The current situation has led consumers to realise the importance of life and insurance, believes Pankaj Gupta, Sr. EVP (Sales) and Chief Marketing Officer, HDFC Life. He also said digital has grown from just being a channel to a way of doing business.
“Today, insurance has become a real need, specifically life and health covers. Global trends reflect that insurance and financial planning are among people’s top priorities in such a crisis. We believe it is going to be similar in India as well,” he told BestMediaInfo.com.
He said there has been an improvement in the number of policies as well as the average ticket size for the protection business in Q1FY21 for HDFC Life. He said the pandemic could be an inflection point for protection in India as customers realise a greater need for protection-based products to safeguard themselves and their families.
“There is an increased awareness around the need for protection and the inadequacy of the insurance coverage that people currently have. This has led to a surge in the demand for term insurance and we believe that the trend is likely to sustain,” he added.
Gupta said as the situation on ground changes, they expect life insurance to emerge as an important avenue for both protection as well as long-term savings, including retirement and children-related planning. “Business has started to pick up on a month-on-month basis and we are seeing higher traction, especially in the individual protection business,” he said.
However, there has been a dip in savings-related insurance products due to the economic situation and the uncertainty around jobs and income. In such a situation, focus must be given to maintaining a balanced product mix and a suite of relevant and innovative products as it helps address the customer's needs, and service the demand effectively, says Gupta.
“Our calibrated approach of maintaining a balanced product mix has once again demonstrated our ability to manoeuvre comfortably through a turbulent environment and also puts us in a position to adapt faster than the market,” he added.
According to him, their innovative products in the traditional segments will also help them to capture the market demand for the remaining year. He said they expect the demand for market-linked products to remain soft throughout the year. The trends for month-on-month renewal collections have also been improving. “Our digital assets have seen strong adoption across all our distribution channels. An outcome of the pandemic is that we are seeing online evolve from being a standalone channel to being a way of doing business across our distribution channels with customers increasingly getting comfortable transacting in a non-face-to-face manner,” he said.
Communication strategy reworked
Like others, the insurance industry had to change its communication due to the pandemic. For HDFC Life, the situation led them to think of ways to help consumers make the right financial decision.
“Genuine empathy for customers is very important. Since the current crisis is something we have never experienced before, in the initial days, our role was to ensure that we remain relevant by engaging with our consumers and finding ways to assist them in taking the right financial decisions. More recently we have launched a Term Insurance campaign to build awareness around the importance of protecting our loved ones in these uncertain times,” said Gupta.
“Given that today our foremost priority is to protect our family, we believe it would be good to create visibility and awareness for our term offerings. We hope that this campaign will help our customers take the step towards securing their family's future,” he added.
Speaking about their communication strategy, he said it is important to have the right media mix to reach out to the right consumer target. “Media buying and overall strategy needed a relook, given the changes in consumer behaviour and consumption trends. Television and a host of digital mediums have seen a spike in viewership and we believed these to be the best-suited touch-points for our communication efforts for the current campaign,” he explained.
Asked if they would focus on non-metro markets in the current situation, Gupta said certain markets are prioritised over others by mapping target audience and key business markets. “As most of our business is concentrated in Metros and Tier-1 cities, they do tend to become our priority markets. Special focus is given to rural and non-urban areas for specific product offerings catering to the requirements of that market.”
According to Gupta, their tie-ups across banks, NBFCs, MFIs, and in non-traditional digital ecosystem partners, enable them to reach out to customers in almost all parts of India. “Our focus on diversifying across geographies has been our long-term strategy, given the level of under-penetration and protection gap we have in India,” he said.