National Economics University PAGE 38 TABLE OF CONTENTS 1ABBREVIATIONS 2LIST OF TABLES AND FIGURES 3EXECUTIVE SUMMARY 5CHAPTER 1 HYPERLINK \l " Toc304143239" INTRODUCTION 51 Rationale 62 Research Obje[.]
BACKGROUND ON MAKETTING MIX
Nature of insurance and travel insurance
People face daily risks and uncertainties that can lead to financial losses, such as death, retirement, theft, fire, or accidents Insurance serves as a financial tool that pools public savings to provide risk coverage and mutual support in times of misfortune The concept of insurance, rooted in mutual assistance, involves community members sharing losses and using contributions from the fortunate to support those in need A key component of commercial insurance is the premium—a voluntary payment made by individuals in exchange for a promise of compensation if they experience a loss Insurance premiums fund loss payments, reserve creation, surplus for abnormal loss years, and dividends for shareholders, ensuring the sustainability and stability of insurance companies.
An insurance contract is an agreement where the insurer promises to pay a specified sum or indemnify the insured against financial loss if a certain uncertain event occurs during the agreed period The insured, in turn, agrees to pay an premium—usually upfront—at the start of the insurance period This mutual arrangement provides financial protection and peace of mind for the policyholder.
Insurance primarily functions to offer protection against potential losses, alleviating concerns related to property damage and loss of life Additionally, it contributes to societal development by accumulating funds that are invested in productive ventures, thereby boosting economic growth.
Insurance is a financial protection that promises compensation for potential future losses in exchange for periodic payments, known as premiums It aims to safeguard the financial well-being of individuals, companies, or entities against unexpected events Some insurance types are legally required, while others are optional Entering into an insurance policy forms a legal contract between the insured and the insurer, where the insurer agrees to pay a designated sum of money if a specified event occurs, providing peace of mind and financial security.
Insurance functions to distribute the risk of economic loss across a broad group of individuals facing similar risks By paying a predetermined premium into a common fund, each member contributes a small amount towards covering losses experienced by any member of the group This collective sharing of economic risk exemplifies the core principle of risk distribution, helping to mitigate financial hardships for individuals through pooled resources.
2 Contract of adhesion or fine print rule
An agreement between two parties that is intended to be legally binding is a contract One parties makes an offer which the other accepts in indentical terms.
Thus, the one party pays (or promise to pay) the premium; the other party promises an indemnity in the circumstances agreed
Insurance is a unilateral contract where most terms are set by the insurer in printed form, and the insured must accept these terms without negotiation This adherent-only approach means the insured cannot alter the conditions of the policy In cases of ambiguity, insurance contracts are interpreted strictly against the insurer and generously in favor of the insured, ensuring fair treatment under the policy.
An insurer's obligation to pay insurance proceeds is triggered only when an uncertain event occurs or at an indeterminate future time, ensuring coverage aligns with the occurrence of specified risks.
An insurance contract is fundamentally a contract of indemnity, serving as the foundation for all property insurance policies It stipulates that the insured, who has an insurable interest in the property, is only entitled to recover the actual amount of loss incurred The burden of proof lies with the insured to demonstrate and establish the precise extent of their loss.
A contract requiring perfect good faith It requires the parties to the contract of insurance to disclose any material fact, which the applicant knows, or which he ought to know.
The law presumes that the insurer considered the personal qualifications of the inssured in approving the insurance application.
When planning a vacation, it’s essential to consider factors like the destination, packing essentials, and activities, but many aspects are beyond your control Travel insurance provides valuable peace of mind by offering financial protection and compensation for unforeseen emergencies during your trip.
Travel insurance options vary based on trip type and duration The most common type is Trip Cancellation and Interruption coverage, which protects travelers against cancellations caused by weather, sudden illness, death, jury duty, emergency military service, or airline and cruise line bankruptcies before departure Offering comprehensive protection, these policies ensure peace of mind for various unforeseen events that may disrupt travel plans.
Medical emergency travel insurance is essential for trips to underdeveloped countries or for travelers with chronic illnesses, providing coverage for doctor visits, medications, and medical evacuations These policies ensure you are financially protected in case of unexpected health issues abroad It's important to check with your insurance provider for specific details, as coverage options can vary widely between policies.
Travel insurance can protect non-refundable tickets if your trip is canceled for any reason, providing peace of mind Some plans also cover missed connections, making it easier to handle flight delays or crowded, confusing airport terminals This coverage can be a lifesaver, ensuring you remain covered in unexpected travel disruptions.
Frequent travelers should consider a comprehensive insurance package for the best value and extensive protection These policies offer a wide range of coverage options, allowing travelers to customize their plan to fit their specific needs Since uncertainties can arise during any trip, comprehensive insurance ensures you are protected against various emergencies, minimizing potential monetary losses Choosing the right coverage can provide peace of mind and security for all unexpected situations on your journeys.
Marketing mix on travel insurance
2.2.1 Definition of marketing and marketing mix
Marketing is often described as "the art of selling products," but according to management expert Peter Drucker, its true goal is to make selling unnecessary He emphasizes that effective marketing focuses on deeply understanding the customer so well that the product or service naturally fits their needs and essentially sells itself Ideally, successful marketing creates a customer who is already prepared to make a purchase, making the selling process seamless and customer-centric.
The marketing concept is a customer-focused philosophy that emphasizes understanding and analyzing the needs of target customers to develop strategies that satisfy those needs more effectively than competitors It adopts an outside-in approach, starting with a well-defined market, prioritizing customer needs, and aligning all business activities to enhance customer satisfaction By focusing on meeting customer demands, firms can increase their profitability and build long-term customer loyalty.
The marketing concept is grounded in thorough marketing research to identify target market segments, their size, and specific needs To effectively meet these needs, the marketing team makes strategic decisions about the controllable elements of the marketing mix The marketing mix—comprising the traditional 4 Ps (Product, Price, Place, and Promotion)—is a combination of activities designed to best serve the target market Properly balancing these elements helps organizations achieve their marketing objectives and fulfill customer requirements.
2.2.2 Marketing mix for travel insurance
Marketing in the insurance industry primarily involves service marketing, which focuses on creating value and building customer relationships According to the American Marketing Association, service marketing is defined as "an organizational function and a set of processes for creating, communicating, and delivering value to customers." Effective insurance marketing emphasizes delivering benefits to clients and managing stakeholder relationships to ensure mutual growth and success.
Figure 2.1 : Types of marketing in service industries
Source: Philip Kotler, “Marketing Management”: Designing and Managing services, p.451
Service marketing encompasses not only traditional external marketing strategies, such as the 4Ps—Product, Price, Place, and Promotion—but also internal marketing efforts focused on training and motivating employees to deliver excellent customer service Additionally, interactive marketing emphasizes the importance of employees’ skills in engaging and serving clients effectively Therefore, service providers aim to integrate external, internal, and interactive marketing approaches to enhance overall customer experience.
“high touch” and “hi-tech” services to the clients through their judgments about the technical and functional quality
Marketing on insurance or insurance marketing refer to the marketing of insurance services with the aim to create customer and generate profit through customer satisfaction The insurance marketing focuses on the formulation of an ideal mix for insurance business so that the insurance organisation survives and thrives in the right perspective
In modern marketing, the traditional four Ps have expanded to include three additional Ps—People, Process, and Place—creating a comprehensive 7 Ps framework This evolution reflects how contemporary marketing is more customer-centric than ever before, emphasizing the importance of engaging with Customers, streamlining Processes, and optimizing Distribution Channels to meet evolving consumer needs and enhance overall brand experience.
Physical evidence plays a crucial role in service marketing, especially within the 7 Ps marketing mix, which is highly relevant for service-based businesses like insurance Since the insurance industry primarily deals with selling intangible services, incorporating physical evidence enhances customer trust and credibility When marketing travel insurance products, the 7 Ps—Product, Price, Place, Promotion, People, Process, and Physical Evidence—must be strategically employed to effectively attract and retain customers, emphasizing tangible cues such as brochures, office ambiance, and customer service interactions to reinforce the quality and reliability of the service.
A product is anything that can be sold in the market, serving as both what a seller offers and what a buyer purchases Products are categorized into two main types: tangible and intangible Tangible products are physical items with definite features that customers can see, touch, and sometimes smell, hear, or taste In contrast, intangible products belong to the service sector and can only be experienced through their performance, usage, or consumption.
There are three levels of a product: Core benefit, actual product and augmented product
The core product is not the physical item itself but the essential benefit it provides to the customer In the case of travel insurance, this core benefit is financial indemnity, offering peace of mind Customers can travel confidently, knowing they are protected against unexpected expenses and financial trouble during their trip This understanding of the core benefit highlights the true value of the insurance product beyond its tangible features.
The actual product refers to the tangible, physical item that provides direct value and usability In the context of travel insurance, the product is the insurance policy itself, which you can submit to comply with local immigration rules Ensuring you understand both the physical product and the necessary documentation can enhance your overall experience and meet regulatory requirements seamlessly.
The augmented product refers to the non-physical components that add value beyond the core offering It often includes benefits such as peace of mind, customer service support, and after-sales services, which enhance the overall customer experience For example, when purchasing travel insurance, these augmented features may justify a premium and contribute to customer satisfaction.
Products are typically classified as either goods or services Goods are primarily tangible with distinct physical features that customers can see, touch, smell, hear, or taste, such as physical products like electronics or clothing Services, on the other hand, are intangible acts or performances offered by one party to another, which do not result in the ownership of anything, including activities like consulting or maintenance (Philip Kotler) Since services are intangible, variable, and perishable, they often require stringent quality control, credible suppliers, and adaptability to meet customer expectations In many cases, the line between tangible products and services is blurred, as most products include both elements; for example, a computer is tangible but often comes with a warranty and software updates, combining physical and service components.
Insurance products, like services, are intangible offerings that possess unique characteristics significantly impacting marketing strategies Key factors to consider include their intangibility, which makes them difficult to evaluate before purchase; perishability, as unused insurance coverage cannot be stored or resold; heterogeneity, highlighting the variability in service quality due to differences in providers and customer experiences; and ownership, since clients do not gain physical possession of the insurance but hold rights to coverage benefits Understanding these features is essential for developing effective insurance marketing programs.
Unlike tangible goods, services lack a physical presence, making it impossible for customers to see, taste, feel, hear, or smell the service before making a purchase This uncertainty about service outcomes, such as insurance indemnities, leads buyers to seek signs of quality through visible cues like location, staff, equipment, communication materials, symbols, and pricing Consequently, service providers must effectively manage and "tangibilize the intangible" by enhancing these tangible elements—such as designing professional policies, maintaining well-equipped offices, and employing skilled staff—to build customer trust and communicate service quality.
Factors impacting marketing mix for travel insurance product
on the organisations perceptual plan of the service.
Processes are systems that enable organizations to deliver efficient services, such as the quick service at KFC where customers receive their meals within a minute Effective processes related to customer service include handling customer complaints, identifying customer needs and requirements, and managing orders, all of which enhance marketing effectiveness and ensure a positive customer experience.
The 7 Ps - price, product, place, promotion, physical evidence, provision of service, and processes comprise the modern marketing mix that is particularly relevant in service industry, but is also relevant to any form of business where meeting the needs of customers is given priority.
2.3 Factors impacting marketing mix on travel insurance product
Vietnam is actively integrating into the globalization process, supported by stable political conditions The country is committed to strengthening both bilateral and multilateral relationships with international organizations, fostering increased international cooperation Membership in prominent trading blocs such as AFTA, ASEM, and WTO has positively impacted Vietnam’s insurance industry, opening new opportunities for growth The high volume of international travel to and from Vietnam indicates a growing demand for travel insurance products, signaling a promising market for insurance providers.
The economic environment significantly influences purchasing power and consumption patterns, encompassing macroeconomic factors such as GDP growth rate, inflation rate, unemployment rate, and income levels With a population of over 89 million people and a robust GDP growth rate, Vietnam is emerging as a promising insurance market, particularly for travel insurance products.
Changes in social/cultural environment affect customer’s behavior Vietnamese people now are getting used to traveling overseas thanks to the higher quality life
Financial services, particularly insurance companies, have historically been among the top investors in information technology, recognizing its crucial role in the industry (Franke, 1987) These companies have long been pioneers in leveraging IT as a tool to enhance productivity and streamline operations Moreover, insurance firms utilize innovative technology to develop new, more diversified products, maintaining their leadership in technological adoption and product innovation within the financial sector.
In Vietnam, as of 2010, there are 28 non-life insurance companies, most of which offer travel insurance products These companies face intense competition by expanding coverage, lowering premiums, and increasing promotional activities and customer care services to gain or maintain market share Providing excellent service, innovative products, and competitive premiums remains a significant challenge for many non-life insurers, including LIV.
Company policies serve as essential guidelines that direct organizational decision-making and ensure consistency Similar to how colleges have policies on admissions, grade appeals, prerequisites, and waivers, companies establish policies to assist managers in handling common situations effectively These policies help streamline processes and promote organizational clarity in everyday operations.
Resources are the essential assets an organization utilizes, including people, information, facilities, infrastructure, machinery, equipment, supplies, and finances Among these, people are the most valuable resource, driving organizational success Supporting nonhuman resources like facilities, equipment, and finances complement employees in achieving the organization's mission The availability and effective management of both human and nonhuman resources significantly influence the organization's environment and overall performance.
Other factor such as the company’s culture, managerial leadership style,cooperation between department also impact marketing mix.
CURRENT SITUATION OF MARKETING MIX ACTIVITIES FOR TRAVEL INSURANCE PRODUCT AT
Overview of Liberty Insurance Limited and travel insurance product
3.1.1 Overview of Liberty Insurance Limited
Liberty Insurance Ltd (Vietnam), or LIV, is a prominent non-life insurance provider with 100% foreign ownership from the USA Since establishing its presence in Vietnam in 2003, Liberty Mutual Group has been committed to serving the Vietnamese market, beginning with the opening of its first representative office in Hanoi.
In November 2006, LIV officially obtained a license from the Vietnam Government to operate as a 100% U.S.-owned general insurer, serving both businesses and individuals As a leading global insurer, Liberty Mutual demonstrates a long-term commitment to Vietnam by investing dedicated resources to provide locally tailored insurance solutions that help protect companies and families.
On April 24th, 2007, Liberty Mutual launched the SafeWork Collaborating Center at the National Institute of Occupational and Environmental Health in Vietnam, supported by a $150,000 funding This initiative aims to conduct research and develop projects dedicated to enhancing worker safety and reducing occupational injuries across Vietnam.
As of January 11, 2008, Liberty Insurance received approval from the Ministry of Finance to offer direct insurance services to Vietnamese individuals and state-owned enterprises, including motor insurance and compulsory public liability coverage This expansion complements its existing license to provide insurance solutions to all types of commercial enterprises in Vietnam The company now caters to the diverse insurance needs of Vietnamese businesses with a range of essential products designed to meet their specific requirements.
LIV also provide insurance solutions for individual clients, including:
Liberty Insurance Limited achiveved the some famous prizes such as Golden Brand Award 2009, Believe & Use Award 2009 and Golden Dragon Award 2009.
Liberty Insurance has achieved public recognition in Vietnam after three years of official operation, reflecting its growing presence in the market The company has consistently enhanced customer service and tailored its product offerings to meet evolving customer demands Today, Liberty ranks among the top 10 non-life insurance providers in Vietnam, demonstrating significant industry progress and customer trust.
3.1.2 Overview of Travel insurance product at Liberty insurance Limited., a Definition and feature
Liberty Insurance Vietnam started to deliver travel insurance product to Vietnamese market in 2007 with a familiar name: Liberty travelcare
Liberty TravelCare offers comprehensive travel protection tailored for individuals and families traveling abroad, ensuring peace of mind with flexible coverage options Its coverage includes personal accidents, overseas medical expenses, hospital visits, additional accommodation costs, and 24-hour emergency medical assistance The plan also covers loss or damage to baggage and personal effects, along with various inconveniences encountered overseas With three levels of coverage, Liberty TravelCare effectively meets diverse financial and travel needs for both individuals and families worldwide.
- The maximum length of each trip overseas for a single trip policy is 90 days.
No refund of premium is allowed once the policy has been issued.
An annual travel insurance policy allows unlimited trips within the coverage period However, each individual trip is limited to a maximum duration of 90 days This means you can travel multiple times throughout the year without restrictions, provided that no single trip exceeds 90 days The policy offers flexible travel opportunities while ensuring coverage for up to 90 days per trip.
- No deductible amount for all benefits.
Our insurance plan provides comprehensive medical benefits, including coverage for overseas medical expenses, hospital visits abroad, and medical costs incurred upon returning to Vietnam It also covers additional accommodation expenses during treatment, pregnancy-related medical expenses, and offers 24-hour medical assistance for urgent healthcare needs Emergency telephone expenses and medical evacuation services are included to ensure prompt and reliable support during emergencies.
- Liability: iconveniences: trip cancelation/ postponement, trip curtailment, trip disruption, travel delay, baggage delay, 24-hour travel assistance…
- Losses: loss of personal money, loss of travel document, loss of or damage to baggage and personal effects,…
- Extensions: hijack benefit, disruption/ withdrawal of hotel service…
- Any Pre-Existing Condition suffered by You or excluded illness
- Treatment arising from stress, anxiety, depression, nervous, emotional, spychiatric and mental conditions or disorder
- Intentional self-injury, suicide or attempted suicide or insanity
- Any professional sport, racing and competitions of any kind, skydiving, rock or moutain climbing normally involving the use of ropes or the equipment, hang gliding or parachuting.
- The use of alcohol or drugs not prescibed by Medical Practitioner
- HIV (Human Immunodeficiency Virus) or any HIV related illness including AIDS (Acquired Immune Deficiency Syndrome) or any mutant derivative or variations or their complications.
- Contraception, miscarriage, childbirth, pregnancy or abortion or their compliccations.
- Any expenses in respect of treatment or operation undertaken as preventive measure e.g vaccination, circumcision, inoculations and the like.
- Dental treament (except as necessitated by an accidental injury to sound and natural teeth)
This table is detail of benefit Liberty travelcare:
Table 3.1: Benefits of Liberty Travel insurance product
Accident Compensate for accidental death or permanent disablement following accidental bodily injury.
Expenses Pays for medical and hospital expenses incurred whilst abroad as a result of illness or injury
3 Medical Expenses Incurred Follow-up treatment within 31 days from return
Upon Return To Vietnam date (following discharge from overseas hospital) or treatment sought within 5 days from return date and up to 31 days (if initial treatment is not sought overseas)
4 Overseas Hospital Visit Pays for the cost of transportation of one relative or friend if the Insured is hospitalized for more than 5 days whilst overseas
The insurance plan covers hotel accommodation costs for a relative or friend if the insured is hospitalized overseas for more than five days, providing up to USD 250 per day with the Classic Plan, USD 300 per day with the Executive Plan, or USD 500 per day with the Premier Plan.
Pays for the cost of transportation of one relative or friend to assist in the preparation of the mortal remains
7 Child Guard Pays for the cost of returning unattended child back to home country or country of residence
Benefit (Overseas) Pays USD50 for every complete day the insured
Person is hospitalized whilst overseas
Pays USD25 for every complete day the insured Person is hospitalized upon immediate return to Vietnam
Pays for medical expenses for pregnancy related sickness as incurred
Assistance On referral or arrangement basis
12 Emergency Telephone Expenses Pays for telephone charges as a result of medical emergency
Evacuation Covers all expenses for emergency medical evacuation coordinated by The International SOS
14 Repatriation of Mortal Remains Covers for cost of transporting Insured's mortal remains or local burial at place of death
15 Personal Liability Insures against third party claims for bodily injury or property damage caused by Insured's negligence whilst overseas
Pays for the non-refundable portion of travel costs paid in advance or administrative charges incurred due to unforeseen circumstances
17 Trip Curtailment Pays for the pro-rata amount for each complete day of the planned trip lost due to unforeseen circumstances
18 Trip Disruption Pays for the pro-rata amount for each complete day of the planned Trip lost if the Insured Person is hospitalized overseas for more than 5 days
19 Travel/Flight Misconnection Pays for full 6 consecutive hours of scheduled transport delayed while overseas
20 Travel Delay Pay up to a limit of USD120 for each full 6 consecutive hours if departure of the scheduled transport is delayed whilst overseas
21 Travel Overbooking Covers accommodation, meal and travel expenses if Insured is unable to board the scheduled flight due to overbooking
22 Emergency Purchases Pays for emergency purchase of essential personal items if Insured's baggage is stolen or permanently lost
23 Baggage Delay Pay up to USD120 for every 6 consecutive hours that the insured person's baggage is delayed whilst overseas
24 24-hour Travel Assistance On referral or arrangement basis
25 Loss of Personal Money Covers for loss of money whilst overseas as a result of robbery, burglary/theft or due to natural disaster
26 Loss of Travel Document Pays for the cost of replacing Insured's travel documents including the additional travel and hotel accommodation expenses incurred
27 Loss of or Damage to
Our coverage includes lost, damaged, or stolen baggage and personal effects while abroad, encompassing golfing equipment and laptops The policy provides up to USD 250 per item, set, or pair of items, with a maximum of USD 1,000 for a laptop computer.
Covers for the excess or deductible which Insured may legally liable to pay in respect of accidental loss or damage to rental vehicle
29 Closure of Travel Agent Pays for loss of travel related expenses paid in advance as a result of financial collapse or default of the travel agent in Vietnam
30 Home Guard Covers for loss or damage to the household contents in Vietnam residence due to fire whilst residence was left vacant for full duration of trip
Pays an allowance if the aircraft in which the Insured is travelling is hijacked for more than 12 consecutive hours.
Limit per 12-hour period of USD65 (Classic Plan) USD 100 (Executive Plan) and USD130 (Premier Plan)
32 Automatic Extension Automatically extends for 7 days if trip is delayed due to accident, sickness, delay by scheduled airline
Hotel Services Pays USD75 for each 24-hour period in the event of disruption or withdrawal of hotel services as a result of strike or riot at travel destination
Travelcare offers 33 comprehensive benefits, with varying liability coverage amounts across three plans: Classic, Executive, and Premier, as detailed in the company’s brochure (Appendix 1) The key target market for this travel insurance product includes frequent travelers, families seeking comprehensive coverage, and business travelers looking for reliable protection during trips Ensuring tailored benefits to meet diverse traveler needs, Travelcare's plans provide flexible options to suit different preferences and budgets.
Liberty Travelcare offers comprehensive travel insurance for all Vietnamese citizens and foreigners who are permanent residents of the Social Republic of Vietnam traveling abroad for business, tourism, or visiting relatives The coverage ensures peace of mind during international trips, whether for leisure or work Please note that travel insurance is not available for travelers under 6 months of age or over 75 years old at the time the insurance certificate is issued.
Many local insurance companies differentiate their travel insurance products into two main types: inbound and outbound (or global travel insurance) Inbound travel insurance covers travelers within Vietnam, while outbound travel insurance is designed for those traveling from Vietnam to international destinations LIV does not offer inbound travel insurance, whereas Liberty Travelcare is regarded as a comprehensive global travel insurance option The revenue generated from travel insurance products varies depending on the type and coverage offered, reflecting their significance in the insurance market.
Liberty Travel Care offers a highly effective insurance solution with small revenue, distinguishing it from other products that generate larger income but lower effectiveness According to the claims department report, the loss ratio for travel insurance is below 10%, significantly lower than the 72% seen in vehicle insurance and 47.2% in healthcare insurance, which dominate the company's market share Despite its high effectiveness and favorable loss ratio, the production volume of Liberty Travel Care remains relatively small compared to other insurance products.
Table 3.2: Production of Liberty travelcare
Current situation of Marketing Mix Activities for Travel Insurance
Liberty Travelcare is a comprehensive travel insurance product designed to protect travelers from various risks Originating from Liberty in Singapore, the current offering has been adapted with specific changes to meet the needs of the Vietnamese market This tailored coverage ensures travelers enjoy peace of mind with reliable protection during their journeys.
Liberty TravelCare offers comprehensive coverage for both unforeseen events and travel inconveniences, including accidental death, permanent disability, personal liability, emergency evacuation, lost money, travel documents, baggage, and flight delays or cancellations Additionally, it provides high-limit medical reimbursement, which is especially valuable when seeking treatment abroad, where medical expenses can be substantial.
Our insurance plans are categorized into three levels: CLASSIC, EXECUTIVE, and PREMIER, each offering varying coverage amounts The key differences lie in the compensation limits for Personal Accident benefits, with maximum coverage of US$80,000 for the Classic plan, US$100,000 for the Executive plan, and US$150,000 for the Premier plan Additionally, the "Overseas Medical Expenses" benefit provides coverage up to US$60,000 for the Classic plan, US$80,000 for the Executive plan, and US$100,000 for the Premier plan, ensuring comprehensive protection tailored to your needs.
Liberty Travelcare offers higher compensation limits compared to competing travel insurance products While it shares core features with other plans, certain benefits are exclusive to Liberty Travelcare, and some benefits offered by competitors are not included To gain a comprehensive understanding of the travel insurance options, refer to the comparison table below, which highlights the features of Liberty Travelcare in relation to other insurers' classic plans.
Table 3.3: Travel insurance product of Liberty and others – Classic plan
Unit: US $ Maximum Coverage (US$) LIBERTY ACE CHARTIS AAA
3 Medical expenses in-curred upon return to
8 Hospital daily income benefit (overseas) 800 1,0
9 Hospital daily income benefit (VN) 250 N/A N/A N/A
10 Medical expenses pregnancy related sickness 1,200 1,100 1,100 1,100
11 24 hour medical assistance SOS hotline SOS hotline SOS hotline SOS hotline
13 Emergency medical evacuation As incurred 100,0
14 Repatriation of mortal remains As incurred 100,0
24 24 hour travel assistance SOS hotline SOS hotline SOS hotline SOS hotline
27 Loss of or damage to baggage & personal effects 1,500 2,0
32 Automatic Extension 7 days 5 days 3 days 10 days
33 Disruption/withdrawal of hotel services 150 150 150 150
Product evaluation of Liberty travelcare service.
- Liberty travelcare service uses of reputation and brand name of Liberty
International and LIV as well.
Liberty Travelcare provides unique benefits that enhance its competitiveness in the market, including coverage for medical expenses related to pregnancy and sickness, emergency purchases, home guard services, and support in case of travel agent closures.
Liberty TravelCare offers fewer essential benefits compared to other travel insurance products, which limits its differentiation in the market While it provides some advantages over competitors like AAA, ACE, and Chartis—such as home guard and hospital daily income in Vietnam—these benefits are often unnecessary for travelers since they are typically covered by local insurance policies The primary purpose of travel insurance is to provide assistance abroad, which is why customers value overseas benefits more than those available within Vietnam.
Liberty Travelcare's Classic Plan offers a higher maximum coverage amount of US$80,000, providing extended protection for travelers Most countries require proof of health insurance with a minimum medical coverage of EUR 30,000 or US$50,000, which must be valid for the duration of the visa The insurance document should include essential details such as the applicant's name, coverage period, and specific coverages Customers who only need to meet the embassy's minimum requirements do not necessarily need to purchase the maximum coverage available in the Classic Plan.
The price of a travel insurance policy, known as the premium, plays a crucial role in marketing strategies and can be adjusted to meet various objectives Setting the optimal premium is essential for competing effectively against major insurers and a growing number of competitors Determining the right pricing strategy is complex, as premium rates are traditionally based on claims distribution data for the policy type For Liberty TravelCare, the optimal premium strategy considers both the premiums charged by competitors and the anticipated costs of settling claims, ensuring competitive and sustainable pricing.
Insurance remains unfamiliar to the majority of Vietnamese people, who are often unaccustomed to purchasing coverage Most tend to think of insuring property like cars or houses, but rarely consider health or travel insurance Due to this market characteristic, many insurance companies adopt low premium strategies to attract more customers and increase market share Liberty Travel Care is entering this market with a pricing approach that aligns with the traditional and strategic practice of offering affordable premiums.
Liberty leverages its understanding of price strategies and expected claims settlement costs to tailor its offerings to the Vietnamese market By considering the unique features of the Vietnamese insurance landscape and its internal market dynamics, Liberty reintroduces the TravelCare Premium, positioning it as a competitive alternative to other providers This strategic approach ensures that Liberty's insurance products meet local demands while maintaining cost-effectiveness and market relevance.
There are three tables to compare premium of three plan: Classic Plan (table 3.5),Executive Plan (table 3.6) and Premier Plan (table 3.7)
Table 3.4: Premium of Liberty travelcare and others – classic plan
Zone Asean Asia Pacific Worldwide Zone Asean Asia Pacific Worldwide
Additional week or part thereof up to
Additional week or part thereof up to
Zone Asean Asia Pacific Worldwide Zone Asean Asia Pacific Worldwide
Additional week or part thereof up to
Additional week or part thereof up to
Table 3.5: Premium of Liberty travelcare and others – Executive plan
Zone Asean Asia Pacific Worldwide Zone Asean Asia Pacific Worldwide
Additional week or part thereof up to
Additional week or part thereof up to 90days
Zone Asean Asia Pacific Worldwide Zone Asean Asia Pacific Worldwide
Additional week or part thereof up to
Additional week or part thereof up to 90days
Table 3.6: Premium of Liberty travelcare and others – Premier plan
Pacific Worldwide Zone Asean Asia
Additional week or part thereof up to
Additional week or part thereof up to 90days
Pacific Worldwide Zone Asean Asia
Additional week or part thereof up to
Additional week or part thereof up to 90days
Liberty TravelCare's premiums are generally less competitive compared to other insurance providers While its short-trip premiums, such as the $8 for a 1-3 day trip in Asia under the Classic plan, align with competitors costing between $4.8 and $8, its long-trip premiums are significantly higher For trips lasting 7 to 90 days, Liberty's premiums are the most expensive in the market, making it less cost-effective for travelers planning extended trips.
The ongoing price competition in Vietnam's non-life insurance sector is challenging to manage effectively Price remains a key strategy for attracting customers and agents, complemented by efforts to differentiate travel insurance services Additionally, focusing on service quality and enhancing brand prestige are essential for sustaining a competitive edge in this competitive market.
Price evaluation of Liberty travelcare service.
- The premiume of travelcare for single trip of Liberty is acceptable to customers for short trip less than 7 days.
- The premium for a long trip is so expensive According to survey result, 70% respondents complain that the travelcare premium is so high
- There is no special price for target market such as family plan, group plan or annual plan.
The table highlights that all insurance competitors offer annual plans, catering to individuals who frequently travel throughout the year Additionally, nearly all insurers in the market provide family plans, which typically come with double the premium of individual plans, ensuring comprehensive coverage for multiple family members.
Liberty started to deliver promotion activity since 2009 with focusing on the company’s brand name and consolidation of customer’s trust in Liberty’s product.However the effectiveness is not high.
Liberty Travelcare, a new entrant in Vietnam's travel insurance market, is actively engaging in advertising activities to attract new customers, enhance brand awareness, and establish a strong market presence The company is promoting Travelcare through advertisements in prestigious newspapers and magazines such as Vietnam Economic Times, Investment Economic Times, and Heritage, as well as on popular websites like VnExpress and ThanhnienOnline Additionally, Liberty distributes leaflets to customers to effectively introduce and promote its Travelcare insurance product.
Initially, personal selling and direct marketing received less attention when travel insurance services were newly established However, currently, more focus is being placed on direct marketing activities Notably, two conferences for brokers and travel agents are scheduled in Hanoi and Ho Chi Minh City in February to enhance engagement and promote the offerings.
Achivements and shortcomings
- Liberty travelcare uses of reputation and brand name of Liberty international and Liberty Vietnam also
- The company has establised both traditional and modern channel which help customers easily contact LIV anywhere
- Policy issuing and claim settlement process are clear, regulated and methodical. All processes are implemented with every step which is clearly defined.
- LIV has establised networks of 200 staffs who are well educated and professional working in Hanoi, Ho Chi Minh city and some big cities in Vietnam.
- Offices are equipped with standard design, modern equipment which brings customers a good impression of a professional insurers
The problems in marketing mix activitis for travel insurance of LIV can be summarized as follows:
Many travel insurance products are inadequate and do not meet customer needs For example, Liberty’s travel insurance exclusively offers coverage for travelers overseas, limiting its usefulness for some customers Other insurers provide a wider range of travel insurance options, including services for both outbound and inbound travelers These policies are often tailored to specific customer segments, such as individuals, groups, or tour participants, ensuring more relevant and comprehensive coverage.
The premium is so high: Liberty travel insurance product started to be delivered in
In 2007, the company entered the market as a newcomer, competing with established giants such as Bao Viet, Bao Minh, PTI, AAA, and Chartis Despite offering similar products, its higher pricing strategy hindered sales performance and posed challenges for intermediaries in promoting the offerings effectively.
The company has not prioritized diversifying its distribution channels, as it primarily relies on traditional methods such as captive agents and broker teams Implementing cost-effective channels like telephone and online selling could significantly reduce distribution costs and expand market reach, yet these digital methods have not been adopted by the company Expanding distribution channels beyond traditional approaches is essential for improving efficiency and staying competitive in today’s digital-first insurance landscape.
Human resource does not meet the demand of growth rate: Human resource for
Liberty Travel Insurance currently struggles to meet the increasing demand for travel insurance services, highlighting a gap between supply and customer needs This shortage of coverage options limits the company's ability to fully serve its expanding customer base As a result, Liberty loses valuable opportunities to provide optimal coverage and enhance customer satisfaction in a competitive market.
A streamlined and efficient purchasing and claims process is essential for companies to effectively manage policies, customer information, and claims However, overly rigid and slow procedures can lead to customer frustration, highlighting the need for a balance between control and convenience to improve overall customer experience.
A clear and systematic promotional policy is essential for effective marketing Companies should carefully plan and decide on the types of advertising and focus on personal selling and promotional activities to attract more customers Implementing a well-structured promotion strategy can significantly enhance customer engagement and drive sales.
There are many reasons cause the above problems in Liberty travelcare, but the fundamental causes are:
+ Objective causes: Awareness of Vietnamese people about insurance is not high.
In 2010, Vietnam's travel industry saw approximately 15 million inbound and 3 million outbound travelers, yet only 5% of these travelers purchased travel insurance, highlighting a significant gap in travel insurance adoption within Vietnam's developing market.
LIV’s leadership has overlooked the crucial role of marketing mix activities in promoting their travel insurance product Although LIV ranks among the top ten insurers in Vietnam’s car insurance market, its leaders mistakenly believe that their established reputation from motor insurance will automatically translate to success with Travelcare To ensure sustainable growth, LIV must recognize the importance of targeted marketing strategies and effectively implement marketing mix elements for Travelcare’s development.
Staffs show little interest in selling travel insurance products due to their relatively low revenue, with a single policy valued at only several hundred thousand dongs compared to motor insurance policies, which generate at least five million dongs each Since the company sets high monthly sales targets, employees prioritize promoting higher-value products that contribute more significantly to meeting their quotas.