Even as premium collected by life insurance companies slipped in 2008-09, insurance companies in

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India have pumped up their marketing and advertising efforts. According to industry estimates, the total advertising spend by insurers has gone up from Rs 400 crores in calendar year 2007 to Rs 480 crores in 2008.

The leading advertisers include LIC, ICICI Prudential, Max New York Life and HDFC Standard Life. Most insurers have increased their ad spend over the previous year, says an industry expert.

With investors preferring to hold on to cash, insurers are trying hard to woo them with increased advertising. “One of the reasons for such high ad spend levels is because there has been a complete loss of investor appetite as far as mutual fund investments are concerned. Money that would have otherwise gone into MFs became an additional source of business for the insurance sector and they have cashed in completely through their aggressive marketing,” said Sandeep Lakhina, chief operating officer, South Asia of Starcom Worldwide, a media-buying agency.

The insurance industry in India is at a nascent stage and hence advertising is a crucial part of brand building and marketing. Life insurers have been increasing spending year-on-year.

According to Salil Vaidya, associate vice president, marketing, HDFC Standard Life, their visibility (areas of presence and frequency) has gone up because of a conscious decision to advertise. “Our ad outlays across the board — print, television, internet and other media —have gone up by 25 per cent in financial year 2008-09,” Vaidya said. HDFC Standard Life has been going strong on television sponsorships by

getting associated with talent hunt shows.

“The sector has seen the emergence of new players such as Religare Aegon, Star Insurance and IDBI Fortis Life. Campaigns from Religare Ageon, Max New York Life, HDFC Standard and so on have been maintaining a high decibel campaign,” Lakhina said.

Sujit Ganguli, senior vice-president & head - marketing, ICICI Prudential Life Insurance, refused to share advertising spend citing competitive reasons. But hinting at the need to communicate to customers during a downturn, he said, “We are and will continue to be one of the most visible brands in the category.”

The higher ad spends by life insurers are despite a cut-back in the budgets originally planned for FY09. Akshay Mehrotra, head-marketing, Bajaj Allianz Life Insurance, told Financial Chronicle that they had spent one and half times more over the past year on ads. “Everyone has reduced the total budgeted ad spend for the year post-September 2008 but the aggregate spends are still higher than 2006-07.”

P Nandagopal, president and chief executive officer, Reliance Life Insurance, said, “We have been using pamphlets and distribution channels that we think are more effective to get and retain customers.”