Food for Thought
Need of Child Space
Food for Thought
Why There is a need of Child Space ? :
• Lets understand the same from a study done by AC Nielsen.
Food for ThoughtPage 3
Dependent Get a Job Have Kids Family Life Empty Nest Retired
Learning to Save
Aspiring Home Owner
Home Equity Builder
Wealth Consolidator
Accessing Property Wealth
Wealth Diversifier
DEPENDENT TEENAGERS
LOWER YOUNG
COUPLESLOWER NO
KIDS
LOWER FAMILIES
LOWER NOT RETIRED
LOWER RETIRED
MIDDLE CLASS
FAMILIES
INDEPENDENT YOUNG SOLOS
YOUNG COUPLES
YOUNG AFFLUENT PARENTS
AFFLUENT FAMILIES
AFFLUENT NO KIDS
AFFLUENT NOT
RETIREDAFFLUENT RETIRED
MATURE SOLOS
So
cio
-Eco
no
mic
Sta
tus
HIGH
LOW
Global Learning's
Financial requirements are more aligned to Life-Stage
Food for ThoughtPage 4
Awareness of Financial Product Categories
Figures in %
100 9997
92
89
Life Insurance Debt Investment Other Investment Non Life Insurance Equity Investment
Base: All respondents (7367)
Life Insurance lead the pack with universal awareness across different Investment products. Awareness of equity products is the least.
Food for ThoughtPage 5
100 9997
92
89
Life Insurance Debt Investment Other Investment Non Life Insurance Equity Investment
Base: All respondents (7367)
Awareness of Financial Product Categories: Life Insurance
Figures in %
9585 82
80
59
Traditional Plan Child Plans Pure/ term Plan Pension Plan ULIP
Traditional plans like ( endowment/money back) are most known Life Insurance policies, however ULIPs are the least known Insurance Policies.
Food for ThoughtPage 6
Life Stage: 7 Financial Ages
“I really don’t want to deal physically with the bank, everything
should be electronic.”
“I save almost nothing and spend all I earn, so I need instant
access to my money.”
Spending Years - Youth
Needy Years - Married
“No one tells you how expensive married life is going to be. We need loans for
everything – a car, household goods, the list never ends.”
“I am dependent on my parents for all my monitory
needs .”
Dependent Years - Adolescent
Responsible Years – Married w/ at least 1 kid
“We need good-value investment options to save for our children’s education and future.
We’d like to have our own house & we need a loan for that.”
Settlement Years – Married with adult childrenWe need finance for our children’s education & good investment options to save for our retirement.”
Worried Years – Couples w/ married children“We need finance for our children’s marriage & good investment options for our forthcoming retirement.”
Peaceful Years – Retired
“We get what we need from our previous investments & pensions.”
X - Not covered in Life 2008
X
X
Food for ThoughtPage 7
All
Spending Years
Needy Years
Responsible Years
Settlem
ent Years
Worried Years
Base 7367 1589 1240 3441 980 95
NETT : TOTAL LIFE INSURANCE 100 99 99 100 99 100
Life Insurance- Traditional/Endowment/Money back 95 95 95 95 94 95
Life Insurance- Child Plans 85 85 82 86 83 81
Life Insurance-Pure/term insurance 82 85 83 81 79 77
Life Insurance- Retirement/Pension 80 85 79 80 76 64
ULIP/Life insurance 59 66 59 58 54 50
Netts Non Life 92 93 90 93 90 84
Health Insurance 88 89 85 89 86 75
Accident Insurance 82 86 81 83 80 63
Insurance Awareness Levels – Lifestyle Stages
Figures in %
INSURANCE AWARENESS
ULIP & retirement plans have the higher level of awareness in people from Spending years, however child plans awareness is higher amongst people from responsible years.
Food for ThoughtPage 8
All
Early Adaptor
s
Mid Adopt
er Late
adaptors LIC
Other private Players
Base 7367 1898 2420 662 3028 512
NETT : TOTAL LIFE INSURANCE 100 100 100 99 100 100
Life Insurance- Traditional/Endowment/Money back 95 98 97 98 98 99
Life Insurance- Child Plans 85 93 82 88 89 87
Life Insurance-Pure/term insurance 82 94 80 75 87 90
Life Insurance- Retirement/Pension 80 92 81 81 88 86
ULIP/Life insurance 59 76 54 48 67 68
Netts Non Life 92 96 93 95 95 98
Health Insurance 88 94 87 90 91 97
Accident Insurance 82 91 83 86 87 85
Product Awareness Levels – Adoptiveness & Ownership
Figures in %
INSURANCE AWARENESS
Awareness level amongst early adopter is higher as compared to other category of people , however there is no major differentiation in awareness level amongst LIC & Private policy Owner.
Food for Thought
All Top 8 Metros
Other metros North East West South
Base: 3382 1975 1407 746 541 1090 1005
Money back Insurance 97 98 95 97 97 97 97
Endowment Insurance 85 92 75 83 88 80 89
Child Plans 85 95 71 78 84 85 91
Retirement /Pension Plans 80 90 65 77 79 79 82
Term Insurance 78 85 68 66 80 80 84
Unit linked Insurance Plan (ULIP) 57 68 41 52 41 58 68
Awareness Levels – Centre wise
Awareness levels for all types of policies higher in South, However ULIP is low on
awareness across all centers, particularly in east.
North has comparatively lower awareness of policies.
Figures in %
Food for Thought
63
23
15
9
25
9
97
85
85
80
78
57
Money back Insurance
Endowment Insurance
Child Plans
Retirement/Pension Plans
Term Insurance
ULIP
Spont Total
Figures in %
Policy Awareness: Spont &Total
Base: All Respondents (3382)
Money Back and Endowment are most aware life insurance products, whereas ULIP is the least aware in pecking order.
Food for Thought
But what is the reality ?
• The fact is, although the awareness for securing child’s future is very high but penetration is very less…
Food for ThoughtPage 12
66
4538
15 10
Life Insurance Other Investments Debt Investments Non Life Insurance Equity Investments
Base: All respondents (7367) Figures in %
44
2111
10 4
Traditional Plan Pure/ Term Plan ULIP Child Plan Pension Plan
Penetration of Financial Product Categories: Life Insurance
Traditional Plans is the most penetrated product among insurance products followed by Pure/Term Plans
Traditional plan has highest penetration in Kolkata(69%). However ULIP has highest penetration
in Ahmadabad (21%)& Bangalore(17%)
Food for ThoughtPage 13
National urban penetration of Child Plan (10%)
Within Age groups
22-30 yrs: 7%
31-40 yrs: 14%
41-50 yrs: 11%
Note: Above figures do not add to 100% since these are a reflection of that measure “within the particular SEC/ Age group”
Category Profile: Life Insurance ( Child Plan)
Within Zone
North: 9%
South: 8%
East: 13%
West: 12%
Within Town class
Top 8 metros: 10%
Mini Metros: 9%
Within Life stages
Spending years: 2%
Needy years: 5%
Responsible years: 16%
Settlement years: 12%
Worried years: 2%
Within Adopters
Early Adopters: 13%
Mid Adopters: 11%
Late Adopters: 7%
Fig in %
Food for Thought
Figures in %
Conversion ratio from awareness to penetration Life Insurance
46
12
26
5
19
Conversion Ratio
Traditional Plans( Endowment/Money back) has the highest conversion ratio, which is quite low in pension plans & Child plans
Food for ThoughtPage 15
Future Intent: Child Plan
10%
90%
Child Plan Non-Holders Child Plan Holders
15
85
0 20 40 60 80 100
Future Intentfor Child Plan
holders innext 12months
Yes No
Base: Child Plan holders - 556
6
94
0 20 40 60 80 100
Future intent forChild Plans Non-
Holders in next 12months
Intend not to buy
Intend to buy
Base: Child Plan Non-Holders : 4837
Total % planning to invest in Child Plans in next 12 months = 6 %Base: All respondents (7367)
Fig in %
Food for Thought
FUTURE INTENTION IN LIFE INSURANCE All
Spending Years
Needy Years
Responsible Years
Settlement Years
Worried Years
Base 7367 1679 1138 3394 942 179
NETT : TOTAL LIFE INSURANCE 30 33 29 30 22 36
Life Insurance- Traditional/Endowment/Money back 17 20 16 17 9 26
Life Insurance- Child Plans 6 1 3 10 6 2
Life Insurance-Pure/term insurance 5 8 6 4 4 9
ULIP/Life insurance 4 6 5 3 4 2
Life Insurance- Retirement/Pension 2 2 1 1 2 3
Netts Non Life 5 6 3 5 4 11
Health Insurance 4 4 2 4 4 11
Accident Insurance 2 3 2 1 1 0
Future Intent (Life Insurance)–– Lifestyle Stages
Figures in %
Future Intention to purchase LI is higher amongst respondent from Spending years & worried years.
Food for Thought
Preference - type of Policy
Money Back Insurance
Term Insurance
Endowment Insurance
ULIP
Child Plans
Retirement/Pension Plans
Fig in %
Base: All Respondents (3382)
Money Back Insurance Policy enjoys highest preference among types of policies, on the other hand ULIP has very little preference
Food for Thought
In Sum: Future Purchase Intention
Future Purchase Intention
Only 42 % of people are intending to invest for next 12 months
Life Insurance has highest future purchase intention :30%
Traditional Plans:17%
Child Plans: 6%
Other Investments: 13%
Gold :7%
Debt Investments: 11%
Bank Fixed deposit :11%
Food for Thought
Current Trend in the Market :
• All the Insurance Companies are targeting this segment as an independent category.
• Lot of Ad & media activities are happening.
Food for Thought
Major Products available :
Kotak
Star Child
Head Start Assure Wealth
Head Start Future Protect
AvivaLittle Master
Young Scholar
Bharti Axa Bright Star
BajajYoung Care
Young Care Plus
Food for Thought
Major products available …(2)
Birla Sun Life Childrens Dream Plan
HDFC
Unit Linked Young Star Plus II
Unit Linked Young Star II
Young Star Champion
ICICI
SMART Kid Single Premium Plan
SMART Kid New Regular Premium Plan
Food for Thought
Major products available…. (3)
TATA Ujjwal Bhawisya
SBI Unit Plus Child Plan
Sahara Sahara Ankur
Reliance Secure Child Plan
LIC Children Future Plan
Food for Thought
Major products available…. (4)
Max New York Life SMART Steps & SMART Steps Plus
HSBC Child Plan
MetLife Met Little Star
Star Union Daichi Prabhat Tara
Food for Thought
What Max New York Life is doing ?
Food for Thought
Plan of action :
• Focus “Child” as a category.
• Highlight the importance of saving for Child’s future.
• Do a proper “Fact Finding” to understand the need of the prospect.
• Use rule 72 to calculate the increasing cost of Education, higher education & foreign education.
Food for Thought
Thanks!
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