Our ATL Spend Is Up By 3x, Digital By 2x Today: Nimish Agrawal, Niva Bupa

The health insurance sector in India is experiencing significant growth and transformation, given the government initiatives, innovative products, technology integration, the rise of social media platforms and the private sector's participation.

The above, along with the pandemic, has catalysed a new wave of innovation and initiative in the health insurance category. In a freewheeling conversation with Nimish Agrawal, executive vice president and chief marketing officer, Niva Bupa, he takes us through the two defining eras in the category: pre- and post-pandemic. He further sheds light on the three marked differences in industry trends: increased relevance of the category, participation of women, and digital discovery. 

Read more to learn about Niva Bupa's IPO plans, communication strategies and the consumers who engage with the brand the most.

Excerpts:

Q. Take us through the broad contours of the health insurance segment in India. How has it evolved in the past five years? What have been some of the prominent trends that erupted in the post-Covid era?

There are two defining eras in health insurance: pre and post-pandemic. From a numbers standpoint, the category was growing at an 18 per cent CAGR pre-pandemic. While during the pandemic, it was growing at about 32 per cent, post-pandemic this year, the category is growing at about 24 per cent CAGR. 

From a trend standpoint, there are three marked differences that we have seen. The first one is the relevance of the category. Consumers post-pandemic understand that the category is far more relevant than they have given it credit in the past. The pandemic has increased appreciation for the category and people are purchasing health insurance because they genuinely believe that they're vulnerable. 

The second big trend that we're seeing is the participation of women. Health insurance has traditionally been the subject of the breadwinner or the male of the house. What the pandemic has taught us is that the virus has been far more cruel to men than women. Interestingly, it has become a conversation in the family, like buying a car or painting a house. 

The third big trend is digital discovery. Today, 69 per cent of overall purchases of health insurance are influenced by a digital channel. This is a fantastic sign that it's now emerging to become a pull-based category.

Q. 2023 had been incredible for Niva Bupa. We saw new product launches, campaign rollouts, and some amazing numbers. Can you shed light on the brand's journey in 2023?

It's a delight for a marketer like me to be in a category that is on the cusp of a push-pull journey. 2023 had been fantastic. The three things that essentially worked for us are: the first is that we have continued to keep innovation at the heart of Niva Bupa. The second interesting thing is rather a dichotomy. Health insurance is a category for healthy people. But all the quotes that are associated with health insurance are about sickness, anxiety, and hospitalisation. So, if health insurance is a category for healthy people, why is it negative in a conversation? What we have done is driven consideration not just in sickness and anxiety but in various parts of life.

The third thing is driving a lot of digitisation and helping the company eliminate genuine friction points. 

And our plans for 2024 will not be any different. We'll continue to drive conversations that talk about health insurance on the go.

Q. Given the many challenges and perceptions that hover over the industry, how are you ensuring that your communication strategy is working in such a way that these are withered away?

The guardrail for us is that we will not sell fear. Our communication brief to the agency has a standard guardrail: to make the benefit of the product as relatable as possible with an intent to bring a smile to his face, like our campaign on Booster Plus. Our communication strategy is about dialling extreme relatability without selling fear in a manner that brings a smile to the face of the consumer. This has been our holy guardrail.

Q. Please shed light on the overall marketing plans that you have for 2024. Also, will we see an increase in your marketing budget in the coming year? 

We are in the annual operating plan cycle, where we are balancing between budgets and some of the other payroll metrics. I can't comment on whether we would have a higher budget or not, but from an intent standpoint, the ATL spends in the category are typically less than 0.5 per cent of the revenue of the company. Niva Bupa has gone a little higher than that. Our ATL spending has gone triple. 

Of course, there's digital spending, which is growing by about 2x. But that also dovetails into business, performance marketing, and some of the other routes. This is essentially one thing, which means there is a genuine need to drive visibility. Now, visibility in today's world is not just driven by marketing campaigns but also by how you make your brand discoverable to consumers in the online ecosystem.

The second is about what we do to make the brand discoverable. And sometimes discoverability does not require a large budget but deep thinking. So, we will continue to spend heavily. Of course, we intend to be far more visible than we've been in the last year; some of it will come on the back of money, some on the back of understanding the consumer more deeply.

Q. How would you describe the consumers that engage with and better understand the health insurance industry in India? What are the typical traits they exhibit? Have you been able to gauge any pattern or trend in the way these consumers interact with you?

In a business model like ours, there is a percentage of consumers who speak to our teams directly, and we get some insights from them. But a large percentage of customers speak to the distributors. 

With some of the work that we have done with our partners like Google and our analytics team, we found a few interesting traits. For example, there is a high correlation between affluence and health insurance propensity. Health insurance continues to be, unfortunately, a discretionary expenditure. So, people who tend to be more affluent tend to have a higher appetite to buy health insurance. 

With an experiment on YouTube, we found that people who come to Niva Bupa's website have also been in the market audience for high-end cars, happen to be luxury travellers, and look at real estate properties of a certain ticket size. This further reaffirms our belief that health insurance continues to be a discretionary expenditure and that there is a correlation between affluence and purchase. 

The second interesting insight is that there is a correlation between graduates and health insurance purchases. We also found that people in metros in Tier I have 1.5 times more propensity to buy health insurance than people in other markets in India. 

Last but not least, we found that people who have used some of the other financial services are engaged consumers, and their propensity to buy is higher.

Q. What are your plans for your IPO debut?

It's very early for us on that journey. We have an intent to do a public debut—when, how, where, etc.—something that even I'm not aware of. It's something that will happen. And whenever that happens, there'll be a formal announcement.