Health Insurance: A Push Or A Pull Product?
A very wise man once said, “Health is Wealth”. However, looking at the current scenario it seems that the Indians haven’t got this proverb right. If there is one segment in General Insurance category which went unattended till now it’s the Health Insurance sector.
Then why is it that suddenly all the General Insurance companies are gearing themselves up for an upcoming battle to win market share in this segment? Why are dedicated Health Insurance companies popping up?And,finally,why exactly there is a sudden slew in number of diverse health policies targeted at specific segments being designed and marketed.
Well to start off,let’s get our statistics in place. According to the annual report of IRDA 2010,the Non-life insurance penetration stands at 0.70% in 2010.Now because of latest IRDA regulations like lifting up of CVP pool, the insurance companies have started to realize that the motor insurance business is not going to be sustainable and profitable in the long run.Hence the whole focus has shifted majorly on health business considering the low penetration where everybody is framing new strategies to get that major proportion of unattended market first. Because of this realization, the health insurance sector has been the largest growing segment amongst all insurance categories lately.
Now, since we know the reason behind pushing health insurance business,we should get into the details of how several companies are going about that. These companies are designing policies for various segments,advertising and distributing them in innovative ways
They have divided the market into several demographic segments like age,life stage,annual income,gender etc.However, what is interesting to note that some insurance companies are breaking throughthe conventional ways of segmenting insurance target population.They are trying psychographic and behavioural segmentation too.As far as age or life cycle is concerned, we have products for young,single and working class or the family cover policies offered at different options of sum insured targeted both for the middle and the upper middle class families or the policies for the senior citizen with higher premiums to cover the risk attached with issuing such policies.
Recently companies like Bajaj Allianz and TATA AIG also came up with products targeted at confident, independent and health conscious women through the women critical illness policy. Though this product hasn’t been advertised much except Bajaj Allianz’s “What would Aditi do with Rs 1000” TVC,it has a lot of potential.What I feel is that other than targeting the women,these insurance companies could have also targeted the married male segment by asking them what can they do to extend their wedding vows to the women of their lives?It could have cashed on the emotional aspect of their life partners by making them more concerned about their wives’ health.
As far as congenital diseases are concerned most of the insurance companies are wary of covering them(Except the Woman critical policy of Bajaj Allianz which covers 50% of the expenses).However,Star Health, one of India’s standalone health insurance companies came up with a policy which is focussed at covering congenital diseases especially for the new born babies.They have also marketed it amazingly by naming it as “Star Wedding Gift” and trying to advertise it as something to gift your near ones on their weddings.Now that’s a new concept yet to imbibe people’s mind with. However, if this habit of gifting health insurance is made a common practice, health insurance penetration figures won’t be so dismal after all.
Moving on from demographic to psychographic segmentation we have health policies designed by another standalone health insurance company-Max Bupa,targeted towards the joint families.These health policies have coverage of maximum of 13 relationships and 50 family members which is of its own kind.We will jump into conclusion if we say that these policies won’t manage to get market share because joint families don’t exist in today’s fast,urban life.
But we should also keep in mind that this is a very good way to attract the rural and suburban market since many people still live as joint families there. It’s also a great idea because the rural and suburban population need to be made aware about the benefits of health policies to increase the insurance penetration.Also, the insurance companies can have a large customer base through a single policy and the word of mouth advertisement will also be able to gather more sales volumes for these companies.The USP of this policy for the nuclear families is to get connected with their near and dear ones through a single coverage and reach out to one another in times of need.
According to me, a good psychographic segmentation would a health policy designed for the rich premium segment where the sum insured would be very high. This would be catering to the self-esteem needs and exorbitant medical chargesof high net worth individuals who get admitted inhigh profile hospitals.
Coming into behavioural segmentation,HDFC ERGO has also started to cover ayurvedic treatment expenses in their coverage catering to the needs of the population who believe in ayurvedic medicines rather than allopathic ones.
Now, let’s move on to their marketing strategies. Though we haven’t seen much advertisement focused to health insurance, the ones by the standalone health insurance companies lead others in this aspect.
We can see ads of Max Bupa trying to make people concerned about the health of their near and dear ones by taking a “Health Promise” through Max Bupa Health insurance.Whether it is the concern of a father when he learns his son is searching “how to quit smoking” online and his embarrassment when he learns he is doing it for his father and not him or the quintessential Indian wife not letting her husband have “gulab jamun” because of health concerns,these ads manage to emotionally connect with the people which would motivate them to get interested about the health insurance benefits and avail them.
So when Max Bupa decides to address the health concern issue through their advertisements,Apollo Munich advertisements address the “features” related concerns of a policy. In its “Let’s uncomplicate” TVC,it addresses how it eases the process of understanding a policy,and the complications of hospital treatment and medicine related benefits.Its “Love actually” TVC projects the importance of renewable till death feature by showing a couple right from their teenage to old age, still there for each other.Its cashless at chemist ad shows the feature where you could buy medicines by showing your health card.
The general insurance companies fall short of this creativity and diversity when it comes to their TVC’s of Health insurance. Though there have been few ICICI Lombard TVC’s on family coverage or health policy advantage,they are too general and fail to attract the customer’s concerns about fears over policy complexity,claim hassles or specific features of policies.Bajaj Allianz,another leading general insurance company doesn’t have much advertisements dedicated to health yet.
Star health undertook an innovative approach on “World Diabetes Day”,2011in Thiruvananthpuram,Kerala by organising a flash mob where all officials including the senior ones held a rally with placards and wearing t-shirts with “World Diabetes Day”printed on them. They were walking around several high traffic areas of the city and handing over pamphlets to passers-by’s making them aware about the disease.This approach of Star Health showed the potential clients how much concerned it is about their health and their readiness to hold their back in times of need.This gesture can win customer buying intention which if properly nurtured through hassle free claims service and renewal notices can achieve customer loyalty too.
As far as distribution of health insurance is concerned majority is done through agency and banks. However, in order to reach out to more customers, new distribution channels like gyms and fitness centres,pharmacies(Over the counter health cards),health magazine subscription, mobile connection services etc. are yet to be tested. Max Bupa is tagging itself with the health blogs and health related websites to get health conscious customer’s attention. Companies have started to look for dedicated health insurance agents in hospitals’ TPA desk handlers, people running spas and fitness centres,poaching from other companies etc.Existing agents are motivated to sell health insurance either through sales pressure or incentives through several campaigns.
Looking at the vast range of strategies adopted by the insurance companies to increase their market share in health insurance sector, its sure is going to get competitive.With the whole focus on products,advertisement and distribution,one shouldn’t forget that it’s a service industry after all. Hence, along with innovating on policy, advertisement and distribution, companies will also have to strengthen its relationship with agents, banks etc. The one which automates and improves underwriting, claims processing,customer grievance addressing and works on customer touch points promptly will emerge as the winner.
This article has been authored by Sayantani Mazumder from GIM.
Image: FreeDigitalPhotos.net
