Life Insurance: a must-have thing

We were just discussing our past work-ex in the office when the question cropped up: what is the most difficult thing to sell? Luckily we have people coming in from various industries so it turned out to be very interesting and informative discussion. There were some who believed FMCG offers more challenges than any other sector and some thought it was telecom but finally there was a consensus as to one of the most difficult things to sell is LIFE insurance. This discussion made me thing as to why it is tough to sell life insurance compared to any other product or any other insurance for that matter?
I remember reading somewhere that insurance is one such industry which runs on the mutual ignorance of both, buyer as well as the seller. If the buyer knows that he is not going to die in the next 20 years he will not take insurance for the next 20 years and if the seller knows that the buyer is going to die tomorrow then he will not sell it to him. Since both are not sure as to what is going to happen in future they enter into contract of insurance. So the basis of contract itself is the mutual ignorance of people entering into it!
Coming back to the selling part of it as to why it is so difficult to sell, especially in India where the percentage of people having life insurance is minimal compared to other countries where celebrities have insured right from legs to chest hair to butts to middle finger to semen and what not! Talk about niche markets in insurance! I feel the factor playing a major role in it is our optimistic nature. An average Indian feels so positive about himself and things around him that the fear of sudden death rarely crosses his mind (this is despite all the bomb blasts in trains and buses. Even when there are blasts you would see these same buses and trains going jam packed the very next day). And there are some orthodox people who are just not convinced about ‘profiting’ out of death as they believe whatever happens is destined and things finally will fall in place with or without insurance.
People have always preferred investing somewhere where they would get reasonable returns and that is where term insurance loses ground. As the term insurance does not give any returns though it gives maximum life coverage (actual objective behind life insurance). The issue is that whatever few people are buying life insurance are going in for products which give returns along with life coverage and in the process they are jeopardizing the future of their families.
Some seriously innovative ideas are the need of the hour to drive home the point that insurance is a must. And if we manage to do this, may be few years down the line insurance will be one of the easier things to sell! One thing that we can do is providing special tax benefits to people who buy TERM insurance as incentives never fail to motivate people whether they are selling or buying!

Buying democracy

We are all aware of the cash-for-votes scandal that hit the headlines in July 2008 when video tapes were released by the opposition party showing its MPs being bribed to save the government. It left an indelible blot on the idea of democracy where representatives of people were caught red-handed accepting money and in turn selling their votes. It just confirmed the level of corruption in India, the largest democracy in the world.
Same thing is taking place once again in Tamil Nadu but under the garb of freebies. The ruling as well as the opposition parties are competing with each other as to which one of them gives out more gifts. Freebies include a mixer, grinder, TV, laptop, free bus travel for senior citizens, rice at subsidized rates, free goats for poor families and even direct cash transfers! Forget about the results, people are just waiting for the elections to get over! Just to give you some idea of generosity: according to one newspaper, freebies that were announced by the earlier governments have cost around Rs.100, 000 crores!
Something seems to puzzle me about the whole affair: why do we not consider this in the same bracket as cash-for-votes scam. Just because it is out in the public officially at the insistence of parties (who want to garner as much attention as they can) and people are being benefited at large it is not considered as buying votes? These are the same people who were screaming on television abusing those politicians who tried to jeopardize national interest for their personal gains. But now it is okay as we are all getting something out of the booty. Secondly, this also prevents honest independent candidates and smaller parties from making their mark in the election as they can not afford such largess. It is like our own money (in the form of taxes) is being used by them (in the form of gifts) to win our hearts and rule us for five years as a result. Democracy is being mocked at, meanwhile there are parties happening in Tamil Nadu, courtesy some other parties (read political parties)!

Fortune at the middle of pyramid

I was just surfing the net when I came across this piece of news on forexpros.com about Cayman Islands (more popular as one of the tax havens) which said that a famous heart surgeon has decided to build a 2000-bed health care city in the country. Logic behind the move: it will come as a boon for patients and health insurers in US, as the cost of the same medical treatment will be a fraction of what one has to pay in US. In fact, the founder in his interview said that the insurance company, apart from footing the medical as well as the travel bill will be in a position to offer a two-week holiday in the country and all this at less than fifty percent of cost in US!
People talk about blue ocean strategy of making the competition irrelevant, this is a perfect example. And what makes even harder or almost impossible for others to replicate it, is the experience of the founder in handling this business model successfully before and anyways how many people can boast of having taken care of the most compassionate heart in the world: that of Mother Teresa! No doubt this is a brilliant idea and deserves all the publicity that it can get, but what prompted me to write this post was the fact that this feat has been achieved by an Indian born surgeon Dr. Devi Shetty. He is the same person who founded Narayana Hrudayalaya in Karnataka and helped the Karnataka government design the world’s cheapest health insurance scheme at Rs.5 per month for the poor farmers of the state.
Low-cost and high volume model is something that has constantly inspired people in India. Not content with the success Swach (the water purifier) Tata has now tied up with an MIT professor whose team plans to generate electricity out of waste water at a cheaper cost. We have also seen the success of Arvind eye care in India.
But this particular example of Cayman Islands can not be treated as serving the bottom of the pyramid like Swach or Arvind eye care as health care-cover costs in the US are not low and can not be afforded by anyone who wants it. So the people who will actually make it to the Cayman Islands are not exactly poor. Same is the case here in India, where Tata Nano and Air Deccan are put in the same bracket as Arvind eye care and Tata Swach. But it is not the case I feel, as the Nano and Air Deccan (now called Kingfisher Red) are serving the “aspiration category” which is constantly trying to improve its standard of living by trying and taking that one step ahead. Somebody who is driving a bike wants to buy a Nano or somebody who has been traveling in an AC compartment of train wants to use a low cost airline and mind you they are not poor or the ‘bottom’, as the poor in India still can not afford a bicycle. The idea behind writing this post was not only to highlight the achievement of Dr. Shetty but at the same time I wanted to convey my apprehension about confusing between the ‘middle’ and the ‘bottom’ of the pyramid. It is irritating when media attaches the ‘bottom’ word with people who buy a Nano or use a low-cost airline.

Sell healthy and get wealthy

Some facts: Diet coke has overtaken rival Pepsi to become the second most popular soft drink in US with Coke retaining the number one spot. Subway has become the largest restaurant chain dethroning McDonald’s with 34,225 restaurants worldwide compared to 32,737 for McDonald's. Now the question is to find out the common thread running between these two which is also an indicator of a change taking place in the food and beverages industry. Answer: It is the fact that both Diet coke and Subway are targeted towards health conscious people. Mind you this is the same category of people which was considered a niche some years ago and now they are in majority.
Hats off to these companies especially Subway which foresaw the trend at a time when not many realized it that health is actually wealth. McDonald's is of course popular worldwide, but not for serving the kind of food that Subway specializes in (McDonald's still ahead of Subway when it comes to revenue though the growth of subway confirms the increasing demand for healthy food). Of late McDonald’s has become proactive on this front with products containing fewer calories and fat (I just loved the print ad that it came out with in Israel when it launched some new products there. The ad featured only four square boxes with each one of them indicating sizes i.e. first one had "XL" printed on it, second one had "L" written on it, fourth one had "S" written on it, the third box had McDonald’s "M" printed on it indicating medium calories and fat).This trend is quite visible in India as well with growing popularity of subway sandwiches, probiotic ice-cream and increasing usage of sugar free.
One reason why I feel these products are selling more is because the people who play the role of "influencer" in the buying process are promoting them big time. The other day, I just heard one pregnant lady saying that doctor has advised her not to eat outside and if she does eat out at times then it has to be subway for health reasons! It will be interesting to see how things shape up in future. I am just waiting for a healthy "vada pav" now!

Networking is not working!

It is out now: Facebook is mentioned in one out of every five divorces in US according to one study done by American academy of matrimonial lawyers (AAML). It did not come as a surprise to many considering how facebook has helped people connect and get up close and personal with their “old friends”. But it is the human nature which is at fault and not facebook. Social networking sites can not be blamed for people losing their senses. But it is so contradicting that something that has been created to connect with “others” is leading to “disconnect” with your family. Aakhir apne to apne hote hai!
But if you are married and in India do not panic and delete your account just as yet. As whether you do social networking or not the main cause of divorce in India always was, is, and always remain the nosy mother-in-law! So keep facebooking and stop reading stuff that discourages you from doing so!

Forget Shanghai, time to go the Venezuela way!

The number of times we have heard the Maharashtra government promising to turn Mumbai into Shanghai is, I guess, higher than the number of times we have seen India TV discussing the end of the world in 2012! And how many of us actually expect the government to deliver on its promise? Not many actually. It is like expecting Ashish Nehra to win a match for India in the last over! (I know the non-existing fans of Ashish Nehra will give the example of his match-winning performance against England, but that happened at a time when Homo etrectus inhabited the Narmada valley or before that!). Agreed, criticizing Ashish Nehra is not the topic of discussion here and anyways one can write a treatise doing just that!
Coming back to the main story, we were just discussing the problem of slums in Mumbai as to how it spreading like a virus (by the way the computer virus is forty years old now and we wish it a very happy birthday) and not getting solved. At the same time we hear news of corrupt politicians involved in fraud land deals all over India so you can imagine the chances of it actually happening. But I do have a suggestion though: I am sure there many such “Adarsh” societies out there in India. Our job is to find them and punish the corrupt the officials. But I just do not understand the idea of demolishing such illegal structures as it will only lead to more costs, monetary as well as environmental. And that is where the solution comes into picture: we should do what Venezuela did in 1994 when its economy suffered a huge blow and the investors ran away from the real estate. There was one 45-storey building on verge of completion when this happened, instead of demolishing it Hugo Chavez decided to let the slum dwellers occupy it! And mind you it was supposed to be eighth tallest building in Latin America at that time and also one of the most luxurious in terms of amenities. Today there are people living in it and they have also formed a society to which they contribute money for overall maintenance of the building and it is, according to my understanding, tallest slums in the world!
So why not have something of this kind here as well? I know it is very illogical suggestion but if you thing from your heart it is dillogical! Very bad joke to end the post!