 "Online sale of products is the way to go, say insurers")
Insurers are betting big on online sale of their products and opening new channels such as mobile phones and other smart devices to reach out to customers.
According to ‘The World Insurance Report 2013’, by Capgemini and Efma, newer channels like mobile phones offer fresh opportunities for insurers to increase revenue by boosting sales, shortening sales cycle times, enhancing customer experience and satisfaction, and reducing attrition. Keeping in tune with this trend, Indian insurers have not only increased their presence in the online and mobile segment, but have also put in place mechanisms to protect data security.
Aviva Life Insurance, for example, has identified the potential of this distribution model. T R Ramachandran, chief executive officer and managing director, Aviva India, said the online distribution channel contributed close to 15 per cent of its total policies in 2012. “We have covered over 40,000 lives through the online distribution model. According to market statistics, close to 13 million searches take place every month on insurance and pensions, hence, we expect our sales to continue to rise,” he said.
While information technology (IT) governance is an important aspect among insurers, with regulators across the world having data leakage prevention programmes, customers also need to take their own precautions, said John Ho Chi, partner-IT risk and assurance practice at E&Y Singapore and director of Isaca. Isaca is a non-profit association that serves IT governance professionals.
With increase in IT adoption by insurers, issues like data leakage and data security have also become a matter of concern for the industry. Sunder Krishnan, chief risk officer, Reliance Life Insurance, and a member of the Isaca India task force on IT governance, said while IT had become an enabler in the insurance industry, insurers were also taking efforts to minimise issues such as data leakage.
Online traffic has seen a substantial rise. Bhavin Shah, head-web sales, Edelweiss Tokio Life Insurance, said: “We started our online sales channel about nine months back and are currently averaging about 120 policies a month. We expect this number to rise substantially once we roll out products that are suited to the online segment.”
Insurers have also seen customers research for products online, but purchase it offline. Aviva’s Ramachandran said their research with market research firm IMRB highlighted the fact that as insurance was perceived to be a complex category, the human intervention in terms of an agent had a comfort factor for buyers. Presently, online (web+mobile) contributes about 8-10 per cent of overall sales for Indian insurers.
While maximum traffic has been seen from metros, the trend is now slowly changing, said insurers. Aviva, for example, has seen growth coming from the non top-30 cities, whose contribution has increased from 10 per cent in 2011 to 20 per cent in 2012.
Insurers are also looking to put additional products online. Gunjan Ghai, vice-president-marketing and e-commerce, Tata AIG General Insurance, said as a company, it focussed on online transactions and not just online sales. “Further, with increasing standardisation of health insurance, we expect customer comfort with online purchase of health insurance to increase.”
Aviva India plans to have a comprehensive suite of products online and will shortly introduce a ULIP (unit-linked insurance plan) and an income replacement plan. Rituraj Bhattacharjee, head-market management, Bajaj Allianz Life Insurance, said both new sales and renewals were happening online, but a lot more could be done to make the platform more convenient.
HDFC Life has more than 11 products available on the online platform.
Companies are not just putting their policies online, they have also made efforts to put security mechanisms in place. Ghai said at Tata AIG, their platforms have been verified by Geo-Trust. Aviva, too, has ensured SSL (secure sockets layer)-certified servers for data security, which ensures data is transmitted securely in an encrypted format.
To prevent data leakage, Edelweiss Tokio Life has a payment gateway, that is encrypted with a 128 bit SSL certificate and do not collect any card or bank information on the site. HDFC Life, on the other hand, has stringent IT security measures in place, including ISO certification of data security for the online platform and also has a network security team, which continuously monitors the platform and transactions as a check against fraud.
However, to meet the demand, E&Y said newer strategies would have to be adopted by insurers.”As consumers increase the use of mobile technology, insurers must keep pace with products and services catering to the mobile lifestyle. This will require new insurer distribution and service strategies in 2013, “ sad the E&Y report.
AT THE CLICK OF A MOUSE
According to ‘The World Insurance Report 2013’, by Capgemini and Efma, newer channels like mobile phones offer fresh opportunities for insurers to increase revenue by boosting sales, shortening sales cycle times, enhancing customer experience and satisfaction, and reducing attrition. Keeping in tune with this trend, Indian insurers have not only increased their presence in the online and mobile segment, but have also put in place mechanisms to protect data security.
Aviva Life Insurance, for example, has identified the potential of this distribution model. T R Ramachandran, chief executive officer and managing director, Aviva India, said the online distribution channel contributed close to 15 per cent of its total policies in 2012. “We have covered over 40,000 lives through the online distribution model. According to market statistics, close to 13 million searches take place every month on insurance and pensions, hence, we expect our sales to continue to rise,” he said.
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Benefits of online transactions reduce the distribution costs and increase efficiency. The Capgemini-Efma report mentioned that the internet has become a critical tool for customers in the early stages of their researching quotes and coverage details. Adding to this, the Ernst and Young (E&Y) 2013 Asia-Pacific insurance outlook said insurers must invest in technology upgrades to support growth and improve operations and risk-management.
While information technology (IT) governance is an important aspect among insurers, with regulators across the world having data leakage prevention programmes, customers also need to take their own precautions, said John Ho Chi, partner-IT risk and assurance practice at E&Y Singapore and director of Isaca. Isaca is a non-profit association that serves IT governance professionals.
With increase in IT adoption by insurers, issues like data leakage and data security have also become a matter of concern for the industry. Sunder Krishnan, chief risk officer, Reliance Life Insurance, and a member of the Isaca India task force on IT governance, said while IT had become an enabler in the insurance industry, insurers were also taking efforts to minimise issues such as data leakage.
Online traffic has seen a substantial rise. Bhavin Shah, head-web sales, Edelweiss Tokio Life Insurance, said: “We started our online sales channel about nine months back and are currently averaging about 120 policies a month. We expect this number to rise substantially once we roll out products that are suited to the online segment.”
Insurers have also seen customers research for products online, but purchase it offline. Aviva’s Ramachandran said their research with market research firm IMRB highlighted the fact that as insurance was perceived to be a complex category, the human intervention in terms of an agent had a comfort factor for buyers. Presently, online (web+mobile) contributes about 8-10 per cent of overall sales for Indian insurers.
While maximum traffic has been seen from metros, the trend is now slowly changing, said insurers. Aviva, for example, has seen growth coming from the non top-30 cities, whose contribution has increased from 10 per cent in 2011 to 20 per cent in 2012.
Insurers are also looking to put additional products online. Gunjan Ghai, vice-president-marketing and e-commerce, Tata AIG General Insurance, said as a company, it focussed on online transactions and not just online sales. “Further, with increasing standardisation of health insurance, we expect customer comfort with online purchase of health insurance to increase.”
Aviva India plans to have a comprehensive suite of products online and will shortly introduce a ULIP (unit-linked insurance plan) and an income replacement plan. Rituraj Bhattacharjee, head-market management, Bajaj Allianz Life Insurance, said both new sales and renewals were happening online, but a lot more could be done to make the platform more convenient.
HDFC Life has more than 11 products available on the online platform.
Companies are not just putting their policies online, they have also made efforts to put security mechanisms in place. Ghai said at Tata AIG, their platforms have been verified by Geo-Trust. Aviva, too, has ensured SSL (secure sockets layer)-certified servers for data security, which ensures data is transmitted securely in an encrypted format.
To prevent data leakage, Edelweiss Tokio Life has a payment gateway, that is encrypted with a 128 bit SSL certificate and do not collect any card or bank information on the site. HDFC Life, on the other hand, has stringent IT security measures in place, including ISO certification of data security for the online platform and also has a network security team, which continuously monitors the platform and transactions as a check against fraud.
However, to meet the demand, E&Y said newer strategies would have to be adopted by insurers.”As consumers increase the use of mobile technology, insurers must keep pace with products and services catering to the mobile lifestyle. This will require new insurer distribution and service strategies in 2013, “ sad the E&Y report.
AT THE CLICK OF A MOUSE
- Online sales contributes 8-20 per cent of total sales of insurers
- Metros are the biggest drivers of traffic, closely followed by Tier-II/III towns
- Policies bought online are 20-30 per cent cheaper than offline products
- Companies have one product of each category online
- Mobile apps are also used to sell and renew policies
- Motor third party standalone plan is not offered online due to low volumes
- One can also compare prices before purchase of policy online
- Research shows that 70 per cent customers research online before purchasing offline policies
- All online insurance sale sites are encrypted and usually do not store sensitive customer info