Page 42 - Insurance Times April 2022

markets), and a sizeable public distribution system, the rural marketing front, primarily due to government support and
markets offer an ample opportunity. C. K. Prahalad initiatives. The social security fund set up by LIC finances 50%
emphasized that "the future lies with those companies who of the premia in some popular rural group insurance
see the poor as their customers." In terms of purchasing schemes, such as Jana Shree Bima Yojana (JSBY) and Landless
power, it may not have great depth, but it has enormous Agricultural Labourers' Group Insurance (LALGI). The LIC has
width, like the bottom of any pyramid. The rural markets been doing intense publicity through mobile vans and other
are pretty heterogeneous, with state-wise variations in rural media. The radio and television reach almost every village
demographics. through community sets.

Problems Furthermore, like all other financial institutions, the word
private seems to signal a worry among the rural folks. The
The life insurance industry's engagement with rural India is
task facing most private players is to get into an exercise of
only a corporate social responsibility (CSR) rather than a
business. Rural insurance, much like priority sector lending, building image and trust to gain credibility. Rural folks trust
is seen as a poison pill by the private players. The fulfillment banks and post offices more for buying insurance than buying
of IRDA's norms for insuring rural lives lacks proactive from the agents. Expensive policies, products not designed
to meet villagers' requirements, and the professional
enthusiasm. IRDA mandates insuring 5000 new lives or
working style have failed to generate confidence as the rural
selling7% of policies in rural areas in the first year. The
number stands at 20,000 new lives or 16% number of population prefers a personalized approach.
policies in the fifth financial year since the inception of an
Among the private players, Aviva, ING, and Tata AIG are
insurance company. The insurers find that the rural
population is widely scattered and demands long-distance some names who have been keenly trying to do something
in rural areas. Aviva has adopted a differentiated approach
travel of agents.
of focusing on unique products to suit the customers' needs.
These products are easy to understand, do not require
The other significant challenges are as follows: i) lack of
awareness and education, ii) non-availability of documents medical tests, and have more straightforward
for certification, iii) non-availability of age proofs and death documentation. Their unique network of advisers recruited
from the local populace and promoting life insurance
certificates, and iv) lack of focus on pure risk, and v) high
lapsation of policies. The small number of advisors operative through rural media such as wall paintings, vans, local
in rural markets is another big grey area. IRDA has revealed events, and village haats are noteworthy.
that the agent population is much lesser in rural areas.
Therefore, alternative distribution channels become crucial Strategies
for success in rural areas. To tap the rural markets effectively and profitably, insurers
need specific strategies for the marketing mix ingredients.
Rural marketing practices of players They should offer simple and flexible products at affordable
premia considering the seasonal harvest income. A
Only LIC has been doing somewhat well on the rural
combination of health and life cover design must cater to
the rural mass. Micro-insurance products can better address
self-employed rural consumers and laborers as the
willingness to buy depends ontrust. Composite insurance
products for the rural poor's life and assets should do well.
IRDA needs to relax the norm of life insurance companies
offering non-life insurance products for miraculous results.
Group insurance will be best-suited for women belonging to
low-income segments.

A judicious mix of the promo tools is essential. Since TV and
print media has limited usefulness, wall paintings, posters,
hoardings in bright, attractive colors and shades should be
utilized. Talk shows, free health check-up camps, and other
social development activities can help build trust. Brochures

42 The Insurance Times, April 2022