Did you know that the penetration rate of life insurance in India is as low as 6 percent while that of general insurance is an even poorer 0.6 percent?
With rising medical expenses, no end to metro construction accidents, an active crime spiral and an unexplainable increase in the number of natural calamities over the last year, the need to have a good insurance cover seems to be becoming even more paramount. So then why, is such a vital product being so perilously overlooked and how is the government trying to change this?
Well for starters – education and awareness. Very few people know about the benefits of insurance as a product. They see it merely as paying a costly instalment for something that they may or may not require in the future, and hence consider it a pointless gamble. People would rather ‘save-up’ themselves, in case of an emergency. Keeping that in mind, companies have only just begun to realise that simply calling up and pushing an insurance policy is not going to work. Big agencies have begun to sit down with potential customers, understand their needs and come up with insurance solutions. Customers are invited to workshops, seminars and even sponsored events like MaxNewYorkLife’s Tambola night at the DCWA Club; where they subtly come to realise the benefits of insurance. Insurance companies have also begun spending large sums of money on advertising to generate awareness; either scaring the viewer into a ‘what if this happened to you’ situation or playing upon their insecurities about the future, like HDFC’s ‘Sar utha ke jiyo’ ad. Either way, the viewer is jolted into thinking about an insurance cover.
Next, insurance companies are realising the need to broaden their circle. There is a virtually untapped rural India market that accounts for nearly 70 percent of our entire population. Here, life insurance and health insurance are unheard of concepts. In a bid to reach out to even the most remote village, the Government has started running rural awareness programmes around the benefits of insurance and introduced a number of unique schemes to suit villages. Some of these schemes include policies as low as Rs.25 and Rs.15!
Furthermore, with the Government easing up on insurance sales and vendors, big-time retail partners like banks are now allowed to sell more than just one brand of insurance, leading to improved quality, better products and most importantly, customer choice. The Government has also made possible ‘monoline’ sales agents, who upon completing a 25-hour training module with the insurance company, can retail their products. So, don’t be too surprised if your local medical shop suddenly advises you to take a personal accident cover or if you are offered a home insurance cover by your neighbourhood grocery store.
Lastly, since insurance is all about repeat-business, referrals and after sales service. So if you don’t have a strong back-end, nobody is going to believe the front you put up. With the opening up of many private ‘third-party-vendors’, insurance companies are no longer bound to stick with sluggish back-end operators whose ineffectiveness earns the company a bad name.