Wednesday, March 06, 2013

Why insurance means “need-based” selling?

Director and Chief Marketing Officer, Max New York Life Insurance, speaks to Steven Philip Warner and Manisk K. Pandey about the company’s segmentation, advertising and differentiation strategies and on why insurance means “need-based” selling.

B&E: There are a host of private life insurance players in India, which offer undifferentiated products under different brand names. How does MNYL strive to be unique in the clutter?
AM: If you have a product which emanates from a consumer’s need, you have your differentiation done. Our Shiksha Plus product is my favourite case in point. Typically, if you say that people are buying child insurance policies, people are not looking at merely insurance. The predominant consumer trend is that of parents wanting to groom their children as all-rounders and not just academic super-achievers. In other words, the consumers typically want a “talent development” kitty and not just a lump-sum for their child’s education. It is this very consumer insight that led to forming the contours of our leading child insurance product – Shiksha Plus. We added features in the product like ‘talent enhancement withdrawals’ – which can be used by parents/children to nurture any special talent that the child posses or wishes to develop. Also, there was need felt amongst parents to be able to add their second child into the same plan without the hassle a completely new policy altogether, hence we introduced the feature of ‘sibling upgrade’ within the plan. Now, these represent just two of the pluses we offer with the Shiksha Plus. We therefore use consumer insights as a differentiator to create relevant products.

B&E: MNYL is quite an aggressive advertiser too. Do you believe that advertising pays off in the life insurance industry?
AM: That is a typical dilemma question, because people say that insurance is sold and never bought. In insurance, up to the consideration stage, the brand funnel remains the same as for an FMCG brand. There needs to be awareness, familiarity with the contours of the product and you need to make it to the consideration set. So, advertising has to play the role to take your product into the consideration set. After that, sales take over. Therefore, advertising works for every industry, be it insurance or retail.

B&E: MNYL is planning to come out with a new marketing campaign in October? Will it be product centric or will it target a certain category?
AM: It’s a little too early to say much on it, but yes it will definitely not be product centric. Rather, it would be category centric. We have decided to keep child as the focus. Insurance fulfils multiple needs; protection, long-term savings, risk-cover, saving for your child’s future and even saving for your own retirement. We have however decided to focus on children and their needs, at least in our marketing efforts, as that ties in well with our segmentation strategy and long-term business goals.

B&E: What has been the response to your rural initiative, Max Vijay?
AM: Max Vijay was an innovation and innovations take own time to fructify, to be understood and to be learnt, before you are ready to scale them up. So, we are still in that phase where we are actually working on refining this innovation. But various aspects of it have been very successful like its top-up plan. In fact, 25% of Max Vijay policy holders topped-up at least once and that too, without an agent approaching them. It’s our continuous efforts that have helped us build an army of 97,000 Max Vijay customers.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

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