Insurer's study area

Insurance, or peace of mind, is entirely intangible. Its spares physical forms are:

• Firstly the pieces of paper - the contracts or insurance policies which define the details and conditions of the service that being sold; and
• Secondly any claims payments, replacements goods or bonuses paid out to policyholders.

The intangibility of insurance should be confused with the tangibility of some of the things that can be insured. As a example, even though a car is physical and can therefore be insured against loss of damage, that car’s insurance – the peace mind associated with knowing that it is insured – is intangible. The customer statement: ‘those repairs will be paid by my insurer’ makes the difference clear. The repair are tangible, but insurance intangible.

The challenge of making an intangible service like insurance is to give existing and potential customers intangible as well as tangible clues are;

• Quality
• Reliability
• Value
• Security