Insurers seek assistance for online policy buyers

Dedicated personnel would be appointed who will take care of all queries arising during an online purchase

Buying insurance online may be a different experience altogether in the next few months, if a proposal by insurance companies is accepted by the insurance regulator. Insurers have requested the Insurance Regulatory and Development Authority (Irda) to have an assistance model in buying insurance on the internet.

Direct business done through the online channel contributes less than 5% of the total business of the insurance companies. Company executives said that research showed how majority of customers went online only to look for product information and then bought through an insurance agent or other offline distributors.

"Since not just term insurance, but all types of products are now available online, all customers may not comfortable buying it off the internet, since product structures may be difficult to understand. To deal with this issue, we are looking to have an assistance structure,” said a senior life insurance executive.

This model will have assistance services to individuals who require help during purchase of an insurance policy online. The chief distribution officer of a mid-size private life insurance company said that dedicated personnel will be appointed who will take care of all queries arising during an online purchase.

Through the Life Insurance Council, insurers have sent a proposal to Irda to look into such a model, which will not just increase web traffic, the quality of business will also improve. Insurers have suggested that assistance for web customers would be distinct from the call-centre individuals who assist customers in grievance redressal and claims processing.

At present, insurance purchased online through the company portal has a much lesser premium due to the lower distribution costs and absence of any third-party in the transaction. Hence, products are custom-made for this segment and tend to be much simpler than offline products, with no need of medical tests upto a certain age limit and for certain policies.

Payment is done online and the policy documents are sent to the policyholder, after the signature (wet signature) on the proposal form is taken. With digital signature acceptance in insurance policies also being discussed, insurers believe that policy purchase will go fully online.

For smaller ticket policies with premiums in the range of Rs 5,000-15,000, industry players say that customers are comfortable paying online.

“However, in large ticket-size policies will a sum assured of Rs 2 crores and above, where premiums could exceed Rs 25,000, individuals are reluctant to pay online. Here they either choose to pay offline or in some cases, think against buying a product. Therefore, an assistance model would be helpful, wherein the customer could be assured of the security features and encryption or in some cases, these persons could be deployed to collect the premium,” explained the head of sales and marketing of a bank-promoted life insurer.