At only two percent, Pakistan has one of the lowest general (non-life) insurance penetration rates in the world (Source: Pakistan Credit Rating Agency, 2013). It is in this environment that Adamjee Insurance Company Limited (not to be confused with Adamjee Life, a sister concern that offers life insurance) has launched two marketing campaigns within the last two years to capture the untapped potential of the general insurance sector.

The Insurance Association of Pakistan (IAP) estimates the value of the non-life insurance sector to be Rs 23 million in terms of the net premium underwritten (IAP Yearbook 2012-13); EFU is the market leader with a 52% market share and Adamjee Insurance is a close second, controlling approximately 43% of the market.

The general insurance products available for corporate and individual customers in Pakistan include fire and property (40% market share), followed by motor (23%), miscellaneous (includes health) at 22%, and marine (15%) (Source: Pakistan General Insurance Sector Report, 2013). The size of the health insurance sector has increased significantly (approximately 18% from 2010-13), since most companies offer it as part of their benefits package.

Despite a 16% growth in general insurance (Source: PACRA Yearbook, 2012-13), market studies conducted by IAP between 2011 and 2013 reveal that there is a potential to increase the market value by one billion rupees.

According to Zehra Faiz, Head of Retail Sales and Marketing, Adamjee Insurance, this can be accomplished by “increasing penetration of general insurance products in the metros – Karachi, Lahore and Islamabad – and increasing awareness in the smaller urban and semi-urban centres of Pakistan to increase the size of the pie.”

General assurance: Adamjee’s new campaign positions insurance as ‘future planning for your peace of mind’.

Although general life insurance products have been available in the market since the 1950s (EFU was the pioneer, followed by Adamjee in the 1960s), promotional and image building campaigns were limited to ‘beema’ or life insurance only. Faiz says this is because “the market was non-existent; there was no concept of having car or health insurance, and it was only a handful of multinational companies which understood the importance of insuring their assets and were consequently willing to incur the added costs of insuring their assets.”

General insurance companies therefore, relied on regular visits to potential clients (corporate and individual) and particularly the personalised relationship between the insurance agent and the clients, to influence purchase behaviour.

The shift in advertising focus from ‘life’ to ‘general’ insurance was prompted mainly by the active role played by the two key regulatory bodies governing the sector; Securities and Exchange Commission of Pakistan and IAP. Insurance compliance regulations for corporations were implemented (Insurance Ordinance, 2000), making general insurance mandatory and/or advisable for certain business processes and this in turn helped insurance companies streamline their processes as well as overcome the ‘traditional distrust and misconceptions’ of people regarding insurance claim settlements.

Increasing demand by corporate executives, who, as a result of global trade partnerships and import and export activities, had gained awareness of international insurance practices, combined with the increasingly volatile law and order situation, not to mention the destruction to property and livestock caused during Pakistan’s worst ever natural disasters (the earthquake in 2005 and the floods in 2010), combined to create widespread interest in general insurance products.

With these market dynamics in view, in May this year Adamjee Insurance launched a second corporate insurance campaign, targeted at organisational decision makers (conceptualised by Spectrum Y&R). This campaign saw a strategic shift in positioning compared to the 2013 campaign (designed by Interflow Communications).

While general insurance products have traditionally been positioned as providing protection against operational hazards, accidents and natural disasters (this was also true of Interflow’s 2013 campaign), in the new campaign the emphasis shifted from ‘insurance providing a cover against all things that can go wrong for a business’ to ‘future planning for your peace of mind’.

According to Waseem Sajid, Senior Creative Manager, Spectrum Y&R, “This was a deliberate strategy to move away from negativity and focus on the positives of insurance. The objective of the tagline ‘Claim the future’, was to convey the message that with Adamjee as your insurance partner, companies can undertake ambitious projects, pursue their mission and vision, and go about their business without anxiety or fear of the future, as their assets and interests are being looked after.”

Faiz adds that the timing of the campaign was significant as well because May and June are the peak policy subscription and renewal periods in the insurance industry. Apart from the positioning change, the campaign was directed towards increasing brand recall among existing customers to renew their policies, as well as attracting new customers.

Print, outdoor and radio were the media platforms used for the campaign. Adamjee, however, has not yet used television advertising for its corporate campaigns, because according to Sajid, “research through focus groups and surveys revealed that our target audience does not watch a lot of TV. The brand was given maximum exposure through running radio spots early morning and evening when people tune in to radio while driving to and back from work and displaying our billboards at primary thoroughfares in the cities.”

Insurance companies (just like financial service providers) have to rely on the quality of the services provided to their clients in order to differentiate themselves from the competition and build customer loyalty. This is all the more important because the cost of insurance has reached a plateau and premium rates are approximately the same across the board, due to the highly competitive market. Moreover, the target audience is educated and well aware of the numerous options it has, and without speedy, effective and efficient service, there will be no renewals or retention.

As a result, says Faiz, a key objective of the campaign was to change market perception that there is a long waiting period between the date of filing a claim and the time when the client receives the settlement. She adds that “our tagline ‘Claim your future’ would not have resonated with customers unless it was substantiated by policy changes that would speed up the settlement process.”

To make this change, Adamjee Insurance set up a separate department for claims in 2013. The department was also responsible for monitoring the company’s compliance with various policies in order to minimise processing and payment delays. Similarly, as part of its customer relationship management strategy and to increase customer engagement, Adamjee became the first insurance company in Pakistan to establish an in-house call centre to work together with the claims department. Customers who want to file a motor insurance claim, for example, have the option of calling the call centre, and within an hour an insurance surveyor is appointed and assigned to their case. Additionally, customer service representatives provide periodic, case and claim processing updates via email and SMS as the case progresses towards final settlement.

These changes have improved service efficiency and the prompt intimations have been appreciated by clients. Currently, the services are limited to the processing of motor insurance claims only, but the management has targeted 2015-16 to bring the remaining categories online as well.

Improvements in insurance services – the call centre is only one initiative – in the larger cities, and increasing awareness of insurance products in the more remote areas are the two areas of focus for Adamjee Insurance in the company’s quest to expand its share of the pie. The primary challenge is the lack of education which makes it difficult to connect with rural populations in particular (65% of Pakistan’s population is concentrated in the villages) and explain why they should spend their limited income on obtaining insurance coverage for their farms, crops or livestock.

Another untapped area of business that Adamjee Insurance is looking to venture into in 2015 is Bancassurance, i.e. partnering with banks to offer customised insurance plans for individuals.

Faiz adds, “The true potential of the general insurance sector in Pakistan can only be realised when literacy rates improve and when corporations and individuals develop a basic understanding of why buying insurance is a smart choice.”