12-09-2013, 03:58 PM
Life Insurance Marketing in India –A The Changing Advertising & Promotion Norms
Life Insurance Marketing.pdf (Size: 95.58 KB / Downloads: 15)
BACKGROUND NOTE
The life insurance industry in India dates back to 1818, when a British firm Oriental Life Insurance
Company opened its office in Kolkata, followed by Bombay Life Assurance Company in 1823. During
the British rule in India, ‘The Indian Life Assurance Companies Act’ was enacted in 1912, which was
followed by the Indian Insurance Companies Act, 1928 enabling government to collect the data
regarding life and non-life business conducted by both Indian and foreign insurance companies. The
1928 act was amended and a new act, ‘Insurance Act’ was formed in 1938.
By the mid-1950s, 154 Indian insurers, 16 foreign insurers and 75 provident societies were
operating in the country. The life insurance business was concentrated in urban areas and was
confined to the higher strata of the society. In 1956, management of these companies was taken
over by the Government of India. LIC was formed in September 1956 through the ‘LIC Act 1956’
with a capital of Rs 50 million. One of the main objectives of forming LIC was to spread the
insurance cover and make it available to the lower segments of the society. In 1972, government
formed General Insurance Corporation (GIC) when it took over management control of 106 private
general insurance companies. Over the years, LIC expanded its network all over the country
emerging as one of the largest corporations in India.
A majority of Indian customers being very conservative and averse to risk, trust was an extremely
important factor in the insurance business. Since LIC was a government owned body, there was an
element of security embedded in its services and products. This proved to be the biggest hurdle for
the new insurance companies as Indian customers were reportedly rather skeptical about them.
Hence, the new companies focused their campaigns primarily on building an image of
trustworthiness and reliability for themselves. Secondly, their advertisements focused on insurance
as an investment option and not a mere tax saving tool – another first for the Indian market. Most
of these advertisements carried messages like the family’s happiness, human bonding, etc., with
underlying emphasis on the security that insurance could provide. Also, instead of projecting the
idea, that an insurance policy actually starts working only after the death of the insured, the new
campaigns projected that insurance protects people throughout their lives.
ADVERTISING INITIATIVES OF THE NEW PLAYERS Contd..
Om Kotak and Birla Sun Life took to sponsoring events in a major way, to attract prospective
customers. In 2001, Birla Sun Life sponsored a play to which a few Citibank credit card customers
were invited. A company official said, “Sponsoring plays and events like these give us good mileage.
They may not directly give us leads to sales, but certainly give us better visibility.” According to
company sources, Birla Sun life was considering the sponsorship of premier shows and offering
tickets to corporate agents like Citibank and employees of Deutsche Bank, who helped in the sale of
policies. A senior company official said, “It is all about building relationships with our corporate
agents.”
Om Kotak initially highlighted in its advertisements the credibility and trustworthiness of individual
partners (Old Mutual & Kotak Mahindra) through its generic campaigns. The TV commercials
featured men and women ‘meeting’ themselves in the future – happy, healthy and secure, thanks to
insurance. In early 2002, company also launched product – specific campaigns. Om Kotak was also
considering sub-branding of products.
During the late-2001, when SBI Life was concentrating on building its brand it was offering
packaged products to its customers. S Muralidharan, Chief of Marketing & Sales, SBI Life, said, “We
are slowly and steadily building our brand. Very soon we will be launching print advertisements in
regional languages too. As for launching a club for the premium segment, it’s certainly a possibility
which we are now evaluating.” According to Muralidharan, SBI Life was also exploring the possibility
of advertising on the Internet in its bid to reach out to its target audience.
Another interesting development was regarding the punch lines used by private insurance players
that invariably tried to associate positive emotions with insurance products. While ING Vysya said
‘Adding life to insurance,’ ICICI Prudential said, ‘We Cover you. At every step in life.’ Similarly,
HDFC Standard advertisements projected a happy man asserting, ‘Now I can continue enjoying a
comfortable lifestyle even after I retire.’ AMP Sanmar commercials carried the line ‘The joy of living
life to the fullest, with a 153-year old expert taking care of your insurance needs.’ Om Kotak
highlighted its campaigns with ‘Jeene ki azaadi’ (Freedom to live)’ and Allianz Bajaj stated ‘Allianz
Bajaj, Life insured by care.’
With private players paying much attention to advertising and promotional
activities, LIC, too, was forced to make efforts to increase its visibility and enhance
its brand image. The company commenced intense, systematic and well-focused
public relations and publicity activities both at the corporate and operational levels.
LIC came out with a corporate advertisement on TV with the punch line, ‘Zindagi
Tumhari Roshan Rahe’ (May your life be glorious). In addition, LIC established a
broad-based frame for external communication aimed at building a stronger brand
image. Several sports events were co-sponsored by the company and special
publicity activities with a social purpose were undertaken (Refer to Exhibit III for a
few print advertisements)