Bandhan Life banks on 99.66% payout claims to boost trust

Marketing in the life insurance industry has evolved dramatically in recent years, particularly in emerging markets like India, where millions remain uninsured or underinsured. Life insurance brands are now pivoting towards digital solutions, customer-centric policies, and the ability to adapt to customers’ changing life stages.

In April 2024, Bandhan Financial Holdings officially took over Aegon Life Insurance and was rebranded as Bandhan Life. The newly formed company is tapping into its parent company's rich heritage and financial ecosystem to cater to these untapped segments of the population.

The rebranding from Aegon Life to Bandhan Life was expected to come with challenges, but Almeida was pleasantly surprised by how smooth the transition has been. "We anticipated friction, but instead, we were met with goodwill from our customers, partners, and sellers," he said.

This seamless transition has set the stage for an aggressive growth strategy in 2024, with plans to recruit 1,000 employees and expand the company’s product offerings. For Bandhan Life, the focus is clear: empathy, personalisation, and making life insurance accessible to every Indian family.

Leading this effort is Akhil Almeida, head of marketing at Bandhan Life. He is dipping into his experience with consumer insights at Kantar to shape the company’s strategy, enabling the brand to cater to underinsured populations through empathy-driven, data-backed marketing initiatives.

The first thing that Almeida has realised is that the insurance industry in India has come a long way from the days of overwhelming paperwork and complex procedures. This transformation is crucial for an industry where trust is the cornerstone of business.

"We deal with customers at the most vulnerable points of their lives," Almeida told Campaign. "It’s more than a transaction—it’s a deeply emotional experience for them, often at a time of personal and financial loss, and we have to live up to that trust."

This is where Bandhan Life's high claim settlement ratio comes into play—99.66%, consistently placing the brand among the top three in India. This, Almeida explained, is an essential marketing tool.

Empathy meets data: The Bandhan Life approach

The claim settlement ratio shows how many claims an insurance company has successfully paid out compared to the total number of claims filed in a financial year. In general, the higher this ratio, the more dependable the insurer.

According to the latest data from the Insurance Regulatory and Development Authority of India (IRDAI), life insurers in India had a strong showing in 2022-23. The individual death claim settlement ratio for the year was 98.45%, meaning over 98% of the claims for individual death benefits were honoured. The overall claim settlement ratio stood slightly higher at 98.64% for the same period.

Bandhan Life’s strategy involves leveraging its stellar claim settlement record to build customer trust. In a market where nearly 95% of the population remains uninsured (according to a report by National Insurance Academy in December 2023), the claim settlement ratio becomes a deciding factor.

"When a brand can demonstrate that it honours claims reliably, it becomes a key point of differentiation," Almeida said. However, marketing life insurance isn’t just about pushing products; it’s about understanding the customer's life stage and offering tailored solutions that resonate.

"Marketers need to understand where their product fits into the customer’s life stage. If you understand their psychology, you’re not selling insurance—you’re solving a problem," he added.

A case in point is Kripashankar Pandey, a small garment shop owner in Varanasi. Life insurance once seemed like an overwhelming and distant concept for the 47-year-old villager. Till his 18-year-old son Sumanth, showed him how he could secure a policy with just a few taps on his smartphone.

By designing products to suit customer needs rather than pushing generic policies, Bandhan Life can engage with an audience often neglected by the insurance sector—those in agriculture or the gig economy, whose incomes are cyclical or unpredictable. Traditional insurance models have largely ignored these segments, but Bandhan Life is changing that narrative with digitisation.

Tech-powered insurance for all

The integration of digital tools has been a game-changer for Bandhan Life. Digital underwriting, which leverages data analytics, is at the core of their customer acquisition strategy.

"We aim for zero documentation," Almeida explained, referencing how the brand simplifies the process through consent-based validation with Aadhaar and PAN cards. Customers can now pre-qualify for products based on 1,500 data points, making the application process swift and seamless.

This ease of access is particularly vital in a country where many are still underinsured. Even those with insurance often find their policies cover just 10% of their actual needs. This is where Bandhan Life’s affordable products, like their INR 20 lakh cover for self-employed individuals with a premium of INR 500, come into play.

Bandhan Life is also focusing on educating the next generation about the importance of life insurance, an effort Almeida believes will pay dividends in the long run. The company has introduced content in school magazines to teach children about financial planning in a fun, engaging way.

"We’re creating conversations about insurance in households where personal finance is rarely discussed," Almeida shared. This early intervention is critical, he says, because it sets the stage for smarter financial decisions as they grow older.

Hyper-personalisation: The future of insurance marketing

In an era where hyper-personalisation is expected, Bandhan Life is taking personalisation beyond marketing messages. "Insurance is deeply personal," Almeida said. "It’s not about pushing a generic product—it’s about having a conversation with the customer about their financial goals and tailoring a solution that meets their needs."

This is where Bandhan Life’s technology-driven tools come into play. Machine learning and AI are simplifying policy documents, traditionally filled with confusing underwriter jargon, into language that everyday consumers can understand. Almeida emphasises the importance of personalisation through technology, stating that these tools help streamline decision-making for both customers and agents.

Bandhan Group, which serves over 30 million customers across India, provides an invaluable platform for cross-pollination opportunities. Almeida feels that many of these customers are already looking for insurance products, making Bandhan Life’s offerings more accessible.

 “Being part of a storied brand like Bandhan Group gives us a captive audience,” he noted. The company is working to expand its product range to meet the diverse needs of this large customer base, including new segments like salaried individuals and self-employed entrepreneurs.

The role of consumer insights

Almeida’s background in consumer insights, honed during his time at Kantar, plays a significant role in shaping Bandhan Life’s marketing approach. "Many marketers don’t appreciate the importance of understanding the customer’s decision-making process," he reflected. "Advertising and visibility are important, but understanding the customer’s psyche is what drives true brand differentiation."

This understanding is played out in its Mother’s Day digital film, conceptualised by Havas CX. The ‘Maa ki udaan, Bandhan se’ (Mother’s flight with Bandhan) ad aimed to tug heartstrings by showing how a mother’s love is the first shield of protection a child needs, followed by the one that Bandhan Life provides.

Talking about the film, Ashu Mhatre, head of creative at Havas CX India, said, “If I were to ask you, who’s your first insurance, it’ll take you a while to wrap your head around the question, but when you do, without hesitation, you'd say your mother. This new thinking towards life insurance is what Bandhan Life is all about—a promise of a secure, safe India, and its ambitions taking flight. In its first story, we've explored the bond a mother shares with her kids… that can be felt even when they're miles apart.”

Bandhan Life is also building its reputation through a combination of word-of-mouth, service experiences, and data-driven insights. This year, the company is making a concerted effort to boost its marketing spend, focusing on functional campaigns that address customer needs while building long-term relationships.

The IRDAI has set an ambitious goal of achieving ‘Insurance for all’ by 2047. To move closer to this target, the regulator recently tripled the number of insurer tie-ups allowed for corporate agents and international monetary funds, aiming to boost accessibility through bancassurance channels.

However, challenges remain, including a significant trust deficit and low financial literacy, both of which hinder insurance penetration. Many potential policyholders are wary of engaging with insurance due to concerns about mis-selling and negative experiences with claim settlements. Additionally, a protection gap persists, driven by limited accessibility, affordability issues, and the lack of personalised digital channels for better customer engagement.

Insurance companies in India, including Bandhan Life, are focusing on improving accessibility to transform life insurance from a complex, paper-heavy process into a streamlined, digital experience. As it continues to grow, it will laser focus its attention on customised insurance products, which are crucial to tapping into underserved markets, particularly among younger individuals. However, gaining a foothold in an overtly competitive market, dominated by legacy players, will not be easy. And this is where it will also need to up its marketing game.