Come grow with me...

Recently while discussing with a prospect in life insurance, something just clicked me regarding upselling. All along we have been talking of selling more and more policies to existing customers. So goes the definition of cross sell (or up sell). I was discussing the applicability of analytics in cross sell with this gentleman from the prospect company.

Suddenly, it was like an eureka movement. I realized that I have a Rupees 1 lakh policy that I am still servicing. This was opened during my first year of employment. A friend had joined as an agent of LIC and he convinced me to go for it. Naive as one is regarding insurance at that stage of first true employment, I promptly went for it. Today, I realized that the value of the sum assured is not significant. How long can a family sustain on 1 Lakh in a city like Mumbai?

I get calls almost regularly from an LIC agent (not the friend who sold me... he has probably moved on in life and moved away too) trying to sell me a new policy. But I somehow always resist actually purchasing one.

Now if someone can realize that its been over 15 years for the Rs. 1 Lakh policy and in these 15 years the value of the Rs. 1 Lakh has fallen to a tenth. While my worth and salary has grown multi fold. If someone could converse with me and show me how this policy needs to increase and provide me a simple hassle-free method of topping up the policy to 10 times the amount, I would gladly go for it without thinking twice. But in trying to sell me another policy, LIC is creating a barrier and probably initiating a process of comparison with other companies.

When I mentioned this to my prospect, he was just equally stumped. I dont know why a life insurance company does not track its customers and increase the policy coverage on the same old policy. The customer is a known customers and after 5 or ten years, the customer is probably also a good customer. Getting an increase in the sum assured on the existing policy is so much easier than selling a new policy. Probably if someone from the life insurance industry is reading this, maybe you can answer why this is not attempted? If this has not been thought of then maybe i can lay a claim over this mode of selling. And dont tell me its a nightmare for the Acturial department to come with tables for every year of vintage of existing customer. The increased premium and more importantly the lock-in of the customer is justification enough.