INDUSTRY ANALYSIS
       Dated: January 24, 2010



             Prepared by

Sahil Chopra (01) & Richa Bhardwaj (26)
    ...
EXECUTIVE SUMMARY


The opening up of the insurance industry in India for private participation in 2000 was done to ensure...
The era is now of building best of breed practices through technological innovation and customer value deliverability. Dis...
STATE OF THE MARKET


   India is the fifth largest general insurance market in Asia with annual premiums of $6.3 billion...
Insurance has remained a grossly less understood concept, especially in rural India and aided by the fact that even physic...
   Newer products are being introduced for agricultural insurance and extensive efforts being made by the insurance compa...
INDUSTRY SWOT ANALYSIS




                         Page | 7
INDUSTRY STATISTICS I - INDIA VS OTHER COUNTRIES

Despite growth, penetration and density levels are still low in India (2...
INDUSTRY STATISTICS II – PREMIUM GROWTH RATE - TRENDS


                                                                NO...
INDUSTRY STATISTICS III – PREMIUM UNDERWRITTEN




                                                 Page | 10
INDUSTRY STATISTICS IV - PRODUCT MIX
   Products mainly divided as Commercial vs. Personal/Retail products

   Growth fo...
GENERAL INSURANCE – MAJOR PRIVATE PLAYERS’ PROFILING


1. ICICI Lombard General Insurance Company Limited (11%)

2. Bajaj ...
MARKET SHARE


                          MARKET SHARE - INSURANCE INDUSTRY - INDIA


               2008-09               ...
IFFCO-Tokio    237           255          313            5%           4%            5%
5%




                   Source: E...
Overall strategy                                                     Technology
      Market leader among private players...
Overall strategy                                             Products and markets
      Aggressive growth strategy       ...
Overall strategy                                                   Servicing
      Highly aggressive growth strategy     ...
Overall strategy                                              Technology
      Stable, quality conscious strategy        ...
Overall strategy                                                  Technical support and technology
      Focus on quality...
CONCLUSION


According to a joint research conducted by Crisil and Assocham, the penetration level of the general insuranc...
potential. Added to these are the rising trends of convergence of financial services, especially in the areas like wealth ...
DIGITAL CHECK UP
       Dated: January 24, 2010



             Prepared by

Sahil Chopra (01) & Richa Bhardwaj (26)
     ...
RATIONALE FOR NEW MEDIA COMMUNICATION PLAN


The post-liberalized insurance industry panorama in India is witnessing drama...
   Search engines like Google and Yahoo! are critical channels for insurers that cannot afford massive consumer marketing...
OBJECTIVES



     To study and analyse the present use of web by IFFCO-TOKIO (and its competitors) to develop critical i...
KEY INSIGHTS INTO THE USAGE OF THE MEDIUM



IAMAI and IMRB International released some data in September 2008 on the usag...
A few key insights for ITGI:


      The reach of internet is not just limited to just the 8 metros, as is often perceive...
E-COMMERCE: ONLINE TRANSACTIONS AND BUYING OF POLICIES


ONLINE MODEL V/S AGENT MODEL

Advantages                         ...
   Reliance General allows its visitors to buy policies online but not renew their old policies. It offers only travel, m...
ONLINE ADVERTISING


The basic objective of any online advertisement is to direct the consumer to the company’s website fo...
The slowdown is also putting a sharper focus on ad networks, which aggregate content from several online publishers to ser...
   IFFCO-Tokio has initiated digital advertising of its products (Motor, Health, Travel) on various high traffic websites...
WEBSITES


Company websites are the most controllable source of providing information and relaying messaging on the Intern...
COMMENTS AND SUGGESTIONS: (POST COMPETITORS’ WEBSITE ANALYSIS)

IFFCO-Tokio’s website is quite nicely developed with an ex...
4.   Set policy renewal reminder- E-mail/SMS




                                               Page | 35
5.   Sharing business ideas




                              Page | 36
6.   Customer feedback- website, company, products, services




                                                         ...
7.   Develop relevant microsites or blogs




                                            Page | 38
8.   Downloads- brochures, forms (claim, application, renewal etc)




9.   RSS feeds: Subscribe to company news through m...
SEARCH ENGINE OPTIMIZATION (SEO)

Key facts

               95% of internet surfers use search engines to investigate pur...
Benefits of Search Engine Optimization:


             Build brand awareness

             Acquire new customers

      ...
Thus, contacting an SEO expert to take constant support from him/her to track the altering SEO prerequisites and keep ITGI...
SOCIAL MEDIA- Social Networking Sites, Youtube, Gaming Sites




                                                         ...
SOCIAL NETWORKING SITES


Three of the top 10 most trafficked social networks worldwide are Twitter, Orkut and Facebook. S...
YOUTUBE

Today, Youtube is one of the most powerful marketing tools on the web, yet very few businesses have been able to ...
   TVCs- Posting TVCs on youtube can help get feedback from people on a real time basis. It can help ITGI understand if i...
SOCIAL GAMING SITES

As brands continue to evolve their campaigns on the Internet, an interesting platform that is becomin...
Media2win developed a game for Max New York Life to promote an insurance plan called Smart Steps, meant for children. Inte...
OTHER SUGGESTIONS


  1.   DIRECT WEB MARKETING – DIRECT MAILERS, REGULAR EMAILERS, NEWSLETTERS should be developed

  2. ...
APPENDIX: CASE STUDIES
s
                                                                                                 ...
The ‘Time Out’ game campaign will run on Contests2win.com for 60 days. Rajagopal Menon, COO, Contest2win.com, says, “The
c...
ICICI PRUDENTIAL, HEALTH INSURANCE AND THE MORAL DILEMMA


                               ICICI Prudential has launched it...
products. Most health insurance ads convey negative sentiments. The ICICI brand has never associated itself with negativis...
ICICI PRUDENTIAL LAUNCHES JOB PORTAL FOR SENIOR CITIZENS


                            ICICI   Prudential    Life   Insura...
ICICI PRUDENTIAL LIFE LAUNCHES ABOUTULIPS.COM

ICICI Prudential Life Insurance has launched a website called AboutUlips.co...
Balasubramanian explains the strategy behind launching the site. “The core objective is to educate the consumers, consider...
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New Media Strategy for IFFCO-Tokio- Supporting document

  1. 1. INDUSTRY ANALYSIS Dated: January 24, 2010 Prepared by Sahil Chopra (01) & Richa Bhardwaj (26) SIMC Batch 2010 Page | 1
  2. 2. EXECUTIVE SUMMARY The opening up of the insurance industry in India for private participation in 2000 was done to ensure that insurance business acquires a prominent place in the financial services of the economy. During 2000-2006, almost 15 life and 13 non-life private insurance players (mostly joint ventures between Indian and foreign players) started operations in India, indicating the willingness of foreign institutional investors to enter the Indian insurance sector. This liberalised regime was started also to ensure that the Indian insurance market inches closer to global standards. With this very intent, several new measures were adopted over the years; and still continue to be adopted progressively. All these innovations have led to remarkable growth in business, especially in some very vital classes of insurance. It should, however, be noted that the progress has not been without any hiccups absolutely. A very major development during the period has been the detariffing of the non-life insurance industry. The reservations that were voiced even at the time of liberalizing the industry were active once again. It was felt that the maturity of the players was not sufficiently tested as to warrant detariffing. The absence of any major fall-outs has vindicated the confidence reposed in the players. IRDA, nevertheless, has been watching the progress private players’ closely to ensure that there are no major upheavals and are confident that the players act with prudence, despite the freedom afforded. Page | 2
  3. 3. The era is now of building best of breed practices through technological innovation and customer value deliverability. Distribution and communication (and promotion) have a key role to play in enlarging a domain like insurance. Although the tied agency style of distribution has been largely successful in the monopolistic regime, the introduction of brokers, corporate agents, and other alternate channels of distribution have been seen to be contributors to the growth achieved in the competitive era. Similarly, the insurance industry has turned into a highly competitive industry with all these developments and thus searching for most effective and efficient mediums of promotion has become more than essential to eliminate the threat of competition and grow in the market. This report studies the present state of the (non-life) insurance industry in India and provides an analysis of the new digital medium (web), suggesting ways and means in which IFFCO-Tokio General Insurance can use the medium effectively to connect with its present customers and attract new ones. Page | 3
  4. 4. STATE OF THE MARKET  India is the fifth largest general insurance market in Asia with annual premiums of $6.3 billion in FY09  21 companies operating in India:  13 private sector companies – multiline (JV with foreign insurer)  4 public sector companies – multiline  2 private sector companies – health  2 public sector specialty companies  Intense competition and strong growth between FY01 and FY08  Premium grew at 19.5% per annum  Penetration levels (premium as a % of GDP) increased from 0.4% to 0.7% (world average being 3.1% in 2007)  Annual premium in April 2008-March 09 was $6.3 billion (excl health and specialty companies)  Market continues to be dominated by public sector, though share has declined since FY01  Large middle class population, increased awareness and income levels have fuelled growth  Currently maximum foreign partner investment is 26% - soon expected to increase to 49% Page | 4
  5. 5. Insurance has remained a grossly less understood concept, especially in rural India and aided by the fact that even physical access was also very difficult; the growth of insurance has remained mostly to the urban pockets of the country. Nevertheless, the domestic insurance industry in India is estimated to be around US$ 60.5 billion by 2010. While the life insurance market is expected to grow to US$ 35 billion, non-life insurance market will touch an estimated US$ 25 billion. Furthermore, the total non-life insurance premium is expected to increase at a CAGR of 25% for the period spanning from 2008-09 to 2010-11. Some More Facts:  Home insurance segment is set to achieve a 100% growth as financial institutions have made home insurance obligatory for housing loan approvals. It is poised to become the second largest business for non-life insurers after motor insurance by 2011.  Insurance Laws Amendment Bill, 2008 was introduced in the Rajya Sabha. The Bill has been referred to the standing committee on finance for its report, which is expected shortly. The key amendments proposed in the Bill are as follows:  Increasing the FDI limits in insurance from 26% to 49%  Introducing “Health insurance business” as a separate category of insurance. Minimum paid up capital of INR 500 million (USD 10 million approx) has been prescribed for standalone health insurance companies. Page | 5
  6. 6.  Newer products are being introduced for agricultural insurance and extensive efforts being made by the insurance companies to reach out to the rural markets. This is expected to shift the skewed nature of insurance, slowly but steadily, towards a more balanced state.  With the entry of several low-cost airlines, along with fleet expansion by existing ones and increasing corporate aircraft ownership, the Indian aviation insurance market is all set to boom in a big way in coming years. Page | 6
  7. 7. INDUSTRY SWOT ANALYSIS Page | 7
  8. 8. INDUSTRY STATISTICS I - INDIA VS OTHER COUNTRIES Despite growth, penetration and density levels are still low in India (2007) Penetration (Premium as % of GDP) Density (Premium per capita in $) North America 4.7% North America 2,072 Oceania 3.3% Oceania 891 World 3.0% World 224 Europe 3.0% Europe 626 Asia 1.6% Asia 50 Latin America 1.4% Latin America 75 Africa 1.4% Africa 15 India 0.9% India 6 0% 1% 2% 3% 4% 5% 0 500 1,000 1,500 2,000 2,500 Page | 8
  9. 9. INDUSTRY STATISTICS II – PREMIUM GROWTH RATE - TRENDS NON-LIFE INDUSTRY 35,000 25% 21% 29,676 30,000 20% 26,613 20% 25,000 21,916 Growth rate pa (%) 18% Premium (Rs cr) 18,975 15% 20,000 16% 16,988 15,246 15,000 12% 12% 12,723 11% 10% 10,000 5% 5,000 0 0% 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08* Premium Growth rate pa Page | 9
  10. 10. INDUSTRY STATISTICS III – PREMIUM UNDERWRITTEN Page | 10
  11. 11. INDUSTRY STATISTICS IV - PRODUCT MIX  Products mainly divided as Commercial vs. Personal/Retail products  Growth for the largest private sector players has been fuelled by the retail segment  Commercial lines will grow in line with high economic activity, personal lines in line with increasing income levels and changing lifestyles  Motor continues to be the largest business segment - Own damage 62% of premiums, third party 38%  Marine insurance is dominated by the public sector -Marine hull 60% of premiums, marine cargo 40%4. Source: MCPL analysis Product Mix (April 08 – March 09) Page | 11
  12. 12. GENERAL INSURANCE – MAJOR PRIVATE PLAYERS’ PROFILING 1. ICICI Lombard General Insurance Company Limited (11%) 2. Bajaj Allianz General Insurance Company Limited Royal (9%) 3. Reliance General Insurance Company Limited. (6%) 4. IFFCO-Tokio General Insurance Co. Ltd (5%) 5. TATA AIG General Insurance Company Ltd. (3%) 6. Sundaram Alliance Insurance Company Limited (3%) 7. Cholamandalam General Insurance Company Ltd. (2%) 8. HDFC-Chubb General Insurance Co. Ltd. (1%) 9. Future Generali India Insurance Company Limited (1%) 10. Apollo DKV Insurance Company Limited (0%) 11. Universal Sompo General Insurance Company Ltd. (0%) 12. Bharti Axa General Insurance Company Ltd. (0%) 13. Raheja QBE General Insurance Co. Ltd (0%) Page | 12
  13. 13. MARKET SHARE MARKET SHARE - INSURANCE INDUSTRY - INDIA 2008-09 59% 41% 2007-08 60% 40% 2006-07 65% 35% 2005-06 74% 26% 2004-05 80% 20% 2003-04 86% 14% 2002-03 90% 10% 2001-02 96% 4% 2000-01 100% 0% 0% 25% 50% 75% 100% Public sector Private sector Page | 13
  14. 14. IFFCO-Tokio 237 255 313 5% 4% 5% 5% Source: Each company’s balance sheets summated for 2004-05, 2005-06, 2006-07; PY based on IRDA Page | 14
  15. 15. Overall strategy Technology  Market leader among private players  Technologically innovative and advanced  Aggressive growth strategy  Helps them to scale up rapidly  Pan India spread through branch expansion  ICICI is moving towards paper-less environment  Key focus area is retail to de-risk the business  Within retail, thrust on health insurance (accounts for Servicing 25% of GWP in 07-08 & 06-07) and motor  Set up grievance cell  In corporate products, focus is on infrastructure projects,  Strengthening internal controls, policies and procedures liability and credit insurance  Constantly reducing claim settlement time Distribution Products  Bancassurance through its own Bank network and ABN  Blue ocean thinking – bundle, innovate to provide AMRO to target high net worth customers customized solution  Rural penetration through presence in 800 towns via marketing agents and retail outlets Organization and brand  Developing low cost channels for low ticket size products  Dedicated product groups through use of technology  Specialized industry teams  Have branches in 40% of towns with population of more  Employee KRA based on innovation & results than 100,000  iAAA rating and many awards Page | 15
  16. 16. Overall strategy Products and markets  Aggressive growth strategy  Strong consumer retention policy  Pan India spread through branch expansion  No new products  Retail strategy  Bundling and co-branding of existing products to provide customized solution Distribution  Re-designed traditional health scheme to offer e-  Bancassurance with top notch commercial banks opinions, health guards, silver health etc covering high net worth to middle class spectrum  Are co-insurers in aviation insurance – airlines and  Large number of effective bancassurance tie up private aircrafts  5229 active agents contributing 33% of their GWP  Covering previously uninsured and unorganized segment  On-line selling to capture internet user of events, marriages, sports, film production Technology Organization and brand  Has spent Rs. 43 cr (by 2006-07) on IT and software  iAAA rating  Young leaders programme Servicing  Talent management system  Newstrack-a quarterly news letter for its customers  SMS alerts on claim status Page | 16
  17. 17. Overall strategy Servicing  Highly aggressive growth strategy  Reputation of dis-satisfied customers in claim settlement  Pan India spread through branch expansion  Poor after sales service – lack support  Corporate business probably from group companies  Retail strategy – essentially motor, followed by health Distribution  Going all out to garner top lines, with may be little  Targeting to open >300 branches by March 2010 thought about bottom lines  Strategy, it seems, is essentially to buy business at any Organization and brand cost – have offered commissions as high as 40%  High pay master  Have poached a group of high cost employees, expecting  New out of home marketing campaigns movement of business from other insurers  Heavily chained placards outside malls saying “Instead  Re-engineer contempory retail products call us”  Leveraging their mobile phone consumer base  Frames across flyovers saying ‘we protect everything that  Heavy media spenders – electronic & online. They buy passes through here” share of mind  For awareness in theft & health insurance, have men roaming in steel armour in crowded places Technology  Launching of ambient media campaign to beat clutter, get  Has spent Rs. 43 cr (by 2006-07) on IT and software noticed, educate people about products Page | 17
  18. 18. Overall strategy Technology  Stable, quality conscious strategy  Has spent Rs. 49 cr (by 2006-07) on IT and software  Focus on quality than quantity  Limited branch expansion Servicing  Retail strategy  24x7 helpline  TATA seems to be a silent partner  Mobile claim services  Policy renewal notice by sms Distribution  Low claim settlement time of average 31 days  Own sales force  Tie-up with large and regional banks Products and markets  Process of developing web enabled policy booking and  Strong retention policy – start well in advance issuance  IT and ITES sector covering corporates and also target  Telemarketing, worksite marketing, affinity partners their employees  Dependence on AIG expertise for energy and high risk Organization and brand project  Strong brand recall in urban India  Developing liability product focus  Cross selling within TATA organizations  Not willing to compete on low priced business  TATA management is considered very professional  TATA AIG inspection of certain risks  Focus on preferred segments Page | 18
  19. 19. Overall strategy Technical support and technology  Focus on quality  Technical Support for underwriting and reinsurance  Wide network of over 110 offices across India from Tokio Marine; Risk management support from  Retail strategy Tokio Risk Consulting (TRC)  Large commercial portfolio  Robust IT infrastructure  Innovative strategy Servicing Distribution  Ensures speedy settlement of claims  ITIS, 100%-owned distribution channel to service its  Renewals and new policies are also issued directly from retail customers the website  Bancassurance Products and markets Organization and brand  Offers a wide range of uniquely customized policies  Pan India presence with 51 SBUs  Underwritten mega policies for a fertilizer and an  Customer focussed brand: bi-annual customer automobile company. satisfaction surveys  Offers niche products like Credit Insurance, Fine Arts  Stability and integrity Insurance, P & I Insurance, etc  Backed by IFFCO, world's largest fertilizer manufacturer  Rural centric initiatives by launching products like & marketer in cooperative sector (74% share) Sankat Haran Bima Yojana, Mahila Suraksha Bima Yojana, etc Page | 19
  20. 20. CONCLUSION According to a joint research conducted by Crisil and Assocham, the penetration level of the general insurance business in India is just 0.60 per cent of its GDP, as against a world average of 2.14 per cent. This is despite the fact that the Rs 30,000-crore business has been growing at 16 per cent annually between 2004-05 and 2008-09. According to the research, India ranks 136th on penetration levels and lags behind China (106), Thailand (87), Russia (86), Brazil (85), Japan (61) and the US (9). This low penetration is attributed to low consumer preference, largely untapped rural markets and constrained distribution channels. The post-liberalized insurance industry panorama in India is witnessing dramatic changes in terms of a slew of latest products and services, new channels of distribution, greater use of I.T. as a service facilitator and a further use of diverse tools of communication and promotion to tackle this issue. It is now seeking to leverage on the power of internet and mobile for faster customer value deliverability and policy management operations. According to industry experts, the marketing and communication initiatives will now become much more specific and one-to-one marketing will see a rise. There is also the phenomenon of noticeable shifts in consumer preferences impacting the product mix being offered by insurers. The market structure dominated by a few stabilized public sector players and the 'new' players in the market (some of whom claim their lineage from established international insurance behemoths) is in a state of flux- in terms of figure out market shares but is full of Page | 20
  21. 21. potential. Added to these are the rising trends of convergence of financial services, especially in the areas like wealth management and evolution of newer risk management tools, particularly in the context of reinsurance management. Greater attention is also being bestowed on the areas like Agricultural Insurance and risk coverage of export-import trade. Then there is impact of visible socio- economic changes like greater urbanization, greater job mobility, growth of the services industry, weakening of traditional family structure, impact of globalization etc. All in all, interesting things are happening in the Indian insurance scene. Page | 21
  22. 22. DIGITAL CHECK UP Dated: January 24, 2010 Prepared by Sahil Chopra (01) & Richa Bhardwaj (26) SIMC Batch 2010 Page | 22
  23. 23. RATIONALE FOR NEW MEDIA COMMUNICATION PLAN The post-liberalized insurance industry panorama in India is witnessing dramatic changes in terms of a slew of latest products and services, new channels of distribution, greater use of I.T. as a service facilitator and a further use of diverse tools of communication and promotion to tackle this issue. It is now seeking to leverage on the power of internet and mobile for faster customer value deliverability and policy management operations. According to industry experts, the marketing and communication initiatives will now become much more specific and one-to-one marketing will see a rise. Celent, a US based global research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies, has gone a step ahead to project that online insurance sales will double by 2011 (worldwide) and that the web will play a major role in most personal insurance purchases across auto, life, and health. Celent’s latest report is titled ‘Online Insurance Sales and Marketing: What’s happening and what’s next’. Its key findings include:  The web has become an increasingly important communication channel between sellers and buyers of personal insurance.  At present, most consumers’ purchasing process is “Web Influenced” Page | 23
  24. 24.  Search engines like Google and Yahoo! are critical channels for insurers that cannot afford massive consumer marketing campaigns to drive shoppers directly to their sites, and more insurers are embracing search engine optimization to help capture these shoppers  Pure online sales are growing, but will still account for less than 15% of sales, even in personal auto.  While 100% online sales are unlikely to exceed 30% in any area, the Web will be a major influencer for nearly all sales within five years. Although these projections and figures are not India centric, the trends in online marketing and communication in the insurance industry are hard to overlook. As per a study commissioned by the Internet and Mobile Association of India (IAMAI) and conducted by IMRB, the number of active urban internet users in India went up from 36 million in March 2008 to 42 million in September 2008. Also, with wireless technology making the Internet available just about anywhere, more and more people have started using it – and it will no longer be limited to just the well-to-do or well-educated person using Internet services. Having said that, there is no uncertainty about the fact that the marketing and communication initiatives will now need to be much more specific and one-to-one rather than on a mass level. This is exactly where the role of internet becomes very crucial. Page | 24
  25. 25. OBJECTIVES  To study and analyse the present use of web by IFFCO-TOKIO (and its competitors) to develop critical insights.  To propose key online marketing and communication strategies to the company based on  Critical evaluation of each aspect of the web- its potential for the insurance industry  Competitor analysis- what are they up to in the online space. Page | 25
  26. 26. KEY INSIGHTS INTO THE USAGE OF THE MEDIUM IAMAI and IMRB International released some data in September 2008 on the usage of internet in India. It was based on a primary survey conducted across 30 cities amongst more than 90,000 respondents. Some key findings: 1. Out of the total internet users in urban India (50 million), 37 per cent of them stay in top 8 metros and 30 per cent in towns with populations below 5 lakh. 2. 37 per cent of the total internet population in urban India belongs to SEC A and 32 per cent belongs to SEC B categories. 3. Among the active internet users in 30 cities (17.9 million), 30 per cent are young men below 35 years who are not school or college students, and 27 per cent are college-going students. 4. 12 per cent are school-going kids while 11 per cent of the active internet users in 30 cities (17.9 million) are working women; only 6 per cent are non-working women. 5. 37 per cent of the 17.9 million active internet users surf the net at cyber cafes, 26 per cent surf at home while 27 per cent surf at office 6. 91 per cent of the surveyed consumers use internet primarily for e-mail, 76 per cent prefer to use it for general search, while 49 per cent consumers are looking for educational content. Page | 26
  27. 27. A few key insights for ITGI:  The reach of internet is not just limited to just the 8 metros, as is often perceived. Thus, it gives ITGI a chance to connect with people from smaller cities and towns (tier I & tier II) as well through the web.  SEC B forms as important a part of ITGI’s TG as SEC A and the internet has a balanced mix of both.  Amongst the internet users, people below 35 years of age form a major chunk (around 57 per cent). Younger people are more open to new concepts, services and products. Thus, there is an opportunity to make them perceive insurance cover as essential – the smart thing to do.  76 per cent of the people surveyed prefer to use the internet for general search, while 49 per cent are looking for educational content. This provides excellent reason for ITGI to invest in Search Engine Optimization, setting up of blog and keeping its website updated. Page | 27
  28. 28. E-COMMERCE: ONLINE TRANSACTIONS AND BUYING OF POLICIES ONLINE MODEL V/S AGENT MODEL Advantages Disadvantages  Distribution made easier  Information overload  Digital policy accessible to customer  No scope for negotiation/bargain  Online customer service 24X7  Lack of privacy/trust  Paperless Transactions  Security concerns e.g. spam  Ease of use, convenience  No. of users (potential buyers online) still low  Lower costs  User expects freebies OBSERVATIONS  ICICI Lombard leads the way in e-transactions. It allows visitors to buy, change, extend or renew their policies online through its website (travel, health, motor and home) in an extremely simple procedure.  Bajaj Allianz General only allows users to buy motor policies online. Also, it allows them to renew their existing policies as well. Page | 28
  29. 29.  Reliance General allows its visitors to buy policies online but not renew their old policies. It offers only travel, motor and health insurance policies, not home.  Tata AIG only allows existing customers to renew their existing policies online.  IFFCO-Tokio allows visitors to buy (motor, travel, health) as well as renew their policies online. But, both the times we tried to check the process of buying the policy out, the server seemed to be unavailable or down.  ICICI Lombard, TATA AIG and Reliance General, Bajaj Allianz General and IFFCO-Tokio have all tied up with policybazaar to sell their insurance products. COMMENTS AND SUGGESTIONS  ITGI’s online policy selling process is quite fast and customer-friendly. There are few clicks, new pages or new windows opening in the process so as to make it faster.  ITGI can look at offering/selling its other products like home insurance etc also through its website.  ICICI Lombard and Reliance General have agents’ login facility on their website for the agents to buy policies for clients, renew them, check their status etc. ITGI can look at exploiting that aspect too. Why limit the service to just end consumers?  ITGI can look at tying up with other websites such as www.insurancemall.in to sell its products. Page | 29
  30. 30. ONLINE ADVERTISING The basic objective of any online advertisement is to direct the consumer to the company’s website for more information or to induce sale. Traditionally, as much as 60 per cent of online advertising comes from the banking, financial services and insurance (BFSI) segment together with online services such as travel, jobs, real estate and matrimony. Online advertising is mainly categorised into two types: search and display. Over time, the trend worldwide has been to put more emphasis on search marketing – and the same is percolating to India as well. While the current ratio of search to display roughly stands at 30:70, share of search is expected to increase significantly this year. In fact, it is believed that search will account for much of the shift that is likely to happen from offline advertising to online. With the current economic slowdown, advertising budgets across all media have been affected. However, according to estimates, the internet as a medium is expected to grow close to 30 per cent in 2009, while TV and print will only see a 10 per cent increase. The internet is quite an accountable medium as it allows real-time monitoring, mapping and adjustment of campaigns. This allows fine tuning of the campaign based on response and feedback to reach the desired goal. An advertiser looks at traffic based on unique visitors and click-through rate (CTR) for the measurability of a campaign on the internet, while TV offers at TAM ratings and print provides circulation numbers to indicate traffic. Measurements of online campaigns are more accurate. Page | 30
  31. 31. The slowdown is also putting a sharper focus on ad networks, which aggregate content from several online publishers to serve up a larger but more focussed audience to their clients. This is in contrast to the big portals – who currently sell their inventories directly to advertisers and account for a big chunk of display advertising. Ad networks are considered more capable in offering rich-media advertising to engage consumers and in better measuring the impact of online campaigns. They are aiming to change the way online media is bought, by using advanced behavioural targeting and by combining the reach and relevance of several online destinations. Behavioural targeting enables an ad network to identify and track the consumption pattern of a surfer even as he or she keeps moving on from one site to another. This is largely done by positing a cookie (a short computer program) on the user’s computer. For instance, say that if ITGI serves an ad on any site, then the behavioural targeting technology of the ad network enables it to tag a cookie to the user’s computer or, in other words, identify the user whenever he clicks on the ITGI ad on the website. Now onwards, whenever the same user visits other sites that have a tie-up with the ad network, the ITGI ad or website links can be shown to him if ITGI so desires. OBSERVATIONS  ICICI Lombard uses the specialised services of AdGuru, the ad-network unit of the Bengaluru based Internet search firm Guruji.com. Page | 31
  32. 32.  IFFCO-Tokio has initiated digital advertising of its products (Motor, Health, Travel) on various high traffic websites like Rediff, Yahoo, in.com, IBN live, cricbuzz etc. The same was done during Elections and IPL. To ensure consistency in the initiative, ads and sponsored links are featured continuously on Carewale.com, Yahoo.com and Google search. COMMENTS & SUGGESTIONS  Now that the digital advertising campaign of ITGI is turning out to be a huge hit and the website is attracting over 1,500 visitors and generating 200 prospective leads every day, the company can look at hiring an ad-network to exploit the medium much more effectively. Page | 32
  33. 33. WEBSITES Company websites are the most controllable source of providing information and relaying messaging on the Internet. These are most trusted when supported by third-party credibility. Thus, it is essential for a website to be well designed and have appropriate content as well as appropriate amount of content so as to leave a positive impression on the visitor's mind. Websites are now also being increasingly used to sell policies by insurance companies, register complaints, apply for insurance claims etc. With the technology improving at such a high rate, these transactions taking place over the web is believed to become a norm in the next few years. Other advantages:  Websites can be used to generate customer (existing and potential) database through on-site registrations. This is a very important tool and should not be neglected.  Websites can be used to make the visitors register for updates etc on new policies and offerings from the company  Websites can also be used to interact with the visitor/potential customer through segments like ‘ask an expert’, ‘live chat’ etc. Page | 33
  34. 34. COMMENTS AND SUGGESTIONS: (POST COMPETITORS’ WEBSITE ANALYSIS) IFFCO-Tokio’s website is quite nicely developed with an excellent interface which is extremely uncluttered, very interactive and user friendly. However, it can still look at adding the following segments to its website. 1. Awards showcase/tab 2. Customer testimonials 3. Agent login Page | 34
  35. 35. 4. Set policy renewal reminder- E-mail/SMS Page | 35
  36. 36. 5. Sharing business ideas Page | 36
  37. 37. 6. Customer feedback- website, company, products, services Page | 37
  38. 38. 7. Develop relevant microsites or blogs Page | 38
  39. 39. 8. Downloads- brochures, forms (claim, application, renewal etc) 9. RSS feeds: Subscribe to company news through mails, newsletters etc Page | 39
  40. 40. SEARCH ENGINE OPTIMIZATION (SEO) Key facts  95% of internet surfers use search engines to investigate purchase decisions  88% of those online locate websites using search engines  92% of journalists use search engines to research companies and stories Importance of Search Engine Optimization:  OPTIMIZATION- Showing the searcher (customer), what you wish them to see (keeping ITGIs website and relevant pages on the top of the search listings)  DEOPTIMIZATION- Hide from the searcher (customer), what you do not wish them to see (pushing the competitors’ pages, irrelevant listings and negative stories about ITGI down on the search listings) Search Engine Optimisation is probably the most talked about subject amongst corporates and anyone involved in internet marketing today. In the current trend of internet world, having an online presence is nothing until it can be seen by most of the online customers’ world-wide. For this, it is critical to optimize the website as per the SEO prerequisites and rules, so that it can achieve top search engine placement in some of the major search engines like Google, Yahoo, MSN, Askjeeves, AltaVista and Alltheweb. Page | 40
  41. 41. Benefits of Search Engine Optimization:  Build brand awareness  Acquire new customers  Protect and promote corporate and brand reputation  Increase product and brand visibility  Generate leads Optimisation is a vast subject and with the ever-changing search engine algorithms things are never stable where SEO is concerned. The complexities of SEO include-  Analyzing the website,  Aligning the website code,  Understanding the primary keywords,  Content alignment,  Website navigation and  Changing the internal links. Page | 41
  42. 42. Thus, contacting an SEO expert to take constant support from him/her to track the altering SEO prerequisites and keep ITGIs website and relevant pages on the top of the search listings, and push the irrelevant/negative ones down is crucial. OBSERVATIONS  Bajaj Allianz has hired Communicate2, a search marketing agency based in Mumbai which has recently become a certified Google Analytics Authorized Consultant (GAAC). COMMENTS AND SUGGESTIONS  Hire an agency to help with SEO and search listings for even according to the trends search advertising is the way forward for web advertising.  A similar sort of benefit can be derived by using web tools like Stumble Upon, Reddit and Digg bookmarks. These can be used expertly for specific interesting pages of the ITGI website and related blogs on insurance in order to drive net user traffic to them. Thus, promoting the company, its products and initiatives. Page | 42
  43. 43. SOCIAL MEDIA- Social Networking Sites, Youtube, Gaming Sites Page | 43
  44. 44. SOCIAL NETWORKING SITES Three of the top 10 most trafficked social networks worldwide are Twitter, Orkut and Facebook. Social networks spans all age groups and demographics and offer real-time interaction with existing and prospective customers. They provide great scope for promotion of a brand by interacting with the customers directly through unique, innovative ways. A superb example of this being the extremely popular 'fan pages', 'groups' and 'applications' like games and quizzes offered by Facebook. The best and most credible form of publicity for a brand is word of mouth publicity and these social networking sites provide us with a platform to promote just that. Tools to be utilized:  Starting up of separate, dedicated and highly active and interactive communities for ITGI  Developing an ITGI profile on Twitter to keep the followers updated.  Developing fan pages for ITGI and its innovative products, schemes and policies.  Developing applications to like How much do you know about insurance quiz, Do you need insurance quiz, Which insurance policy best suits you quiz etc to promote brand loyalty and gain customer feedback on the products.  Using these social networking sites to leverage and promote the initiatives undertaken by ITGI and even gauge feedback on its new advertising and promotional campaigns.  Regular tracking of these communities to gauge customer feedback on ITGI and its offerings and negating the negative opinions and feedback of the customers on the brand.  Using these communities to promote the new product offerings- policies and services. Page | 44
  45. 45. YOUTUBE Today, Youtube is one of the most powerful marketing tools on the web, yet very few businesses have been able to harness its full potential. You tube is a phenomenon that has caught on like wildfire and attracts unparalleled online traffic. Apart from entertainment purposes, people today are using it as a source to:  Research about companies, its products and services  Gain knowledge into subjects through experts talk videos etc  Find information for work purposes  Thus, it makes complete sense for ITGI to leverage on this opportunity to connect with customers through this medium. Tools that can be utilized:  ITGI can put expert talk videos on Youtube about the current industry scenario, innovations in the industry etc. (This can be used for management profiling as well- as the top management people from ITGI can be a part of these discussion videos)  ITGI can also look at putting up videos to educate the consumers who have still not touched insurance products to educate them about the need and benefits of these products and services. Page | 45
  46. 46.  TVCs- Posting TVCs on youtube can help get feedback from people on a real time basis. It can help ITGI understand if its TVC is connecting well with the audiences or not. Some companies have even gone a step ahead and used youtube as the testing ground for their TVC. Even before buying spots on television to post their commercials, they have put them up on youtube for feedback purposes. The most critical issue about these tools is that they cannot be used in the run of the mill way, the ideation and executionbehind their use needs to be extremely innovative for these to be effective. Page | 46
  47. 47. SOCIAL GAMING SITES As brands continue to evolve their campaigns on the Internet, an interesting platform that is becoming popular with marketers is online gaming. Advertisers have realised that consumers may overlook brands in display and search ads. However, it’s hard to do so when they are actively involved in playing a game that has the brand as its central theme or character. According to the Internet and Mobile Association of India (IAMAI), the size of the online gaming market in India (as in January 2007) is Rs 21 crore, of which advertising – advergames, in-game placements and display ads – contribute 11 per cent, or Rs 2.3 crore. Of course, these figures are over a year old and industry professionals estimate the industry to be valued much higher. On an average, consumers spend between three and five minutes on a game. All this while, they are immersed in the brand. By the time they’re through with the game, the brand message is completely communicated. But what needs to be ensured is that the thought around the brand is embedded in the game. There’s no point in just placing the company’s logo in the game. It will not impact gamers until the brand is integrated well into the game. The idea is to try and use another touch point to leave an impression on the target audience. While the consumer might understand that it’s a branded game, there is more openness to receiving brand information since it is woven into an entertaining format. Thus, the concept of a game developed for a brand has to be carefully chosen to match with the brand’s values and message. Page | 47
  48. 48. Media2win developed a game for Max New York Life to promote an insurance plan called Smart Steps, meant for children. Interestingly, the game was targeted at parents and was part of a microsite developed for the product, www.super-parents.com. The game required parents to cross three levels, indicating the growth phases of children. Describing why the company chose a game format, Anisha Motwani, senior vice-president, marketing, Max New York Life, in an afaqs article said, “Insurance can be an extremely educative, albeit boring subject. To make it interesting, we built it into the game, where parents learnt about the pitfalls in bringing up a child and about planning for the child’s future.” Looking at the success of this game, MNYL is planning to soon launch another one. OBSERVATIONS: 1. Bajaj Allianz tied up with Contest2win to create a game for it. 2. Zapak has developed advergames for LIC and ICICI Lombard. SUGGESTIONS: 1. IFFCO-Tokio can look at a gaming tie-up as well to promote its product through forums, gaming sites as well as its own website. Page | 48
  49. 49. OTHER SUGGESTIONS 1. DIRECT WEB MARKETING – DIRECT MAILERS, REGULAR EMAILERS, NEWSLETTERS should be developed 2. CREATE AN EXCLUSIVE ITGI GROUP (a premium group for its loyal customers) and look at offering them special services through the web and offline. This activity can be leveraged across media, the web being an important part. Page | 49
  50. 50. APPENDIX: CASE STUDIES s source: www.afaqs.com NEW GAME BY BAJAJ ALLIANZ MAKES YOU COUNT YOUR PENNIES Bajaj Allianz, the life insurance company, has launched an online game called ‘Time Out’ on the contests site, Contests2win.com. The game tries to convey the brand’s message – the longer you delay your retirement plan, the more expensive it becomes – to customers in an interactive manner. In the game created by Contests2win, the player has to collect as many gold coins (his ‘savings’) as soon as possible. The gamer has to control Smart Alec, the game’s character and the brand’s mascot, in the game and make him collect enough coins while dodging the obstacles encountered at various levels of the game. With each level, Smart Alec grows older and the difficulty level of the game increases. The participants of the game can win prizes such as digital cameras and iPods by making the highest score in the least possible time. Sanjay Jain, head of marketing at Bajaj Allianz, says, “The whole idea is to start saving at a young age. We thought this activity (gaming) is one thing youngsters are hooked on to on the Net. TV and traditional media would not have helped us reach out to the youth. So, that’s the reason we extended our communication through a game. We expect good responses from it.” Using the game, Bajaj Allianz is trying to reach youngsters in the 21-30 years’ age group. The 'Time Out' game Page | 50
  51. 51. The ‘Time Out’ game campaign will run on Contests2win.com for 60 days. Rajagopal Menon, COO, Contest2win.com, says, “The consumer can ‘virtually’ touch or experience the brand. The game is created in such a way that the consumers won’t be able to complete it on the first attempt. On the second, they’ll just about succeed and, on the third attempt, they’ll definitely crack it. On an average, consumers will spend three-five minutes on the game.” Contests2win has created games for brands such as Airtel, Garnier Fructis, ICICI Prudential, Intel, Nescafe, Barista, Yamaha and Jet Airways. Ad-based games on Contests2win.com normally generate 30,000-50,000 responses, according to Menon. Airtel’s SongCatcher game, which generated 40,000 responses, required the participants to scout for songs embedded in the picture. As per NASSCOM, the Indian gaming industry is expected to reach $300 million (Rs 1,180 crore) by 2009. The current size of the online gaming industry in India is Rs 21 crore (as per IAMAI’s Online Gaming India Report 2007) and the revenue for the gaming portals streams in through subscription, advertising or revenue from organised cafes. The contribution of advertising (Rs 2.24 crore), which is currently low, should go up over the next two-three years, in line with developed gaming markets such as the US, where it accounts for close to 40 per cent, predicts the IAMAI report. A number of brands like Airtel, Intel, Garnier, Nescafe, Yamaha, Jet Airways and Barista are taking the route of game-based advertising to communicate their brand message to their target audiences. The concept of game-based advertising, popularly known as advergames, involves developing a game around a brand and, if done in a subtle way, it can prove to be an effective route to catch the consumer online and transfer the message in a playful yet discreet way. Designing an advergame costs about Rs 3 lakh, according to industry estimates, though the more complex advergames can cost much more. However, creating game-based advertising is much cheaper than mass media advertising formats. Page | 51
  52. 52. ICICI PRUDENTIAL, HEALTH INSURANCE AND THE MORAL DILEMMA ICICI Prudential has launched its first viral campaign to promote its health insurance products. The financial Ailing mother services company has rolled out an animated viral video, Beta No. 1 (www.betano1.com), which spoofs the 1970s Bollywood era and features an ailing mother and her devoted son in the centre of a moral storm. The video opens with a doctor telling the hero, Raju (a Bachchan lookalike), that his dying mother is in dire Doctor hands prescription need of medicines. Raju takes the prescription from the doctor, but is distraught to find that his piggy bank has to Raju only a coin in it. It’s night and raining heavily, but he runs out of the house and returns with the medicines. His surprised mother asks him where he got the money for them. When he doesn’t reply, she slaps him dramatically, saying Mother bangs him with bats and pans that he must have stolen the money. As the son tries to explain, she hits him with a pan saying that he must have gambled. Her son denies this also, but she then batters him with a bat, saying that he must have sold his books, and that he will never become a doctor now. Tired of her accusations, Raju shouts, “Maaaaa! Maine chori nahin ki, jua nahin khela, kitaabein nahin bechi... He shows her the ICICI's Life Solutions hamare paas ICICI Health Insurance ka full health cover hai.” Apologetically, she embraces him, but then, having second thoughts, asks him, “Beta, premium ke paise kahan se aaye?” leaving Raju in a fix once again. Talking about why ICICI used a humorous viral for the promotion, Sujit Ganguly, senior vice-president, marketing, ICICI, says, “We have always conveyed our message differently from other health insurance Mother apologises, hugs Raju Page | 52
  53. 53. products. Most health insurance ads convey negative sentiments. The ICICI brand has never associated itself with negativism (in our ads). Our brand values are optimistic and none of the TVCs have any negative sentiment in them and we have taken that forward through this viral, which is a humorous take on the matter.” The animated video with stereotypical characters and dramatic storyline has been created by interactive agency Contests2win. The viral, which was launched two weeks ago, has received about 140,000 views till now, according to Raj Menon, COO, Contests2win. On how the viral is being promoted, Menon says, “Virals are seeded and then they take off by themselves. ICICI Prudential Life Insurance seeded the viral to their entire database, and from there, it has picked up like wildfire.” Commenting on why the agency has created yet another Bollywood spoof video, Menon says, “Every marketer knows that Bollywood and cricket rule the roost in India. Bollywood is known for melodrama. It is easy to pick characters and spin a twist in the tale. Users have to forward a viral to make it successful, which is the ultimate test of a viral’s success. I don’t think it is monotonous as there is no incentive to forward a viral other than the fact that the user actually liked it.” Ganguly adds that ICICI has been actively advertising on online media for the last six months, but declines to share the company’s ad spend on the campaign. “We want people to see the viral, have a nice laugh with it, share it with their friends and family and, of course, get the brand message we want to convey,” he says. Page | 53
  54. 54. ICICI PRUDENTIAL LAUNCHES JOB PORTAL FOR SENIOR CITIZENS ICICI Prudential Life Insurance has launched a job portal for senior citizens, www.dignitysecondcareers.org. The portal has been launched by ActivAge, an organisation formed jointly by ICICI Prudential and Dignity Foundation, a non-profit organisation for ageing people, which has more than 50,000 members across the country. The portal is for retired people above the age of 50 years, who are looking for a productive way to spend their free time. The job listings on the portal include both paid and voluntary work. Candidates can post their resumes on the site for a fee of Rs 100. Employers can access the resumes for jobs which suit the profile of the candidates. Some of the employers on the site are TM Cards Dot Com, DSK Legal and ICICI Bank. NGOs can also scout for volunteers on the site by placing their postings there. Though the portal has been created with a social purpose, it will charge fees from employers (a one-time registration fee) as well as employees (for accessing resumes). Advertising space has also been created on the portal in the form of banners. Shikha Sharma, managing director and chief executive officer of ICICI Prudential Life, who unveiled the portal in Chennai, said in an official communiqué, “The job portal will bring together companies that are open to enriching and benefiting from the rich experience of retired citizens, and senior citizens who are enthusiastic about pursuing careers post their retirement. We are confident that through this website and our other initiatives, we will be able to popularise the concept of re-employment of senior citizens in the country.” Page | 54
  55. 55. ICICI PRUDENTIAL LIFE LAUNCHES ABOUTULIPS.COM ICICI Prudential Life Insurance has launched a website called AboutUlips.com. This effort is not to gain leads or gather information on potential consumers; rather, it is an initiative to educate and inform consumers about unit linked insurance plans (ULIPs) in general. The website doesn’t disclose the identity of ICICI Prudential Life Insurance anywhere; neither does it say that the site is owned by ICICI Prudential Life. It’s only when a visitor closes the site, a separate window pops up, which says that the site is an initiative by ICICI Prudential Life Insurance. The visitor has the option to write and submit feedback on the site through this window. Speaking to afaqs!, Srinivas Balasubramanian, chief manager, marketing, ICICI Prudential Life Insurance says, “We purposely did not want to highlight ICICI Prudential Life’s association with the site. It’s because consumers perceive brand neutral information to be reliable.” However, visitors, who can identify the brand’s icon, Chintamani can make out that the site is part of ICICI Prudential Life. Chintamani helps visitors navigate the site. The information provided by the site includes an introduction to ULIPs, the type of insurance plans a consumer can opt for, the charges a consumer has to pay to get insured and steps to choose the right insurance plan. A glossary of insurance related terms is also available. Besides, the site offers insurance and retirement plan calculators and a ULIP related quiz and poll. Page | 55
  56. 56. Balasubramanian explains the strategy behind launching the site. “The core objective is to educate the consumers, considering that ULIP is a high-involvement investment product and a consumer is required to understand the product properly before investing in it. Also, volatility in the markets makes it important for investors to take the right investment decisions, which serve their long-term investment needs.” Developed by Interactive Avenues, the site was soft-launched in mid-September. No promotional activity has been carried out as yet to boost the traffic on the site. Speaking to afaqs!, Paurush M Sonkar, brand manager, digital initiatives, ICICI Prudential Life Insurance, says, “The site has received 8,500 visits and the average time spent by a visitor on the site is five minutes. On an average, users, who arrived on the site through a search engine, stayed there for 11 minutes.” Balasubramanian says, “We are planning to promote the site through search marketing and carry out a display advertisement campaign across 12-15 websites.” On making the site more interactive, Balasubramanian adds, “We will gauge the traffic on the site and once it reaches around 20,000- 25,000 visits, we will chalk out our interactive content strategy. We will figure out whether to provide Live chat and Message board features to the users or create a community around ULIP.” Page | 56
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