As the financial year enters the last quarter, insurance companies have gone on an advertising overdrive. Be it advertising, marketing or promotional activities, the insurance sector has become as visible as the telecom or FMCG sector. exchange4media talks to some leading insurance companies like Kotak Life Insurance, Max New York, ING Vyasa, Bajaj Allianz and ICICI Prudential for their take on this advertising boom.
Looking Beyond Tax Saving
Amit Gupta, Director-Marketing, ING Vysya Life, said, “There is a sudden boom in advertising by insurance companies. The life insurance industry has become very competitive with 15 private players competing in the market. Customers have become discerning today even towards financial services. An average consumer can recall 3-4 brands. So, it is important to be visible in your target segment.”
Rahul Sinha, Senior VP, Marketing, Kotak Life Insurance, said, “There are a total of 17 players that are competing in the life insurance sector today. India, one could say, is unique in the sense that most of the biggies of the world are playing in this market. New players are entering the market every year. On the other side, private players grew their business by almost 80 per cent last year. I think the dynamism that we are witnessing is a direct result of all these factors. That’s the reason we see a sudden boom in this sector.”
Anisha Mowani, Senior VP-Marketing, Max New York Life Insurance, said, “The insurance industry is increasing at an astounding rate with the first year premium having gone up by 110 per cent in 2006-07. A New York Life-NCAER India Financial Protection Survey has revealed that though 78 per cent of the Indian households are aware of life insurance, only 24 per cent own life insurance. Advertising is one of the most effective ways of conveying this message to the audience and to increase awareness about the product choices available in the market.”
Sanjay Jain, Head of Marketing, Bajaj Allianz Life Insurance, said, “We notice a sudden boom because this product is used for tax saving purposes from January to March.”
According to Sujit Ganguli, Head of Marketing, ICICI Prudential Insurance, “With the entry of private companies in the life insurance space, consumers have started to experience many product benefits that meet their needs beyond life insurance. The new private entrants have positioned insurance as a goal protecting investment rather than a mere tax saving tool, and to effectively communicate these attributes of life insurance, mass media is one of the most efficient tools.”
The overall advertising spend is increasing along with the size of the insurance market.
Motwani said, “The overall advertising spends of insurance companies in India amounts to around Rs 400 crore (Source: TAM figures).”
Quoting an MAP (Media Analyzer Package) study, ING Vysya Life’s Gupta said that in the last three years there had been a huge jump in life insurance advertising – from Rs 233 crore in 2005 to Rs 416 crore in 2007. “As the market matures, we can expect the advertising spends to further grow by approximately 30 per cent per year,” he added.
Ganguli said, “For the financial year 2006-07, the total premium collected was Rs 1,696 billion, while the new business premium stood at Rs 754 billion. However, the insurance penetration as a percentage of the GDP is still as low as 4.1 per cent and, therefore, the potential of a huge untapped market.”
Sinha added here that the size of the market was Rs 76,500 crore till March 2007, and the market was growing at 24 per cent (December 2007).”
Gupta said, “The life insurance industry recorded a first year premium income of over Rs 75,000 crore during the financial year 2006-07. Life insurance is only 4 per cent of the GDP, whereas in developed countries it is in the range of 9-10 per cent. In India, life insurance has very low penetration, and is expected to grow at a minimum of 30 per cent CAGR.”
The Right Reach
The target audience that each insurance company is targeting belongs to different age groups and gender and class.
Sinha said, “Our target audience in the 25-55 age group, married, Sec A and B.”
Motwani said, “We are targeting the core age group of 28-45 years, and the spillover 45-55 consisting of both husband and wife. The income should be Rs 2 lakh per annum. We are targeting consumers residing in upper middle class, middle class and lower middle class urban areas staying in metros, mini-metros, Class I and Class 2 towns. The target audience encompasses businessmen, professionals and the salaried class.”
Jain of Bajaj Allianz said, “We are targeting the mass middle class across the country. We are even targeting small towns and non-urban towns.”
Ganguli said, “The bulk of ICICI Prudential Life’s communication is addressed to the consumer in the age band of 25-45 years. As a brand we believe in long term planning and hence, planning early. However, since we have multiple product categories, the target audience varies from one category to the other. For example, an Education Solutions Plan is targeted at newly married couples in the 28-35 age group, whereas the Retirement Solution is for individuals in the 35-45 age group.”
Commenting on the trends Kotak Life Insurance’s Sinha said, “The most noticeable trend is that a lot of advertisers are shifting away from brand advertising to product advertising. Secondly, the intensity in advertising is making the industry innovate and experiment with its choice of media. Also, as marketers realise the importance of engaging meaningfully with the consumers, consumer activations have begun to demand a more thoughtful approach. Lastly, product development is becoming sharper focused. The number of products is growing with the rise in competition and with the growing experience of each player.”
According to Gupta, “The trends seen by the insurance companies are that even in the financial space, consumers today recognise brands on a daily basis. This has made the market more sophisticated. Products and services are a given. Brands will look at creating a distinct identity for themselves. While mass advertising like television, radio or print will help overall brand recall, on ground activities will help consumers experience the brand directly. Digital media like the Internet and mobile would become significant in the coming years.”
Jain said, “Consumer behaviour is changing. Consumers are investing when they are planning for a child, retirement, etc. Consumers are also using e-based solutions. They are no longer only investing only to save on taxes.”