Web aggregators offer price comparisons, claims settlement rates, and general functionality, but are silent on issues that may require individual discussion or explanation.
Insurance is not a commodity, which is why buying and selling insurance has always been channel-centric. The customer is rarely seen going to a seller and buying a policy except in cases where the law requires insurance to secure his or her possessions. In 2013, the insurance regulator drew up regulations to introduce a new channel known as web aggregators to meet the needs of young people who prefer to do most of their financial transactions using the internet.
Common platform Today we have over 20 web aggregators. These days we are seeing a good number of extremely active web aggregators on almost every TV channel urging people to purchase term insurance or various health plans with the click of a mouse. But unfortunately, the ease of purchase alone cannot motivate the purchase of life, health or other insurance. Buying insurance is serious business and the decision once made has long term financial implications. Customers are sometimes fooled by salespeople who lure them in with incomplete information about the important terms and conditions of a particular policy, thus vitiating the entire contract.
Web aggregators offer price comparisons, claims settlement rates, and general functionality, but are silent on issues that may require individual discussion or explanation. For example, fees levied during the first year and subsequent years under ULIP policies and their impact on the number of units awarded against the renewal premium, the privilege applicable during the first years of the life cycle of the contract or the contract proceeds not being eligible for Sec 10 10) D deductions under certain circumstances under IT law are not explicitly mentioned.
Indicated price Likewise, issues such as the lack of coverage for an existing illness or the payment of a mandatory co-payment are not mentioned when selling policies on the aggregator platform. Most people therefore decide on the basis of the quoted price but regret it later. But as more people move from physical interaction to digital interactions, the only option is to make the digital road more reliable. They should try to eliminate all apprehensions so that customers not only have the ease of buying, but also enough power through proper disclosure to make the right choice. Besides the emphasis on price, all the other factors that distinguish one product from another should be highlighted. Indeed, aggregators must allow visitors to their website to make an informed choice. To achieve this, insurers will need to come to an understanding with aggregators that they must go beyond price transparency because the cheapest product is not necessarily the best product for a customer.
Aggregators should understand that a term insurance policy is very different from an auto insurance policy. Insurers must differentiate themselves on the distinctive features that must be brought to the attention of the client. This will not only make the buying process satisfying, but also allow aggregators to achieve a high conversion rate from survey to actual sale. Such an approach can make insurance web aggregators a major channel for the struggling industry.
Prospective customers who are comfortable with digital transactions will continue to look to purchase insurance products online. It is up to the industry to live up to their expectations and embed the digital wave to achieve breakthroughs in market penetration and match their performance to the best in the world.
The writer is the former CEO of SUD Life
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