New age digital marketing technologies by private sector life insurers is giving public sector giant LIC tough competition to retain market share.
According to latest from IRDAI (Insurance Regulatory and Development Authority of India), the market share of LIC in terms of first year premium up to 31st May 2019 was 66.08 per cent, down from 67.40 per cent up to 31st May 2018, according to the business figures of insurance companies published by the IRDAI a few days back.
Although the fall is marginal in the last one year, over the last five years, the market share of LIC in terms of total premium has come down substantially.
In 2013-14, the market share of LIC in the overall life insurance business in terms of total premium to be 75.34 per cent, which has come down to 69.36 per cent up in 2017-18, according to the latest annual report of the insurance sector by IRDAI suggest. In tandem, the share of 23 private insurance companies increased from 26.95 per cent in 2013-14 to 30.64 per cent in 2017-18.
Among private insurers, the largest share is held by HDFC Life, which account for 9.24 per cent of market share, followed by SBI Life a 6.49 per cent and ICICI Prudential Life at 4.68 per cent, at the end of May 2019.
Interestingly, much of the gains by private sector life insurers without opening new offices. Between 2013 and 2018, the number of offices of private life insurers came down from 6759 to 6204 (as on end of March ). At the same time, the number of offices of LIC increased from 3526 to 4908.
Private insurance firms says, over the last few years, they have been investing on digital technologies to reach semi urban and rural areas.
“Our core strategy comprises 3 Ds – Data, Digitize and Disrupt. We leverage data to understand the behaviour of our existing and prospective customer base; we invest in digitization to improve operational efficiencies and productivity; we focus on developing disruptive technology to differentiate ourselves from our competitors. This has resulted in better customer retention and helped to improve our persistency ratios,” said Nipun Kaushal, CMO - PNB MetLife.
According to Chandramohan Mehra, CMO, Bajaj Allianz Life Insurance, along with digital technologies, innovations in products in keeping with demands of the millennials has been a key growth factor for the company.
“A lot of our marketing strategies has to do with smart marketing, along with innovation in product and distribution model. Millennials are looking at life at a different way. They are looking to meet multiple life goals, and maximize living benefits. Hence the whole narrative has changed,” Mehra.
“Our approach has organically aligned us to the evolving demographic changes in the society. Over the years, our traction on digital has increased multi-fold, right from having a website in nine regional languages to equipping field agents with 360 degree digital tools for serving various consumer needs and designing relevant products be online or offline, we has strived to stay ahead of the curve,” said Ravindra Sharma – Chief of Brand and Corporate Communication, SBI Life Insurance.