Your Money: Reading Google searches as lead indicator of business trends

Your Money: Reading Google searches as lead indicator of business trends

The searches for these products have shown distinct peaks in these months.

The searches for these products have shown distinct peaks in these months.

Our study of Google search trends of various insurance companies and products suggests that there is a fair bit of correlation between searches and business volumes. As such, Google search trends can be used to gauge success of new products, pick up inflection points and understand growth and market share movements.

Relationship between Google searches & business growth
We studied data from FY2004 onwards to understand the relationship between (1) Google search trends for keywords, i.e. ‘life insurance, term insurance’ etc., companies like ICICI Prudential Life, HDFC Life etc. and key products like ‘click2protect’, ‘iprotect’, ‘eshield’, ‘Sanchay Plus’, etc. and (2) growth in individual APE during similar periods.

We find a fair relationship between Google search trends and APE growth, adjusted for some lead-lag impact. Thus, one can study trends in Google search volumes for specific life insurers to gauge likely trends in monthly premium growth, most-selling products, inflection points and market share movements. A couple of examples: LIC reported strong growth in individual business in November 2019 and January 2020 led by higher volumes from select sunset products like ‘LIC Jeevan Labh’ and ‘LIC Jeevan Anand’. The searches for these products have shown distinct peaks in these months. Search for ‘HDFC Sanchay Plus’ peaked in June 2019 and November 2019—growth in non-par was likely strong in these two months.

A strong positive correlation may not always be easy to establish due to (1) lead-lag impact, i.e., new products are initially pushed through the bancassurance channel (that may not translate into digital footprint), (2) ambiguity in specific keywords searched by a potential buyer/agent and (3) spike in search volumes of company names during periods of major corporate events (e.g. IPOs).

Propensity of purchasing ‘term insurance’ increased; ULIPs tepid
Overall search volumes for ‘term insurance’ have increased rapidly over the past few months from FY2015-18 levels. This is in line with the strong growth in term insurance APE for most life players. Among its key protection products, Tata AIA’s ‘Sampoorna Raksha’ and HDFC Life’s ‘click2protect’ have higher digital footprint compared to ICICI Life’s ‘iprotect’ and SBI Life’s ‘eshield’. ULIPs saw strong interest during bull markets in 2HFY17-1HFY18 but have moderated thereafter.
Low skewness for ‘life insurance’ searches in Q4

Search trends for the term ‘life insurance’ in Q4 remains at 21-30% of the annual searches. These ratios (Q4/annual searches) have remained broadly stable during periods of FY2005-09 and FY2014-19. As such, there was no seasonal skewness reflected in search trends during FY2005-09 and FY2014-19. On the other hand, the share of individual APE for private players booked in Q4 was 32-50% of annual individual private sector APE during FY2005-09; these ratios declined to 34-39% of annual individual private sector APE during FY2014-19. Higher business booked in Q4 may be prompted by 80C benefits; the relevance of 80C was higher during FY2005-09 as compared to recent years. This is however not reflected in the search trends.

Google search trends for February 2020 suggest that HDFC Life and TATA AIA will likely have a strong month. HDFC Life’s newly lunched par product ‘Sanchay Par Advantage’ has seen strong surge in Google search during the month. While ‘Sanchay Plus’ has moderated from peak levels, overall buyer interest appears to remain high.

[“source=financialexpress”]