Of the total number of insurance policies sold in the country in 2004-05, only 20 per cent were sold in rural India. At the first of Rural Marketing Agencies Association of India’s Seminar Series, rural and insurance marketing experts said that there was immense potential, and that this number would go up manifold.
Delivering the keynote address on ‘Rural Insurance: Obligation or Opportunity’, N Rangachary, Advisor to the Chief Minister of Andhra Pradesh, explained that since the insurance sector was opened up, a number of professionals had been attracted by the industry. He added that the country had attracted companies with over 100 years’ experience in the industry in their markets.
Rangachary, who has earlier served at the IRDA, added, “When we granted licenses, we never anticipated that the private players would account for 6 per cent of the market in three years. Today, the count is between 30 per cent and 33 per cent, I am told. The private sector has also set benchmarks that the public sector has had necessarily to follow.”
He elaborated, “If you want to develop a market in a situation where insurance as a concept needs to be bought by people, the initiative has to come from the state, or any of the government bodies. Make films and exhibit them. When you have a dedicated channel for sports, why don’t you have a dedicated channel for ‘Krishi’?”
Several speakers, including Rangachary, dwelled on the need to use the post office to augment channels. Bipul Chatterjee, Head-Rural, Birla Sun Life Insurance (BSLI), said, “We are in the process of building a successful and sustainable model for the rural markets. We at BSLI will be increasing our presence from 85 locations to 165 locations by the end of this financial year.”
Pawan Verma, Head-Rural and Social Business, Reliance Life Insurance, spoke on the conceptual aspect of product development for the rural market. He said, “We have merely downloaded urban products to rural markets with a little bit of tinkering here and there.”
Delivering the welcome address, R V Rajan, CMD, Anugrah Madison, and President of the RMAAI, said, “There is a big income shift being witnessed in rural India. The market is in the region of Rs 200,000 crore. There is a huge market, but unfortunately marketers look at short term benefits.” He underlined that the association would launch the first issue of its Rural Marketing quarterly from next month, and was working on ‘RM Works’ (Rural Marketing Effectiveness) Awards later in the year.
Tata AIG’s Chief Distribution Officer, Joydeep Roy, spoke on the need for innovative communication channels for reaching rural consumers. He cited the example of using a 30-minute film (not a documentary) to communicate the benefits of insurance to the rural masses.
On the same theme, ICICI Lombard’s Head, Rural and Agriculture, Pranav Prashad, added, “You don’t have to spread yourself too thin. 17 per cent of all Indian villages account for 50 per cent of the population in villages.” On the use of communication channels, he said, “One core thing is that you identify events that fit the brand identity. Over time, the event should signify the brand – like in the case of the Standard Chartered Mumbai Marathon. By far, one of the most important aspects is the direct contact mechanism.”
Post-lunch, K Nitya Kalyani, Founder and former Editor, IRDA Journal, and Editor, India Insurance Journal, underlined the role and changing interest levels of the media, in the insurance segment. She contended that the media had, to a large extent, not been able to figure out the industry, however, the interest level in insurance was going up.
“Besides the general media and the business media, specialised media is coming in. When it does, we’ll see more content on grass root issues – content that will, for instance, keep the intermediary informed and involved on an ongoing basis,” added Nitya Kalyani, who is scheduled to launch a magazine focused on the insurance segment – Premium – in July 2006.
Others who addressed the forum of insurance marketers and management students included Pradeep Kashyap, CEO of MART and VP of RMAAI; Neelamegham, CEO Akshara Advertising, and VP, PRCI; Mathew Joseph, AGM, Andhra Bank; R A Patankar, MD, Sampark Marketing Solutions; and Mukti Bosco, Secretary General, Healing Fields Foundation. RMAAI put together the event in association with the PRCI.