One quarter of Indians who own insurance policies say that they are likely to invest in an additional form of financial service or product over the next 12 months. Of this, more than half or 14 per cent of policyholders are showing interest in purchasing additional insurance policies, according to ACNielsen ORG-MARG baseline study on the retail consumer market for life insurance, LIFE 2004.
India’s largest syndicated study of its kind, with a sample of 4,000+ respondents, LIFE 2004 covers 17 key metropolitan markets within urban India. The study profiles and details the buying behaviour and perceptions of target consumers for life insurance products and services in the context of overall financial planning.
“Assessing the stimulus to purchase life insurance products entails a careful consumer profiling across potential markets. Though life insurance is relatively well penetrated in comparison to most other financial products, the possibility of actively investing individuals purchasing multiple policies means that the market potential is enormous,” a communiqué on the study quoted Jairaj Jatar, Director, Client Service at ACNielsen ORG-MARG.
Over the next year, 14 per cent of policyholders claim that they will purchase fresh policies, while a lower proportion (seven per cent) indicate an intention to enter into fresh or additional bank fixed deposits. The greater proportion favouring life insurance schemes suggests that it is, perhaps, currently considered as a viable companion to bank deposits in one’s personal investment portfolio.
While non-bank retail investments form a very small proportion of overall GDP today, this change in intention therefore appears quite heartening as it may well indicate that Indians are discarding their traditional reluctance to build up an ‘active’ personal investment portfolio.
The ownership profile for various policies too differs amongst varying policy types. “These nuances become important when marketers assess their presence across various consumer profiles. This helps them fine-tune their targeting strategies for individual products within their portfolio,” Jatar said. Pension or retirement policies, for instance, display a greater bias towards nuclear families (without any elders) as more than half such policies are owned by nuclear families. In contrast, the proportion of nuclear families (with elders) holding pension or retirement policies is much smaller. “There is a clear relationship between type of family and type of policy owned. This kind of profiling is essential for a service provider to tap opportunities and offer the relevant product to the right audience,” the release quoted Jatar.
However, amongst non-policy holders, a sizeable proportion (28 per cent) indicates an intention to purchase an insurance policy. Interestingly, for marketers, the level of interest appears to be similar across demographic segments, with the exception of SEC C. Amongst the larger metros, there is a higher intention to invest than most of the other 13 locations covered in the study. “Non-policy holders are a different breed of consumers from the insurance sector’s viewpoint. Their motivations, barriers and profiles are quite different and they merit a closer look since they can be an important pool of future investors” Jatar said.