Price! Price! Price! Price proposition continues to dominate Insurance Sales. From the onset, a look at Kenya’s Insurers price dominates their defined competition. In a significant way, their pricing is not Value Based Pricing. No wonder an individual can secure quotations from various underwriters with serious disparities as though these firms operate in different economies. If the sellers and buyers of insurance understood what Warren Buffet means when he says “Price is what you pay. Value is what you get.” There would be an obvious need to redefine value and price would not be the key selling proposition.

In orienting sales personnel into the actual selling of insurance products, little emphasis has been levied on value. We have therefore end up with industry players that sell price. Many professionals selling insurance have for a fact failed to educate and inform prospects with an aim to help them understand and internalize the value proposition that they sell if any.

The rush and the hype in tagging price to insurance is what has seen many companies with a sustained low customer retention capacity as the clients are always looking for lower prices. Again, a highly regulated industry with key bodies like Insurance Regulatory Authority still has noncompliant players, some affected by their overly cut prices that ends up affecting their cash flows. The resulting effect being poor services, hence their inability to attract and retain clients.

The purchasing impulse should not be engendered by the promise to just save money but rather the value one beholds. In fact, the current state in Kenya now sees the policy holders wanting to know more and more on underwriter histories before they can buy with them. This points to the fact that over time, price won’t matter but value. Value in this case will be defined by the following:

• Seamless claims processes,
• Reduced turnaround time on claims,
• Simplicity and Clarity

Kenyan Insurers are their worst enemies. With pressure to book increase revenues, they have compromised on their value propositions as to succumb for price competition. As such, they’ve ended up undercutting, the resultant effect being reduced quality if any. The effect in the long run is their inability to retain even the very low price buying clientele.

Anyone reading this will label me weird. True, price drives insurance sales. But to find your insurance sales entirely premised on price that will definitely be your downfall.

Industry players have no option but to reengineer their value proposition. They must position brands to attract based on value over price.

In penning off, I make reference to these two quotes:

• “The moment you make a mistake in pricing, you’re eating into your reputation or your profits.” – Katharine Paine
• “You know you’re priced right when your customers complain—but buy anyway.” – John Harrison [Pricing News Daily, 2014].