The advertisement campaigns often launched by insurers focus on promoting particular insurance plans and not the concept of insurance.
By Kamalji Sahay
Every year insurance companies achieve higher sales as compared to the previous year. But at the end of every year, industry leaders are dissatisfied with their performance because of one perpetual truth—the performance could not match the potential in the market. It is therefore imperative that the root cause that leads to perpetual dissatisfaction is identified and analysed. The financial year 2018-19 is going to be over but the industry must prepare itself for such performance during the next financial year and beyond so that the same frustration does not confront it again.
Insurance is sold
People keep spending and buying goods and services to make their life comfortable and insurance does not occupy their mind space. What insurers want to sell and what people want to buy do not naturally meet each other. That is why the saying “Insurance is never bought, it is sold” still holds good.
Any event such as a mere collision between two vehicles or sinking of a ship or a plane crash or even a house on fire ultimately leads to setbacks to ongoing life or business and causes loss of life and property. In spite of the well-acknowledged fact that these cause severe setbacks to an individual, a society or a nation the need of tackling such a situation for bringing life back to normalcy is seldom felt or understood by the individuals. In all such situations insurance alone provides the remedy.
Likewise, life insurance provides instant financial security if the breadwinner dies. But the ground reality is that there is a gross lack of awareness among people of any structured and scientific method to confront such situations and restore normalcy at the earliest.
It is universally acknowledged that since people do not feel the need of insurance, they need to be told about it by someone. While it is a fact that to come back to terms with life after a major tragedy is very difficult, still the mechanism needs to be put in place so that the adverse situation is dealt with scientifically and not left to chance.
Insurance fills up this gap and is the only scientific method to mitigate the hardship caused to someone by unforeseen events. But the million-dollar question is who will bring this knowledge to people who are not aware of the benefits of insurance. Making attempts to sell more insuranceis always jeopardised by the fact that the concept of insurance is not universally acceptable. Experts on insurance are unanimous that “lack of awareness among students and the youngsters is the only hindrance in universalising the concept of insurance”. Now the question is how to raise the awareness quotient. Unfortunately in our country research is rarely conducted on the consumer behaviour in the insurance industry. Hence there is no authentic data on insurance awareness in our society.
What insurance provides is a mitigation mechanism in case of loss and the probability of loss is always high in anybody’s life. Awareness programme on insurance should begin when a child is in primary or high school. Gradually, she should be made to believe in insurance as a scientific tool to reduce the impact of an adverse condition on life or property. Currently, only when the law mandates buying certain insurance policies, people do so. Otherwise, nobody cares about protecting himself, his family or his business against sudden tragic events.
The advertisement campaigns often launched by insurers focus on promoting particular insurance plans and not the concept of insurance. The regulator has to play an important role in this regard by making insurance awareness the responsibility of insurers, both life and non-life. We do not have to look anywhere else for finding reason of poor insurance penetration in India at 3.69%. The buoyancy in the insurance market will continue to elude the Indian insurance industry until demand is induced by high awareness about the benefits of insurance. Sales without sensibility in cultivating a market would always result in mediocre performance.
The writer is former MD & CEO, Star Union Dai-ichi Life Insurance