Warren Buffett may have sought to rescue marquee names like Bank of America and Goldman Sachs by investing $5 billion each, but his much-hyped insurance debut in India could itself do with some rescue efforts.
The legendary investor's company, Berkshire Insurance, had debuted in March this year amid surging sales, courtesy a carefully planned marketing strategy. In the first month of its launch, Berkshire managed to sell over 300 motor insurance policies online for an evening meeting with the man who is also known as the Sage of Omaha. The other novelty, as the company website put it, was that Berkshire "opened an office in India by not opening an office".
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But as the initial euphoria about the play with words and a chance to meet Buffett died down, sales nosedived to just a tenth of the initial figure - to less than 30 a month.
Insurance brokers said Berkshire's business model of working through direct marketing on the internet and tele-calling was premature for a market like India.
But no one can fault Berkshire for not trying. Early this month, Berkshire came up with a revamped version of its website to resurrect sales.
When contacted, Berkshire executives declined to give any sales numbers but said they had launched a revamped version of their website, which they termed the "real launch" of Berkshire Hathaway in India.
"The real launch happened only from August. The earlier version of the website was specifically targeted at the event in March. So, in the April-June period, there was no activity on our part. The marketing activity started from August, only after we launched the revamped website," Berkshire India CEO Arun Balakrishnan told Business Standard.
He said in the coming months, sales would reach their "peak" again as the new version of the website was better and eased the buying procedure.
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"Customer feedback on the new version has been very good. Internet selling requires a continuous approach and we keep on upgrading the model based on customer feedback. Over the next few months, our sales numbers will surpass the peak of March," he added.
In March, Berkshire India, a joint venture between the Nebraska-based Berkshire Hathaway and Allianz, started its operations in India as a corporate agent of Bajaj Allianz General Insurance. The launch coincided with Buffet's maiden visit to India.
As part of Berkshire India's marketing strategy, anyone who bought a motor insurance policy for $48 could secure an invite to meet him in New Delhi. "Invites, which aren't transferable, are restricted to one per policyholder and available on a first-come, first-served basis," Berkshire Hathaway Inc had said in an emailed statement on the eve of its India launch.