Organizations (DMOs)

6 Things Tourism Businesses Should Know About Their Destination Marketing Organizations (DMOs)

Destination Marketing Organizations or DMOs have plenty of challenges to deal with. One of these challenges involves managing all industry stakeholders. Negotiating politics while offering value has always been a scuffle of sorts. What stakeholders need to understand is that, sometimes, even their own actions can birth issues and difficulties for DMOs. This, of course, only compounds existing challenges.

On that account, and for the obvious benefits of achieving the ultimate shared goals, tourism boards and travel businesses need to make sure they’re not compounding problems by understanding these 6 core features of DMOs.

 

DMOs Can’t Satisfy Everybody

 

When you let the DMO focus on what’s important for the industry as a whole, you are actually allowing for a greater inflow of tourists, which will eventually benefit you as well. As the saying goes, a rising tide lift all boats. By focusing on key attractions and targeted campaign messages, the DMO can help to attract more inbound tourists and position the destination’s varied unique selling points to individual markets. There’s no point in forcing the DMO into promoting things that don’t draw in the huge crowds. The message will only get cluttered and unappealing if everyone wants a feature.

Solution: Let the DMO do what it does best. Allow them to focus on what’s good for the destination, country, state or even the travel industry. In the globalization era, that could mean complex localization procedures such as website translation, the creation of multilingual content, and marketing and social media messages.

 

Go Beyond Reactive Marketing

 

There’s a good chance that you may not agree with your DMO’s marketing. However, if you have a disagreement, don’t let it be based on what your competitors are doing. Very often, opinions from industry stakeholders can ruin the effectiveness of a campaign.

Solution: Give your DMO room for creativity. Let them suggest and do what they think is best in forwarding your goals. After discussion and agreement, stick to the marketing plan and strategy. After all, they didn’t whip ideas out of thin air, but base them on research and expertise.

 

DMOs Aren’t Sales Channels

 

DMOs are primarily purposed to market experiences and not individual offerings. There are enough options and channels out there for tourists and travelers to buy their tickets or book their accommodation.

Solution: Let your DMO focus on marketing the experience of visiting your destination. They are not there to handle the sales of tickets or rooms. Instead, they should keep their eyes on the bigger picture of experience marketing and destination branding.

 

DMOs Think In The Long-Term

 

Looking for support from your DMO to meet the current quarter’s sales targets is fine, but, DMOs have bigger things to worry about. They need to look at the tourism figures for your entire province, state or even country. They need to develop long-term strategies to keep inbound tourists coming and returning.

Solution: Let the DMO focus on the long-term view of building your destination’s brand, reputation, and desirability.

 

DMOs Want You To Succeed

 

DMOs are public organizations and that makes them subject to politics and media scrutiny. Often, they need to be careful about what they engage in and deal with complications that might not be evident at first glance. Though they have to solve complex problems and consider manifold red tape, they usually love what they do and share common goals with you. When you succeed, they too take immense pride in the positive outcome of their work.

Solutions: Try and understand that DMOs want the best for you, but, have their own challenges to deal with. So, collaborate with them towards a common goal instead of questioning their motives.

 

Accept Their Failures

 

Allow your DMO to fail without them worrying about their jobs or their resources. The industry cannot grow without a little failure now and then. Remaining steadfast in the face of adversity or failure will only strengthen their marketing, allow them to innovate, and try new and different things that can set you apart from other destinations.

Solution: Let your DMO conducts its experiments and testing with the goals of fine-tuning the strategy and the execution. Let them go beyond outdated methods of destination marketing to yield exceptional results for you.

To cut a long story short, tourism boards and travel businesses need to give DMOs their space to think big, see far, and perform well. DMOs need to have a certain amount of autonomy to carry out their functions. They cannot be spending their efforts in trying to satisfy everybody, especially when their goals is to boost tourism and not just profits.

Top 5 Challenges Confronting Tourism Travel Industry

Top 5 Challenges Confronting Tourism and the Travel Industry

When it comes to volatile industries, there are many that come to mind. The travel industry is definitely one of them. For starters, tourism is far from being immune to economic, political, and social shifts.

Now, it’s agreed upon that most of these factors are outside the control of tourism boards and travel companies. However, staying aware can help the travel industry become more proactive and develop adaptive strategies quickly.

Here are 5 key challenges that the travel industry is currently confronting and needs to address.

 

Globalization

 

Globalization is leading the creation of uniform standards and protocols. However, the unique selling point (USP) of travel companies or destination marketing organizations (DMOs) lies in providing a rare and unique experience. The travel industry, therefore, works towards offering products that allow the average tourist or traveler to experience something they have never experienced before. Novelty is a much-needed element in today’s travel aspirations.

However, at the same time, localization is also important. Tourism boards and travel companies must know how to connect with the foreign traveler. They must make use of translation services to create multilingual websites, vital travel information, and essential signages that can guide tourists in the proper manner. Tourists must feel welcomed and at ease while they are away from home.

 

Taxation

 

Tourism is one of the most taxed sectors. A simple glance at the taxes paid on airline tickets and hotel rooms gives an idea of how taxation can greatly affect tourism. Therefore, it’s necessary for the travel industry to offer competitively priced offerings in order to balance out the equation.

Governments must also come to the realization that tourists already contribute to the local economy via purchases, travel retail, and other tourism expenditures.

 

Travel Marketing

 

Travel marketing can sometimes be deemed by travelers or tourists as being inadequate, false, or exaggerated. In order to change this perception, marketing entities must work towards developing innovative marketing solutions to lure the new crop of travelers who are becoming more discerning and informed. In addition, technological disruptions and the influence of social media also mean that it’s a time of both opportunities and risks. Travel marketers must look to harness tech and creativity to find their way into tourists’ travel plans. On the other hand, they must also pay attention to localized content.

 

Infrastructure

 

Tourism infrastructure in many locations is outdated and underdeveloped. Governments, tourism boards, and destination marketing organizations must work towards improving the current infrastructure with foresight. Future challenges must also be addressed in this area. Solutions could include faster immigration at airports, faster checkout processes in hotels, better public transportation, and interpreting solutions at airports, stations or ports.

 

Security

 

Industry players must work towards establishing better security infrastructure for tourists and travelers. This can be achieved by working with local law enforcement, city councils, and local governments. Governments must work towards sourcing for more manpower and economic resources to boost security and vigilance without stifling the travel experience within the country.

Now, the big question is, can these challenges be overcome? Well, some of these challenges can become growth opportunities for travel companies, tourism boards, and destination marketing organizations. As for the others with external factors involved, it would be unthinkable for individual travel businesses to make significant changes. The travel industry as a whole must unite and be willing to negotiate and discuss its terms – sometimes with governments and unions. At the same time, it must also be willing to adapt to changing scenarios and trends.

8 Tips to Boost Bookings for Your Travel Packages

8 Tips to Boost Bookings for Your Travel Packages

Like all businesses, your travel company too has one objective – to sell products and generate profits. However, achieving this objective is a completely different story for a travel business or a tour agency. There are strategies and tactics that travel companies can deploy in order to boost bookings for their travel packages.

We have listed 8 of the most effective strategies right here. Take a look, apply, and watch your booking rates go up.

 

Register With Travel Aggregator Websites

 

Registering with travel aggregator websites is one way to boost your bookings. These websites – rooms, airfares, tours and experiences aggregators – cater and target millions of customers the world over. Registering with them allows you to connect with a wider customer base and extend your reach. A good example of such a site would be TripAdvisor, which is known to have a customer base consisting of 36 million members. Other tour-related websites can include Expedia, Viator, and GetYourGuide.

 

Go Social

 

Social media platforms have evolved to become effective marketing channels. Around 93% of marketers across the world rely on social media to get the word out about their offerings and to engage with customers and avid travelers. Social media is effective because it’s fast and convenient. It allows for a targeted approach that is cost-effective. Some travel businesses have also ventured into influencer marketing through image-driven social media platforms like Instagram, Facebook, and Townske.

 

Highlight Package Benefits And Unique Experiences

 

Are there specific properties or experiences in your travel packages that set you apart from those of your competitor’s? If so, make sure you highlight these properties and experiences. This adds value to your travel packages and provides the customer with an opportunity to compare and contrast. If your packages are truly more beneficial or can provide a unique experience that appeals to customers, you’ll have bookings rolling in.

 

Offer Mobile Booking

 

Mobile bookings, be it through mobile apps or mobile web browsers, on mobile phones or tablets, are expected to reach 40% of online travel sales in 2017. If you’re a travel business and you’re not mobile ready, you’ll be missing out on this substantial pie. It’s time to go mobile and offer the customer more convenience, faster access, and immersive travel content as mobile phone usage increases.

 

Localize

 

As globalization takes over, it’s becoming a matter of critical importance for businesses to be considerate of local markets. Be it culture or language, a travel business needs to pay attention to local preferences and sensitivities. If you’re catering to customers in foreign markets or attracting inbound tourists, localization is a must. So, make sure you hire mobile app, website, and marketing translation services to help you out. You need to use a multilingual approach to connect with larger customer pools.

 

Digital Marketing

 

Use online services such as Google AdWords, Bing Ads, Facebook Advertising or Instagram Advertising to get the word out about your travel packages. Also, optimize your ads using the right keywords, ad copies or creatives. The advantage with such online advertising tools is that you’ll have options that allow for precise targeting based on metrics such as demographic, interests, and hobbies.

 

Build Partnerships

 

Partners can play a key role in increasing the booking rates for your offerings. By establishing strong connections with B2B partners, you can tap into new opportunities and improve the quality and delivery of your own services.

 

Establish Relationships With Customers

 

Use existing customers to market your offerings by establishing strong relationships. Reward customers with offers and discounts to keep them coming back and to also spread the word about your services. Nothing is more credible and a higher closing ratio that word-of-mouth marketing and referrals.

So, there you have it – 8 tried-and-tested strategies that have worked for travel companies across the globe. But, will they work for you? Well, there’s only one way to find out – try them out! You’ll never know otherwise. If you’re still unsure, remember, these are tried-and-tested methods, which means they’ll most likely work for you too if you can adapt and tweak according to your travel business’ capabilities, resources, and goals.