In India, less than 20 per cent of the population has health insurance coverage, according to reports from 2015. But more alarmingly, only four per cent out of that 20 per cent actually buys health insurance themselves and this despite an increase in the number of policies sold.
â€śOnly four per cent of population actually buys health insurance from a private or public organisation. The rest of the coverage that you find is through the government or through the employer-employee relationship,â€ť said Nandini Ali, CMO, Apollo Munich Health Insurance Company.
The reasons for such low coverage percentage range from ignorance to fear. Historically, people in India have been wary of health insurance due to long-held perceptions and bad experiences.
â€śThe IRDA or other such authorities werenâ€™t around back then but it is a completely regulated sector now but the perception that insurance companies just take premiums and donâ€™t pay claim is very strong even now,â€ť said Ali.
Another reason that Ali pointed out was the lack of presence that insurance companies have on traditional mediums like television. Calling it a chicken and egg situation, Ali explained that insurance companies do not feel putting huge monies behind ATL marketing like a television commercial will make any difference in sales.
â€śCurrently, people are not seeing the value behind a six-eight weeks campaign because television costs a lot. So, getting a 500 GRP would mean that one would have to set aside Rs 15-20 crore just for a month. A lot of discussions are happening in different forums where individual representatives of insurance companies have come together and said that this is a challenge that needs to be addressed as a sector and not as an individual company. No single insurance company can actually foot the bill of creating that awareness, it has to be a collective effort,â€ť said Ali.
Ali also stressed the fact that how important word-of-mouth is for a category like this and how their newly coined purpose and ad film will help in building trust for the brand.
â€śThe underlying pillar of our marketing strategy is largely centered around creating consumer and partner loyalty. In order to create brand loyalty for our distributor we are completely inclined towards word-of-mouth publicity. The experiences of policy holders make or break the reputation and businesses of companies in this category. So, in order to achieve that trust one can take the route of creating brand loyal ambassadors, people who are using our products and are associated with us,â€ť said Ali.
AMHIâ€™s new ad film is a digital film that tells the story of Mohanachandran C, an advisor with Apollo Munich Health Insurance. Mohanachandran, who lost his eyesight, did not let that detail of his life come between him and his will to live. He persisted and persevered and today as an advisor with Apollo Munich Health Insurance, he helps others make the right and important choices that might one day save their lives too.
Speaking about their marketing strategy, Ali said that it largely depends on their product but that they are BTL skewed.
â€śAs an organisation, the strategy that we had taken with respect to the consumption of our brand and marketing budget is largely centered around the distribution set-up and therefore, we do a lot of activities in the BTL format. Our marketing strategy also largely depends on the products that we need to push for the year. Last year, our marketing budget was divided between BTL, digital and PR in a 60-20-20 ratio, 60 being BTL,â€ť said Ali.
While the fact that only four per cent of the countryâ€™s population buys insurance is a challenge in itself, Ali pointed out that only 1.5 per cent buy health insurance online. While these statistics are definitely a challenge for any industry, Ali also looks at it as an opportunity.
â€śThis is obviously a huge opportunity for players like us and new generation organisations who are looking to maximise on digital and digitisation. The challenge comes in because historically, insurance in India has been very traditionally done. People are used to seeing insurance in a traditional and transactional format. So, there is a huge mind shift that needs to happen. It is important to inculcate trust in the digital medium because even cumulatively for the entire segment to reach out the districts and villages of India is a huge challenge.â€ť
AMHI realises that people want ease when buying health insurance and quick and better services. Therefore, they have come up with something called digital offices.
â€śWe have developed a tablet and mobile operated solution and this is not contingent to a city or a place. If this tool is available with my agent sitting in Bhatinda for example and if they have internet connection, he/she will be able to make the sale happen from there itself and issue the policy within seven minutes,â€ť said Ali.
Today, AMHI has 158 brick and mortar offices and 68 digital offices.
AMHI has had a CAGR growth of 22 per cent for the last five years, whereas the health insurance industry has shown a CAGR growth of 18 per cent for the last five years. While, Ali agrees that Star Insurance is ahead of them in terms of market share, she believes that in terms of mind share AHMI comes on top. AHMI holds a market share of 4 per cent in the overall health insurance segment and a market share of 22 per cent in the standalone health insurance segment.
According to Ali, North and West are their strong markets but the awareness and penetration of health insurance in rural areas is abysmally low.
AHMI is also trying to build a strong foothold in tier II and tier III cities.
â€śIn our strategic expansion programme, for the last two years, we have expanded largely in the tier II and tier III cities. If you take last year, we opened 50 offices in these tier II and tier II cities,â€ť said Ali.