When conversations revolve around financial independence and securing the future, the benefits of life insurance seem to outweigh the risks. This financial methodology, called life insurance, in general, acts as a protective shield for loved ones, safeguarding them from potential financial losses in the event of the policyholder’s death. The product has been created with an aim to provide financial security, help pay off debts, cover living expenses, and manage medical expenses. To be able to capture this market and to be able to prepare people for the uncertainties of life, Bandhan Group entered the life insurance sector by acquiring Aegon Life Insurance, in Feb 2024 and rebranded it as Bandhan Life in April 2024.“Bandhan already has a strong brand with good service and ties to its customer base. The word ‘Bandhan’ signifies trust and relationships, which are crucial for a long-term commitment such as life insurance. We felt that transitioning to Bandhan Life would signify a long-term commitment to our customer’s well-being and growth,” Akhil Almeida, head of marketing, Bandhan Life, told BrandWagon Online.
The life insurance market in India is projected to reach (gross written premium) of $105.70 billion by 2024, as per the market research firm Statista. The average spending per capita in the life insurance market is expected to amount to $73.30 in 2024. With an annual growth rate (CAGR 2024-2028) of 4.39%, the gross written premium is projected to result in a market volume of $125.50 billion by 2028.
Experts believe that the shift from Aegon Life Insurance to Bandhan Life brings forth its benefits and challenges as well. “Positively, this action lets Bandhan broaden its business operations and enter the hitherto unexplored life insurance market in line with its rivals who already have divisions for insurance,” Ravi Singh, SVP – retail research, Religare Broking Ltd, said.
Shift and drift!
Industry experts opine that life insurance is viewed as a long-term commitment for customers, with trust playing a role in their decision-making process. As part of its plans, it plans to target users based on demographics. “We started tapping into underserved markets three years ago, and transitioning to Bandhan Life is a natural evolution for us. In that sense, it’s something we’ve been looking forward to for the better part of a year now, and the team is looking forward to what the future holds,” Almeida said. As per Statista, in FY23, India’s insurance penetration stood at four per cent, with the majority coming from the life insurance sector.
Bandhan Life’s iTerm Prime provides an online term insurance plan with up to 10% discount on online purchases and aims to offer a smooth digital process with zero documentation. iTerm Comfort offers a term insurance plan with a return of premiums, allowing policyholders to get all your premiums back with Special Exit Value&, at age 55,and includes tax savings of up to Rs 46,800 under Sec 80C with zero documentation. Saral Jeevan Bima is another affordable term plan for family protection, offering flexibility in premium payment terms, a one-time lump sum death benefit, and premiums starting at Rs 163 per month.
In the pension category, the Insta Pension Insurance Plan offers immediate pension income post-retirement, while the Saral Pension Plan ensures regular pension payouts. The Jeevan Riddhi Insurance Plan and Regular Money Back Insurance Plan both offer periodic returns during the policy term along with life cover. As mentioned on the company’s website, the rural term insurance plan is designed specifically for rural areas, with affordable premiums and easy access.
Industry observers believe that Bandhan Group apparently wants to play a significant role in all sub-sectors that make up the financial services landscape. This is evident from their strategic moves since 2023 when they acquired IDFC Mutual Fund and rebranded it as Bandhan Mutual Fund. “Bandhan Life (earlier Aegon Life) has limited traction as far as policies sold are concerned. But they bring the necessary licenses to operate, a well-settled team, and digital capabilities to Bandhan Life. The insurance company under the new owner stands to benefit from the distribution capabilities of Bandhan Bank which will help scale up the reach to both individual and corporate buyers of life insurance products,” Saurabh Uboweja, managing partner and practice leader- positioning strategy, BOD Consulting, said.
Budget shift!
In today’s digital age, effectively marketing and advertising products or services necessitates a strategic allocation of resources. Industry experts emphasise that a well-considered budget allocation is key to implementing marketing strategies essential for achieving successful rebranding outcomes. “For us, this is a foundational year as Bandhan Life. So, our focus is on identifying key performance indicators (KPIs) that impact brand recall, customer satisfaction, and engagement levels tied back to top-line inputs. We’ll have a combination of digital and traditional marketing interventions based on customer segments. Digital-first strategies may suit savvy consumers in metros, while a physical touchpoint remains crucial for others, especially in finance decisions,” Almeida highlighted.
The company claims to focus on consumer education, gaining insights into their financial needs, and aims to deliver tailored communication to provide relevant solutions. “This approach prioritises being contextual and pertinent at the pivotal moment of truth, rather than adhering to a rigid online versus offline budget split. By beginning with a deep understanding of the customer journey, we seek to facilitate better decision-making and streamline the purchase journey through the use of appropriate media channels,” Almeida emphasised.
The company further stated that it plans to focus on business enablement, entailing collaboration with sales teams and distribution partners. As per the company, The collaborative effort aims to ensure that the right products are brought to market, positioned effectively, and supported with marketing initiatives. For Almeida, the goal of the company is to facilitate faster decision-making and conversions, thereby driving business growth in alignment with Bandhan Life’s strategic objectives. But for Singh, the insurance industry is highly regulated; hence, high standards and compliance are required, which could be challenging for Bandhan Life. “Furthermore, the insurance industry demands large capital commitments, which strains finances. Moreover, well-known insurance industry firms could provide competition for Bandhan Life, which can make market share capture difficult,” he noted.
Expectations for innovation!
Moreover, the insurer claimed that by easing processes onboarding, it had created a seamless experience. “We’ve been working on making this process more seamless and less painful for customers. For the past couple of years, we’ve focused on zero documentation. Instead of asking customers to upload or submit physical copies of documents, they only need to enter their PAN or Aadhaar number. Our technology then handles KYC checks and financial verification in the background. Medical underwriting is simplified with a 15-second video selfie, reducing the policy issuance time from weeks to days, or even hours in some cases,” Almeida highlighted.
Furthermore, instant issuance has become crucial for the company, making the process easier for customers, it stated. But fraud remains a key problematic area. “Despite our digital underwriting process, we maintain one of the highest claim settlement ratios in the industry. This indicates that our innovations are effective, ensuring that genuine customers and cases are handled properly and claims are honoured quickly, within a few days, without making customers wait or run around,” Almeida said.