ICICI Bank is finally out of the woods it went into last year. But, the resurgence needs more push to regain its lost ground, says Deepak Ranjan Patra

October 10, 2008 was no less than a ‘Black Friday’ for India’s second largest lender, ICICI Bank. It was the day when the bank’s stock price nose-dived by a mind boggling 28% amid rumours of the bank’s potential exposure to the global financial turmoil, particularly to the collapsed global financial giant, Lehman Brothers. The situation had turned so critical that the bank’s Joint Managing Director (Chanda Kochhar at that point of time) had to announce in a television interview, “If people have fears around us, I’m re-clarifying these are small exposures considering our size and profitability.” Not only that, the bank also filed complaints with the regulators about some conspiracy going on to drag its share price down.

Those events looked big then, but in reality they were nothing more than a few short term glitches and their remedies were not difficult to find. The real damage, however, for the bank came in the form of a steep fall in its brand value. The bank responded to the crisis with a series of image makeovers within the next few months. Today, when one can safely say that the worst part of the global financial turmoil is over, the moot question is whether ICICI Bank has been able to rebuild its brand value to past levels?

Before understanding ICICI Bank’s brand value re-creation one must first understand what it has lost. ‘Brand Finance Global Banking 500’ report for year 2009 (published early this year) indicates massive erosion in ICICI’s brand value as compared to 2008. As per the report, ICICI Bank’s brand value plummeted over 60% (to $939 million) from $2.6 billion a year ago. Moreover, the bank’s ranking (in the list of top financial brands across the globe) has gone down from 64 to 108. Avers Unni Krishnan, MD, Brand Finance India, “Brand ICICI has faced a substantial erosion of value after the financial crisis. This is certainly a source of concern for the bank and it needs a strong hand to recover.” No doubt the bank has actually responded to the situation with a very strong hand, but with a soft voice.

Since November 2008, ICICI Bank has hit the accelerators in terms of its campaigns. Data available with AdEx shows, between November 2008 and October 2009, the bank’s ad volume has recorded remarkable growth, with a higher focus on television media as compared to the industry average in the BFSI domain. In terms of TV ads, while the volume of the BFSI segment has gone down by 24%, the duration for which ICICI Bank’s ads met the audiences’ eyes was 64% higher than it was for the year ago period (November 2007 and October 2008). Similar is the case in print media. Although ICICI’s ad volume has registered a 5% fall in print media, it’s still better than the industry average, which witnessed a 14% fall.

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Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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Clutter-breaking advertisements from insurance companies are helping them push child insurance policies to a new high.

The fad is only just beginning to pick up with consumers. Gyanendra Kumar Kashyap wonders how this beginning will pan out...

As customised insurance plans are catching the fancies of Indian life insurance companies, the idea of alluring parents to think about their child’s future seem to be bouncing on everyones’ courts. And why not, sector analysts peg the child plan market in India to be around Rs.350 billion (approximately 20% of the entire life insurance market). In the segment, where product differentiation is tough, what the players have tactically resorted to are clutter breaking advertisements. Agrees Rahul Agarwal, CEO, Optima Risk Management Services, as he says, “There is not much of product differentiation; returns and features are more or less similar; all the difference comes in how well have the companies used the emotional plank as a brand and marketing strategy.” Who would have missed the brilliant ads from Max New York Life, Aegon Religare, Bajaj Allianz, LIC, ICICI Prudential, Aviva, HDFC SL, et al?

Considering the fact that most of the child policies offer similar features, the challenge for them lies in the fact how well and how differently the individual insurers market their product. Undoubtedly, the child insurance policy advertisements on air these days do carry a realistic feel and drive home the message without beating around the bush. Yet, there are brand analysts who feel that branding in the insurance domain (a serious business arena as they put it) has not taken off till now. However, considering the number of advertisements enticing the parents to opt for child insurance plans, the branding aspect of the insurers is certainly taking the centre stage. Consider the latest ad from Bajaj Allianz, “Papa mere future ke bare mein kya socha hai…” or, the one from the stable of Max New York Life, “…Bolo beta Chekoslovakia…” and you will agree how suavely they have used children as their focus to target the parents. Yet the moot question remains as to whether these advertisements have been successful in convincing the parents and have their best bets paid off?

It is estimated that in India over a third of the population comprises of children under the age of 18 and half of the household expenditure goes towards providing for education. It is therefore imperative for them to get a reliable source of funding the particular need. Says Rishi Mathur, Vice President, Product Development & Customer Management, Bharti AXA Life Insurance, “In India, even today, given that children are considered a source of retirement income, parents desiring a secure future for their children are more of an emotional requirement. However, with the cost of ‘quality’ education growing exponentially, parents, especially in mass market segments, are finding it increasingly difficult to fund the best learning for their children and to provide a sound footing for the child’s career post-education.” While these indicate that need for such products actually exist, it is crucial for the insurers that while planning a child benefit product the timing of benefit must coincide with the key milestones in the child’s life.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
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