Advertising and Sales Promotion

Amity Business School

Presented by:

Akash Pandey(D25)

INSURANCE SECTOR ADVERTISING


• The meaning of Insurance is important for understand for anybody that is considering buying an insurance policy or simply understanding the basics of finance.

• Insurance is a Hedging Instrument used as precautionary measure against future contingent losses. This instrument is used for managing the possible risks of the future.

• In the words of justice Tindall, “Insurance is a contract in which a sum of money is paid to the assured as consideration of insurer’s incurring the risk of paying a large sum upon a given contingency.”

The Meaning of Insurance

Amity Business SchoolHistory of Insurance in India

http://www.medindia.net/patients/insurance/insurance-concepts-and-irda-history.htm

Phases Period Industry

Phase 1a.Life Insurance

b. General Insurance

1818 to 1956( about 138 yrs)

1850 to 1972(about 122 yrs)

Many (245) private sector companies only.

Many (107) Private sector companies only.

Phase 2a.Life Insurance

b. General Insurance

1956 to 2000(about 44 yrs)

1972 to 2000 (about 28 yrs)

Nationalization, public sector or state monopoly, only one company.

Nationalization. Public sector monopoly, only 1 company.

Phase 3Life Insurance and General Insurance

After 2000Opened to the entry of private domestic and foreign companies, mixed sector of public and private sector units.


History of Insurance in India contd…

•1818 First life Insurance company “ Oriental Life Insurance company (in Calcutta).

•1850 First general insurance company “ Tritan Insurance Company (in Calcutta).

•Till 1956/1972 life and general insurance industry grown in terms of number of companies (life 245 and general 107 with complete private sector ownership), the volume of premium, investible resources, and so on.

•The insurance was regulated through the Insurance Act, 1938.


History of Insurance in India contd…

•In 1956, 245 Indian and foreign life insurers and provident societies were nationalized, and new single entity namely “LIC” was established by passing the LIC Act, 1956.

•Similarly, in 1972, 107 general insurers were nationalized through the passing of general insurance Business Act, 1972.

•The existing 107 insurers were amalgamated and grouped into 5 companies, viz., National Insurance company (NIC), New India Assurance Company (NIAC), Oriental Insurance Company (OIC), United India Insurance company, and General Insurance Corporation.

•Then insurance industry transformed into monopoly and oligopolistic state or public sector insurance industry in India.


AWARENESS CAMPAIGNS BY INSURANCE COMPANIES

1.Stimulating the need for insurance.

2.Under insurance

3. Financial Independence

4. Insurance is a Long Term Savings

5. Trust & Transparency

http://canirmalg.files.wordpress.com/2013/01/few-perspectives-on-indian-insurance-

sector.pdf


Comparison Between public & private sector• only endowment and money back policies were popular among

consumers.

• focused on providing customized products, products that contain innovative features to the customers created favorable demands for other type of policies like tern insurance, child plan, pension plans and unit linked insurance policies.

• In oct.2000, IRDA issued license paper to three companies, which are HDFC Life Standard, Sundaram Royal Alliance Insurance Company and Reliance General Insurance.

• At the same time “Principal approval” was given to Max New York Life, ICICI Prudential Life Insurance Company and IFFCO Tokio General Insurance Company.

• Today total 22 life insurance companies including one public sector are successfully operating in India.



MARKET SHARE OF PUBLIC AND PRIVATE INSURANCE COMPANIES

With the opening of insurance sector in India, the share of private insurer was very less.

Total share of private insurer was just 2% in 2001-02. It was because of any reason which includes credibility on private players.

Insurance sector

2001-02

2002-03 2003-04 2004-05 2005-06 2006-07

2007-08

Public 98 94 87 78 73.66 65.28 59.65

Private 2 6 13 22 26.34 34.72 40.35



• It is because of innovative & customized products, novel distribution channels, aggressive marketing etc.

• Private players gave a tough competition to public sector company (LIC).

• Gradually, the market share of private insurer went up and till financial year 2007-08, total share of private insurer reached as high as 40.35%.

• The market share of LIC decreases after the entry of private insurer but it doesn’t mean that the growth of LIC got down. LIC continue its growth even after a cut throat competion from the private players.

• Total revenue generated in 2007-08 by LIC is 149783.99 crore against just Rs.51561.42 crore, generated by all 21 private players.

• It shows that even after opening of insurance industry and heavy competition from the new entrant, LIC observed a continuous growth in its revenue generation.


• A key catalyst in the Indian insurance market growth has been the entry of private players in2000-01.

• With the entrance of private players and foreign collaborations, penetration of insurance sector in India has gone up from 1.02% in 1999-00 to 4 % of GDP in 2007-08.

• Life insurance business in India grew by 14.2 per cent in US Dollar terms in 2007-08.


ADVERTISING AND PROFITABILITY.A CASE STUDY OF SELECTED INSURANCE

COMPANIES

The research examined the effect of advertising on profitability of insurance companies. This was because of the low return reported by insurance companies as a result of low service awareness by the clients.

The study also realized that the major role of advertising is to restore customer awareness for the services provided by insurance companies in order to increase revenue. From the study, it was recommended that insurance companies should set advertising objectives and classify them as whether they are going to inform, persuade or remind. In this area the choice depends on the current market situation.

http://cees.mak.ac.ug/sites/default/files/publications/ADVERTISING%20AND%20PROFITABILITY.pdf


Overview of Insurance Sector advertising in Print during FY 08 -09

• Print Advertising of 'Insurance Sector' has seen growth of 3% during the FY 2008-09 compared to FY 2005-06.

• 'Life Insurance' sector gathered 70% share of overall 'Insurance Sector' Print ad pie during FY 2008-09.

• 'LIC' leads in Print advertising of 'Insurance Sector' during the current fiscal year.

• 'LIC Jeevan Varsha' topped the list of new brands of 'Insurance Sector' advertised in Print during current fiscal year.

• More than half of the 'Insurance Sector' advertising on 'Non Metro' Newspapers during FY 2008-09.

http://www.exchange4media.com/e4m/others/analysis240409.asp


Volumes Growth of Insurance Sector in Print during FY 2008-09

During FY 2008-09, 2% decline in Print ad volumes of 'Insurance Sector' compared to FY 2007-08.


Contribution by the Sub Sectors of Insurance Sector in Print during FY 2008-09


• During FY 2008-09, advertising of 'Life Insurance' and 'Non Life Insurance' sector was in the ratio of 70:30.

• 'General Health/Accidents Insurance' contributed the highest (58%) of overall 'Non Life Insurance' sector advertising in Print followed by 'General Insurance' and 'General Agriculture Insurance' with 30% and 5% share respectively during the current fiscal year.

http://www.exchange4media.com/e4m/others/analysis240409.asp


Top Advertisers of Insurance Sector in Print during FY 2008-09

Amity Business SchoolBIMA BEMISAAL –The Insurance

Awareness Campaign of IRDA

'Bima Bemisaal' is the brand name for IRDA's insurance awareness campaign.

It is a consumer education initiative and has the tagline "Promoting Insurance. Protecting Insured“

Bima Bemisaal educates policyholders about their rights and obligations and informs them about the complaints resolution methods available to them. It also creates awareness about insurance among the general public.

The Bima Bemisaal campaign uses various media like print, radio and television. This website is also part of the Bima Bemisaal initiative.








Amity Business SchoolConclusion

• Insurance companies must advertise just like any other company with a product on the market. This increases the awareness of the insurance company's brand and makes it more recognizable to potential customers. Insurance is not a tangible item; it is more of a concept and a promise to pay in the event of a claim.

• Because of this, it makes advertising for insurance more difficult. Advertising for insurance is more about making a personality for the company that clients can relate to, or by portraying the feeling of having a claim paid or feeling safe and protected. Also, insurance advertising can turn insurance into a commodity and portray the insurance company's brand as being the most cost-effective.

http://voices.yahoo.com/marketing-advertising-insurance-companies-6266538.html


THANK YOU

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