The insurance market in India is growing at 15-17 percent a year. In terms of four-wheeler and two-wheeler domestic sales, the biggest time of purchase is between Dussehra and Diwali. For insurance companies now is the time to strike the iron while it is hot. Also, historically, financial products are purchased more in the second half of the year versus the first, even for people looking at health insurance. “In a low penetrated category, distribution will create its own demand, says Rathin Lahiri, Head Marketing and CSR, SBI General Insurance.
Lahiri discusses with Storyboard18 how the subsidiary of SBI is marketing a complex category like insurance, leveraging co-partnering with its mother brand SBI, while optimising distribution channels, differential pricing and data mining to become a market leader. Edited excerpts:
SBI General Insurance came out with three ad films reminding people to be prepared for unforeseen circumstances. Can you elaborate on that?
Since insurance, specifically general insurance, is a very complex category, it has had low consumer penetration. More than risk management, we as Indians have been focused on increasing our returns. 10-15 years ago, the society was very different. In small towns, one had a joint family structure, even in large towns, families were much closer. There was a far greater support system available to families. A lot of that is dwindling with nuclear families. Health costs are growing faster than incomes. That being said, general insurance is one of the fastest growing categories in the country. It’s growing twice the economy. If you take the economic growth at 7 percent, last year the category grew around 15-17 percent and expected growth is around 15.5 percent this year and that’s actually on a very large base.
Coming now to the genesis of the film, SBI General Insurance aims to be one of the category leaders and therefore one of our marketing goals is to own the category benefits. The key category benefits that we have identified are essentially trust and safety – and that’s what we have tried to leverage across our three ad films. Whether it is health, motor insurance, or small and medium enterprises insurance for businesses, it allows us to display the range of products that we have.
Also, we want to leave the customer with one takeaway – here is a brand which will offer you the core benefits of protection, and then we use other mechanisms, like our vast multichannel distribution network, education of agents and insurance awareness to grow the category. We do a lot of work with educating our agents, and we also run a very extensive CRM analytics based programme tooffer the customer the relevant product benefits. The core consumer insight that we have put to use is ‘chote se chota risk bhi mehenga par sakta hai’ meaning even the smallest of the risks can be costly.
What is SBI General Insurance’s understanding of the current consumer patterns?
If you look around, everything is becoming more volatile, Covid has been a trigger which has made younger people more susceptible to health issues, you keep hearing about a 40-plus guy coming from the gym and suddenly he collapses with a heart attack. Covid itself was a big awakening, we are seeing that heightened interest in health insurance. We aim to encourage people aged 25-30 to take health insurance seriously as accidents and illness can happen anytime. In case of an accident, you need to be prepared with health insurance because the medical expenses are growing faster day by day.
Now coming to motor insurance, it’s very surprising in a market like India, approximately 45 percent of vehicles are not insured. If you take two-wheelers, that number goes up to 60 percent. If you look at the brand film on motor insurance, the accident is caused by the other guy. Our messaging is that even if you might be a safe driver, you might be following all the traffic rules, you might not be the reason for the accident, but the accident can be caused by anyone on the road. That can affect you and therefore you can be prepared with our product and that gives you peace of mind.
The premiums today are really low, it costs less than a couple of weeks of petrol that you spend, the cost is not the barrier, it is the mindset. Similarly, in the case of the SME film, the insight is that if you speak to any guy who has a business, the number of uninsured businesses is more than the businesses which have insurance. Most small businesses will be in industrial estates and a lot of them are really old, and a lot of them will have electric wirings one over the other, and some issue at the neighbouring business which leads to a fire can cause damage to your property. So, again the key thing is that you may not be the guy who is causing it but you may be the guy having to pay the price for it. That’s why you need to mitigate your risks.
Why would a customer choose SBI General insurance offerings over others?
The newer fintech players are massively short of customers, so they are constantly looking for new customers and customer acquisition. But it is different for us because of partnerships with other banks including our mother brand, we are able to get a massive amount of customer data. For us, what is more valuable at this stage is data mining of our own customer base and identifying which segments have higher propensities and therefore reach out to them with relevant products.
Our philosophy is essentially to provide different kinds of appropriate products across the spectrum. We are serving a diverse range of customers – we have an insurance product which literally in today’s age costs less than a rupee because we have a tie-up with IRCTC. Your train journeys can be insured and the typical insurance if you are buying a second-class ticket could be less than a rupee.
We are insuring some of the most complex large projects in India; in fact, we are one of the lead general insurers for the World Cup property this year. We are also serving across rural and agriculture markets. We also give importance to customisation and relevance; therefore customers can skip features which are not relevant to them while optimising a product.
Given the diverse set of customers, where is the business coming from the most?
Since we have a very strong distribution partnership with our parent company SBI, we are able to reach the widest parts of India and serve Indians across the length and breadth of the country. Having said that, the top 20-25 cities account for the bulk of the business and currently the bulk of the growth. We have 140 plus branches , and distribution tie ups with national banks , regional rural banks , fintechs etc to cater to the needs of the different customer segments .
Could you give an idea about the market size of the category? How much is SBI General Insurance’s share?
The overall market size is Rs 2.5 lakh crore. Our market share is approximately 6.3 percent in the private sector. Last year, we closed around Rs 11,000 crore.
What’s your innovation and marketing strategy?
We have a pure digital-only product called Health Edge, which is customisable. For example, if you are a single guy, you can opt out of maternity cover. When these options are pre-included, it costs more so we understand the need for customisation and relevance. We also have a product called Super Health which has reinsure benefits; suppose someone is hospitalised and uses 50 percent of the cover, that cover automatically gets refilled for reuse, therefore that person need not opt for a higher policy. Distribution-wise, we are aiming to be available at all points of distribution. Whether it’s an agent network, whether it is via fintechs, banks or our own website, we are available across the spectrum. We are also using a lot of analytics for risk profiling of various segments of customers.
Customer intelligence is a priority for us as well. We are trying to use AI and alternative data to work out mechanisms which will help us to reward the good customers and identify and segregate the customers who are trying to misuse the whole system.
Co-marketing also plays a role in our marketing strategy. We do co-marketing campaigns with our mother brand SBI. Let’s take home loans for example. With the home loan, we have a policy called ‘Griha Raksha Plus’, which is a property insurance product that we offer to that customer segment to protect them against eventualities.
Also, we leverage videos and short content, product infomercials and educate the agents as we believe that the person who is selling the product should know all the benefits of our products. Thus, there is a fair bit of B2B marketing in those channels.
We have a product called Cyber VaultEdge, which provides protection against online fraud. Today, if you speak to 50 people, you will find at least a double-digit percentage of them (from lockdown to now) who have been victims of some online fraud. We are using data and AI to market Cyber VaultEdge. We are using Analytics to reward good customer behaviour .
Also, our strategy includes pricing differentially for markets. There are certain districts in India where the claim ratios are irrational. When you get the pincode-wise data, you are able to identify that. We leverage that data for differential pricing.