“Life insurance companies marketing strategy in the digital world”

The research is aimed to evaluate the internet marketing strategies in of life insurance companies in Ukraine. The insurance service in the time of digitalization faces scenarios of implementation in the marketing strategy on-line component. The main challenge for Ukrainian life insurance companies comparatively with the world practice is non-obligatory status of such kind of insurance contracts. So, on the one hand, costs of operation, regulatory pressures and inflexible technology infrastructure are increasing, and, on the other hand, economic recession does not allow to increase the number of insured persons, premiums and profit growth. Sector of financial services is characterized by an increase in the level of competition, life insurance compelled to compete with pensions funds, banks and other financial institutions in order to defend their market share. Insurance companies marketing strategy determines how an insurer can best achieve its goals and objectives, keep existing customers and attract new ones with minimal costs. Keeping all the above problems around the study would attempt to study all the factors that contributed to the effective marketing strategies. This paper presents different marketing strategies that are taken up in life insurance services keeping in view exter-nal and internal environment of the company.


INTRODUCTION
In the global economy, the financial services sector is highly competitive (Gidhagen, 1998).Digitalization trends such as the growth of internet availability have created new instruments of the development of innovative marketing strategies for this industry.The number of Internet users by the end of 2018 amounted to 4.021 billion (53% of the world's population), which is 7% more compared to the same period in 2017.For five years by 2020, the number of Internet users in the world will grow by almost 20%.So on-line business strategies will be more competitive and effective (Davis, 2006).
Effective marketing strategy should integrate an organization's marketing goals, policies, and action sequences (tactics) into a cohesive whole.The objective of a marketing strategy is to provide a foundation from which a tactical plan is developed.This allows the organization to carry out its mission effectively and efficiently.
Internet insurers have a 23.0% cost advantage over agency insurers and a 5.1% cost advantage over their nearest rivals, the direct response insurer: The Internet is the most cost-effective means of selling insurance ever devised.This is important since consumers buy basic "commodity-type" insurance products on price considerations in the majority of cases (DataMonitor, 1996).
Insurance companies selling and servicing over the Internet will have a cost advantage over traditional insurers in the range of 58% to 71% over the life-time of a customer.Savings are driven by reduced sales costs, lower customer service and operations costs, and cheaper and better information capture (Booz-Allen & Hamilton, 1997).
Insurance companies and producers are already taking advantage of the commercial potential of the Internet by establishing websites (National Association of Insurance Commissioners, 1998).The insurance industry "remade itself" in response to new issues and new technologies (Insurance marketing issues).Commercial retail insurance marketing differs from physical products marketing, as well as other financial services' marketing (Nogueira & Oliveira, 2003).In banking, information technology investments have enabled banks to rely more upon ATMs to carry out teller functions, and the lending function has become standardized and automated to the point where far fewer loan officers are needed to manage a portfolio of a given size (Wilhelm, 2001).The early empirical evidence on the impact of the Internet on insurance prices is limited to a study by Brown and Goolsbee (2002).Robert P. Hartwig, president of the Insurance Information Institute, says rumors of the insurance agent's death have been greatly exaggerated.Online insurance shopping is already a crowded space, which in addition to comparison portals includes the powerful marketing arms (Robert P. Hartwig, 2015).
As e-commerce becomes more fully integrated into insurers' business practices, it will provide researchers with opportunities to empirically measure the extent to which e-commerce affects insurance costs and insurer profitability (James R. Garven, 2002).
In the past decades, general marketing overcame significant changes (Rust & Espinoza, 2006).

AIMS
The insurance market remains the most capitalized among other non-bank financial markets.The main distinctive feature of the life insurance market in our country is the low penetration rate.There are several reasons: the lack of a culture of insurance, the instability of the national currency, nullifying the investment attractiveness of insurance, lack of trust in the players of the financial market by the population.The modern stage of development of the world economy and international relations, processes the market transformation of the national economy, the entry of Ukraine into the system world economic relations necessitate the development of the insurance market with taking into account world experience and national peculiarities.
Particularly relevant is the problem of the formation and development of the insurance market life for Ukraine, when there are radical changes in the economic system.The processes of market transformation of the national economy necessitate conducting research on the international life insurance market, effective use of world experience in Ukraine, which will ensure full implementation economic reforms, stable development of the national economy, its further integration into the world economy.

METHODOLOGY
The insurance market is an important element in the financial system of Ukraine, because it ensures the stable functioning of all branches of the national economy.The insurance market occupies a significant place among non-bank financial markets of Ukraine and remains one of the most capitalized.Increasing the role of insurers engaged in insurance of various types of risks positively influences the interest of foreign investors in expanding their own business in Ukraine.
To assess the overall potential of insurance companies in Ukraine regarding the scope of insurhttp://dx.doi.org/10.21511/ins.09(1).2018.06ance services, we analyze the dynamics of their number over the past 3 years (Figure 1).The total number of insurance companies on December 31, 2012 was 310, of which 39 life insurance companies and 271 insurance companies, other than life insurance (non-life insurance).
The number of insurance companies should be considered together with the concentration indicator given in Table 2.In Ukraine, almost all insurance premiums (99.5%) are received by 51% of life insurance companies, and the TOP-3 companies accrue 43% of insurance premiums.
The Index of Herfindahl-Hirschman Index accounts for the number of firms in a market, as well as concentration, by incorporating the relative size (that is, market share) of all firms in a market.It is calculated by squaring the market shares of all firms in a market and then summing the squares, as follows:  Rhoades, 2013).Assume that there are four banks in a market.In the life insurance market, the of Herfindahl-Hirschman Index (HHI) in 2016 is 1,079.59(in 2015 -982.98).From this we can conclude that there is moderate monopolization in this market (in fact, there are over 1,000 HHIs).The number of insurance companies and their concentration do not allow us to make tangible conclusions about the level of development of the insurance market, so it is also important to consider the dynamics of insurance premiums and insurance payments in Ukraine and compare them with other countries.
Traditionally, life insurance companies expand their agent networks and increase the number of independent insurance intermediaries.Online sales are an innovative tool for selling insurance products, but in Ukraine they are not yet used as a complete channel.At the same time, insurers use separate.
Internet marketing tools to promote.Consider more online tools of international insurance companies on the Ukrainian market.High quality site should have complete and structured information that is updated promptly, us-er-friendly and well-designed.In Table 3, insurers' corporate sites compared according to different criterias.
Having analyzed the websites of the companies, we can conclude that Ukrainian insurers view the site as one of the important means of communication with customers.It is on the official page that you can find all the necessary information about the insurance company, the services provided, read important news about the activity, download the application forms and receipts.However, such newest tools as an insurance calculator, a personal cabinet, online consultation, are not used in every company.Insurence companies dont use innovative instuments of on-line marketing such as chat bot or micro targeting in social networks, which are the the main marketing channels in the digital world.There is no mobile app for clients with any insurer, and therefore its creation could become an additional competitive advantage.
Also, the site can be used as a separate sales channel (Table 4).Online insurance is that the full cycle of sales of insurance services takes place in a virtual mode.
In Ukraine, it is impossible to obtain a fully electronic life insurance policy (i.e.electronic mail).
Insurance companies implement separate online insurance tools, but for the most part the client needs to appear at the insurer's office for the conclusion of a life insurance contract and the settlement of an insured event.Even the PZU company, which has the most online insurance features on the site, still delivers an insurance policy to the policyholder on a paper carrier for its signing, which is related to the restrictions of Ukrainian legislation.Another reason for insufficient implementation of online insurance in the activities of insurers is the low financial literacy of the population and the complexity of the insurance product, as a consequence -the consumer is not ready to buy a life insurance policy independently without consulting brokers or agents.Thus, online tools are used by life insurance companies, not for attracting new clients, but for keeping existing ones, increasing their loyalty.
In the age of digital technology, social networks are becoming more and more important, and they have become an important tool for Internet-based communication tools for insurers ( In addition to sites and social networks, an important communication channel for online life insurance companies is the financial forums and blogs where existing clients, insurance intermediaries (agents, brokers) and other interested parties can send feedback and talk about everything related to the insurer.Given that when choosing an insur-ance company, consumers take into account the impression of other people about the quality of service delivery, insurers do not neglect negative feedback.
Hence, the website and social networking as an element of Internet promotion are the important ones for the individual sales channel, in order to maintain loyalty to sellers and existing customers, to increase brand awareness in a globalizing environment.The communication strategy as a comprehensive program of action aims at optimal combination of promotion tools to ensure effective coordination of the insurance company with customers and impact on the target audience.In order to determine the economic efficiency of using the tools of marketing communications by the insurer, it is necessary to compare the results of economic activity with the costs of its achievement.Aquisition activity is the activity of an insurance company for attracting consumers, whose purpose is to increase the number of contracts.Aquisition costs (sales costs) consist of expenses related to the conclusion of new or renewal of existing insurance contracts.The structure of expenses for the sale of life insurance companies is shown in Table 6.As you can see, commission fees, which include commissions and bonuses to agents, brokers and other intermediaries, are an important part of the accrued expenses all insurers represented.
One of the indicators of the effectiveness of the insurance company's operating activities is the volume of insurance premiums collected (Table 7).In order to determine the effectiveness of the sales activity of the insurer, the amount of insurance premiums and sales costs should be compared.Table 8 shows how many insurance premiums brings 1 UAH of different types of expenses.

RESULTS
As a result of the calculations, we see that commission costs vary in direct dependence on the conclusion of an insurance contract and the receipt of insurance premiums by the company, since brokers and agents only have a commission when they attract a client.At the same time, there is no direct relationship between the cost of advertising and marketing and the amount of insurance premiums.
Table 9 shows absolute performance indicators for TOP-5 insurance companies.The leader in insurance premiums is MetLife, with sales costs (the smallest) -Grawe, net profit -Uniqa, for assets -Grawe, by  Sales costs represent a significant part of insurance premiums, which implies that marketing has a significant impact on the success of the company's operating activities.Therefore, based on the above data, we calculate the performance indicators of the implemented marketing and communication strategies (Table 10).

CONCLUSION
The highest profitability of assets is the Unica company, which is characterized by the highest return on assets.The return on equity, which shows the investment attractiveness of the company, is practically identical in MetLife, PZU, Uniqa and Grawe and maintained at a high level, since all companies are members of international insurance groups.Unica also has the highest ROI, indicating the effectiveness of its operations.
The Grawe company has a fairly effective marketing strategy, because 1 UAH of aggregate sales costs brings more insurance premiums and net profits than other insurers.Grawe is also the most active in social networks, as evidenced by the highest proportion of insured, subscribed to FB.Thus, the use of Internet marketing tools significantly increases the efficiency of the enterprise.
On average, the highest insurance premiums per person insured in 2016, received PZU, and in general, the leader in terms of premiums per person is Grawe.The lowest sales costs per one insured at MetLife.Uniqa has the highest net income per insurer.
Consequently, we can conclude from the analysis that MetLife is leading in absolute performance, and the most effective marketing and communication strategy in Grawe and Uniqa is based on relative indicators.
market share of firm i and there are n firms in the market.The following example of calculating the HHI before and after a merger illustrates the use of the formula (Stephen A.

Table 3 .
Comparison of corporate life insurance company websites Source: Sites of the companies.

Table 2 .
Life insurance programs of insurance companies in UkraineSource: Sites of the companies.

Table 5
Online insurance tools on life insurance companies' sitesSource: Sites of the companies.
Linkedin, as a social network, is aimed at attracting new employees to find and establish business contacts, but in Ukraine it has not yet become Таble 4.

Table 5 .
Comparison of pages of social networks of life insurance companies in Ukraine by the number of subscribers as ofNovember 1, 2017Source: Sites of the companies.

Table 6 .
Expenses on sales of life insurance companies in UkraineSource: Sites of the companies.

Table 7 .
Insurance premiums of life insurance companies in Ukraine, thousand UAH Source: Sites of the companies.

Table 8 .
Value of insurance premiums to expenses of life insurance companiesSource: Sites of the companies.

Table 9 .
The main indicators of life insurance companies in Ukraine as ofJanuary 1, 2017Source: Sites of the companies.

Table 10 .
Indicators of the economic efficiency of marketing activities of life insurance companies in Ukraine as ofJanuary 1, 2017Source: Sites of the companies.