Apollo Munich: Pause and effect

A new advertising campaign by Apollo Munich Health Insurance builds on an effort launched by the private insurer last year, which focused on removing the confusion surrounding health insurance. This time the company is pursuing a more aggressive stance and urging people to take time from their busy schedule and think about purchasing health insurance.

The revised focus of the communication is an outcome of consumer research which revealed that even though people realise the importance of health insurance, buying one is not high on their priority list.

Apollo Munich, a 74:26 joint venture between Apollo Hospitals and Munich Re of Germany, operates in a fairly crowded space. In a segment which is equally divided between public sector undertakings and private insurers, it competes with general and life insurance companies and standalone health insurers like Star Health and Allied Insurance and Max Bupa. However, penetration in the segment is a low 3 per cent, creating an opportunity for several players to flex their muscles. “More than 70-80 per cent of medical bills are paid out-of-pocket because people are not covered by health insurance,” adds Tapan Singhel, chief marketing officer of rival firm Bajaj Allianz General Insurance Company.

According to the Insurance Regulatory and Development Authority, the gross written premium (GWP) for the health insurance segment in April-December 2010 was Rs 8,156 crore, a 36 per cent growth compared to the GWP of Rs 5,985 crore in the same period the previous year. Health insurance is also one of the fastest-growing areas (25-30 per cent) in the overall insurance space.

CEO, Apollo Munich, Antony Jacob believes the success of the industry hinges on the awareness levels of consumers and hence the campaign. The four films that are part of the campaign showcase a person speaking to different parts of the body — brain, heart and kidney — reminding them about the importance of health insurance. The campaign will span other media platforms including print, outdoor and radio. Jacob is also keen on increasing visibility through events. “Mumbai Marathon was a first, and going forward we will identify several such events across cities.” The company also plans to showcase the brand in high visibility zones like shopping malls. In all, the insurer has spent Rs 10 crore on the campaign.

While brand building in the category is important, true differentiation and market dominance can only be created through an efficient product, strong distribution channel and efficient after-sales service, believe sector analysts. Doctors also feel that transparency in the system is important to build consumer confidence through timely and accurate settlement of claims.

Apollo Munich, on its part, believes its expertise in the healthcare space (Apollo) and insurance space (Munich Re) has allowed it to tailor-make product offerings. For example, it has introduced a product Maxima that offers cashless inpatient and outpatient treatments, pharmacy bill settlement, diagnostic tests and dental treatment. Another differentiator is the lifelong renewal that the company offers, irrespective of insured member’s age. Jacob explains that 90 per cent of the business comes from hospital indemnity products, but going forward the insurer will promote inpatient and outpatient treatment products and overseas travel insurance.

Reaching out to the consumer is another important aspect and Apollo Munich currently follows a multi-tiered approach. About 50 per cent of the company’s insurance sells through agents, 30 per cent from strategic partners and the balance from sales force working with corporate, digital and telesales. “We have a current base of 20,000 agents and propose to increase it to 40,000 in the next year,” says Jacob.