HDFC Standard Life bets on online channel

Private life insurer HDFC Standard Life Insurance Company Ltd. plans to offer most of its schemes online by the end of this fiscal, said a senior official here Thursday.

"We plan to offer children/retirement and other plans online by the end of this fiscal. There are around 20 million people who search about life insurance policies on the internet. We would like to target them," Sanjay Tripathy, senior executive vice president-marketing, product, digital and e-commerce, told reporters.

He was here to launch the company's new unit-linked insurance policy (ULIP) Click2Invest available for purchase only online.

Tripathy said the online sales of life insurance policies happen mainly in the case of term insurance plans.

"The total online life insurance policy sales in India will be around Rs.300 crore and our share in that is around 33 percent," he said.

According to him, the company's average premium per policy (APPP) on its term insurance plans is around Rs.12,000.

"The online policies do not involve distributor commission and hence it is cheaper than off-line version. The insurance regulator wants the companies to pass on the cost savings to the policy holders and hence it is cheaper. This does not mean rebating of premium to the policy holders," he said.

He said around 20 million people did e-commerce last fiscal in India and the number is expected to grow to 35 million this fiscal and 80 million in 2015-16 fiscal.

The Indian e-commerce market estimated to be around $13 billion in 2013 and is expected to grow to $70 billion by 2020 and nearly 50 percent of the new mobile phones will be smart phones.

"Three out of four life insurance policies sold will be influenced by digital channels by 2020," he said.

Tripathy said the company's new online ULIP is a savings product and does not involve premium allocation, policy administration, policy discontinuance charges.

This is the industry's first of its kind plan that invests 100 percent of the premium and only charges fund management fee of 1.35 percent and the risk premium for mortality cover.

The new policy plan offers varied premium payment options like single/annual/half-yearly/quarterly and monthly.