The online insurance market in India has been witnessing a steady growth over the past few years. The growth in this segment has been largely led by external factors, such as rising demand for insurance products, surge in business of web aggregators, high internet penetration, change in consumer preferences, etc.
Before the advent of web aggregators in India, insurance companies mostly relied on traditional channels of distribution. And while this was an effective way of reaching out to consumers, it provided them with limited options of making informed decision, owing to lack of comparative data. Further, in the age of technology, customers have zero tolerance towards turnaround time. As frequent users of online purchase platforms, they expect a similar instantaneous gratification for life insurance policies too. Web aggregators addressed this gap by feeding relevant information to consumers through the web, including providing access to comparative prices, costs, services and consumer reviews etc.
A customer can avail benefit of cost, convenience, speed, safety and service under one roof on an online platform. Convenience is the key, which appeals to customers today. Online transactions provide ease and simplicity of buying, along with comfort of completing the process sitting at home. Following are some of the significant advantages of an online insurance platform:
Value for money: low distribution cost: Price sensitive consumers see internet as a low-cost medium that not only offers value for money, but also saves a lot of time. The online platform brings down the distribution costs and allows insurers to pass on these benefits to consumers.
Elimination in chances of fraudulent/mis-selling cases: In the absence of an agent or broker, the customer can purchase a plan using her/his judgment and not be swayed by promises of unrealistic high returns.
Option to compare for suitability: The online medium has been hailed for providing unbiased comparisons and analysis of various insurance products based on price, quality and other key features. It provides customers an opportunity to evaluate the pros and cons of each product and then helps them purchase a plan, which matches with personal goals.
Secured electronic payment: Technological advancement has enabled customers to make payments based on their preferred option, credit card, online banking, etc.
Evaluating insurer's service and policyholder feedback: Buying online offers customers the advantage to connect with other policyholders (directly or indirectly) and obtain first-hand information about the product/services offered by insurers. This enables the customer to take an informed decision.
The shelf life of online products is short, giving way to improvised versions to remain ahead of competition. The core purpose of customised products is to provide better value to customers in order to fulfill their financial goals. Online platforms can be accessed anywhere anytime on mobile devices and tablets.
The trend is here to stay and future is extremely bright where the online market would grow by leaps and bounds.
The writer is chief distribution officer, Canara HSBC Oriental Bank of Commerce Life Insurance
