Life Insurance Marketing in India (C) The Changing Product & Pricing Norms

Product Innovations Contd...

The endowment policy for children at age 18 covered children aged between 91 days and 13 years, and policy would mature when the child is aged 18. The policy for children's endowment at the age of 24, covers children between age of 91 days and 15 years with the policy maturing at age 24. The policy endowment at the age of 60 covered individuals aged between 91 days and 50 years and the policy would mature at the age of 60. Maturity benefits under this policy included sum assured and terminal bonus. Having realized the untapped potential of the rural markets for insurance products, AMP Sanmar decided to target semi-urban and small towns by having product features simple and straightforward.

It also attached riders to its various policies, which did not feature in LIC's products. AMP Sanmar decided to keep its product strategy as offering simple life insurance solutions to individuals primarily aiming at wealth creation and risk protection.

Birla Sun Life also launched products meant for the rural population in order to capture a larger market share. It launched the Birla Sun Life Bima Kavach Yojana, a three-year single premium insurance cover available in denominations of Rs 50, 100 and 200, which offered 100 times the amount of premium paid in the event of death of the insurer. HDFC Standard Life stated that it would target the mass market comprised of retail customers in the low and medium income group for its insurance products.

The company also announced that it would concentrate on secondary and tertiary towns to reach out to a larger percentage of the population. The company's MD, Deepak Satwalekar, said, "Our studies have shown that there is a high level of economic activity in these towns and the potential for encouraging savings exists."

According to company's sources, in the first year of its operations, company set up branches in 12 cities in the country, which included metros and mini-metros. HDFC Standard Life also announced that it would design special products for targeting the rural markets and the socially underprivileged sections. HDFC Standard Life also strengthened its relation with over 90 non-government-organizations (NGOs)⁴ in order to determine what kinds of products would best suit the rural population. It had already decided, in association with various NGOs to provide insurance cover to over 1,000 families in the economically weaker section of the population of Karnataka, with low interest housing loans provided as riders to the policies.

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4] NGOs work independently towards enhancing the living conditions of the weaker and deprived classes of the society.
They are generally funded by international organizations such as World Bank and United Nations Organizations bodies.

Case Details

Case Code : MKTG028
Themes: Pricing
Case Length : 14 Pages
Period : 2000-2002
Organization : ICICI Prudential, Max New York Life, ETC
Pub Date : 2002
Teaching Note : Available
Countries : India
Industry : Insurance

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