Diversifying life insurance

Marketing trends in the life insurance industry have seen a major shift in the last three years. Traditionally, direct selling played a major role, now however, print advertisements and TVCs are used extensively for awareness and image building.

This is because the positioning of insurance products has changed from ‘providing financial stability to dependents when you are no longer there’ to ‘a means of ensuring financial well-being for an improved quality of family life.’

According to industry experts, the shift in marketing communications is due to the fact that Pakistan’s life insurance to GDP ratio is one of the lowest among developing countries, standing at only 0.58% of GDP in 2016 (source: JCR-VIS Sector Update, June 2016). Therefore, creating awareness of life insurance policies, not only as a protection-based product, but as a savings and investment tool, is expected to expand the customer base. It is with this in mind that two major players in the market, EFU Life and Jubilee Life have diversified their life insurance portfolios and launched marketing campaigns to introduce their new products to the market.

The lion’s share of the life insurance market belongs to State Life (50%); Jubilee Life and EFU Life each account for 20% of the overall market, and the remaining 10% is shared between smaller companies such as Adamjee Life, Pak-Qatar Takaful, and IGI Life (source: JCR-VIS Sector Update, June 2016).

Life insurance companies earned a profit of Rs 798.6 million in the first quarter of 2016, which is an increment of 28.5% from the comparable period in 2015. Muhammad Ali Ahmed, Chief Strategy Officer and Executive Director, EFU Life Assurance, attributes this to economic certainty and industry-wide campaigns to increase awareness that have made the general public more receptive life insurance products.

Life insurance companies earned a profit of Rs 798.6 million in the first quarter of 2016, which is an increment of 28.5% from the comparable period in 2015.

M. Sohail Fakhar, Group Head Marketing, Corporate Business and Micro Insurance, Jubilee Life Insurance adds that “although State Life’s penetration in the market has been stagnant for a while, our company has seen an average annual growth of 35% in the last 13 years.”

This can be attributed to the fact that State Life offers the market a standard life insurance plan, with fixed maturities, that could only be claimed in the event of death or injury of the policyholder.

Breaking through State Life’s hold on the market required building a USP and this meant creating differentiation in the form of a diversified product portfolio. Market research was conducted to identify latent needs and this led to the formulation of cardiac savings, critical illness, education, retirement and wedding plans within the life insurance category.

“Such packaged plans make the product more relatable for the consumer and our portfolio now offers a product to cater to every life stage,” says Aman Hussain, Head of Marketing & Product Management, EFU Life Assurance.

According to Fakhar, child savings plans (education and wedding plans) have the greatest emotional appeal and are the most sellable products. Ahmed confirms this, stating that child financial planning solutions make up 75% of the company’s revenues.

"Child savings plans (education and wedding plans) have the greatest emotional appeal and are the most sellable products."

“To develop awareness, investment in marketing communication has been increased and we aim to maintain noise all year round,” says Zohaib Ayaz, Head of Strategic Planning, Prestige/Grey Communications, (Jubilee Life’s creative agency).

Referring to the recent campaign with Noman Ijaz, Ahmad Kamal Mir, Director Client Management, Prestige/Grey Communications, states that, “We were not looking for a celebrity endorsement, rather we wanted a credible icon who would fit into the profile of the bread earner targeted by Jubilee’s education, retirement and wedding plans – and Noman Ijaz fit the bill.”

The campaign was aimed at creating awareness and fighting off the general sense of procrastination that prevails in the market by urging the decision-maker to act now for his family’s secure future.

Similarly, the concept of Kamal (introduced in 2013 by EFU Life) was about doing something important for your family.

“The concept has evolved organically, beginning with humour to break the clutter and reduce the morbidity often associated with life insurance,” explains Kiran Murad, Creative Consultant, MullenLowe Rauf (EFU’s creative agency).

Information-based ads were later added to the mix, and the latest campaign is based on urging the bread earner in the family to act now for a secure future. Murad added that the ‘Kamal ki jeet’ tagline is used to target parents in the 35 to 40 age bracket to do a ‘kamal’ for their own and their children’s future.

Daniah Ishtiaq, Manager Planning, MullenLowe Rauf, makes another interesting observation, by pointing out that the campaign is breaking stereotypes “as the daughter is shown completing a degree (with the help of an education plan) while the son is getting married (thanks to a marriage plan).” EFU Life Assurance has also added the Nisa Savings Plan to its portfolio, specifically targeting working women and housewives.

To facilitate customers further, both companies have set up an SMS enquiry system, whereby, once a customer texts ‘Dost’ to 8398 (for Jubilee) or ‘Kamal’ to 9898 (for EFU), the customer’s information and preliminary requirements are recorded by the customer services department and the information is then directed to the relevant field officer to set up a one-on-one meeting.

The fact that both EFU and Jubilee Life have substantially increased their ATL budgets, and are advertising heavily on print, TV and outdoor, does not mean that the role of the insurance agent has become obsolete. Whether it is customer acquisition or cross selling a product to existing customers, Fakhar emphasises the importance of having the right sales force to ensure customer engagement. He takes pride in having the most comprehensive training programme in the industry, which has helped the company record the highest productivity rates compared to the competition. Hussain, on the other hand, believes that EFU’s 5,000+ sales force is an integral component of the organisation’s customer outreach and facilitation strategies.

Going forward, Fakhar’s view is that the huge untapped insurance market is ready to be explored and this makes competition irrelevant. “The market is open to be conquered,” he says.

Ahmed agrees that the future does indeed look very promising, mainly because almost 60% of the population is below 25 years of age. This presents a huge opportunity for marketers to inculcate a savings concept early on to ensure that once these individuals enter the workforce, they invest in various insurance plans.

“Inculcating a disciplined savings mechanism with a decent return at an earlier life stage can help our young people become less consumption-oriented,” he adds.