Catch them young: ICICI Lombard eyes 18-35-year-olds with digital health cover
Mumbai: ICICI Lombard is targeting younger customers with digital-first health insurance products, health and wellness initiatives, mental wellbeing and lifestyle-linked reward points as it seeks to tackle high rates of policy discontinuation among customers aged 18-35.
The strategy comes as insurers look to expand health coverage among younger Indians while keeping acquisition costs under control. For ICICI Lombard, the immediate objective is to get younger customers into its customer base early, keep them engaged and eventually move them toward higher-value products as their financial capacity and insurance requirements grow.
About one in two customers aged 18-35 typically discontinues their policy within three years of purchase, according to Girish Sehgal, chief, health underwriting and claims, customer service and operations, ICICI Lombard. The insurer sees an opportunity to engage these customers earlier, when they are starting their careers and have relatively lower insurance needs and spending capacity.
Only 14% of young Indians aged 24–34 own a personal health insurance policy, according to a report by Niva Bupa Health Insurance released earlier this year.
“This is a young customer base. So, you would expect lesser risk and fewer claims,” said Priya Deshmukh, head of health products, operations and services at ICICI Lombard, at the launch of ‘Vibe’, an ecosystem designed for customers aged 18-35.
The online-first product is being positioned as an affordable entry point to health insurance, with the company expecting customers to opt for more comprehensive coverage as their income and insurance needs grow. This is unlike traditional plans, which primarily provide hospitalisation benefits.
“For a Gen Z it has to be digital,” Sehgal said, adding that roughly 20% of the insurer’s customer base sits in this age bracket.
The digital approach also aims to lower customer acquisition costs among younger buyers, who may initially generate smaller premiums than more established policyholders. The product is currently distributed entirely through digital channels, without bank or agency distribution.
Stock of ICICI Lombard General Insurance Company Ltd settled 4.54% higher at ₹1,583 on the BSE on Wednesday.
The general insurer is viewing the product as a longer-term customer acquisition strategy rather than a standalone product. Younger customers who enter through the affordable offering can eventually “graduate” to more comprehensive products as their insurance needs evolve through different stages of life.
“We do have this segment buying Elevate. However, when you talk about affordability, there is a drop off,” Deshmukh said. “This is a layer as an entry point. We will keep them engaged. As they graduate, we will keep moving them into our Elevate platform, which is more comprehensive, more encompassing and richer.”
The company is also taking into account the longer duration of health insurance relationships when assessing the strategy’s overall value. Unlike some other insurance products, health policies can be renewed over a customer’s lifetime, allowing insurers to generate value from a policyholder over several years.
“Commercial economics, not only for one year, we look at five years, ten years down the line,” Deshmukh said.
The product also uses wellness benefits and engagement features to encourage younger policyholders to stay connected with their insurer rather than viewing health insurance only as protection against hospitalisation.
A large part of the focus is also on automation and digitisation of services across the board, which has helped reduce costs by around 7% for the company. Part of these savings have been reinvested into expanding the scope of services and benefits offered to customers, Deshmukh said. The insurer has tied up with multiple partners such as gyms, sports facilities and other such activities.
In an effort to encourage policyholders to continue to hold policies, the insurer is also offering discounts on renewal premium. Here, if a customer has a claims-free experience for five years, the sixth year’s premium will be discounted to the extent of the premium paid in the first year.
