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Despite being the first player to enter the private life insurance mart in India, HDFC Standard Life faltered due to its short-sightedness and nonaggressive approach, virtually handing over its first mover advantage on a platter to ICICI Prudential and Bajaj Allianz. But their desperation to join the big league in the race is visibly apparent. In fact, till last year, HDFC was number two in the race, but this year, it was browbeaten by Bajaj Allianz, to slip down to the third slot. Bajaj Allianz’ aggressive marketing, combined with an army of direct sales agents, helped it acquire a Rs.185.47 crore edge over HDFC, in terms of premium collected. One can empathise with HDFC’s pain. SP Subhedar, Asia Head, ICICI Prudential, clarifies on reasons that some have moved up and stayed ahead on the insurance ladder: “Many have failed to look at the rural segment (70% of the population) beyond the regulatory compliance perspective.” HDFC is working fast and ferociously to augment its weak penetration. Agrees Sanjay Tripathy, Head Marketing, HDFC Standard Life, “Sustainability will come through reach and penetration. We are increasingly expanding our reach into B & C class towns, while increasing our sales force and focusing on bancassurance channels to support the expansion.” Another HDFC spokesperson told 4Ps B&M that the number 3 player is now increasingly focusing on ‘a need based selling strategy’. Anurag, an analyst with RNCOS, a market research firm, comments on the agony of the 3rd, 4th and 5th rung players, by saying that the “prime reasons (for their predicament) are low market penetration and inadequate application of IT for business.”
It is estimated that by 2014, penetration of life insurance in India will increase to 4.4% (from the present 1.27%), and by 2009, the industry’s value would reach Rs.1,683 billion. While LIC is spreading wide, HDFC and the other also-rans can perhaps find solace in such statistical jugglery & forecasts…
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Source : IIPM Editorial, 2008
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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