Unorthodox is the word for Max Vijay. One, it is unlike any orthodox insurance product. Two, its distribution network runs solely on word of mouth and trust. The brand name comes much later. Consider 50-something Govind Ram Kamani from Agra. For the past 23 years, he has sold tea from a makeshift cart. He doesn?t know what Max New York Life is, but he bought an Rs 1,000 Max Vijay Life policy eight months back from a fellow shopkeeper, Sanjeev Arora. More than the fact that the policy gives him a life cover of Rs 5,000 and an accidental cover of Rs 10,000, Kamani looks at it as a savings product, where he can deposit any amount, any time, ?even Rs 10!?
?Aroraji told me about it. I completely trust him; he won?t sell a wrong thing to me,? says Kamani. ?In the past 23 years, since I began selling tea, I couldn?t save a penny. I had even opened a bank account. When I used to go to deposit my savings, some people in the queue would wait to deposit Rs 10,000, others Rs 50,000…it made me feel inferior, complexed. Even the bank babu used to look at me twice when I handed over Rs 200 to him,? shares Kamani hesitatingly. Now he ?tops up? his policy almost everyday. And, with each top-up, his insurance cover also increases. ?I sell tea worth Rs 40 to Arora?s shop everyday. At the end of the day I collect Rs 30 and ask him to deposit the rest in my policy. Arora does it either through his own mobile or hands over a Rs 10 scratch card to Kamani. Keshav Kumar, a small-time tailor in the same market and Ashok bhai, an electrician, have also bought the same policies. Then there?s Bunty Tiwari, a small-scale soap manufacturer, who not just bought 10 policies for his family, but also urged the 40 labourers working under him to buy one.
But the Max Vijay pilot in Agra, which looks successful at the face of it, had a difficult take-off. Launched in August 2008, the product pretty much dragged its feet till October 2009. That?s when MNYL decided to rope in Amitabh Bachchan (for the cult Vijay Dinanath Chauhan character that he played in Agneepath). It also helped that Big B, too, has his roots in UP. It started with full-page teasers in local dailies, saying Aukat Par Vijay, followed by a phenomenal launch with a crowd of 30,000 people and hundreds others jostling to enter the venue. As many as 300 hoardings dotted Agra. The company pumped in Rs 2.5 crore at that time and has been since fuelling Rs 15-16 lakh per month in marketing. Awareness regarding insurance, as per an IMRB study, increased from 3.4% in October 2009 to 90% in May 2010.
For instance, Lloyd?s recent report, Insurance in Developing Countries: Exploring Opportunities in Microinsurance, shows that microinsurance products could be a way to build a brand and client base in economies that have largely been untapped. ?Today?s low income communities in China, India or Latin America could be tomorrow?s affluent consumers,? it says.
Of the one lakh Max Vijay policies sold in India, Agra, the only town in the country where the retail pilot is on, has a share of 6,500 policies. As many as 2,500 policy holders in Agra top up their policies regularly and have accumulated Rs 30-35 lakh! In Achnera village in Agra district, 400 policies got sold in two months. However, MNYL stopped servicing the rural outlets because the cost was turning out to be very high. ?Addressing the trust factor without establishing in the nearby city was not advisable for an insurance product,? says Atul Mittal, AVP, marketing, MNYL.
So, how does it work? There are 75 retailers all over the city selling Max Vijay. It basically comes as a kit (quite like the one you can expect to get for a new mobile connection). One just needs to fill the form inside, attach an identity proof, which can even be a letter from the village pradhan. The retailer sends the form to the distributor in the city, who has the authority to verify and return it back. Of the three variants of the Max Vijay product (Rajat, Swarna and Heera), the Rs 1,000 Rajat is the most popular.
Sanjay Chadha, owner of the Chadha General Store in Bilochpura colony in Agra, has ?sold 300 policies since 2009?. It?s a typical 8×5 ft neighbourhood store, but one that also sells coffee. His is the perfect example that ?a lot can happen over coffee.? A cup of coffee gives Chadha ample time to chat and convince customers about Max Vijay.
So, what does the retailer stand to gain from the entire deal? ?A one-time 10% commission on each policy. The Rs 100 incentive is a draw enough for him, as being a grocery store owner his margin of profit on other items is seldom more than a few bucks. The distributor gets about 2%,? says Mittal, adding, ?We are targeting 15,000 policies, for which we are expanding to 150 retailers in the next three-four months. So, the target should be achievable in a year?s time.
That?s when we will ease the marketing expenses.?
The norm is that insurance is never bought, it?s always sold, but success for Max Vijay will be when people actually begin to buy it.