Online insurance With everything from banking to matchmaking going online, can insurance be far behind? Smita Deodhar looks at websites that facilitate online insurance After the Insurance Amendment Bill (2002) made it possible for insurance companies to accept premiums electronically, Life Insurance Corporation was the first to activate online buying of insurance. However, not wanting to do away with the ‘agent’, none of the public and private sector companies followed suit, except Star Health & Allied Insurance which, on 17 September, started selling its policies through its website www.starhealth.in, with no medical check-ups or paperwork required. This includes Star Senior Citizens Red Carpet, for individuals between 60 and 69 years of age. Recently, Bonsai Insurance Broking Private Ltd, a Mumbai-based insurance broker, realised that as an agent it could gain twice as much. So, in July, it launched www.insurancemall.in. The website offers ‘compare and buy’ engines for motor, home, travel and student insurance products from over a dozen (predominantly private sector) companies. It also offers customers insurance portfolio management and claims assistance across India. Life and health insurance shopping will soon be possible. While the customer gains the facility to scan and buy insurance online, Insurancemall gains commission like it does for offline services. Earlier in May 2007, Pune-based broker firm Peacock Financial Advisors launched www.getmeinsure.com, an insurance-related website. This site does not offer online insurance yet, but facilitates comparison shopping (it lists premiums for various packages for several companies) to ensure that the buyer gets to see all his options to get the best possible deal. Aditya Dwivedi, founder and director of Getmeinsure, reports enthusiastic customer response, saying, “We are generating targeted enquiries every day.” Insurancemall has also drawn similar interest. The idea of online insurance is not new. Hyderabad-based MFL Net Services pioneered the concept in India with www.bimaonline.com in 2000, an idea way ahead of its time. At the time online insurance wasn’t allowed, but even after the amendment the site didn’t pick up. Today, it’s predominantly a content-based website, with exhaustive information on 170 life insurance policies in 15 categories for individuals, with 16 retirement policies — there is also information for companies and professionals. You also find a database of agents in different cities; a section on non-life insurance policies (home, travel, accident, health and motor); news reports on insurance; premium and bonus calculators; and a policy advisor (that requires you to email the managers personal details) that gets back to you personally over email. Manish Jaiswal, CEO and MD of Bonsai Insurance, which has offices in Mumbai and Bengaluru, says that going online is a global trend. “The global online insurance market is close to about $ 100 billion, 40 per cent of the global insurance market,” he says. “With the huge upswing in Internet access coupled with rising disposable incomes, the online insurance market will become an interesting playing field in coming years.” According to Dwivedi, around 45-55 per cent of all general insurance policies in the US and other developed countries are sold through the Internet, which will soon happen in India too. K C Mishra, director of National Insurance Academy, Pune, says, “In the West, health insurance can be bought online as medical documentation of all individuals can be verified online owing to their public health system. This worldwide trend has a good chance of being replicated in India.” The increasing popularity of online insurance shopping comes from convenience and savings in terms of time and easy comparison. “Insurancemall is extremely useful for senior citizens, as you need just three clicks to buy any of the insurance products available on the site,” says Jaiswal. And Dwivedi believes Getmeinsure will help seniors know their options and eliminate the hassles associated with buying insurance. Though Getmeinsure is moving in that direction, Insurancemall is currently the only portal that offers a comprehensive package — buying, tracking and servicing a policy, along with Frequently Asked Questions (FAQs), published articles about insurance and myth-busters. The process, Jaiswal explains, is simple. The prospective buyer must first provide personal details relevant to the policy. The website then displays all suitable insurance plans of participating companies, along with premiums. After short-listing the choices, you can download the brochure for more details. (If the options are not satisfactory, you can opt for offline personal contact and customised quotes.) All you have to do then is fill in and submit the application form for the selected policy. The premium can be paid through cheque, credit card or Internet banking. The policy is emailed to you in PDF format within four hours and a hard (paper) copy is couriered to the buyer within 48 hours. These timelines may vary for different companies, though. In case of www.starhealth.in, consumers need to answer some basic questions to know the premium and define their terms for coverage. After this, they need to fill an application form and pay through a credit card. An e-copy of the policy is delivered in minutes, and the physical copy a few days later. For the insurance company, online selling brings in cost-efficiency in sales and distribution. “In the long-term, these cost-efficiencies will help insurance companies keep the premium low,” explains Jaiswal. The website, which acts as online broker, gets the commission for selling the policy (or a marketing fee, in case of Getmeinsure). The premium charged while buying over the Net is the same as buying through an agent so there is no cost advantage on the premium for the customer as such. The advantage comes from easy comparison of options, convenience in buying, and some free value-additions. For instance, Insurancemall provides timely renewal reminders, insurance portfolio management, designing of the complete insurance calendar for the user, storage of policies online for instant access, claim assistance, availability of instantly downloadable claim procedure forms and processes, and online assistance through live chat. The claim assistance feature should prove to be especially useful, though the extent of involvement of the website is limited to assisting policyholders with paperwork. The policyholder is given a claim number, which can be used to track the claim. Policies can also be renewed here, provided it is done within 12 days of the date of expiry. As for silvers, we suggest you use the website for general insurance — except health. Insurancemall does not sell policies online in cases where medical checkup is a prerequisite — for people above 45 — as the infrastructure is still under construction. (You can do it offline by contacting an agent through Insurancemall, though.) Niraj Jain, principal insurance officer, Insurancemall, says that the company plans to tie up with pathology labs, which will send them online medical reports. After this is in place, they can start covering people over the age of 45. The second drawback of this website is that United India Assurance is currently the only public-sector insurance company whose products are carried on this website, and that too only in some categories. The policies of public-sector companies, which are often cheaper than the others, do not even get displayed as options. The non-participation of public-sector companies has another downside. Some of them have launched cost-effective health insurance products especially for seniors (for instance, Varishtha Mediclaim for senior citizens from National Insurance Company). It is advisable to check the offerings of these companies before making any decision. In this respect, Getmeinsure has an edge. It has tied up with agents and relationship and sales managers from several top insurance companies, including public-sector companies, to provide customers the best quotes in life insurance as well as general insurance categories. In some cases, rates can also be negotiated in a one-on-one meeting. “As of now, customers need to apply online but have to buy offline,” says Dwivedi. As a first step to provide online buying, the website has tied up with ICICI Lombard for general insurance products and is in talks with other companies, too. “Financial awareness is very low in India and therefore buying online will first be restricted to people who have some degree of knowledge about insurance products and prices,” admits Dwivedi. Insurance websites are doing their bit to change this. Featured in Harmony Magazine October 2007