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| Budgeting for the uncertain times | | The new campaign for HDFC Life Insurance's online term insurance is aimed to make the potential consumer ?feel concerned? |
| Preeti Khicha / Mumbai Feb 06, 2012, 00:07 IST |
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 With age, our commitments increase. Be it your child, wife or parents, they all demand financial security. And this is the very thought that HDFC Life Insurance plays on as it launches its online term insurance Click 2 Protect. The campaign, consisting of five different commercials, delineates different life situations that require a man to secure his family, in case he meets with death. The campaign, says the company, is aimed to make the potential consumer “feel concerned”.
To put things in perspective, HDFC Life’s Click 2 Protect Plan is a term insurance plan which can be purchased online. This protection plan pays a lump sum amount to the nominee in the event of death of the policy holder. This is a pure risk protection plan and is available for online purchase without any intervention of insurance agent.
Coming back to the commercial, the brief given to the agency was to deliver two things: “First, promote insurance online and second speak to a younger audience,” says KV Sridhar, national creative director, Leo Burnett who conceptualised the campaign. “The ad was based on the insight that young people like to live in the present and not worry much about the future. The objective was therefore to change that mindset,” says Sridhar.
Using the emotional route and alluding to the concept of family to sell insurance products is a common ploy for many insurance brands. However, Sridhar believes the execution is the main differentiator in this case. “The way in which we have used the family and emotions is what makes it different,” he says, emphasising that HDFC Life as a brand has used ‘self respect’ (Sar utha ke jiyo) as a theme to differentiate itself from competition. “In India, we are not rational when it comes to buying insurance, so one needs to weave in the emotional element. Also, unlike many other individualistic cultures, we worry a lot about our family,” explains Sridhar defending the use of the hackneyed slice of life imagery in the campaign.
Some seem to agree with Sridhar. “Strategically, many insurance brands have touched on the family aspect, but in terms of creative execution, the brand still does an excellent job. And this campaign successfully takes forward the Sar utha ke jiyo positioning which the brand had crafted a while back,” says Arijit Ray, president, Mudra West.
Others are not so convinced. “The communication does nothing to address the issues or questions that people might have with regard to term insurance,” says a spokesperson of a Top 10 advertising agency who does not wish to be named.
Agreed communication will play its part in selling the new product but the going will not be easy. According to data released by the Insurance Regulatory and Development Authority (IRDA), the online term insurance space, which experts claim has a 5 per cent share (in terms of premiums) in the Rs 49,064 crore market (first six months of 2011) is choc-a-block with players. There are players like Aegon Religare (with iTerm Plan), Future Generali (Smart Life), Aviva Life (i-life), ICICI Pru Life Insurance (iCare), Kotak Life (e-Term plan) and Met Life which are using the online platform to boost term insurance sales.
The task is cut out for these players. Awareness about term insurance is still low and consumers do know not how beneficial it is. “The popularity of online term products is limited to the metros,” says Niraj Jain, CEO, insurancemall.in. The biggest hindrance in selling term insurance is the perception that these products do not pay anything at the end of the policy term. “Most consumers are still driven by a tendency to seek returns from their investments in life insurance products and hence tend to look at endowment linked products as semi protection products,” says Madhivanan Balakrishnan, executive director, ICICI Prudential Life Insurance.
Also, the earnings from term insurance plans are lower as the ticket sizes tend to be smaller (when compared to other investment led insurance plans like unit-linked insurance plans or ULIPs). Hence, term insurance products have been among the less preferred products for distribution channels like agents.
The other challenge is misuse of insurance. Also, the lack of facilities to keep a structured medical history in the country is a hindrance. In the absence of these, insurers are required to conduct several medical tests, thus increasing the cost of providing coverage.
But challenges do not worry the company which believes there is enough scope for growth in the online space. The increasing penetration of internet in India is fuelling growth of the e-commerce space. The young demographic which is a key target audience is a fast growing segment, spends a considerable amount of time online and is comfortable completing the purchase of an insurance policy with little or no assistance from a broker or planner. “Recently the IRDA (insurance regulatory and development authority) came up with a regulation that you do not require a physical signature and can use a digital signature. This will further boost sales,” says Sanjay Tripathy, executive vice-president & head (marketing), HDFC Life.
HDFC Life is investing heavily behind its website to boost sales. “We had our ULIPs online and are using those learnings here,” says Tripathy. “Our website is customer friendly and navigation is easy,” claims Tripathy. The company has also invested in back-end service to ensure it offers a seamless experience. Online customers who buy from websites like Flipkart and Snapdeal.com are well-informed and expect high levels of service. The plan has been launched for 750 cities, a high number by any measure. So far the company has received 1 lakh clicks, claims Tripathy. In fact the company also believes 90 per cent of all business will move online in the next three months.
Yet as Jain of insurancemall.in feels, while HDFC has a trusted brand name going for it, pricing and the ease of documentation and process time will play an important role in helping the product stand out in the clutter.
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