PROJECT REPORT ON

ADVERTISEMENT IN INSURANCE

BACHELOR OF COMMERCE

(BANKING AND INSURANCE)

SEMESTER VI

2016 17

SUBMITTED BY:

VAIBHAV.H.RAO

ROLL NO. 21

K M AGRAWAL COL LEGE OF ARTS, SCIENCE &

COMMERCE,

GANDHARI ROAD, KALYAN (W)

UNIVERSITY OF MUMBAI

1
 PROJECT REPORT ON

ADVERTISEMENT IN INSURANCE

BACHELOR OF COMMERCE

(BANKING AND INSURANCE)

SEMESTER VI

2016 17

SUBMITTED

IN PARTIAL FULLFILMENT OF REQUIREMENT FOR THE

AWARD OF DEGREE OF BACHLOR OF COMMERCE

(BANKING AND INSURANCE)

SUBMITTED BY:

VAIBHAV.H.RAO

ROLL NO. 21

SEAT NO.__________

K M AGRAWAL COLLEGE OF ARTS, SCIENCE AN

COMMERCE,

GANDHARI ROAD, KALYAN (W)

2
 K .M.AGRAWAL COLLEGE OF ARTS, SCIENCE
AND COMMERCE, KALYAN

(CONDUCTED BY KALYAN CITIZENS EDUCATION SOCIETY)

(AFFILIATED BT BY UNIVERSITY OF MUMBAI)

BACHELOR OF BANKING AND INSURANCE

CERTIFICATE

THIS IS TO CERTIFY THAT MR. VAIBHAV.H.RAO OF T.Y.B.B.I

(BANKING AND INSURANCE) (SEMESTER-V) HAS
SUCCESSFULLY COMPLETED THE PROJECADVERTISEMENT
IN INSURANCE UNDER THE GUIDANCE OF
PROF.MAHENDRA PANDEY.

PROJECT GUIDE PRINCIPAL

COURSE CO-ORDINATOR

INTERNAL
EXAMINAR

3
 DECLARATION

I, VAIBHAV.H.RAO , student of T. Y. B.Com Banking and insurance

semester V (2016- 17) hereby declare that I have completed the project
on ADVERTISEMENT IN INSURANCE I, further declare that the
information imparted is true and fair best of my knowledge.

SIGNATURE
VAIBHAV.H.RAO
ROLL NO.21

4
 ACKNOWLEDGEMENT
During the course of this project, Ive been helped and supported by a lot
of people whose names if not mentioned, would be inconsiderate
on my part. Id like to thank all of them.

I would like to thank my guide PROF.MAHENDRA PANDEY who

guided me throughout and has been a helpful guide. Working under his
guidance has been great experience
.
Im deeply obliged to our college Liberian who guided me through the
reference book, without which my project wouldnt have seen the light of
the day
Most of all, I wish to thank my family for dealing with me
patiently and supporting me while I was working on this project.

5
 INDEX

SR.NO CONTENTS PAGE.NO

1 INTRODUCTION 6

2 ADVERTISING & INSURANCE SECTOR 11

3 ADVERTISEMENT IN INSURANCE SECTOR 23

4 TYPES OF ADVERTISEMNETUSE IN INSURANCE 24

SECTOR

5 WORLD OF MOUTH ADVERTISEMENT 29

6 PLANNING OF ADVERTISEMENT CAMPIGN 32

CREATIVE THEMES OF ADVERTISEMENT IN

7 INSURANCE SECTOR 40

STARTEGIES ADOPTED BY DIFFERENT INSURANCE

8 COMPANIES 42

IRDA REGULATION WITH REGARDS TO ADVERTISING

9 IN INSURANCE 44

10 JOINT SALE ADVERTISING 50

11 CASE STUDY 52

12 SURVEY 61

13 CONCLUSION 70

14 BIBLOGRAPHY & WIBLOGRAPHY 71

6
 INTRODUCTION

Meaning of marketing

Marketing is the process of communicating the value of a product or service to

customers. Marketing might sometimes be interpreted as the art of selling products,
but selling is only a small fraction of marketing. Marketing is about identifying and
understanding your customer and giving them what they want. It's not just about
advertising and promoting your business.

Definition of marketing

Marketing is a human activity directed towards satisfying needs and wants through
exchange process.

MARKETING MIX

Marketing mix is one of the most fundamental concepts in marketing

management. The marketing mix is often crucial when determining a product or
brand's offering for attracting consumers and for sales promotion, every manufacturer
has to concentrate on four basic elements or components these are as follows

1. Product

2. Pricing

3. Distributive channels (place)

4. Sales promotion techniques

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DEFINITIONS OF MARKETING MIX

According to Philip Kotler, marketing mix is the mixture of controllable marketing

variables that the firm uses to pursue the sought level sales in the target market.

Service Marketing Mix

The service marketing mix is also known as an extended marketing mix and is an
integral part of a service blueprint design. The service marketing mix consists of 7 Ps
as compared to the 4 Ps of a product marketing mix. The product marketing mix
consists of the 4 Ps which are Product, Pricing, Promotions and Placement.

These are discussed in my article on product marketing mix the 4 Ps. The extended
service marketing mix places 3 further Ps which include People, Process and
Physical evidence. All of these factors are necessary for optimum service delivery

PRODUCT

The product in service marketing mix is intangible in nature. Like physical products
such as soap or a detergent, service products cannot be measured. Insurance industry
is the excellent example. At the same time service products are heterogeneous,
perishable etc. The service product thus has to be designed with care. Generally
service blue printing is done to define the service product.

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 PRICING

In the insurance business the pricing decisions are concerned with:

i) The premium charged against the policies,
ii) Interest charged for defaulting the payment of premium and credit facility, and
iii) Commission charged for underwriting and consultancy activities
.
With a view of influencing the target market or prospects the formulation of pricing
strategy becomes significant.

In a developing country like India where the disposable income in the hands of
prospects is low, the pricing decision also governs the transformation of potential
policyholders into actual policyholders.

The pricing in insurance is in the form of premium rates.

PLACE

This component of the marketing mix is related to two important facets --

i) Managing the insurance personnel, and
ii) Locating a branch.

The management of agents and insurance personnel is found significant with the
viewpoint of maintaining the norms for offering the services.

This is also to process the services to the end user in such a way that a gap between
the services- promised and services -- offered is bridged over.

In a majority of the service generating organizations, such a gap is found existent

which has been instrumental in making worse the image problem.

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PEOPLE

Understanding the customer better allows designing appropriate products. Being a

service industry which involves a high level of people interaction, it is very important
to use this resource efficiently in order to satisfy customers.

Training, development and strong relationships with intermediaries are the key areas
to be kept under consideration.

Training the employees, use of IT for efficiency, both at the staff and agent level, is
one of the important areas to look into
PROCESS

The process should be customer friendly in insurance industry. The speed and
accuracy of payment is of great importance. The processing method should be easy
and convenient to the customers.

Installment schemes should be streamlined to cater to the ever growing demands of

the customers. IT & Data Warehousing will smoothen the process flow.

PHYSICAL DISTRIBUTION

Distribution is a key determinant of success for all insurance companies.

Today, the nationalized insurers have a large reach and presence in India. Building a
distribution network is very expensive and time consuming.

If the insurers are willing to take advantage of India's large population and reach a
profitable mass of customers, then new distribution avenues and alliances will be
necessary. Initially insurance was looked upon as a complex product with a high
advice and service component.

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Promotion

Promotion is one of the market mix elements, and a term used frequently in
marketing. Promotion is a very important concept in marketing .

It represents all of the methods of communication that a marketer may use to provide
information to different parties about the product
.
Promotion comprises elements such as: advertising, public relations, personal selling
and sales promotion.

Publicity
Free promotion through news stories in newsletters, newspapers, magazines and
television

Sales Promotion

All forms of communication not found in advertising and personal selling, including
direct mail, coupons, volume discounts, sampling, rebates, demonstrations, exhibits,
sweepstakes, trade allowances, samples and point-of purchase displays

In designing a promotional plan, clearly spell out:

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 ADVERTISING AND INSURANCE SECTOR

Meaning of advertising

Advertising is nothing but a paid form of non-personal presentation or promotion of

ideas, goods or services by an identified sponsor with a view to disseminate
information concerning an idea, product or service. In Latin, advertise means to turn
the mind toward.

Advertising is a form of communication for marketing and used to encourage or

persuade an audience (viewers, readers or listeners; sometimes a specific group) to
continue or take some new action. The purpose of advertising may also be to reassure
employees or shareholders that a company is viable or successful. The most important
aspects of promotion is advertising.

Advertising is an indispensable part of the marketing strategy of any product or

service. A proper advertisement has a great impact on the sales of the product and that
is why companies spend huge amount of money to make effective advertisements.

DEFINITION OF ADVERTISMENT

According to Wood, "Advertising is causing to know to remember, to do."

According to Richard Buskirk, "Advertising is a paid form of non-personal
presentation of ideas, goods or services by an identified sponsor."

The above definitions clearly reveal the nature of advertisement. This is a powerful
element of the promotion mix. Essentially advertising means spreading of information
about the characteristics of the product to the prospective customers with a view to
sell the product or increase the sale volume.

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BACKGROUND

The earliest forms of advertising would have been through word of mouth.
Advertising for sales, and lost and found was commonly created on papyrus in ancient
Egypt, Greece and Rome. Commercial adverting through wall or rock paintings that
goes back to 4000 BC has been found in many parts of India, Africa and South
America.

Commercial and political advertising displays have been recovered from the ruins of
the ancient Pompeii, a roman city destroyed by the volcano Mount Vesuvius in 79 AD
as education became an apparent need and reading, as well as printing, developed
advertising expanded to include handbills.

In the 18th century advertisements started to appear in weekly newspapers in

England. These early print advertisements were used mainly to promote books and
newspapers, which became increasingly affordable with advances in the printing
press; and medicines, which were increasingly sought after as disease ravaged
Europe. However, false advertising and so-called "quack" advertisements became a
problem, which ushered in the regulation of advertising content.

The main features of advertise are as under:

It is directed towards increasing the sales of business.

Advertising is a paid form of publicity
It is non-personal. They are directed at a mass audience and nor at the
individual as is in the case of personal selling.
Advertisements are identifiable with their sponsor of originator which is not
always the case with publicity or propaganda.

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Objective / Functions of advertising
The purpose of advertising is nothing but to sell something -a product, a service or an
idea. The real objective of advertising is effective communication between producers
and consumers. The following are the main objectives of advertising:

Preparing Ground for New Product

New product needs introduction because potential customers have never used such
product earlier and the advertisement prepares a ground for that new product.

Creation of Demand

The main objective of the advertisement is to create a favorable climate for

maintaining of improving sales. Customers are to be reminded about the product and
the brand.

It may induce new customers to buy the product by informing them its qualities since
it is possible that some of the customers may change their brands.

Facing the Competition

Another important objective of the advertisement is to face to competition. Under

competitive conditions, advertisement helps to build up brand image and brand
loyalty and when customers have developed brand loyalty, becomes difficult for the
middlemen to change it.

Creating or Enhancing Goodwill

Large scale advertising is often undertaken with the objective of creating or enhancing
the goodwill of the advertising company.

This, in turn, increases the market receptiveness of the company's product and helps
the salesmen to win customers easily.

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Informing the Changes to the Customers

Whenever changes are made in the prices, channels of distribution or in the product
by way of any improvement in quality, size, weight, brand, packing, etc., they must be
informed to the public by the producer through advertisement.

Neutralizing Competitor's Advertising

Advertising is unavoidable to complete with or neutralize competitor's advertising.

When competitors are adopting intensive advertising as their promotional strategy, it
is reasonable to follow similar practices to neutralize their effects.

In such cases, it is essential for the manufacturer to create a different image of his
product.

Barring New Entrants

From the advertiser's point of view, a strongly built image through long advertising
helps to keep new entrants away. The advertisement builds up a certain monopoly are
for the product in which new entrants find it difficult to enter.

In short, advertising aims at benefiting the producer, educating the consumer and
supplementing the salesmen. Above all it is a link between the producer and the
consumer.

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FUNCTIONS OF ADVERTISMENT

It promotes sale of goods and services.

It helps introduction of new product in the market.
It encourages a business firm to do mass production.
It stimulates research and development activities.
It provides revenues to press and other medium of advertisement like
television, newspaper, magazines etc
It builds reputation of the advertiser.

Importance of Advertisement:

Advertising broadens the knowledge of the consumers. With the aid of advertising,
consumers find and buy necessary products without much waste of time.

This speeds up the sales of commodities, increases the efficiency of labor in

distribution, and diminishes the costs of selling.

It is an accepted fact that without market stimulus of heavy advertising, consumers

might have waited another sixty years for the product evaluation that took place in
less than ten years

It took after all over sixty years from the invention of the safety razor before the first
acceptable stainless steel blades appeared in the market.

These words are more than enough to testify the potentialities of advertising in the
field of modern marketing system.

1. Crucial for a launch

Advertising is very crucial for launching (introducing) a new product, service and/or
idea in the market. If advertisement of any concerned product, service and/or idea is
done properly at a right place, through proper media, and within a specific time
constraint, can attract new-customers.

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This helps to capture the market and increase sales of an advertiser. Advertising is
also essential for announcing an upcoming event. Advertising an open invitation
maximizes the chances of event attendance.

However, if people are unaware of any such happening, they may not show up. As a
result, the event may not get an expected response. Hence, advertising contributes to
the success of an event.

2. Source of revenue

Advertising is a prime source of revenue for publishers of mass-media like

newspapers, TV channels, magazines, websites, etc. The input cost involved in
processing any valuable information is usually higher than its selling price.

A publisher's cost rises due to various data gatherings and information-processing

activities like research (investigation), professional writing, editing, proof-reading;
publishing in form of printing or digital web hosting, and distribution.

Advertising pays publishers their input costs and in return use their media platform as
a medium to reach maximum people.

Indirectly, because of it, customers of publishers (who are mostly readers and/or
viewers) also get an affordable access (or sometimes even a free access) to high-
quality information databases.

3. Sales promotion

Advertising is done to promote goods, services, ideas and/or events. Advertising is

used for the promotion of: Goods falling under categories like cosmetics, electronics,
eatables, stationary, jewelry, textiles, etc. Services provided under banking, insurance,
hospitality, air travel, consultancy, health care, education, etc

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4. Increases sales

Advertising sparks an interest in masses about advertised products and/or services of

its advertiser. This interest creates demand in the market. The growing demand soon
results in higher sales.

Eventually, the advertiser fulfills his main goal of investing in an advertisement.

However, to continue with such a growth in sales, the advertiser must also maintain a
good price-quality ratio along with regularly continuing his ad campaigns.

5. Maximizes profit

Advertising helps in increasing sales and control the cost borne by the advertiser. It
helps to widen the gap between his sales and incurred cost. With maximizing sales
and lowering cost, the profit of an advertiser grows. Thus, advertising aids in
maximizing the profit of its advertiser.

6. Consumer awareness

Advertising creates awareness by informing consumers.

Awareness:

Advertising creates awareness among consumers about an availability of any specific

product and/or service in the market. It attempts to convey them why an advertised
product and/or service is better than other alternatives currently available in the
market.

Information:

Advertising informs a consumer, mainly about; various features, benefits, price and
use of an advertised product and/or service. It also gives information about the brand
name or trade-mark used, address of a manufacture or a service provider, and other
relevant details to the consumer. While creating awareness and supplying relevant

18
information, advertising ultimately helps a consumer to make a right choice in his or
her purchase.

7. Demands creativity

Advertising is impossible without creative thinking. In other words, creativity is the

essence (main ingredient or soul) of advertising.

For an advertisement to be a success; it must have some fundamental aspects or

characteristics in it. An advertisement (ad) must be:

Creative,

Original,

Not a copied one,

Artistic, and also

Attractive to large masses.

8. Element of marketing mix

Advertising is an important element of marketing mix. It supports sales promotion. In

today's competitive world, it is getting difficult to sale something. Consumers now-a-
days are more cautious and better aware about things they buy and use.

They don't easily break their loyalty towards their favorite goods and/or service unless
and until somethings allure them in unique way and compels them to at least give a
try.

9. Target oriented

Advertising is target-oriented in nature. Target oriented means to focus on (or target

one's attention to) only a specific thing, at one time.In context of advertising, it means
to focus on (target), or deliver attention towards, only a specific group or class of
consumers.

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10. Monitor demand and supply

Advertising, if done repetitively, helps in generating higher demand in the market for
advertised products and/or service. Rising demand must be met with an equivalent
amount of supply of products and/or efficient delivery of services.

Proper care must be taken to monitor the demand and supply function, so that none of
the demands are skipped.

If supply is not made at par with an increasing demand, the market may soon lose
confidence and downfall of demand may take place. If this happens, the sale will fall
down, and money spent on advertising may not be recovered. This may add to losses.

Thus, when advertising results in higher demands, an appropriate supply must be also
ready to compensate it. To see that such compensation is done properly, the demand
and supply function must be well monitored.

11. Builds brand's image

Advertising creates goodwill and helps in building a brand's image in the market.
Repeated advertisements make brands very popular.

Generally, people tend to show a more trustworthy attitude towards advertised brands
over non-advertised ones.

Well-known branded products are usually made from high-quality raw-materials and
hence are always preferred by most consumers.

This increases demand for such products. Rise in popularity and building trust
gradually helps to increase the value of the brand.

This eventually boosts sales of such branded products. It also increases the reputation
of that entity who owns these brands.

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12. Generates employment

Advertising agencies are constantly in search of newer creative ideas to cope with the
rising demands from their clients (advertisers).

Each ad assignment (project) demands a high-level of mental labour.

There are dead lines within which projects must be completed and submitted.
Furthermore, the concept of ad must be also welcomed (approved) by the advertiser.

Overall, this creates a huge demand of creative people and thus opens new
employment opportunities in the field of advertising.

Advertising provides employment to deserving candidates who are mainly creative

thinkers, directors, artists, graphic designers, sales representatives and managers.

BENEFITS OF ADVERTISMENT

TO THE INSURANCE COMPANY

It encourages agents and brokers to sell insurance companies product.

It enhances an insurance companys public image.

It supports introduction of new products.

It influences public and legislative opinion on issues of importance to the

insurance industry.

Establish and maintain your distinct, identity, and brand

TO THE POLICYHOLDER:

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 Remind customers and potential customer of the benefits of the product and
services.
It predispases customers to be receptive to sales calls.
It provides an opportunity to the customers to compare the merits and demerits
of other companies insurance product.
It helps the customer to know when and were and what are the procedures in
obtaining the policies
DIFFERENT CATEGORIES OF ADVERTISING

Advertising can be classified into different categories they are as under:

Personal- In this kind of advertising individual and families buy space in newspapers
and magazines to sell personal belongings like cars, home etc.

Classified advertising The term classified advertising is a type of advertising

usually classified under heading such as job vacant, cars etc.

Manufacturers consumer advertising This refers to high spending repetitive

advertisement on television. it is the way in which large manufacturers communicate
directly with their end users i.e., customer

Service advertising It refers to advertisement of intangibles, like banking services,

insurance service etc.

Industrial (business to business advertising) This kind of advertising of goods

and services for commerce, industry, government and other institutions. The
customers are executives and official taking discussions to purchase such has a
factory equipment, office equipments etc.

Product advertising - Normal characteristics of advertising is to create demand for

product rather then the brand. It refers to advertising of the product, i.e., goods and
services provided by the organization.

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Institutional advertising where the objectives of advertising is to project the image
of the company it takes the firm of institutional advertisement.

ADVERTISERS

Advertisers refer to an entity that advertises. Advertisers can be classified as follows:

Consumer advertisers they are those who manufactures consumable goods,

durables or non durables and services

Industrial advertisers These advertisers predominately manufactures market

product for industrial market

Retailers They advertise locally for store patronage.

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 ADVERTISMENT IN INSURANCE

Insurance is a fast-paced field with a wealth of opportunities to offer motivated

professionals and talented salespeople, and having the right personal skills coupled
with a great attitude and the proper credentials can make for a great beginning to a
successful career in insurance.

There are other components necessary for launching or improving an effort in selling
insurance, no matter the specific type or line involved.

Among these, insurance advertising is a central necessity that can make or break a
campaign, no matter how great or well-prepared its other elements may turn out to be.

Understanding advertising as a standalone concept can be helpful in the quest to gain

an advantage

In the insurance world, but being able to apply advertising principles to insurance
while staying up to date on the newest trends and ideas in both fields are sure ways to
realize productive advertising campaigns.

Insurance advertising has typically based its primary methodologies and attributes on
the type of insurance that is being sold.

Because emotional content is an important part of selling insurance, it's imperative to

have a good idea of the feelings and thoughts associated with different types of
plans.

People interested in purchasing disability or final expense insurance probably won't

be as responsive to overly-enthusiastic, unsympathetic advertising, whereas those

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shopping for business insurance likely don't wish to focus on worst-case scenarios,
but rather have a positive spin put on the aspects of the plan or package they're
considering.

There is ample market research available for studying the emotional triggers and
associations involved with different types of insurance, though local surveys may be
of use to especially ambiti

TYPES OF ADVERTISMENT USED IN INSURANCE

Virtually any medium can be used for advertising.

Commercial advertising media can include wall paintings, billboards, street furniture
components, printed flyers and rack cards, radio, cinema and television adverts, web
banners, mobile telephone screens, shopping carts, web popups, skywriting, bus stop
benches, human billboards and forehead advertising, magazines, newspapers, town
criers, sides of buses, banners attached to or sides of airplanes ("logojets"),

In-flight advertisements on seatback tray tables or overhead storage bins, taxicab

doors, roof mounts and passenger screens, musical stage shows, subway platforms
and trains, elastic bands on disposable diapers, doors of bathroom stalls, stickers on
apples

In supermarkets, shopping cart handles (grabertising), the opening section of

streaming audio and video, posters, and the backs of event tickets and supermarket
receipts. Any place an "identified" sponsor pays to deliver their message through a
medium is advertising.

TELEVISION ADVERTISMENT

A television advertisement or television commercial is a span of television

programming produced and paid for by an organization that conveys a message . it is
the latest and fast growing medium of advertising it makes appeal through both eyes
and ears

ADVANTAGES

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 Television permits you to reach large numbers of people on a national or
regional level in a short period of time.

Independent stations and cable offer new opportunities to pinpoint local

audiences.

Television being an image-building and visual medium, it offers the ability to

convey your message with sight, sound and motion.

DISADVANTAGES

Targeting your market is difficult.

These can an inappropriate medium for some businesses.

It is difficult to find items that are appropriate for certain businesses.

Longer lead time in developing the message and promotional product

Possibility of saturation in some items and audience.

Wrong choice of product or poor creative or poor creative may cheaper the image
of advertiser

NEWSPAPER

It refers to daily publication containing news and opinions about current events and
feature articles. Newspapers are one of the traditional mediums used by businesses,
both big and small alike, to advertise their businesses.

ADVANTAGES

Allows you to reach a huge numbers of people in a given geographic area.

One has the flexibility in deciding the ad size and placement within the
message.

26
 Ad can be as large as necessary to communicate as much of a story as you care
to tell.

Exposure to the ad is not limited; readers can go back to your message again
and again if so desired.

Free help in creating and producing ad copy is usually available.

Quick turn-around help your ad reflect the changing market conditions the ad
you decide to run today can be in your customers hand in one to two days.

DISADVANTAGES

Ad space can be expensive.

Poor photo reproduction limits creativity.

Newspapers are a price oriented medium; most ads are for sales.

Ads have a short shelf life, as newspapers are usually read once and then
discarded.

Newspapers are a highly visible medium so your competitors can quickly

react to your prices.

With the increasing popularity of the internet, newspaper faces declining

readership and market penetration.

27
 A growing number of readers now skip the print version of the newspaper
(and hence the print ads) and instead lead the online version of the
publication.

MAGAZINE

Magazines or periodical are an excellent medium of advertisement when a high

quality of printing and colors is desired in an advertisement

ADVANTAGES

Allows a better targeting of audiences, as one can chose magazines

publication that caters to your specific audience or whole editorial content
specializes in topic of interest to your audience.

High reader involvement means that more attention will be paid to the
advertisements.

Better quality paper permit better color reproductive and four-color ads.

The smaller page (generally 81/2 by 11inches) permits even small ads to
standout.

DISADVANTAGES

Long lead times means that one has to make plans weeks or months in
advance.

The slower lead time hightens the risk of the ad getting overtaken by events.

There is limited flexibility in terms of ad placement and format.

Space and ad layout cost are higher.

28
Examples: Life Insurance Corporation uses this medium vastly to advertise their
product.

RADIO

Radio is ancient yet unique, growing and pervasive medium. Radio is with its
audience when one wakes up in the morning, goes to jog, commutes to and from
jobs, at workstations and goes to bed. It can be broadcasted to highly targeted
audience.

ADVANTAGES

Radio is a universal medium enjoyed by people at one times or another during the
day at home, at work, and even in the car.

Gives the business personality through the creations of campaigns using sound &
voices.

Free creative help is often available

Rates can generally be negotiable.

During the past ten years, radio rates have seen less inflation that those for other
media.

DISADVANTAGES

Because radio listeners an spread over many stations, one may have to
advertise simultaneously on several stations to reach your targets audience.

29
 Listeners cannot go back to the ads to go over important points.

Ads are an interruption in the entertainment because of this, a radio ad may

require multiple exposures to break through he listeners tune-out factor and
ensure message retention.

Radio is a background medium. Most listeners are doing something else while
listening, which means that the ad has to work hard to get their attention.

Examples: Bharti Axa life insurance effectively uses this medium.

WORD OF MOUTH ADVERTISMENT

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 Word of mouth or viva voce is the passing of information from person to person
by oral communication. Oral tradition is cultural material and traditions
transmitted by word of mouth through successive generations.

Word-of-mouth depends on the extent of customer satisfaction with the product

or service. It lies on the added credibility of person-to-person communication, a
personal recommendation.

Word-of-mouth advertising is important for every business, as each happy

customer can steer dozens of new ones your way.

And it's one of the most credible forms of advertising because a person puts their
reputation on the line every time they make a recommendation and that person has
nothing to gain but the appreciation of those who are listening.

ONLINE ADVERTISING

Online marketing, also known as online advertisement, internet marketing, online

marketing or e-marketing, is the marketing and promotion of products or services
over the Internet.

Online advertising is a form of promotion that uses the Internet and World Wide
Web to deliver marketing messages to larger audience.

Online advertising is a form of promotion that uses the Internet and World Wide
Web to deliver marketing messages to attract targeted customers.

OUTDOOR ADVERTISMENT

DIRECT MAIL ADVERTISMENT

Advertising mail, also known as direct mail, junk mail, or ad mail, is the delivery
of advertising material to recipients of postal mail.

The delivery of advertising mail forms a large and growing service for many
postal services, and direct-mail marketing forms a significant portion of the direct
marketing industry.

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 Some organizations attempt to help people opt out of receiving advertising mail,
in many cases motivated by a concern over its negative environmental impact.
Numerous polls have found that Americans consider advertising mail to be
intrusive.

POINT OF PURCHASE ADVERTISMENT

It refers to advertising that is built around impulse purchasing and that utilizes
display designed to catch a shopper's eye particularly at the place where payment is
made, such as a checkout counter.

There are various types of point-of-purchase displays, including window displays,

counter displays; floor stands display bins, banners of any kind, and all types of open
and closed display cases.

Generally, these displays are created and prepared by the manufacturer for
distribution to wholesalers or retailers who sell the manufacturer's merchandise.

Often, a manufacturer will discount the cost of merchandise or in some other way
compensate the retailer for using a point-of-purchase display.

SELECTING THE ADVERTISING MEDIUM

Advertising media selection is the process of choosing the most cost-effective media
for advertising, to achieve the required coverage and number of exposures in a target
audience.

For the purpose of choosing the appropriate medium or media of advertisement in

insurance following factors should be taken into consideration

NATURE OF PRODUCT- Nature of product plays a vital role. In case of insurance

nature of product can be classified depending on different types of policies.

Like in case of health insurance television advertising is more effective than any
other medium because detailing of the cause is possible.

32
NATURE OF MARKET- Nature of market can be determined by various factors
like geographical region, size of population. The market can be either local or
national.

Outdoor advertising is more suitable for local market and newspapers are most
suitable for advertising insurance product on national level.

LIFE OF ADVERTISING- Outdoor advertising magazines and direct mail have

suffientlly longer life but the life of newspaper, radio and television advertising is
very short unless they are repeated occasionally.

So considering these factors also an advertising medium has to be selected by the

insurance company.

FINANCIAL CONSIDERTION The cost of advertising media is a very important

consideration and it should be considered in relation to

The amount of funds available.

The circulation of media.

PLANNING OF ADVERTISMENT CAMPAIGN

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The advertising agency in charge of the campaign must study the marketing plan to
know, the direction of the company is taking the strategic decisions for the future,
before working on advertising campaign.

Some advertising agencies are involved by some companies in preparing their

marketing plans also.The planning of an advertising campaign involves the following
procedure:

APPRAISAL OF ADVERTISING OPPORTUNITY:

The advertising is planned the advertisers must determine whether the advertiser has
a role to play in a particular marketing situation.

To evaluate advertising opportunities is really difficult task. The below mentioned

condition are to be considered to evaluate the advertising opportunities.

Presence of a favorable primary demand trend must be there. If consumer likes to

purchase the basic product category the insurance company advertising that product
will succeed.

If the trend of the product is declining than advertising cannot reverse the trend and
therefore it wont succeed
.
Eg: The unit link plan offered by LIC of India (money plus policy) has more
advertising prospects rather than their traditional product.

There should be good chance of product differentiation. Product

differentiation provides opportunity to consumers to prefer one brand over
another by distinguishing unique or exclusive qualities.

E.g. AVIVA life insurance has variety of products to offer to their customers
which increases their scope of advertising.

34
 Powerful emotional buying motives must be present. An advertising message
that touches the core of what the consume really wants if likely to succeed.

E.g. Max New York Life Insurance child plus plans

There must be hidden qualities in the insurance product. Like in case of Life
Insurance their can is the concept of bonus on the policies taken. This works
as a surprise package.

Adequacy of funds is another important condition for appraising the

advertising opportunities of an insurance company. High advertising budget
obviously increases the scope of advertising.

E.g.- the Bharti Axa Life Insurance has a very high advertising budget.

2. Analyzing the market

The second step in planning process is to analyze the market closely the target market
for the product. Once the target market of consumer is known an advertising
campaign to suit those people may be designed.

The target audience is the rural area so advertise should be designed in such a manner
that the people in rural areas are convinced with the product and its benefit.

IFFCO- TOKIO Rural Insurance

Schemes are advertised to connect to the mentality to people residing in rural areas.

3. Determining advertising objectives

In the absences of objectives nothing can be planned. The ultimate advertising
objectives are to increase the share of the market of the insurance companys product.

The ultimate responsibility for determining the long range advertising objectives and
short term advertising or marketing goals should rest with the management of the
company controlling the advertising functions.
4. Establishing budget and necessary control system

35
Once the advertising objectives are determined the fund necessary to achieve the
objectives
must be provided for.

A large sum is being spent on advertising in the modern insurance business. In

order to spent sum on advertising wisely a specific amount of money is assigned to
various department.

5. Developing the strategy

Having laid down the objectives of advertising an appropriate strategy is to be
developed to achieve these objectives. Advertising strategy is creativity applied to
knowledge for

a. Selecting Media The media selection process can be described as matching the
audience for specific medium with the media. A large portion of the budget
appropriations is spent for the use of media as recommended by the advertising
agency.

b. Creating advertising message advertising message are at the core of advertising

planning. It can be held the value of excellent message is many times greater than a
mediocre message.

Creating of an effective advertising message is one of the primary functions of the

advertising agency. An effective advertising message must answer the following
questions
what business goal does the company seeks to accomplish ?
how do those people now thinks, feel, and believe our product, the company
and its competition?
What kind of people do we now sell to and what kind of people should the
Insurance company sell to?
What kind of thought do we put into the minds of those people to make them
feel, think, believe and do what the company wants?

36
 What tone of voices will get those people to hear and believe the?

6. Co-ordinating advertising with other promotional method

Advertising to be fully effective, needs active support from the channels of
distribution and other non advertising components.

E.g ICICI prudential life insurance had a tie up with movie cheeni kum to promote
their life insurance policy. The punch line of the advertisement is jeete raho was
used quite often in the movie.

7. Evaluating advertising result

As soon as the campaign is under way it is advisable to be tested within the stimulated
market environment. there are two types of testing :
a. Pre-testing Pre-testing is done before an may influence the buying of media
and the creative steps yet to come. The goal of pre-testing is to eliminate the errors
or weakness up the campaign before considerable sums of money are invested in
the effort.
b. Post-testing The main objective of post-testing is to learn from the weakness
and success of the existing campaign and use such knowledge in planning the
future campaign more effective. The purpose of finding the most effective way of
achieving the end. Strategy issues arises in two major areas of advertising.

ADVERTISING STRATEGIES

Insurance companies need to advertise their products and there organization on the
whole to make their products reach the consumers. The job of advertising the product
is a specialized one that requires lots of professional skills.

An insurance company cannot do this job individually. So it hands over the

responsibility of creating and making and advertisement to the advertising agency

Advertising services provide a way for an insurance company to inform the public
about a product or service they want to sell.

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Advertisers hire establishments, such as ad agencies or marketing companies, to sell a
clients product or service to the most likely buyers.

Advertising services can include consulting, creating, and producing the actual ads;
media placement and account handling.

The goal of advertising is to target the segment of a population who has a special need
for a particular product or service and finding ways to provide that product or service
in the most effective means available.

The function of advertising and marketing companies is to professionally promote

individual business and organization. Advertising agencies and marketing firms are
dedicated to the development of the most innovative and effective means of business
promotion available.

When life insurance is being talked of, it is one of the hottest picks in the insurance
industries. Keeping this in the view, insurance companies try to pull crowds towards
life insurance and go for different advertisement technique to attract people.
Life insurance companies are employing new means to advertise themselves and their
products. A most obvious but expensive form of advertising. Effective and
continuous advertising is one of the important functions of any successful business.

It is imperative that the products or services of any insurance business receive the
proper exposure, and the way to achieve exposure is through advertising. Whether it is
on the national or local level , advertising campaigns are necessary to let people know
about an insurance companys business.

A most obvious but expensive form of advertising is the advertisement being

employed by them on the television . a huge number of people are glued to the
television ,so insurance companies target this medium on a prime basis ; they build
distinct advertisements that arrest the attraction of the viewers , thus putting a mark on
them about the importance of life insurance and what they have to offer.

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Television advertisements are very effective since target audience both see and listen
to what is being told at the same time.

Advertising about life insurance in news paper is also an effective way to advertise
and market the agency since the companies try to build brand name recognition for
themselves.

An advertisement for health insurance should be promising for the viewers otherwise
it would be mere failure. If the health insurance advertising company or companies
are successful in convincing the audience about there past successful records and able
to introduce different flexible possible for the well being of different range of
customer, success in inevitable.

The policyholder must be acquainted with the risk involved if any.

We may sometimes find a health insurance ad on wed page we surf. This kind of
advertising by the ad agencies is all right until it doesnt pose any integrity questions,
because, health insurance is a sensitive matter.
Health insurance advertisements campaigns not only help the masses for giving them
a secured life but also to built a nation with greater life expectancy.

The advertisers basically count on the important or the highlighting factors to make
their ads. The ad basically revolves around the USP (unique selling point) of the
insurance product

So these firms lay there advertisements in movie halls when people are out with their
family to watch a film, typically coming up when viewers are sitting in their seats
waiting for their movies to start life insurance companies are also finding different
innovative ways of advertising their product.

They are distribution newsletters so as to reach target customer in person. These firms
are also advertising life insurance through their business stationery and supplies.

They distribute stuffs like pen, paperweight, calendar, etc with their names embarked
on their stuffs.
39
These firms are also employing online advertisements on popular web portals. Along
with publicizing their brand names, the life insurance companies also keep reminding
people about the importance of getting life insurance.

Health insurance advertisement is a best way to propagate the idea of insurance

among the general public. The main aim of insurance company is to advertise health
insurance effectively by all possible means. Now days most advanced methods are
being used to advertise for health insurance.

Advertising for health insurance in television, newspaper and radio is very effective.
Although its cost a bit for health insurance television advertisement, it is most
powerful tool for large scale or wide spread campaign. Advertising health insurance
must be carefully dealt with because of the sensitive issues involved in spite of it
being a business. An ad for health insurance must appeal to the audience in a positive
manner.

WORK OF AN ADVERTISING AGENCY

A unique aspect of advertising is the advertising agency, which in most cases makes
the creative and media decisions. It often supplies supportive market research and is
involved in the total marketing plan.
Full advertising services often began with defining and advertisers target audience, or
the demographic profile of consumers most likely to buy their type of product.

These statistics usually include age group, gender, education level, location, job type,
income and family living situation. Knowing these facts better enables agencies to
come up with a plan to sell the product to a specific audience.

This up-front work eliminates wasting time and money advertising to people who
would not be interested in the product. After determining the consumer profile, a
campaign concept is created and in- house or sub-contracted agency employees use
advertising services expertise to decide which media best reaches the client
customers.

40
Media time or spaces purchased by the agency for the advertiser. Media planners and
buyers determine the best television and/or radio channels, internet sites, or
periodicals that will support the campaigns goals of reaching customer. Todays media
choices are more numerous than ever because of the prevalence of Internet use.

Another advertising service that my be offered is the creative work performed to

produce the advertising. Art directors, graphic designers, photographer and
copywriters are a few of the key players on a print ad creative team, with broadcast
media requiring producers, directors, scriptwriters, video editors, and camera
operators.

Behind the scenes, other advertising services staffs finds and book talent for ads and
commercials, voice talent, models, and actors. Coordinating all aspects of an
advertisers account, an account executive keeps abreast of the campaigns progress
and communicates details and statues to the advertisers.

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 CREATIVE THEMES OF ADVERTISING IN INSURANCE:

PRESTIGE: These themes very effectively in the insurance advertise. It presents the
concept of self respect. This theme can be used to show how by having a particular
insurance policy one can be self dependent.

E.g the HDFC Standard Life Insurance works on these theme with its punch
line of Sar Uthake Jiyo.

Health this theme is very useful in advertising of health insurance scheme.

Such kind of ads shows the effect of sudden physical contingencies to promote
their policies.
E.g. ICICI Lombard Health Insurance Policy.

Comfort this scheme is used in advertising of pension plans. This concept

shows that by the virtue of having a retirement policy of a particular insurance
company one can have a comfortable life after retirement. E.g. AVIVA
Pension Plus Plan.

Parental affection this scheme can be effectively used in advertising of child

plans.
E.g. Max NewYork Life Insurance Child Plus Plan.

Fear this scheme is used effectively to advertise life insurance product.

This theme explains about the uncertainties of life and its consequences.

E.g. the Life Insurance Corporation of India uses the theme.

Using endorser in advertising an endorser can be used to advertise a product.

Endorsers usually are a celebrity in its own right. He or she can be an actor,
politician any famous sport personality etc.
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The consumers now a days are much influenced are in a way of such
celebrities and when they get to see their favorite celebrity using a particular
product, they get very much influenced to see that product themselves a
research from market evaluators determine the likeable personality and
celebrity based on various surveys and there popularity in general.

Based on these studies, they approach an endorser usually known as a brand

ambassador to endorse there product.
E.G AVIVA Life Insurance as Sachin Tedulkar as its Brand ambassador.

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 STRAGIES ADOPTED BY DIFFFERENT INSURANCE COMPANIES

Recently the one that made an impact recently was the full-page ad for Apollo Munich
health Insurance. The promise of an uncomplicated insurance is likely to resonate
only too well with consumers.

Recently, Bharati Axa General Insurance took a similar stance attempting to re-
position competitive offers as insensitive towards the consumer. The advertisement
outlined the promise of cashless facility and no medical checkups upto 55 years of
age as the justification for the claim.

Such promises ( in fact similar promises) get a mention in the press ad, which
eventually creates more impact

Bajaj Allianz has launched its latest advertising innovation on child insurance plans.
For the first time on television, Bajaj Allianz will display its Groovy kids innovation
in promoting child insurance during the India- Australia match in Hyderabad in 2 slots
for 10 seconds each.

It is a media innovation, showing a father and son duo, which takes the campaigns
central idea into the field and breaks away from the clutter through an activity within
the match, as opposed to a usual commercial break.

The innovation, showcasing the son endorsing his father on planning his future, is
designed to take the central promotion campaign to an all together new level. Mr
Mehrotra further added, the campaign provokes parents to start planning their
childrens education.

Bajaj Allianz offers a host of insurance plans specifically suited to help parents plan
their childs higher education, marriage and provide funds for contingencies. Our

44
super Agent is key custodian and friendly advisors who provide excellent service and
information to the customer for their future and insurance planning.
This is the first time an insurance brand has taken the media innovation route to its
product offering directly on to a platform as broad based as a cricket match.

M. Suresh (GM Sales of HDFC Standard Life) said, Stemming from the idea of being
different and backed by research on what a consumer truly looks for, we came up with
the theme of self-respect. khuddari is something that has been ingrained in us by
our parents and this is the genesis of our campaign.

We have in fact taken it to a higher level and talked about financial independence. The
biggest asset in life is ones existence and the most significant need that one has to
cater to is financial independence.

o the thought process behind the campaign was that an individual should be able to
live with dignity at various stages of life.

Keeping in mind this basic concept of the company the advertisers gave it the tag line
Sar Uthake Jiyo , there by satisfying the khuddari (self-respect) pre-requisite.

Reliance Life Insurance has entered into a tie up with the movie three idiots and is
using the thought All is Well and to promote both the movie and all advertises of
their product.

The campaign, spanning television, radio and outdoor, talks about Reliance Life
Insurances assurance of taking care of its consumers financial worries and enabling
them to live life to the fullest.

The Birla Sunlife Insurance Company has two ads, which show the lives of the two
cricketers the story of their glory and success, as well as the low points of their
careers.

45
The source of their wealth and fame is always dependent on their performance in the
field a wrong shot from their bat could get them down. While dealing with this
uncertainty, the cricketer understands and brings out the need for insurance.

IRDA REGULATION WITH REGARDS TO ADVERTISING IN

INSURANCE

OVERVIEW

These guidelines issued are intended to protect the interest of the insuring public,
enhance their level of confidence on the nature of sales material used and ultimately
encourage fair business practices.

They are considered as the minimum standards to be adhered to, in addition to

compliance with the IRDA (Insurance Advertisement Disclosure) regulations, 2000
(herein after referred to as Advertisement Regulation) and the code of conduct
prescribed by the Advertisement Standard Council of India (ASCI) and any other
regulations as applicable.

These guidelines reinforce extant regulations on all promotional communications with

policyholders/prospective policyholders or targeted market segment with the objective
of soliciting insurance business or otherwise.

CATEGORIES OF ADVERTISEMENT

For the purpose of these guidelines an advertisement may be classified into two types:

1. Institutional advertisement: this is advertisement of any nature which is not,

either directly or indirectly, intended to solicit the insurance business, but only
promotes the brand image of the insurance companies and/or its intermediaries and
may contain the registered name, address, toll free number, logo or trademark thereof.

46
Advertisement issued in any mode including those that highlight sponsorship fall
under these categories

2. Insurance advertisement: any advertisements issued with the specific purpose of

soliciting insurance business, and/or to influence the choice, opinion or behavior of
the prospective policyholder will fall under this category. Advertisement, for this
purpose, means insurance. Advertisement as defined in a advertisement regulation
and is classified as under:

Invitation to Inquire: this is an advertisement which highlight the basic

features of insurance/insurance products issued through recognized marketing
media in any mode to create a desire to inquire further about them.

Invitation to Contract: this is an advertisement containing the detailed

information regarding the insurance/insurance product mainly to induce the
public to purchase, increase, modify, reinstate or retain a policy.

47
 GUIDELINES TO ADVERTISEMENT

These guidelines are to be complied with by

All the insurers (life insurers, non-life insurers and health insurers).

The insurance intermediaries.

COVERAGE: these guidelines apply to advertisements, issued through all

recognized marketing media, in any mode including printed material, radio,
television, e-mails, hosting on the internet and any other audio/visual electronic
media.

General Requirements are ( Dos )

Communications are clear, fair and not misleading whatever is the mode of
communication. They should use material and design (including paper size,
color, font type and font size, tone and volume) to present the information
legibly and in an accessible manner.

Sales material and advertisement are comprehensible in the light of the

complexity of the product being sold.

Brand names of the product as proposed in the File and Use application are
adhered to.

When issued in vernacular languages, the mandatory disclosure are also in the
same vernacular language.

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(Donts ):

The design, content or format shall not disguise, obscure or diminish the
significance of any statement, warning or other matter which an advertisement
should contain as required by these guidelines.

Use or denigrate names, logos, brand names, distinguishing marks, symbols

etc, which may be similar to those already used by others in the market that
may lead to confusion in the market place.

SPECIAL GUIDELINES TO INVITATION OF CONTRACTS.

Doss : advertisement should ensure that :

Any expression of opinion of the insurers is a fair and honest representation.

Any statement of fact, promise or projection disclose all the relevant

assumptions ; and indicates in a clear and prominent way significant
limitations / criteria on which any special offer are available.

Where attention is drawn to insurers past financial performance it should

indicate that the past performance is not an indication of future performance.

The content should necessarily include:

The nature of the insurance contract and there type of the product.

The risks involved ; the limitation and exclusions of the contract;

Illustrations, which indicate the exact costs and projections (e.g., disclose date
of NAV);

The commitment of the insurer and policyholder under the contract (e.g. the
minimum amount to be invested; minimum and/ or maximum sum assured;

49
 lock-in period; the reasonable safety norms to be adopted in case of non-life
insurance products etc.,)

ADVERTISING THROUGH AND OTHER ELECTRONIC MEDIUM:

INTERNET

In case of communications on/through internet an insurer should ensure that

the recipients/viewers have the opportunity to view the full text of the relevant
key features; terms and conditions; any other applicable risk information
required by these guidelines and they shall not be hidden awy in the body of
the text

It shall be easily obtained, before any application form is offered. In case of e-

mails communications there should be a provision to unsubscribe from the
mailing list.

Insurers should take an undertaking from the prospective policyholders that

they have read the entire text, features, disclosures, terms and conditions, etc.,
while applying for insurance on-line.

Mandatory provision of a helpline or help number to further provides all

information that a policyholder would reasonably expect.

Insurers should provide hard copy of the necessary information on request.

TELEPHONIC INTERACTIVE MODE:

50
 Promotional activities through Cold- calls shall be preferably by a licensed
intermediary. In case it is done other than license intermediary, responsibility
of compliance with advertisement regulation and the guidelines vests with the
insurer/ intermediary that has outsourced this activity.

The telephone caller shall take necessary steps to ensure that they do not
introduce into the privacy of the receivers. They should disclose their identity
and proceed to converse only after permission.

A reference on the access to full information about the available products and
the importance of financial need analysis along with the contact phone
numbers, which can provide such information, shall be placed before closing
the call.

Every insurer shall facilitates an access to do not call registry with the
contact numbers of the persons who wish not to be contacted, which should be
referred to, before every call.

Draw attention to favorable tax treatment without stating that they are subject
to changes in the taxes laws.

Highlight the positive financial condition of the parent (or promoting partner)
company without mentioning the financial condition of the insurer and/or
indicate that the assets of parent company can be banked upon when desired.

Disclose benefits partially without disclosing the corresponding limitations/

conditions/ implications.

Indicate that acceptance of risk and/or settlement of claims is liberal and

generous without intent to do so.

Use ambiguous words or phrases which are likely to exaggerate the underlying
benefits of the policies or plans and/ or capable of limiting the actual
exclusions or the limitations of the underlying benefits of the plan.

Denigrate or damage the reputation of the competitors or the industry.

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Mandatory disclosure in invitation to inquire:

Every advertisement in the nature of invitation to inquire should disclose the

following statement for more details on risk factors, terms and conditions please read
sales brochure carefully before concluding a sale.

JOINT SALE ADVERTISING (JS)

Any insurance advertisement brought out jointly by an insurer either with its
corporate agent or with a micro-insurance agent would fall under this category. These
could relate to promotional activities where the logo/trademark/trade names of the
participating parties are displayed jointly.

Joint sale advertisements in the nature of insurance advertisements can be

released only after obtaining prior approval from the Authority. Every
application for approval shall carry a certificate from the Appointed Actuary
that it presents the same features of the product as cleared under file and use.

The contents of these guidelines will apply in mutandis to all the JS

advertisements, as applicable. These guidelines super cede the circular
IRDA/ADVT/2004 dated 6th December 2004 regarding Product Co-branded
with Corporate Agents/Broker.

BRANDING WITH THIRD PARTIES (THIRD PARTY FOR THIS PURPOSE

SHALL MEAN ANY INDIVIDUAL/ ASSOCIATION /ENTITY OTHER
THEAN INSURANCE INTERMEDIEARY)

52
 Branding can be used on any advertisement of insurance
company/intermediary only when it does not urge the prospect or a
policyholder to purchase, renew, increase, retain or modify a policy of
insurance.

An exemption is however, given to insurance schemes sponsored/ subsidized

by Central/ State government (s) in which case branding is permissible in any
category of advertisements.

The bonus vests with the insurer as to the compliance requirements of time, in
such cases.

RATING/ RANKING/ AWARDS

Any claim of rating/ award should be based only on those declared by entities
which are independent of the insurance company and its affiliates. Insurance
company and its affiliates should not however, procure services from such
independent entities so as to get a rating/award.

Source of such rating/ award is to be disclosed conspicuously and legibly in

such advertisements.

No claim of ranking by an insurance company, as regards its position in the

insurance market, based on any criteria (like premium income or number of
policies or branches or claims settlements etc., ) is permissible in any of the
advertisements.

OTHER IMPORTANT GUIDELINES

Mandatory disclosure as specified by advertisement regulation and

applicable guidelines as may be specified from time to time should be clear,
conspicuous and legible and should find at least 10% of the total space utilized
for the advertisement in print/visual mode with a minimum print equivalent to
font Times New Roman No.7. In case of audio mode, these disclosures
should be spelt for at least 10% of the total time slot of the advertisement.

53
 All the advertisements should carry a unique identifiable reference number
Where material is filed with the Authority

in accordance with the advertisement regulations, in other than English /

Hindi language, true translation of the same in English / Hindi duly certified
by an Authorized officer of the insurer, is to be enclosed.

In Unit Linked business, advertisements should also adhere to the

advertisements inconsistent with the provisions of these guidelines should be
withdrawn within 2 months of the guidelines coming into force

CASE STUDY

Life Insurance Marketing in India the Changing Advertising &

Promotion Norms

In early 2002, India's state owned insurer, Life Insurance Corporation (LIC),
announced tie-ups with Corporation Bank, Oriental Bank of Commerce, Bank of
Punjab and Nedungadi Bank for sale of its products through their branches.

The aim of the tie-ups was to diversify LIC's distribution channels and increase
product penetration. Industry observers were not surprised by this move. They felt
that LIC had no option but to explore new channels of distribution to maintain its
position as the market leader.

The liberalization of the Indian insurance industry in 2000 led to the entry of private
insurance companies with MNC as their partners. Reaching anywhere near LIC's vast
network, built over decades, was going to be extremely tough for the new players.

54
Consequently, private insurers decided to rely on aggressive advertising and
promotional measures and use hitherto untried distribution channels. Private insurers
began exploring the various distribution channels available instead of concentrating
on individual agents, a channel LIC had been using for decades.

To minimize cost, these companies tied up with established financial services

companies and used their distribution network instead of setting up their own
network.

According to insurance industry observers, distribution was expected to emerge as

one of the key factors for the success of private insurers in India. They also felt that
insurance intermediaries and new distribution channels would become the strongest
drivers of growth for the insurance sector and that multi-channel distribution would
become the norm.

With even LIC adapting these new channels of distribution, the distribution of
insurance products/services seemed all set to undergo a radical overhaul.

The 'Indian Life Assurance Companies Act' was passed in 1912; this was followed by
the Indian Insurance Companies Act, 1928. These acts allowed the government to
collect data regarding life and non-life businesses conducted by both Indian and
foreign insurance companies.

Later, the 1928 act was amended and a new act, the 'Insurance Act' was passed in
1938. By the mid-1950s, 154 Indian insurers, 16 foreign insurers and 75 provident
societies were operating in the country.

The life insurance business was concentrated in urban areas and was confined to the
higher strata of society. In 1956, the management of these companies was taken over
by the Government of India.

LIC was formed in September 1956 through the LIC Act 1956, with a capital of Rs
50 million. One of the main objectives of forming LIC was to make insurance cover
available to a large number of people, particularly to the lower segments of society.

55
In 1972, the government took over management control of 106 private general
insurance companies and formed the General Insurance Corporation (GIC). Over the
years, LIC expanded its network all over the country and became one of the largest
corporations in India. LIC had seven zonal offices, 100 divisional offices, 2,048
branch offices and army of agents totaling 6,28,031.

Growth in Indian insurance industry was minimal in the 1960s and 1970s because of
low savings and the low level of literacy. In addition, the insurance industry lacked
sufficient funding and infrastructure.

However, changes in the economy in the 1980s, such as growth in the rate of
industrialization, improvement in infrastructure, the capital markets, increase in the
savings rate and substantial capital formation resulted in tremendous growth in the life
insurance industry.

Over the years, LIC launched several group insurance and social security schemes to
enhance its reach in the rural areas. In the early 1990s, the government felt it
necessary to reform the industry, provide better coverage to the citizens and to
increase the flow of long-term financial resources to finance the growth of
infrastructure.

In 1993, the Indian government set up the Malhotra Committee to suggest reforms in
the industry. The committee, which submitted its report in 1994, recommended
opening of the insurance sector to private players, improving service standards, and
extending insurance cover to larger sections of the population.

Various labor unions and political parties in the country opposed the committee's
suggestions.They felt that the entry of private players would lead to job cuts by the
nationalized players to make them more competitive.

There were a host of other arguments against these reforms. As a result, the
government decided to restrict foreign stake in insurance companies to only 26%,

56
which was well below the 51% required by the Insurance Bill for controlling the
management of the company.

Though one of LIC's basic objectives was to 'provide insurance cover to all Indians,'
insurance penetration in India remained very low. According to reports, only 65
million people were covered by insurance.

R N Jha, LIC's former Executive Director, commented in his book, Insurance in

India, "Insurance coverage has been extended only to about 25% of the insurable
population in 40 years". In other words, the insurance market in India was largely
untapped.

However, the fact remained that more than 75% of the Indian insurable population
was untapped. According to industry observers, one of the main reasons for the low
insurance penetration was the poor distribution and marketing strategies adopted by
LIC.

Prior to liberalization, due to its monopoly status, LIC seemed to have had no
strategically devised distribution strategies in place. It depended entirely on individual
agents, which it had trained over the years to distribute its products.

LIC made no efforts to use other distribution channels (Refer Exhibit I for various
distribution channels for selling life insurance).

LIC's agents were not well qualified for their work. Prior to liberalization of the
Indian insurance industry, no minimum qualification was laid down for people who
wanted to become insurance agents.

Agents generally acted like brokers; they cared more for their commissions than the
needs of the customer. As a result, they did not make the effort to educate customers
about the insurance products being offered.

To distribute insurance products, LIC employed a large number of marketing people

as 'Development Officers'.

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These officers employed and trained a number of agents. Development Officers
received bonuses from the business generated by their agents, in addition to their
salary.

Consequently, LIC ended up paying bonuses and commissions twice for every new
policy and subsequent renewal of premiums to both agents and Development
Officers. It was reported that after only a few years of recruitment of agents,

Development Officers earned huge amounts as commissions. Despite this, the

attrition rate among the agents was very high, largely because LIC selected the wrong
kind of people in the first place.

LIC's bid to implement strict incentive schemes and 'career agent' type of distribution
failed due to the powerful Union of Development Officers. However, with the entry of
new players, the insurance market changed dramatically.

Analysts commented that the private insurers seemed all set to make the industry
market-driven, wherein technical expertise and service excellence would be the key
success factors.

The private companies, to make their presence felt and expand their reach,
experimented with new distribution channels.

According to analysts, it not only helped insurance companies increase market

penetration and premium turnover, it also helped banks increase their Return on
Assets (ROA annual earnings divided by total assets).

This was because, even with a constant asset base, bancassurance contributed to
enhanced ROA through fee income. (Refer Table III for various bancassurance
agreements).

Allianz Bajaj Life Insurance (Allianz Bajaj) planned to build a multi-channel

distribution network, which included agents, corporate agents and strategic alliances
with banks, Bajaj Auto network and other direct marketing initiatives.

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 In late 2001, it signed a Memorandum of Understanding (MOU) with Standard
Chartered Bank for an exclusive bancassurance distribution agreement.

According to reports, Standard Chartered was to act as the corporate agent for the
company, and the partnership was expected to leverage the bank's 60 branches across
the country

Standard Chartered Finance (a subsidiary of Standard Chartered Bank) was also

expected to market Allianz Bajaj's products. Companies such as HDFC Standard Life,
ICICI Prudential Life, and SBI Life insurance planned to leverage the branch network
of their parent companies, HDFC, ICICI Bank and SBI respectively, for distributing
their products.

Reaching out to the bank's existing customers would be very easy for the insurance
companies as the banks already had a well-established relationship with their
customers.

Since SBI had a network of over 9,000 branches, SBI stood to gain a lot by utilizing
the bancassurance channel. It was reported that by the end of 2001, 21 branches of
SBI were distributing SBI-Cardiff's group policies.

Many analysts believed that bancassurance would play a very important role in India
because banks were familiar with the target customers' needs, had a strong service
delivery mechanism, good quality administration, complete integration of insurance
and bank products and services, qualified personnel and an organized tracking system
for reporting on agents' time and the results of bank referrals.

However, it was also pointed out that the partnership between insurers and banks
could run into problems.

The most common problems that partners could face were inefficient manpower
management, lack of sales culture within the bank, lack of branch personnel's
involvement, insufficient product promotions, failure in integrating marketing plans
of both bank and insurance company,

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limited database expertise of the bank and inadequate incentives to the bank personnel
involved in sales of insurance products.

Despite the growing thrust on bancassurance, most of the players believed that
individual agents would continue to play a major role in the Indian insurance industry.

According to Anuroop Singh, CEO, Max New York Life, the new distribution
channels would not be able to completely replace individual agents. He said, "Over
90% of the life insurance schemes the world over are sold through individual agents.

Agents will be the primary channel of distribution in India and so we have invested
substantially in training our life insurance agent advisers here." Max New York
worked towards making the quality of its agents its main differentiating factor.

The company adopted the career agent system instead of LIC's general agent system.
Max New York paid attention to the agent selection process so as to recruit the best
talent available. The selection process comprised four stages screening,
psychometric tests, career seminars and final interview.

Agents were trained in the various products the company offered and the insurance
needs of the customers so that they were in a position to offer them sound advise.

The training covered 152-hours, instead of the mandatory 100 hours stipulated by
IRDA. The program involved modules on understanding the consumer psyche and the
financial market, and developing selling skills and the right attitude.

Commenting on the need for training agents, Mr. Debashis Sarkar, senior vice
president, marketing, Max New York, said, "Internal employees are all opinion
shapers and indirect brand-builders and brand promise needs to be replicated down
the chain at every customer touch point.

The company also made training an ongoing process, and ensured that the training
program addressed the needs of agents through development of skills and knowledge
through a program spreading over 500 hours over two years.

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HDFC Standard Life decided to rely on individual consultants and corporate agents
for distributing its products. According to company sources, individual consultants
were expected to play a key role in the sales process.

The company therefore invested 20 man-months in developing training programs for

consultants.

The company also trained its consultants through institutions approved by IRDA. In
addition, HDFC Standard Life tied up with corporate agents all over country. It had
already tied up with HDFC and some other banks to distribute its products.

To increase its coverage in rural areas, HDFC Standard Life held talks with NGOs
that were involved with HDFC's housing schemes in rural areas.

Birla Sun Life announced the appointment of Village Extension Workers (VEWs)
who would help create awareness about insurance in villages.

Generally, these VEWs were from social improvement projects promoted by the
Aditya Birla Group of companies. Each VEW was put in charge of a cluster of 10-15
villages.

Many other major private insurers were laying emphasis on the recruitment and
development of quality agents to enhance their brand image in the market and attract
customers.

LIC ran an advertisement campaign that featured one of its most successful agents to
highlight its belief in the individual agent system. Meanwhile, the Government of
India opened up yet another avenue for distributing insurance products in August
2002: brokers (Refer Exhibit II).

Foreign brokerage firms were also allowed, but only through a tie-up with an Indian
partner and a 26% cap on equity.

IRDA planned to finalize regulations by September 2002 and issue licenses to four
categories of brokers - direct general insurance broker, direct life insurance broker,
reinsurance broker, composite broker, and insurance consultant.What Lies Ahead

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After the decision to allow brokerage firms was announced, many Indian and foreign
firms expressed their interest in entering the Indian insurance market. HSBC Bank
announced its intention to set up an insurance brokerage firm in India.

The Tatas also planned to enter the insurance brokerage business, focusing on both
corporate and retail clients (reportedly through a strategic partnership with the Hong
Kong based Jardine Matheson group).

As marketing, distribution and technical superiority were expected to be the decisive

factors for success in the Indian insurance sector in the future, the new players seemed
to have a good chance.

With the growing popularity of new distribution channels in the Indian insurance
market, Private insurers hoped to effectively leverage the strengths of the new
distribution channels.

The above belief was strengthened by the emergence of another new channel the
Internet. According to reports, in 2001, around 12% of the insurance products were
sold through the Internet, and this figure was expected to grow as Internet penetration
increased.

Because of increasing competition in a crowded market, private insurers were trying

to leverage every possible medium. According to analysts, in the not-too-distant
future, even departmental stores, ATMs, Internet kiosks and supermarkets would be
selling insurance

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 SURVEY

Life Insurance Corporation of India is a public sector giant in the life insurance
industry in India. For almost five decades LIC is monolithic company in the life
insurance sector. Since nationalization LIC has built up a vast network of 2048
branches, 109 divisions.

The largest life insurance company in India, Life Insurance Corporation is fully
owned by the government. It provides individual life insurance, group insurance and
pension plans. Today the company is on the Internet and is utilizing Information
Technology in servicing its clients.

Survey analysis

A sample survey was conducted of 3o people about there preference of LIC over other
insurance company. The following are the result of the survey conducted.

1. Which method of advertising do you find attractive (rank them).

10- Highest 1- least attractive

TV. Internet
Radio Mobile/sms
Newspaper Pam plates

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Magazines Direct mail
Hoardings Transits ads

Ratings
4% 2%1% TV
5% Newspaper
8% 30%
Hoardings
Mobile/sms
Radio
Pam plates
Magazines
Direct mail
22% Internet
8% Transits ads

8%
12%

Most of the people prefer TV as a more attractive advertising and the least
attractive advertising goes to the transits ads. Because nowadays, people are more
influenced by watching television.

2. Do you feel that advertisement influences people to buy insurance?

a) Always. b) Sometimes.
c) Occassionaly d) Never.

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 8%

10%
30%

Always
Sometimes
Occassionaly
Never

52%

Most of the people say sometime insurance advertisement influence to buy insurance.
Few of them says they never get influenced by the advertisement.

3. Which age group get most influenced by advertising?

a) 1-15 yrs. b) 16-30 yrs. c) 31-45 yrs.

d) 46-60 yrs e) 61-75yrs f) 75yrs & above.

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 3%
7%
18%

22% 1-15 yrs

16-30 yrs
31-45 yrs
46-60 yrs
61-75 yrs
75 yrs & above

50%

Age group of 16-30 years get most influenced by advertising whereas the age group
of 61-75 years are less influenced but the least age group is 75 & above years.

4. How do you find ads in insurance sector?

a) Rational b) emotional c) both.

20%
30%

Rational
Emotional
Both

50%

Most of the people feel that advertisement gives emotional appeal whereas some of
the people think that ads sometimes give rational appeal.

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5) Reasons for success of advertisement of insurance company.

a) Brand ambassador b) catchy tagline c) creative ads

d) good copy e) product in formation
f) more frequency of ads

8%
19%
8%

10% Brand Ambassador

Catchy Tagline
13% Creative ads
Good Copy
product in formation
more frequency of ads

41%

Most of the people say that success of the advertisement depends on the creative ads
whereas few of them say frequency of ads and product information is the reason for
success.

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6) Do u remember advertisement of any insurance company?

a) Yes b) No c) cant say

If yes, mentioned along with name of company

20%

Yes
50% No
Can't say

30%

Most of the people remember the advertisement of insurance company. Few people
are confused about the advertisements.

Most of the people who said yes remember the ad of LIC, ICICI Prudential life
insurance, Bharti AXA.

7) Which companys advertisement do you find most influential?

a) LIC b) ICICI Prudential c)Bajaj Allianz d) HDFC Standard

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 e) Bharti AXA insurance f) Max new York g)Kotak mahindra

7%
12%

LIC
40%
ICICI Prudential
10%
Bajaj allianz
Hdfc Standard
Bharti AXA
Max new york
8%
Kotak mahindra

8%
15%

Many people feel the ad of LIC is more influential than any other insurance company
mentioned above.

8) Do you remember the tagline of LIC?

a) Yes b) No c) cant say

If Yes, mention it below:

23%

45% yes
No
can't say

32%

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 Many people say yes that they remember the tagline of LIC .
Jeewan ke saath bhi Jeewan ke baad bhi
Whereas some people are confused about the tagline.

9) Is LIC really able to compete in advertising with other private company.

a) yes b) no c) Cant say

10%

Yes
No
30%
Can't say
60%

Most of the people think that LIC advertisement is able to compete with other private
players.But there are less number of people who are not sure about it.

10) Rate the advertisement of LIC (1-10)

70
 30%

Highest rating
Lowest rating

70%

Maximum number of people rate LICs ad between 10 to 8.Whereas minimum

number of people gave less rating between 5 to 3

Conclusion:

From the overall analysis it was observed that there are more number of people who
are most influenced by the advertisement of LIC. Most of the ads are creative and
emotional that gives a strong appeal to attract people.

LIC is able to compete with private insurance companies, being a public undertaking.
This survey gives the clear indication that advertisement plays a vital role in insurance
sector.

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 CONCLUSION

Advertising in the insurance sector has become an integral part for the growth in
insurance business. The basic objective of advertising in case of insurance sector is to
make consumer aware about different products available in the market.

It helped in product differentiation on the part of the customers and it also makes it
easy and convenient for the customer to buy desired kind of product.

From this project we refer that there is a lot of scope for advertising in insurance we
also see that with growth in use of advertisement in insurance will grow to great
heights.

Advertising is a form of communication for marketing and used to encourage or

persuade an audience (viewers, readers or listeners; sometimes a specific group) to
continue or take some new action. The purpose of advertising may also be to reassure
employees or shareholders that a company is viable or successful.

The most important aspects of promotion is advertising. Advertising is an

indispensable part of the marketing strategy of any product or service. A proper
advertisement has a great impact on the sales of the product and that is why
companies spend huge amount of money to make effective advertisements.

BIBLOGRAPHY

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 BOOKS

Wilmshurst John, The fundamental of advertising, butterworth

publication 2000.
Chandra Jagdish, Advertisement management, Omega Publication 2008.

WEBSITES

www.advertisingindia.com
www.advertisingjournal.com

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