The web aggregators offer price comparison, claim settlement ratio and broad features but are silent on issues which may call for one-to-one discussion or explanation. Insurance is not a commodity, hence buying and selling insurance has traditionally been channel-centric. The customer is rarely seen going to a seller and buying a policy except in cases where the law mandates insurance to secure one’s goods or property. In 2013, the insurance regulator framed regulation to introduce a new channel known as web aggregators to cater to the young who prefer to make most of their financial transactions using the internet.
Today we have more than 20 web aggregators. These days we see quite a good number of web aggregators extremely active on almost all the TV channels inviting people to buy term insurance or various health plans at the click of the mouse. But unfortunately, ease of buying alone cannot be the motivation to buy a life, health or property insurance. Buying insurance is a serious business and the decision once taken has long-term financial implications. Customers sometimes get duped by sellers who entice them with incomplete information on important terms and conditions of a particular policy, thus vitiating the whole contract.
The web aggregators offer price comparison, claim settlement ratio and broad features but are silent on issues which may call for one-to-one discussion or explanation. For example, the charges levied during first and subsequent years under ULIP policies and their impact on number of units allotted against renewal premium, lien applicable during first few years of the life cycle of the policy or the policy proceeds not being eligible for Sec 10(10)D deduction in certain circumstances under the IT Act are not explicitly mentioned.
Similarly, issues such as no cover for existing disease or obligatory copayment are not mentioned while selling policies on the aggregator’s platform. Most people therefore decide on the basis of the quoted price but regret later. But as more people shift from physical interaction to digital interactions, the only option is to make the digital route more trustworthy. They must try to remove all apprehensions so that customers not only get ease of buying but also enough empowerment through adequate disclosure for making the right choice. Apart from focus on price, all other factors that distinguish one product from another must be highlighted. In fact, the aggregators must enable the visitors to their website to make a well-informed choice. To achieve this, the insurers will have to arrive at an understanding with the aggregators that they need to move beyond price transparency as the cheapest product is not necessarily the best product for a customer.
The aggregators must understand that a term insurance policy is very different from a motor insurance policy. The insurers must differentiate themselves on distinctive features which must be brought to the notice of the customer. This will not only make the buying process fulfilling but will also enable the aggregators to achieve a high rate of conversion of enquiry into actual sale. Such an approach can make the insurance web aggregators a major channel for the industry struggling to achieve a breakthrough.
Prospective customers who are comfortable with digital transactions will continue to look for buying insurance products online. It is for the industry to rise up to their expectation and encash the digital wave to achieve breakthroughs in respect of market penetration and match their performance with the global best.