Online Insurance- Setting New Trends In The Insurance Sector

The fast growing Indian online insurance market is characterized by numerous opportunities for the aggregator websites as well as Insurance companies to capitalize and grow their business. Almost every other day, there’s an introduction of new insurance products for online buyers by the insurance companies aiming to explore the possibility of innovative technologies which are simple to use and cost-effective. With growing awareness towards insurance, the number of people demanding better insurance products with excellent features of premium, cover and claim returns, technological advancements and cost effectiveness is rapidly increasing. The new IRDA compliances which provide comparison between the insurance products with unbiased information and are cost effective due to rising competition have become a key concern for Web Aggregators in India. The high internet penetration in India has helped in improving the online insurance penetration with plans for Health, Travel, Motor and Term insurance being in a constant high demand.

However, things were not assmooth as they are currently for the insurance sector. A few years ago, there were hardly any players in the segment and online insurance was almost unheard of. It was bewildering that for a country boasting ofover 300 million internet users and an e-commerce business volume of over US$ 16 billion, there were no companies in the online insurance segment till a few years back. Whatever was there was present across the other popular B2C segments like, gadgets, travel and tourism, music, books and fashion goods and accessories.

The growth story for online insurance has been on an upward trend. The online insurance market is already in excess of Rs. 700 crores with life insurance sales leading the way followed by motor, health and travel. The reason for this growth can be attributed to the fast growth of online players, complemented by increasing trust within the customer community buying Investment Insurance policiesonline. Savings, in terms of reduction of premiums and easy availability and access to policy related details have also acted as major growth boosters for the sector.

The online Insurance market witnesses a healthy mix of customers from lower income to higher income segments. Majority of customers are from the low-mid income segment which include mainly those earning under Rs 5 lakh per annum. People who earn between 5 to 10 lakh make up for 21% of online customers. Customers whose earnings are above 25 lakh account for 5 % of online customers.

Apart from this, the age profile of online insurance customers, not unexpectedly, is made up of persons between 26 to 35 years of age. They form 55% of the overall online buyers, followed by 36-45-years groups, which accounts for 19%. Moreover, it has been found that youngsters in the age group of 25 years and above prefer online services more as compared to senior citizens.

Of all the metro cities, Bangalore is at the top in the list of online insurance customers followed by Delhi, Mumbai, and Hyderabad. In the non-metros, Pune, Thane, Ahmedabad, Gurgaon, Ghaziabad, Lucknow and Jaipur collectively contribute to 27% of the online customers.

An online term plan is much more cost-effective as it works on the principle that the person making a decision to buy a plan is literate, have researched and made an informed choice and the personal information provided is completely accurate. Also, the final purchase cost is negligible as the product is available directly from the company website.

It has been observed that a term plan, when bought from an online insurance aggregator costs around 50-60% less than offline plans from the same companies having similar features.

However, a very important thing that should be kept in mind while purchasing a plan is that the cover and claim settlement depends on the authenticity and accuracy of the information given. Withholding information about any medical condition or other critical condition in an effort to lower the annual premium may result in complications or rejection of claims in future.

Hence, it is best to reveal things like pre-existing disease, habits, like consumption of alcohol and tobacco, etc, to ensure quick processing. An important point should be kept in mind that since the insurance plan has been developed keeping the online platform in mind, it may not be accessible for customers in all places except those residing in urban cities with good internet connections.

With the rapid proliferation of the online market, social media and various customer forums and sites, a buyer can get a lot of information and collective experience of other people and can check the company’s records including its financial information, customer satisfaction levels, etc.before taking a decision of going ahead and buying a policy.

To sum up, the online market is an enormous platform for you to get the best insurance deals even when buying a simple insurance cover. So start surfing, not just to plan your vacation but also for various insurance deals available through web aggregators.