CHAPTER-5

ADVERTISING OF INSURANCE PRODUCTS

5.1 Insurance Advertising

5.2 Insurance Agency Advertising

5.3 The changing and promotion norms

5.5 Appeals on Emotion to buy Insurance products

5.5 Guidelines on Advertisement, Promotion and

publicity of Insurance companies and Insurance

Intermediaries

5.6 Growth chart of Insurance Advertising

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INSURANCE: "Insurance is a contract between two parties whereby one party called insurer

Undertakes in exchange for a fixed sum called premiums, to pay the other party

called insured a fixed amount of money on the happening of a certain event.

"Insurance is a protection against financial loss arising on the happening of an

unexpected event. Insurance companies collect premiums to provide for this protection.

A loss is paid out of the premiums collected from the insuring public and the Insurance

Companies act as trustees to the amount collected. For Example, in a Life Policy, by

paying a premium to the Insurer, the family of the insured person receives a fixed

compensation on the death of the insured. Similarly, in a car insurance, in the event of

the car meeting with an accident, the insured receives the compensation to the extent of

damage. It is a system by which the losses suffered by a few are spread over many,

exposed to similar risks.

5.1 INSURANCE ADVERTISING

Insurance Advertising is done by companies that provide the facility of insurance. They

do so in order to attract attention of the customers and utilize them. This helps them to

increase their profit percent and take their company to greater heights. They launch

several attractive schemes to do so. Insurance Advertising encourages brokers and

sellers to earn for them by selling more and more insurance products of their company.

They try to convince the Customer and fulfill their demands and provide services

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according to their need. Satisfaction of the customer is the utmost policy in this field of

Insurance Advertising. They use various methods to attract attention which may include

media, banner display, visual interaction, etc.

Product advertising describes the benefits from the product that it will give after it is

being taken into consideration. Insurance Advertising also used as Institutional

Advertising. It describes the financial strength and stability of the company. Companies

advertising may be national, local or corporative; it entirely depends on the target of

market and size.

Insurance Marketing Strategies

A very common way to promote a Insurance company through Insurance Marketing is to

make the name of the company familiar to others by means of television commercials,

handling out pamphlets, hanging banners in populated areas and by providing exciting

offers.

Telephone marketing is another way of Insurance Marketing. One can see the telephone

companies' directories and send messages about various offers and they even make phone

calls. Web Insurance Marketing is another good strategy to promote insurance policies.

The pop ups that one sees while using Internet are actually a very effective way of

sending messages across the potential insurance customers.

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One should listen to the existing Insurance Policy Holders as well as the potential

insurance policy holders and listen to what people who actually matters have to say. One

common problem that the insured persons face is that the insurance companies do not

inform its clients about the hike in the premium rates. These things should be kept in

mind. Not only that, a client should be informed about everything related to his policy

and the Insurance Company should keep the transparency as much as possible.

• Community Insurance Marketing is another different way to get promotion and a

high recognition for the Insurance Company. Eminent workers join local community

institutions, such as Chamber of Commerce, and by signing up there, one can help

various projects that take place. These kinds of activities and social works on behalf of

the Life insurance company helps the company to get free publicity as their names are

published in news paper and in media also. Doing charity works also helps the Insurance

companies to come across various people who act as volunteers and can act as their

potential Insurance clients. People also like to deal with like-minded people and

companies and this is how many deals are made.

Insurance Company should not charge different premium to different client for the same

policy. This kind of policy gives the insurance policy holders the feeling that they are

being treated unfairly and that the Insurance companies are only looking for profits and

not the betterment of customer welfare.

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When an Insurance claim is filed, especially for a very big hefty amount, the Insurance

Company should help the policyholder in processing out the paperwork. One should not

let bureaucracy enter and make it so difficult for the one making the claim so that he

gives his claim .This has always been a common tactic on the insurance company's part

to avoid paying claims claimed by the policyholder. This though makes a short-term

profit for the company but it hurts in the end as the reputation of the company is

hampered severely.

People in this insurance industry should always try to keep in constant contact with the

existing customers as well. The competition in the insurance market is so tierce today

that no company wants to loose out on a customer to another company. Clients who are

not contacted for a longer period normally fail to remain loyal to the insurance company

and look for a different insurance company. The company can keep the records of the

clients birthday and days like anniversary and sent him or her small tokens of love or

loyalty at a regular basis. If the company can afford a little more it cm send dinner

coupons to the Life insurance policyholder. These things play a major role and can be

considered as an effective Insurance Marketing strategy.

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5.2 INSURANCE AGENCY ADVERTISING

Insurance Agency advertising can help to pick an agency for customer Insurance needs.

The advertising will let customer knows where they are located . One might not have

known that there was a location right down the block (torn your job or home. Seeing the

advertisement on a billboard,' flyer or postcard helps to bring this information to

consumers.

Advertising business is crucial to widening and expanding business and educating local

residents on services.

Insurance Agency advertising is a business expense that really pays off for the insurance

companies. Many agencies advertise about multiple policy discounts. Having home,

health, life and car insurance policies with one company can actually save the money.

Insurance companies offer a percentage discount for this as well as for many other

things. These agencies work like intermediaries.

Banks, NGOs, panchyats allowed selling insurance

The government has notified major amendments to insurance laws, recognizing banks,

brokers and other entities like cooperatives, NGOs and panchayats as intermediaries who

can sell insurance for a commission. Besides, the amendments while spelling out the

rights of the customers will enable them to pay insurance premium through credit cards

and internet.

The crucial being brought about relates to widening the distribution channels

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For insurance products by amending the Act on corporate agents. While under the old

laws the only corporate agent that was recognized was a firm where all

Directors were insurance agents, the new law allows virtually any entity to sell

These also include a firm, a company, a bank (commercial, co-operative, rural), or a

non-banking finance company. Any of these can now register as a corporate agent. The

conditions are that the person selling the policy should be mined and there should be a

chief insurance officer.

Insurers say that allowing corporate entities to sell insurance would help them lower

distribution costs and achieve scale rapidly. While agents are still the preferred route

because of the focus they provide, the low average insurance premiums in India makes

focused selling expensive.

A change that will help both policyholders and insurers is the decision to recognize

various modes of payment of premium. Although not explicitly towed earlier, premium

was collected by only cheque or cash as the Insurance Act 1938 said that no insurer

could assume risk without receiving premium in advance.

This has caused confusion on whether credit cards and internet payments are valid. The

new law now allows insurers to accept premium through credit or H cards, bank

guarantees/cash deposits, internet, e-transfers, direct credit through standing instructions

or any other payment method approved by the Regulator. This will benefit insurance

companies indirect sales of personal lines of insurance products. In credit card payments

however, insurers will have to decide whether they are willing to bear the merchant

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discount rate charged by credit card company, which ranges from 2.5 per cent to 4 per

cent.

Recording to officials, insurers may be willing to bear the discount rate in direct sales

since they will save on the commission.

Educate, Build and Then Insure

When the insurance industry was first opened up and private players entered the field in

the year 2000, there was a host of challenges that lay before them. Consumer attitudes

towards insurance were largely indifferent, and insurance was regarded, as inflexible,

tax-saving products were not transparent and were typically sold as the "one-size-fits-

all" kind, with very little relevance to a consumer's actual need.

I lie most broad-based challenge for all companies was to spread awareness about life

insurance - how it works, it s benefits and most of all, its absolute necessity for anyone

who has dependents. At a more company-specific level, K| for ICICI Prudential was to

build a relevant brand that customers could trust.

Being a frontrunner in the life insurance industry, ICICI Prudential has always formed

both the category task, as well as the brand task, with the help of advertising and public

relations (PR). The company's initial campaigns

Addressed various myths and misconceptions about life insurance, seeking to customer

attitudes.

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Breaking Myths

for instance, life insurance had long been regarded as expensive, rigid, difficult |

understand and good only for tax saving. As a result of ICICI Prudential's advertising,

life insurance is now increasingly seen as a complete solution to meet one's myriad

needs - health, wealth, life, child protection and retirement. 1 a financial product that

provides a stable return on investment, protects life at affordable cost, secures a child's

future, does retirement planning in the most effective way and provides additional health

protection. It is now an integral part of the consumer's wealth management basket.

Building Image

The other major communications task at the time of launching operations was lo present

the visiting card of the company to the public at large and build credibility and stature, to

give the consumer the confidence that "here was a company that could be trusted to

invest funds with". This required a corporate campaign, which started with advertising to

establish the brand, build awareness and give the brand a larger than life image. The aim

was to position ICICI Prudential as the new and modern face of the life insurance

provider in India and change the perceptions of the target audience to view insurance not

IJ compulsory tax saving instrument, but as a means to lead to worry free and secured

life.

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Specific Needs

Amongst ICICI Prudential’s innovative steps, was the introduction of life stage and

need-based solutions selling, thereby unshackling the category and meeting specific

customer needs. The brand proposition for all the aid campaigns was reflected in the

punch J.ine; The campaign also provided several lines of support serving to inculcate

trust and belief in the company, such as the competitive advantage or product

performance, a showcase of products available for different segments, the flexibility

and value addition in products and the sound financial backing and credentials of ICICI

and Penitential.

The advertising idea was encapsulated in an endearing, lasting and universally

recognized symbol of protection - the "sindoor". The company launched a miss media

campaign including print, outdoor internet and radio and finally culminating in the

corporate film. With the geographical expansion of the company, TV became a viable

medium and the corporate campaign was run on TV, because the medium lends itself

well to an emotional type of film that strikes a chord with the audience.

This campaign contributed extensively to raising brand awareness of the company. The

Effies - the name signifying that the awards are for effective

advertising I are amongst the most significant international advertising awards they

honor the one truly important achievement in advertising- results,

i.e., how the advertising really worked for the brand.

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Beyond Advertising

The Advertising campaign was complemented by other activities like seminars I spread

awareness about the need for retirement planning and direct marketing innovations.

Moreover, according to recent syndicated ORG MARG studies, the ICICI Prudential

brand name and advertising had the highest recall amongst all private players, and was

only marginally behind LIC. On a cost per saliency point basis, ICICI Prudential, with

an advertising budget of about Rs. 20lcrore stands as one of the most efficient

advertisers in the category..

Ten years since the liberalization of the life insurance industry, we see consumers

becoming increasingly aware of and actively managing their financial affairs. They are

looking to insurance companies to offer them a complete solution and one of the biggest

challenges facing insurers is to continuously re-evaluate customer needs and develop

products to fulfill this need. ICICI Prudential's strategy is to remain customer-centric in

all that it does, thereby constantly evaluating and meeting customer needs. Regular focus

groups, individual meetings with customers, listening to the voice of the Corner, etc, are

all methods that the company implements to ensure that the Corner remains central to

the ICICI Prudential's being.

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5.3 CHANGING ADVERTISEMENT AND

PROMOTION NORMS

"Instead of pushing policies down the throat we should educate the customer and offer

guidance on how much insurance the individual needs, an approach that is slowly

paying off."

Forced Sell Well? In July 2002, India's state owned insurer, Life Insurance Corporation of India (LIC)

announced aggressive marketing plans with a budget of around? Rs. 1 billion

The aim of this unusual decision was to woo customers across the country through a

multimedia campaign including advertisements on the radio and the press media, the

outdoor media and the television. However, this did not come as a major surprise to

industry observers who said that LIC did not have too many options. With the insurance

bill being passed in 2000, the Indian insurance sector saw a host of private players enter

the market with multinationals as their partners. These new players resorted to aggressive

marketing and advertisement strategies - something the market had never seen earlier.

This sudden spurt of advertisements and awareness programs was visible on all the media

channels.

Print, electronic and outdoor advertisements of the new private insurers flooded

Could be. This prompted many comparisons of such behavior of insurance

Companies with the seen everywhere advertising frenzy of the dotcoms in India

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Not too long ago 1 with similar full-page advertisements, huge hoardings and

costly electronic media advertisement.

Advertising Initiatives of the private Insurance companies

The new insurance companies have been using all channels of advertising from

newspapers and the television to insurance agents and direct mailers. A fierce tattle

seemed to have begun among Indian insurance companies to make one's own brand win

over the other. A majority of Indian customers being very conservative and averse to

risk, trust was an extremely important factor in the insurance business.

Since LIC was a government owned body, there was an element of security embedded in

its services and products. This proved to be the biggest hurdle for the new insurance

companies as Indian customers were reportedly rather skeptical about them. Hence, the

new companies focused their campaigns primarily on building an image of

trustworthiness and reliability for themselves.

Secondly, their advertisements focused on insurance as an investment option and not a

mere tax saving tool - another first for the Indian market. Most of these advertisements

carried messages like the family's happiness, human tending, etc., with underlying

emphasis on the security that insurance could provide. Also, instead of projecting the

idea, that an insurance policy actually

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Starts working only after the death of the insured, the new campaigns projected that

insurance protects people throughout their lives.

Max New York also resorted to depicting positive emotions such as trust and protection

in its print advertisements.

The company released two print advertisements. While one of them carried an image of

the revered deity Goddess Durga, the other projected three teenagers standing together,

with their faces painted green, white and saffron - like the Indian national flag.

Reportedly, Max New York wanted to convey the message that 'insurance is your

partner for your life.' Suhel Seth of Equus Advertising the ad agency, which created the

advertisements for Max New York - said, "We had to break the clutter, as insurance as a

category has largely communicated doom and fear. Therefore, the campaign lent itself

better to an emotional route".

Max New York Life also carried out an extensive outdoor media campaign across the

country, focusing on 'India-specific' images such as traditional wrestlers and village

people. In addition to such TV commercials, the private insurance companies were

trying to make their presence felt by organizing blood donation camps, contests and

sponsoring various events. ING Vysya tied up with leading US-based Columbia Picture's

Indian arm to carry out promotional activities using the blockbuster English movie

'Spiderman.'

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In the metros, ING Vysya a distributed free movie tickets to its customers. A

I exercise was carried out for another English movie 'Mitr' (Friend).

Reportedly. Columbia Pictures and ING Vysya had planned to join hands on a long-term

basis. The latter also organized the Green Mumbai Drive and several blood donation

camps in association with the Red Cross, besides sponsoring the action replay of the

India-West Indies cricket match series in May 2002 and also in November 2002. Om

Kotak and Birla Sun Life took to sponsoring events in a major way, to attract

prospective customers. In 2001, Birla Sun Life , sponsored a play to which a few

Citibank credit card customers were invited. A company official said. "Sponsoring plays

and events like these give us good mileage. They may not directly give us leads to sales,

but certainly give us better visibility."

According to company sources, Birla Sun life was considering the sponsorship of

premier shows and offering tickets to corporate agents like Citibank and employees of

Deutsche Bank, who helped in the sale of policies. A senior company official said, "It is

all about building relationships with our corporate agents,"

Om Kotak initially highlighted in its advertisements the credibility and trustworthiness

of individual partners (Old Mutual & Kotak Mahindra) through its generic campaigns.

The TV commercials featured men and women 'meeting' themselves in the future -

happy, healthy and secure, thanks to insurance. In

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Early 2002. Company also launched product - specific campaigns. Om Kotak was also

considering sub-branding of products.

Allianz Bajaj went a step ahead. Apart from bringing out TV commercials and pulling

up hoarding and billboards, it entered into a two-month long contract I Shoppers Stop.

According to the contract, every Shoppers Stop outlet had an Allianz Bajaj kiosk that

provided information about policies in order to attract customers. According to company

sources, its plans were to try any kind of activity that would generate awareness about

company and its policies and leads' (interest by a prospective customer) and converting

the same into its customers.

Allianz Bajaj’s entire communication package included print advertisements, outdoor

media campaigns and direct marketing methods. All its print advertisements carried a

visual of human hands, which symbolized partnership and care to stress on the concept

of care. Similarly, Tata AIG entered into an agreement with Westside to set up

information kiosks in all its outlets in order to attract people's attention. Also, Tata AIG

was one of the first insurance companies to adopt the celebrity endorsement strategy.

Tata AIG chose the Hindi movie star, Naseerudin Shah (Shah), as its brand ambassador

for endorsing its personal accidental death insurance policy.

According to company sources, Shah was selected because he had the image of being an

intelligent and reliable individual.

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Another private insurer AMP Sanmar, roped in former Australian cricket Captain . Steve

Waugh for endorsing its life insurance policies. MetLife came up with simple, lucid

advertisements that could be easily understood by all.

One of its advertisements read, 'Why does anyone need insurance? Well, why does a car

need a spare tyre?' According to analysts, this advertisement successfully projected the

importance of insurance for an individual. MetLife's advertisements carried cartoons

from the popular Peanuts' series and carried emotional messages.

In addition to all the above, private players in the insurance sector charted out various

innovative marketing plans to establish their products. For instance, ICICI Prudential

launched the TruLife Club' for its high-value policyholders as part of its marketing

strategy. Through TruLife Club, the company offered a wide range of health-related

products, health and fitness equipment and membership in gyms, health resorts and

clinics in India. Policyholders with a sum assured of ? 0.5 million or more were included

into this club. According to company sources, the purpose of this whole exercise was to

encourage a healthy life of its customers. During the late-2001, when SBI Life was

concentrating on building its brand it was offering packaged products to its customers.

S Muralidharan. Chief of Marketing & Sales, SBI Life, said, "We are slowly and steadily

building our brand. He said, SBI Life is exploring the possibility of advertising on the

Internet in its bid to reach out to its target audience

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Another interesting development was regarding the punch lines used by private

insurance players that invariably tried to associate positive emotions with insurance

products. While ING Vysya said 'Adding life to insurance,' ICICI Prudential said, 'We

Cover you. At every step in life.'

Similarly, HDFC Standard advertisements projected a happy man asserting; 'Now I can

continue enjoying a comfortable lifestyle even after 1 retire.' | AMP Sanmar

commercials carried the line 'The joy of living life to the fullest, with a 153-year old

expert taking care of your insurance needs.' Om Kotak highlighted its campaigns with

'Jeene ki azaadi' (Freedom to live)' and Allianz Bajaj stated 'Allianz Bajaj, Life

insured by care.' With private players paying much attention to advertising and

promotional activities. LIC, too, was forced to make efforts to increase its visibility and

enhance its brand image.

The company commenced intense, systematic and well-focused public relations and

publicity activities both at the corporate and operational levels. LIC came out with a

corporate advertisement on TV with the punch line, 'Zindagi Tmhari Roshan Rahe'

(May your life be glorious) addition, LIC established a broad-based frame for external

communication aimed at building stronger brand image.

Several sports events were co-sponsored by the company and special publicity activities

with a social purpose were undertaken. Traditionally, LIC used to target either middle-

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aged people or elderly ones. But private insurers targeted individuals in all age groups in

their advertisement campaigns. Analysts pointed out that LIC was also biased against

women; most of its policies were with men in mind, whereas private insurers' products

covered women’s needs, too. Thus, LIC was forced to modify its advertisement

campaigns and communication in order to appeal to all groups.

It made its advertisements carry universally applicable messages, focusing particularly

on the young executive or the working woman, in order to tap the market comprised of

people in the age group of 18-35 years.

According to reports, in the first quarter of the current year, insurance companies spent

70% of what was spent in the whole of previous, on advertising and publicity. Across

the world, insurance, as a category was one of the largest spenders on advertising. In

India, too substantial expenditure was being incurred due to advertising. However,

during the first year of the entry of new players, while LIC reported a growth of over

250%, private insurers managed to garner only about 0.5% market share, in spite of

spending hefty amounts on advertising and promotion. According to reports, LIC's

business increased mainly because of the increased public awareness about insurance,

which was brought about by the heavy advertisement campaigns of private Payers. It

was reported that customers resorted to LIC after the awareness m insurance increased

as a result of the marketing efforts of the new

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Players because they were attracted by the 'security factor' attached with the state-

owned insurer.

According to a survey on the popular life insurance brands, awareness of LIC policies

was a phenomenal 100%, while the private insurers lagged far behind. The survey was

conducted to collect information about the awareness of the life insurance brands and

whether respondents were ready to buy the policies of such companies or not. This

tested the success of the communication strategies of the companies concerned.

However, the private insurers failed to lap the rural markets due to their limited reach.

They focused their marketing efforts only in limited metropolitan areas. With LIC's

brand being very firmly etched in the minds of the Indians, private insurers definitely

seemed to have a tough battle ahead. However, it is true that the market share of private

players has increased from 0.5% in 2001 to 7% in October 2002 and 26% in 2009, which

has reduced LIC's market share to 74% because of good advertising policies of Private

insurance companies.

5.4 APPEALS ON EMOTION TO BUY INSURANCE PRODUCTS:

APPEALS ON THE EMOTIONS

In a world where we are all called upon to make choice, lo pick one product from

various similar items, one service from many, and one lifestyle or another advertising of

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products and service can make a huge difference to our decision. Yes, the product or

service that is being offered must have a certain quality and of course, the price or

investment matters too. However, most purchase decisions assuming that price is not a

major factor are not made in cold blood. Rather we tend to buy or invest in the things

that make us feel good about ourselves or that touch us.

That is why the kind of advertising that works best is advertising that plays on an

emotion. Fear, affection, anger, security, humors, basic values.... If a commercial

manages to arouse any of these emotions in us, chances are we will remember that

adverting and buy that product

Advertising agencies are well aware of this phenomenon. "India is a country is very

high on emotions". Most people here act and react more on instinct & emotions than

anything else. The 'feel factors' is very strong. People not only relate very well to

emotions, but are also immensely entertained by them. However, is there any particular

emotion that works better that other? Humor is easy to relate to. We are more inclined to

recall a joke than a moment of sadness. On the other hand, we do have the reputation of

being a rather sentimental nation, so does poignant advertisement work best?"

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Here are some of the snapshots of the advertisements from the insurance sector that

appeals on the emotions of the target audience or viewer.

1. LIFE IS LIKE CRICKET

As one proceeds with his investment pattern, there are certain issues of dilemma such as

risk return, cumulative return versus intermittent returns, etc. A viva life insurance has

directly hit the issues through an advertisement featuring cricketer Sachin Tendulkar.

One has to find the gaps to make the most from investment made in an avenue. The life

is beautifully compared with the cricketer where the expectations rest on the players.

Similarly, the earning members have also to look after the expectations of their family

members. They have to balance between the high return expectations and the risk

attached to them. This advertisement also reveals the stress one has to go through while

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taking investment decision. It gives a good insight into the investor mind. Moreover,

Sachin Tendulkar, being a role model for the present generation, makes it all more

effective.

2. HEALTHY PLANS FOR HEALTHY LIFE

Humor in advertising, if appropriately used can make wonders with the target

audience. The Reliance General Insurance has come up with a hilarious advertisement

where a couple orders a pizza. While ordering they tell the waiter to eliminate the high

calorie ingredients, as the order is served what remains on the plate are some cut

vegetables. The Advertisement ends with the narration. If you can do so much for the

health of yours then why not take out a health insurance?

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This is a very preliminary introduction to the health insurance products. The

health insurance market is not ripe in India. This advertisement brings out this issue very

lucid

3. SHELTER-HITTING ON THE BASIC NEED.

Indian Housing Finance Industry is driven by the ever-growing housing needs of

the people. Building a house is a lifetime aim for everybody. With the ever skyrocketing

rates of real estates. It is far-fetched lo think of buying a property without housing

finance.

In this context, the commercial of LIC HOUSING FINANCE is very appealing.

A son who is settling down in Bangalore is traveling with his parents. He remembers

how difficult it was for his father to educate him and bring him to this level. With this

retrospective thinking, he puts the nameplate with his father's name to his house. This

reflects the cultural

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Indians avoid fear as much as possible and love to have a happy ending. They will

never understand the danger of unprecedented tragedies, believing strongly that they will

happen only to others. MNYL has addressed the same.

An ad of MNYL shows a woman reaching home and enquiring the watchman

If her husband had already arrived as she climbs the stairs in her flat. She rushes inside

and call 'hi Sanju' and doesn't receive any response, She starts Worrying and tries to

reach him on mobile only to see that it is Ringing below the couch pillow. Panic stricken

she finds her husband in a Chair in the terrace With coffee cup overturned and spilling

she goes behind and nudges him. Her husband, who has been listening to music since

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long gets started. They hug each other with a sigh of relief. It ends with a thought that

Museebatien bataake nahin aati, and hence MNYL is here to people's rescue when

such unforeseen events happen.

However, in a bit scary manner, this ad tries to make the viewer understand the ill

effects of not having insurance. However, it was given a happy ending so as to give the

viewer a sigh of relief at the end.

5. FUTURE GENERALIINSURANCE-

EK SHAGUN ZINDAGI KE NAAM

This television commercial of FUTURE GENERALI INSURANCE come up with a new

idea i.e. EK SHAGUN ZINDAGI KE NAAM Where a woman is preparing for the

pooja and her husband asks her for a name for their new house. The lady says let us

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complete the pooja then we will decide upon it. She reaches at the door for pooja and

sees her name on the entrance and is overwhelmed with the love of her family. This

advertisement ends with a message that you do so much for your beloved ones so why

not present an insurance policy to them on special occasions. HDFC THE KHTIDDART CAMPAIGN

In the face of tough competition, all insurance companies are adopting different

strategies and ideas to differentiate their products.

HDFC LIFE came up with the theme of self-respect; KHUDDARI is something that

has been taken as the genesis of their campaign. They have even taken it to higher levels

by talking about financial independence. The idea behind the campaign was that an

individual should be able to live with dignity at various stages of his life.

5.5 GUIDELINES ON ADVERTISEMENT, PROMOTION I & PUBLICITY OF

INSURANCE COMPANIES, AND I DURANCE INTERMEDIARIES

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The success of sales communication depends on public confidence and the J H they

repose in the insurance companies, when they receive a communication from them

promoting their products. As such, the insurers are expected to adopt honest and fair

practices in the market place and avoid practices that tend to impair the confidence of

the public. As it is very difficult for the public to understand and evaluate the latent

intricacies involved in the various insurance products, it is of paramount importance that

the publicity material is relevant, fair and transparent enabling informed decision making

about whether or not to buy a specific insurance product. The verbal communication

that the prospects receive from their advisors can be supplemented by the written

material that is made available to them.

These guidelines issued with the above background are intended to protect the interests

of the insuring public, enhance their level of confidence on the nature I sales material

used and ultimately encourage fair business practices. They are be considered as the

minimum standards to be adhered to, in addition to compliance with the IRDA

(Insurance Advertisements and Disclosure) 2000 (hereinafter referred to as

‘Advertisement Regulations') and the code of conduct prescribed by the Advertisement

Standards Council of India (ACSI) and any other regulations as applicable. These

guidelines reinforce the extant regulations on all promotional communications with

policyholders/ prospective policyholders or targeted market segment with the objective

of soliciting insurance business or otherwise.

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Categories of Advertisements:

For the purpose of these guidelines, an advertisement may be classified into two types:

1. Institutional Advertisements

2. Insurance Advertisements

Institutional advertisement: This is the advertisement of any nature, which is not, either

directly or indirectly, intended to solicit the insurance business, but only promotes the

brand image of the insurance companies and its intermediaries and may contain the

registered name, address, toll-free number, logo or trademark thereof. Advertisements

issued in any mode including those dial highlight sponsorships fall under this category.

Any inclusion of product names or information about the products, performance of the

companies or their funds or the information about the product launches constitute

insurance advertisements as below.

Insurance advertisement: Any advertisement issued with the specific purpose of

soliciting insurance business, and to influence the choice, opinion or

Behavior of the prospective policyholders will fall under this category. Advertisement,

for this purpose, means Insurance Advertisement as defined in Advertisement

regulations' and is classified as under:

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Invitation to Inquire": This is an advertisement, which highlights the I of

insurance/insurance products issued through recognized marketing media in any mode to

create a desire to inquire further about them.

Invitation to Contract'': This is an advertisement containing the detailed | regarding

the insurance/insurance products mainly to induce the public to purchase increase,

modify, reinstate or retain a policy.

Advertisements on Guidelines

These Guidelines are to be complied with by:

All the the insurers (life insurers, non-life insurers and health insurers)

The insurance intermediaries coverage these guidelines apply to advertisements, issued

through all recognized marketing media, in any mode including printed material, radio,

HB e-mails, hosting on the Internet and any other audio/visual electronic media.

General Requirements:

Dos': All insurance advertisements should ensure that:

I Communications must be clear, fair and not misleading whatever is the mode of

communication. They should use material and design (including paper size, color, font

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type and font size, tone and volume) to present the information legibly and in an

accessible manner.

2. Sales material and advertisements are comprehensible in the light of the complexity

of the product being sold.

3. Brand names of the product as proposed in the File and Use application are adhered

to.

4. When issued in vernacular languages, the mandatory disclosures are

also in the same vernacular language.

Don'ts

1 The design, content or format shall not disguise, obscure or diminish the significance

of any statement, warning or other matter, which an advertisement should contain as

required by these guidelines.

2.Use or denigrate names, logos, brand names, distinguishing marks, symbols etc.,

which may be similar to those already used by others in the market that may lead to

confusion in the market place.

Specific Requirements for an "Invitation to Contract":

Dos': Advertisements should ensure that:

1. Any expression of opinion of the insurer is a fair and honest representation.

2. Any statement of fact, promise or projection discloses all the relevant assumptions;

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and indicates in a clear and prominent way significant limitations / criteria on which any

special offers are available.

3. Where attention is drawn to insurers past financial performance it

should indicate that the past performance is not an indication of future

performance.

4. The contents should necessarily include:

a. The nature of the insurance contract (i.e., whether traditional/unit linked) and the type

of the product (i.e., its uniqueness or otherwise, whether annuity, pension, health or

whole life, home owners', shop keepers policies and any combination thereof, etc.,).

b. The risks involved; the limitations and exclusions of the contract;

c. Illustrations which indicate the exact costs and charges;

Reasonable projections of benefits; and full disclosures the basis and sources

of information of nation (e.g., disclose of NAV);

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d. The commitment of the insurer and the policy holder under the contract

(e.g. the minimum amount to be invested; minimum and/or maximum sum

assured; lock-in period; the reasonable safety norms to be adopted in

Case of non-life insurance products etc.,)

Where illustrations are provided, they should adhere to the guidelines issued, if any, by

the Authority or the Council.

Don'ts: The advertisements should not:

1. Highlight the potential benefits of an insurance contract without giving a fair

indication of the risks.

2 Draw attention to favorable tax treatment without stating that they are subject to

changes in the tax laws.

3- Highlight the positive financial condition of the parent or promoting B Company

without mentioning the financial condition of the HI indicate that the assets of parent

company can be banked upon when desired.

4. Disclose benefits partially without disclosing the corresponding limitations/

conditions/ implications.

Indicate that acceptance of risk and settlements of claims are liberal

and generous without intent to do so.

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6. Use ambiguous words or phrases which are likely to exaggerate the underlying

benefits of the policies or plans and capable of limiting the actual exclusions or the

limitations of the underlying benefits of the plan.

. 7. Denigrate or Damage the reputation of the competitor or the industry.

Mandatory disclosure in 'invitation to inquire': Every advertisement in the nature of

'invitation to inquire' should disclose the following statement "For more details on risk

factors, tenns and conditions please read sales brochure carefully before concluding a

sale".

Advertising through the Internet and other electronic media: Provisions applicable

to published advertisements apply equally to advertising through 1 media i.e.,

advertisements through a telephonic interactive mode or on the internet

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Internet:

1 In case of communications through internet, an insurer should ensure that the

recipients/viewers have the opportunity to view the full

text of the relevant key features; terms and conditions; any other applicable risk

information required by these guidelines and they shall not be hidden away in the body

of the text. It shall be easily obtained, before any application form is offered. In case of

e-mail, communications there should be a provision to unsubscribe from the mailing list.

2. Text, graphics, hyperlinks and sound should be entirely consistent

with all the requirements specified in these guidelines.

3. Insurers should take an undertaking from the prospective

policyholders that they have read the entire text, features, disclosures,

terms and conditions, etc., while applying for insurance on-line.

4. Mandatory provision of a helpline or help number to further

provide all information that a policyholder would reasonably

expect.

5 Insurers should provide hard copy of the necessary information on request.

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Telephonic Interactive Mode:

1. Promotional activities through Cold-calls shall be preferably

by a licensed intermediary. In case it is done by other than licensed intermediary,

responsibility of compliance with advertisement regulations and the guidelines vests

with the insurer/intermediary that has outsourced this activity.

2. The telephone caller shall take necessary steps to ensure that

they do not intrude into the privacy of the receiver. They

should disclose their identity and proceed to converse only

after permission.

3. A reference on the access to full information about the

available products and the importance of financial need

analysis along with the contact phone numbers that can

provide such information shall be placed before closing the

call.

4. Every insurer shall facilitate an access to 'do not call registry' with the contact

numbers of the persons who wish not to be contacted, which should be referred to,

before every call.

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Joint Sale Advertisements (JS):

Any insurance advertisement brought out jointly by an insurer either with its corporate

agent or with a micro-insurance agent would fall under this category. These could relate

to promotional activities where the logo/trademark/trade names of the participating

parties are displayed jointly.

A. Joint sale advertisements in the nature of insurance advertisements

can be released only after obtaining prior approval from the Authority.

Every application for approval shall carry a certificate from the

Appointed Actuary that it presents the same features of the product as

cleared under File and Use.

B. The contents of these guidelines will apply in mutatis mutandis to all

the JS advertisements, as applicable. These guidelines supersede the

circular IRDA/ADVT/2004dated 6th December 2004 regarding “Products

Co-branded with Corporate Agents/Brokers".

Branding with Third parties: (Third parties for this purpose shall mean any

individual/association/entity other than insurance intermediary)

1. Can be used on any advertisement of insurance company/intermediary only when it

does not urge the prospect or a policyholder to purchase, renew, increase, retain or

modify a policy of insurance.

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An exemption is however, given to insurance schemes sponsored/subsidized

by Central/State government (s) in which case branding is permissible in any category of

advertisements.

3 flic onus vests with the insurer as to the compliance requirements of 'advertisement

regulations' and the guidelines issued from time to time, in such cases.

Rating/Ranking/Awards:

I any claim of rating/award should be based only on those declared by entities, which are

independent of the insurance company and its affiliates. Insurance company and its

affiliates should not however, procure services from such independent entities to get a

rating/award.

2. Source of such rating/award is to be disclosed conspicuously and legibly in

such advertisements.

3. No claim of ranking by an insurance company, as regards its position in the

insurance market, based on any criteria (like premium income or number of

policies or branches or claims settlements etc.,) is permissible in any of the

advertisements.

4.Mandatory disclosure as specified by 'advertisement regulations, and applicable

guidelines as may be specified from time to time should be clear, conspicuous and

legible and should find at least 10% of the total space utilized

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For the advertisement in print/visual mode with a minimum print equivalent to font'

Times New Roman" No. 7. In case of audio mode, these disclosures should be spelt for

at least 10% of the total time slot of the advertisement

5. All the advertisements should carry a unique identifiable reference number J

maintained in the advertising register in accordance with regulation 3 (v) (a) of die

regulations.

6. Where material is filed with the Authority in accordance with the 'advertisement

regulations', in other than English/Hindi language, true translation of the same in

English/Hindi duly certified by an Authorized officer of the insurer, is to be enclosed.

7. Advertisements filed in accordance with Regulation 3(v) of the 'advertisement

regulations should be filed within 30 days of its release.

8. In Unit linked business, advertisements should also adhere to the advertisement norms

prescribed in circular no: 032/IRDA/Act/Dec-2005 dated 21 December 2005.

These guidelines come into force from 1st July 2007. Those advertisements inconsistent

with the provisions of these guidelines should be withdrawn within 2months of the

guidelines coming into force.

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5.6 GROWTH CHART OF INSURANCE ADVERTISING

Volumes Growth of Insurance sector in Print during FY 2009-10

Print ad volumes of 'Insurance sector' up by 26% during FY 2009-10

1. 'Insurance sector' has seen growth of 26% during FY 2009-10 compared to same period in 2008.

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Quarterly advertising of Insurance sector in print

More than 50% of ‘Insurance sector print advertising during the last quarter of FY 2009-10

• The 4th quarter of FY (2008 and 2009) recorded highest advertising share of 'Insurance sector’ in Print.

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Share of life Insurance and Non Life Insurance sector in print

‘Insurance sector' advertising skewed towards’ ‘Life insurance’ brands in Print during FY 2009-10

1. Print advertising of "Life Insurance' and 'Non Life Insurance' brands was in an

advertising ratio of 74:26 during FY 2009-10.

• General Health/Accidents Insurance' accounted for 51% share of overall

‘General Insurance’ Print ad pie followed by 'General Insurance' and 'General

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Agriculture Insurance' with 43% and 3% share respectively during FY 2009- 10

Top advertiser Insurance sector in Print during FY 2009-10

Top 10 advertisers share aggregates to 78% of overall

'Insurance sector' Print ad pie

1. Life Insurance Corporation Of India', 'ICICI Prudential Life Insurance Co' and

'Employee State Insurance Corporation' were the top 3 advertisers of 'Insurance sector' in

Print during FY 2009-10.

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Top Brands of Insurance sector in Print during FY 2009-10

Top 10 Brands of ‘Insurance sector’ in Print during FY 2009-10

1. ‘LIC’, 'ICICI Prudential Life Insurance' and 'LIC Market Plus 1' were the 13 brands of

'Insurance sector' advertised in Print during FY 2009-10. ' Top 10 brands accounted for

54% share of overall insurance sector' advertising in Print during FY 2009-10.

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Advertising of Insurance sector in Metro/Non Metro/ Mini Metro

Newspapers

More than 45% of 'Insurance sector' advertising in Non Metro Newspapers during FY 2009-10

‘Non Metro' newspapers accounted for highest share i.e. 47% of overall

‘Insurance sector’ advertising in Newspapers followed by ‘Metro’ and Mini Metro’

Newspapers with 37% and 17% share respectively during FY 2009-10