Why is this work relevant for Direct?

Who would have thought, that a simple SMS based registering mechanism delivered through the humble postman could play such a pivotal role in generating acquisition in a category such as life insurance that has almost 100% push sales? This was exactly what Softlogic Life did, where we broke through the barrier of life insurance aversion by getting rid of the ton of complicated paperwork to deliver an affordable product, through a simple SMS based process delivered through the local postman. A Direct Marketing Strategy that propelled acquisition of families at the bottom of the pyramid, helping them be financially stable.

Background

Life Insurance Penetration in Sri Lanka Languishes at 14%. Softlogic Life has been a trailblazer and the fastest growing life insurance company locally. In the last 5 years the company has doubled its market share and achieved a revenue growth of 33% while industry average was 12%. It’s more difficult to convince the bottom tier population (Earning less than 100USD/moth) when even the upper tiers with disposable income weren’t buying life insurance. The Agent-model isn’t affordable at the bottom of the pyramid and not profitable for Softlogic life given the operational expenses/ incentives involved. For micro insurance, volume is key but given the large number of households agent model was not appropriate. We created a micro-Insurance product with the aim of acquiring 2000 new customers from this segment by end 2020. This was an ambitious target considering take-up of micro insurance products are slow but grow exponentially in later years.

Describe the creative idea (30% of vote)

Our message was simple- “To uplift the quality of every Sri Lankan’s life, together with the Sri Lanka postal department, Softlogic Life introduces the postal insurance cover for just Rs.5/= a day” Why postman? They are from a tightly knit community and are a familiar sight for these families having a great relationship within the neighborhoods they serve. Their recommendation is trusted much more than traditional insurance agents and any communication. The postman are also from lower income brackets. We tied up exclusively with the Sri Lankan postal department and we also provided a 10% incentive for their referrals which was a significant income for themselves. The postal network is well established and 100% spread which allowed us effectively reach lower income groups as the delivery of letters remain an integral part of these people’s everyday lives. The ring of the postal bell was used across media to break clutter.

Describe the strategy (20% of vote)

40% of Sri Lanka’s population are daily wage earners at the bottom of the pyramid vulnerable to disruption of their lifestyle if the breadwinner is unable to work. While they need the financial stability of insurance, they are averse to it due to lack of disposable income and complicated paperwork. Our three-pronged strategy to break through was: 1.Introduce a 0.03 USD per day premium with a loss of income benefit for each day of hospitalization plus a pay as you go benefit which prevents the policy from lapsing. We asked them to cut back on 2 cigarettes a month to afford this. 2.Uses the same reload mechanism as telco’s (149% mobile penetration with 91% using mobile reloads) to both register and pay monthly premiums using a scratch card via any basic mobile phone. 3.Deliver this to the doorstep using postal network which has 100% reach.

Describe the execution (20% of vote)

Traditionally a postman’s visit brings “Good News” be it exam results, news from relatives and the sound of the bicycle bell which announces his arrival is a fond memory with a lot of nostalgia associated, especially for this audience who is still dependent on post. We decided to use this sound on TV and on digital communication to create anticipation around the postman’s visit. The partnership with Sri Lanka Postal Department on a 25% profit sharing basis with 10% more given to the postman as an incentive encouraged them to educate our target audiences on the micro-insurance product Making sure the masses knew about the product, we launched a campaign across all mediums, using the iconic, ‘ring’ of the postman’s bell with a message that said ‘await the good news’. Digital video, TVC, political memes and postal affiliated posm used during the presidential election which commanded 90%+ island wide reach.

List the results (30% of vote)

We benchmarked the 1000 policy mark we hit during the first year of operations, and despite a 3-month COVID lockdown succeeded in surpassing 6000 policies in a year Our crucial insight – people don’t believe in brand messaging, but they believe in the message if a known party conveys it. Our brand was carried to them endorsed by their trusted postman; this was a deal breaker! The postmen get a 10% commission on each reload card sold thereby making the model sustainable. We also kept aside 25% of earnings to improve the postal department IT infrastructure Impressions: 4.6Mn (Source: ISOBAR MIS System) Consideration Increase: 400bps (Source: Kantar LMRB Brand Health Report 2020) This shows how “simplicity” helped increase the dormant life insurance penetration numbers in Sri Lanka. The 100% Mobile Process is a world’s first for the category and will be crucial in enabling financial wellbeing for lower income groups.