Online insurance moves beyond plain vanilla products

Apart from products such as pure term, insurers are moving to newer types of web policies

Buying a cheaper pure term policy or renewing a motor insurance policy may not be the only reason to go online. Insurance companies are looking at offering newer products for the web consumers, both on the life and non-life side.  

Reliance Life Insurance has launched of ‘Reliance Online Term’, which offers Rs 1 crore of life cover for as low as Rs 15 per day (for a 25 year-old healthy male). The unique proposition of Reliance Online Term, the company said, is that it offers higher life protection up to the age of 75 years through a transparent and hassle-free online process.

Similarly, Kotak Life Insurance has launched Kotak e-Lifetime income plan, an immediate annuity product which offers the purchaser of the annuity the option to choose an annuitant or beneficiary other than self.  The plan is also available online.

Pankaj Razdan, MD & Chief Executive Officer, Birla Sun Life Insurance had recently told Business Standard that not just term products but other products in the endowment and health space are also being made available online.

Aegon Religare Life Insurance, one of the largest players in the web space, has online guaranteed insurance plan, online Ulips (unit-linked insurance plans), health products and fixed benefit products.

On the general insurance front too, there has been a big emphasis on getting products online. While the motor third party covers for commercial vehicles are usually taken offline due to the size of the transactions, other covers are readily available for purchase and renewal online.

General insurance companies are also tying up with additional travel portals and airline companies to make available travel and overseas medical insurance to customers at affordable and competitive rates.

In the near future, buying an insurance policy online could also be a different experience altogether. This is because the industry has 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.

Recent studies have shown that online insurance will grow exponentially in the next few years. Insurance sale from online channels is expected to grow 20 times by 2020, and overall Internet influenced sales would be around Rs 300-400k crore, said a report by Boston Consulting Group (BCG) and Google India.

The report estimates that three in every four insurance policies sold by 2020 would be influenced by digital channels during either the pre-purchase stage, purchase or renewal stages.