Q] Niva Bupa locked a growth rate higher than the industry standard during the pandemic. What has been the post-pandemic experience and current standing?
In FY 2021, the year of the pandemic, we grew at 41% when the industry growth rate was 12%. In FY 2022, we grew at 60% compared to the industry growth rate of 26%, and in FY 2023, we grew at 45%, while the industry growth rate was 21%. We’ve been comfortably managing or sustaining growth rates of about 40%, growing off a smaller base relative to the industry. But we are excited about the health insurance opportunity in India. COVID-19 has been an inflection point for the health insurance industry and the company, in terms of awareness.
Today, as we speak, the demand is not what it was during the pandemic years, but it is higher than what it was before the pandemic. We believe that we will be able to grow faster than the industry, between 25 and 30%, in the medium to long-term future.
Q] In 2021, it was cited that Niva Bupa is on its way to 5,000 cr. gross written premium by the year 2023-24. Is the brand on track?
Up until August this year, our growth rate has been at 40% relative to the industry growth rate of 22%. I do firmly believe that we’re on track towards the 5000 Cr+ goal that we set for ourselves for this financial year.
Q] How can distinct product categories and innovative features highlighted in marketing campaigns such as ReAssure 2.0 give a competitive leverage? What are the insights behind them?
Product differentiation is an important element of being competitive in the marketplace. With ReAssure 2.0 we have three very strong differentiators. One is the booster plus feature that carries forward any unused sum, and appeals to a very Indian and human sentiment that nothing should go to waste.
For protection against medical inflation, we’ve launched this feature that we call ‘Reassure Forever’, where there is an unlimited green statement of the sum. So, you never lose, you never run the risk of running out of insurance, especially in catastrophic events. The third one, which I think beats the industry as nobody has replicated it yet, is what we call ‘Lock the Clock’. One thing that customers worry about is health insurance premiums going up all the time, and they get increased for two reasons. One is inflation, second is because your age changes. With ‘Lock the Clock,’ we’ve addressed the age change part for customers who stay healthy. If a 45-year-old has been healthy and there’s been no hospitalization, then the feature allows this customer to pay the premium of a 25-year-old. So, imagine you turn 45, but you’re still paying the premium of a 25-year-old. The premium could go up because of inflation, but this person will be paying whatever a 25-year old is paying, which I think is revolutionary.
Q] The next set of health insurance consumers are expected to come out of the Tier lI and Tier III regions of India. How does Niva Bupa plan to capture the emerging market and use elements such as regional communications or hyper-personalization?
In the Digital world, you can sit in Gurgaon and market all over India. You can draw traffic to the website and convert it. We do that part of the business too. But the other part is still a conversation-led business. To capture a market through the length and breadth of India, you need to have a distribution footprint, which we have. With our agency team, we have more than 220 physical offices across the country. All our bank partners collectively have 45,000 branches across the country, and we are positioned to firmly cater to Tier II and Tier III markets.
Next comes the communication part of it, which goes out in at least nine languages, both for our distributors as well as our customers. For the most part, our above-the-line marketing budgets are for English and Hindi, but as we increase our market presence in some of the states, we will start to do more local communication.
Q] Please share a few insights on the brand’s marketing blueprint and the overall communication strategy.
We do both traditional as well as Digital marketing. In traditional marketing, we leverage TV and Connected TV, which is becoming increasingly important. There’s a whole medium expansion that the team does depending on reach, frequency, and parameters. So, that’s one dimension of our above-the-line campaign. For the most part, we do Television. We do some Print, and Radio, but the bulk of our expenditure is on TV.
We spend a lot of money on the Digital marketing side too, more specifically, performance marketing. We are present on Google, YouTube, Facebook, and X (formerly Twitter). This spend is more ROI driven, so, you spend the money to get the business.
Q] Please explain how a consumer who is already with Niva Bupa, becomes the brand’s ambassador.
The health insurance industry gets negative press when the reality is that it does a lot of good work. We settle 91% of all claims, which is one of the best, if not the best in the entire industry. When the testimonials come from real customers with real experiences, it is much more powerful. This is a word-of-mouth business, and it is built on trust. I feel the best way to reinforce trust is through people because people trust people. This is how we shape the perception of the company. A lot of good work happens, and who better to speak about them than your customer? That’s also our thought process behind the Smile Ko Claim Kar Le campaign.
Q] India is set to be one of the sixth-largest health insurance markets in the world. At this point, what are the major concerns and hindrances that need immediate resolution and are stopping the country from becoming the largest health insurance market in the world?
When I say equitable health insurance, it means the purpose of the company is to ensure every Indian has the confidence and access to the best healthcare. Healthcare spending is the number one reason Indians become poor in our country today. I think every Indian has to be able to access healthcare. The amazing thing for us as an industry is that we have a regulator that has a massive development agenda. It is remarkable to have a regulator who’s placing building blocks towards health insurance penetration. As to what can we do more or what hindrances could come in the way? Taxation can be more favourable. Because given that it’s an intangible product, I think tax incentives help persuade customers to buy health insurance. A lower tax rate has been a longstanding request from the industry, to help make products more affordable, as 18% GST on health insurance is quite high.
