Health insurance is a category that has not been marketed enough: Niva Bupa’s Nimish Agrawal

The insurance industry in India has witnessed remarkable growth in recent years, particularly in the non-life segment. This surge, driven by the health and motor insurance sector, propelled the industry's growth to 16.4% in FY23, a significant increase from the previous year's 11.1%.

As per a Redseer report, projections by the Insurance Regulatory and Development Authority of India (IRDAI) indicate that the Indian insurance market is on track to reach US$ 222 billion by 2026, positioning the country as the sixth-largest insurance market globally within the next decade.

As the insurance industry undergoes transformations, including new developments, modified regulations, and digital disruptions, new avenues for growth are emerging, ensuring the industry remains relevant in changing times.

Previously dominated by offline channels such as corporate agents, brokers, and banks, the insurance industry is now rapidly embracing digitization, leading to a shift in dynamics.

Nimish Agrawal, Executive Vice President and CMO, Niva Bupa sheds light on the underutilization of marketing efforts, particularly in health insurance. He highlights the industry's heavy reliance on distributors for consumer outreach. However, with the growing consumer interest post-pandemic, Agrawal underscores the importance of conveying compelling narratives and engaging stories about the significance of health insurance through marketing. 

Furthermore, Agrawal points out a notable trend where women are increasingly involved in family health insurance decisions, challenging the traditional male-dominated target audience in the sector.

Edited Excerpts:

How has 2023 been for Niva Bupa from a marketing point of view?

A few days of 2024 are still remaining from a financial year standpoint, but based on early trends observed until December, year-to-date from April to December has been a fantastic year for us. We have achieved a growth rate of approximately 49%, according to our H1 data. The category is growing at roughly around 23%. Consequently, our market share as a private health insurer in the health insurance space has further increased from about 8.4% to approximately 9.2%. Thus, we are effectively tracking our growth plan from a financial and marketing perspective.

From a marketing standpoint, there are a few important metrics that we look at. The first is how a brand is from a brand health standpoint, for which we rely on third-party assessments by Nielsen, which conducts monthly studies. Our awareness and consideration have all shown significant improvement compared to last year, with data available up to November. This consolidation has firmly positioned us as one of the strongest brands in the category, with our spontaneous awareness now leading the category, surpassing even Star Health, the market leader in health insurance. This is a key metric we closely monitor.

Another important metric is our Google query share, which tracks the number of people searching for us on Google among five competing brands. We continue to outpace the category in this aspect, transitioning from being the third or fourth-largest search brand in this space to becoming the second-largest.

Additionally, the insurance space, especially health insurance, often faces negative feedback from consumers on social media. About nine to ten months ago, we implemented a comprehensive strategy to address consumer issues promptly through a dedicated channel. Despite regulatory standards stipulating a turnaround time of seven to fourteen days for resolving complaints in the health insurance industry, we aim to close all social media complaints within 24 to 48 hours. This approach is playing well for us.

Around 15% of social media mentions about Niva Bupa are positive sentiments. This 15% is significant because the rest of the industry put together is less than 15%. So, the positive mentions on social media, the biggest competitor in the space, are between 1% and 3%. Because of our speed to respond to consumers and resolve their concerns, we are getting a lot of love on social media. It's relative; we, of course, want it to be better, but it is still better than where the industry is set. So these are the three large markers.

In terms of website traffic, despite transitioning from Max Bupa to Niva Bupa two years ago, our organic traffic has increased substantially, reaching 2.2 times the level observed when we were Max Bupa. Max Bupa was amongst the strongest brands in the category from a brand health standpoint. Overall, it has been a fantastic year for us.

The insurance industry, especially health insurance, is a category that has not been marketed enough. It's largely a category which has been left for distributors to sell to consumers. But as the consumer traction post-pandemic builds on the category, it is important for the marketing fraternity to tell good, relevant, beautiful stories to consumers on why health insurance is important. 

As we enter a new year, what are some trends you are expecting in 2024 in the health insurance sector from a marketing standpoint?

One big trend that will not only continue but also accelerate is down-ageing. The overall category is getting down-aged considerably. Niva Bupa's average policyholder age is 37. But we see a reasonable amount of queries, inquiries, and Google searches happening in the cohort, which is 22 to 35, which is very healthy for the category. 

Younger individuals, who previously perceived themselves as invincible and considered health insurance a waste of resources, today feel that it is an important investment to be made. This shift is evident in various trend reports. Hence, one important thing that will play out is the overall down-ageing of the category.

Secondly, from a health insurance perspective, while it has traditionally been a push category, there is a rising emphasis on the direct-to-consumer approach. Although the overall business split between online and offline policies remains around 90-10%, I anticipate the 10% segment to grow faster than the 90%. As the awareness of health insurance becomes important, consumers want to understand more about health insurance. They want to buy it themselves. They want to compare it themselves. It becomes important for us as marketers to provide those kinds of journeys and literature to consumers so that they can make informed decisions. This represents a significant shift as the health insurance sector has largely remained untouched by the direct-to-consumer wave. However, with the entry of new players such as PhonePe, ACKO, etc, there's a big change that's happening, and the distributor will lose some of its persuasion because the consumer wants to make a direct transaction with the company.

Typically, in insurance and health insurance as well, the target group for policy, product, distributor literature, consumer literature, and consumer advertisement has been largely the male or the man of the house. That is slowly changing. From our own consumer research, we see women taking an active role in discussing, debating, and deciding the kind of health insurance policy that the family should buy because health insurance is largely a family exemption product.

What would be your larger marketing objective in 2024 as a brand?

We are still a younger brand compared to Max Bupa's legacy. So, Niva Bupa still needs to do a lot to be visible to consumers. One big area from a marketing standpoint is dialing up the visibility of the organization. Now, there are various parts to which visibility is enhanced. One is through typical ETL communication. We are aiming to be more active in the media in 2024 than we were in 2022. We were more active in the media in 2023 compared to the last 12 years of Max Bupa. So, driving visibility and leveraging the media vehicles that are available in ETL are the first focus areas.

This year, Google searches are up by 35%. That has never happened in the category. The overall category growth on Google searches has been in the range of 15 to 20%. And the expectation was that post-pandemic, when. things settle down, the searches on Google would be their original base, maybe two or three percentage points higher, but 38% or 35% is a reasonably good number to believe that more and more consumers today want to understand health insurance. 

To address this trend in our marketing strategy, we are ensuring our presence on digital channels, including social media, aggregated websites like PolicyBazaar and PhonePe, and consumer review forums like Quora. We are actively creating marketing collaterals and creative assets to appeal to this large consumer cohort as they seek information about the company. Hence, dialing up our digital game is our second strategic focus area.

The third focus area is about dialing up the relevance of health insurance. In recent consumer research conducted across seven cities involving 235 participants, One thing that emerged, which slightly differs from earlier studies of a similar nature, is that consumers today are aware of the importance of health insurance. However, they perceive that they may want to buy health insurance a few years down the line. Despite the collective advertising efforts by the industry, the relevance of the category in terms of buying health insurance right now is not appealing to their rational sense. Therefore, our focus will be on dialing up the relevance of the category to consumers through interesting reasons to believe (RTBs) and interesting storytelling. 

In summary, our three strategic focus areas are dialing up visibility, our digital presence and digital strategy and the relevance of the category, leveraging the product benefits or various other truth markers that exist for Niva Bupa.

Where is the brand spending its marketing money in 2024?

We are likely to be omnichannel in 2024. 60% of our spend will be offline, and about 40% of our spend with the digital. 

Jan-March is an important period for the BFSI industry, this is also the time when marketing spends jump. What are Niva Bupa's plans for this period?

70% of my budget for the year will be deployed in JFM. In terms of medium, it will be 80% offline and 20% digital. The reason behind this allocation is the lengthy purchase cycle for consumers, driven by factors such as tax benefits and others. 

Additionally, there are 52 crore Indians who do not have health insurance, and when considering the consumption of digital channels, it remains suboptimal from an engagement standpoint. While the reach is there, the clutter on digital platforms diminishes engagement levels. 

Our experimentation indicates that, from a recall standpoint, traditional mediums exhibit far higher stickiness compared to digital mediums, unless we are discussing cricket or large-scale events.

Therefore, our strategy in JFM entails 80% allocation to traditional mediums, including TV, news, and general entertainment genres, followed by 20% dedicated to digital, primarily focusing on amplifying reach. 

To focus on growth, many industries reduced their marketing spends in 2023.  How did the insurance industry spend its marketing money in 2023?

The spends  are increasing due to the growth of the category. A growth rate of 24% is considered very healthy. As the category expands, the spends are also on the rise, and with positive regulatory changes, numerous new players are entering the market. For instance, ACKO has initiated its focus on the health insurance vertical since September. Additionally, Phonepe has entered the category, challenging the dominance of policy bazaar as the primary aggregator. Other newcomers include Navi, Digit, and nine more licences granted to insure tech ventures. The regulatory body is actively ensuring that the category remains attractive and lucrative from an investor's standpoint. For example, raising the FDI cap from around 50% to 74% is expected to attract substantial investment from foreign firms, particularly those with technology as a competitive advantage. Consequently, this will introduce a host of interesting challenges to the industry and is likely to further increase spends.

The second trend involves a significant shift of media spending towards digital platforms. Typically, when discussing industry spending, we refer to data provided by Broadcast AudienceResearch Council (BARC), which primarily captures above-the-line (ATL) spends, including print, radio, television, and to some extent, outdoor advertising. However, digital spending is largely concentrated within the walled gardens of Meta and Google. As a result, the movement towards digital platforms is not fully reflected in the data. For instance, in the case of Niva Bupa, if one were to solely rely on BARC data, it may appear that spends are decreasing. However, when considering the amount allocated to cricket sponsorships, such as IPL or the World Cup, as well as the other channels we are experimenting with like Sony Live, Hotstar, YouTube, or Meta, our overall spends have actually increased by approximately 60% year on year.

Are you expecting an upward or downward trend on ad spends from the insurance sector? And Why?

The trend favours digital. The reason is that it's much sharper from an advertising standpoint compared to television or any other traditional channel, as you can't segment the consumer cohort as effectively. Another significant trend in the industry is cohortisation and segmentation. Historically, insurance has been a catch-all category where one product is sold to everyone. However, as consumers become more interested in the category, similar to the FMCG sector, various need spaces are emerging.

For instance, we've launched products tailored for different demographics, such as the younger generation (aged 22 to 34) and senior citizens. There are also specific products for diabetes and hypertension patients due to their different treatment needs and higher frequency of treatment. While such products have existed in the health insurance space, they haven't been marketed extensively, often being left for distributors, agents, or advisors to promote. Now, marketers in the health insurance space are marketing these products and building strong storefronts, similar to e-commerce platforms, from direct to end-point.

As a result, it's natural for digital spends to increase. For example, if I'm launching a maternity product, digital channels allow me to target females specifically. Similarly, for products like Niva Bupa’s HealthPremia, designed for premium consumers or high-net-worth individuals (HNIs), digital signals enable precise targeting. On the other hand, radio, outdoor, print, and television advertising primarily focus on dialing up brand awareness for the company rather than product-level conversations, reflecting the growing segmentation within the category. Therefore, I anticipate a rise in the use of digital channels for advertising purposes.

What would be your short term and long term marketing goals in 2024?

In the short term, our goal is to become the most recalled and recognized brand in the industry. With new players entering the market, competition is intensifying. We aim to enhance our top-of-mind awareness, overall awareness, preference, and consideration metrics. Our short-term objective is for Niva Bupa to be the brand that immediately comes to mind when consumers discuss health insurance. 

On the other hand, our long-term goal is to fulfil our purpose, which is to genuinely empower every Indian to have the confidence to seek treatment at any hospital in the country. Our aspiration is to become the most trusted brand in the BFSI segment. 

Visibility is crucial in the short term; being the most visible brand in the category is our short-term priority. However, building trust takes time, and our long-term ambition is to establish Niva Bupa as the most trusted brand in the category.