Wednesday, April 15, 2009
Mr. Sanjay Tripathy Executive VP – Marketing, HDFC Standard Life Insurance Co. Ltd.
Mr. Tripathy is endowed with the responsibility of leading the marketing portfolio of country’s one of the most reputed and respected insurance company HDFC Standard Life. Prior to the current engagement he was the Head of Marketing, International Business at Reliance Infocomm. Besides professional commitments, he is an avid traveller. This interview is based on his interaction with Asit Kumar Jain, IIM Shillong.
What do you feel about the effect of current market situation on the insurance industry?
Though the industry is growing at a lesser pace than expected, the need for insurance has increased due to increased uncertainty. ULIPs as a product category has slowed down because of market sentiments but the conventional guaranteed products & term plans have become more relevant in today’s market scenario. Today, we are seeing customers moving away from a scenario of purchasing ULIPs buoyed by the equity movement to a much more need based insurance purchase. The need for life insurance – either protection or saving – is universal, irrespective of market conditions.
The Indian insurance market is mostly unit linked based and companies are propagating the extended benefits instead of the core benefits of insurance. Do you not think that the core benefit is being diluted?
India is basically a savings market with insurance being as high as 17-18% in the overall savings portfolio. Insurance is one of the modes for financial saving / self dependence for self and one’s family members (esp. in his absence) and it gives customers the option of saving for the long term while participating in market linked benefits (i.e. In the case of ULIPs). ULIPs provide customers the option of purchasing transparent products wherein they can actively manage their investments (through fund options) unlike conventional products. Besides insurance companies it propagates the needs of individuals (e.g. our Children’s plan – U.S Scholarship Advertisement / Pension plans – Bicycle advertisement). ULIPs are just means to save for that need without losing out on the market linked benefits. We, as a company also propagates our Term plans e.g. Loan Cover Term Assurance Plan advertisement. Hence, I do not feel that the core benefit is being diluted in any way.
“Emerging channels such as internet, mall-assurance and also the possibility of mobile-assurance might affect the traditional agent network”. Your comments.
Business acquired by the traditional channels i.e. agents still account for a large proportion of overall business (more than 60%) for most of the private insurance players; Banc assurance being the next highest (30-35%) Emerging channels such as internet, mall-assurance have surely become channels for enticing customers, providing them information about products and services but are yet to show large contributions to overall business performance (2-5%). Certain impediments like after sales service, renewal premium collections, repeat purchase, need analysis etc. prove to be deterrents against these channels especially since Indians love to have a human interaction while buying financial products. These emerging channels will surely have their own space in new business acquisition and would always be an addendum to existing channels rather than being a competition to them.
How much do you see the opportunities for insurance industry in the untapped rural and semi urban belts and HDFCSL plans for leveraging it?
India is still an under insured market esp. the rural market. There is an urgent need for educating the rural mass on the importance of Life Insurance. Distribution reach, easy to sell products and building trust & brand equity will be the key to success in these rural markets. We do have our presence in quite a few Tier II and Tier III towns and plan to expand over the next few years. Currently we sell policies among rural customers but it is still on a pilot scale (through different models and for regulatory requirements). Scaling up the rural reach will take time and huge resource requirements esp. For servicing these policies over long periods of time.
Keeping in view the new emerging, educated and service oriented youth market segment, what are the future strategies of HDFCSL to tap that segment?
We strive to make HDFCSL a brand relevant to the target segment. We do this across our communication e.g. The Tulika Sharma – Car advertisement (TVC), Young Executive Plans promotion (online medium), offering products that are need based, relevant to the target segment and reaching out to these customers in the way and at the place they would prefer to buy the policy from i.e. through the use of new & emerging channels e.g. Online buying, telemarketing etc.
"Sar Utha ke Jiyo" campaign is regarded as one of the successful marketing campaigns in the insurance industry. Please share its secret of success which will act as a great learning for us.
‘Sar Utha Ke Jiyo’ has managed to re-define the way life insurance advertising has been done in the past. It has managed to bring a stronger connect and relevance of our category to those individuals who did not see a fit for life insurance in their lives. This core brand thought – Sar Utha Ke Jiyo – was derived at, after extensive research and insight that an individual doesn’t want to be a burden on his family and that he doesn’t want his family to depend on anyone after his death i.e. of ensuring financial independence and self respect for the family, irrespective of the metro-non-metro divide. In order to create and run such successful campaign (consistently) you need to have a strong & dedicated team who are very much aligned to the company’s vision and values and always believe in what they do. Our long term association with our agencies also plays a very important role in achieving this objective.
What is your take on the importance of brand equity in the foundation of a company with respect to HDFCSL?
Brand equity plays a very important role esp. for this category as customers invest their hard earned money over long periods with an organization. Customers need to have the right image and reasoning for considering / preferring your brand over 20 other private life insurance companies. In this regard building a credible Brand Equity for HDFCSL has been easy for us compared to any of the newer players. Its strong parentage i.e. HDFC Ltd. & Standard Life, UK organizations that have build high brand equity for themselves in their own category have surely helped us in this endeavour.
Besides it is also a continuous exercise. You need to keep working hard at sustaining, building it ever further esp. In a market scenario’s such as this downturn and amidst the growing number of competition in the category.
Insurance industry has not been an attractive proposition for IIM graduates looking at the past decadal result. But in the time of turmoil it has been a large head-hunter. How it is going to change the insurance paradigm and the competitiveness as compared to other BFSI's?
Insurance being a growing category there has always been a need for quality workforce; be it at the entry level or at the mid level. Even though it is part of the BFSI category the pay scales in insurance companies are unlike investment banks, MNC banks etc. and hence tend to lose out to these companies in campuses. In the downturn the long term nature and need based products has helped it to remain relevant to customers and is still showing growth compared to the Investment Banks/MNC banks and hence the need for quality workforce still persists. Also the total number of players in the category is still growing (today 21 private players) and another 5-6 are in line for licenses; hence the need for quality workforce will always exist in future as well. What is needed is a change in mindset among IIM graduates. They need to move away from the quick buck syndrome and look at long term career opportunity (growth & development being the key) with an Insurance company while contributing to society (through its noble cause).