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If one goes by latest trends, just putting an 'e' before everything makes it fashionable. But it has its benefits as well. And the main benefit is reduction in cost, often quite sharply. So, when asked the question whether buying an e-policy is better than the offline policy, most would agree with the convenience of the former.
There is now increased category comfort amongst customers while transacting online. Innovative payment methods, express delivery, free returns, try and buy and secure e-platforms are a few of the initiatives that have led to widespread adoption and experimentation.
Financial services now account for over a third of all non-travel e-commerce and the online insurance business does constitute a substantial slice of this pie. The online insurance category has evolved at a rapid pace. A dynamic environment now exists that allows for online insurance customer research, category comparison and product selection tools. This space has seen a surge in customer interest as substantiated by increasing insurance related keyword searches, introduction of innovative online insurance products and healthy double digit sales growth. This truly is a platform that is self-initiated, allows for customer pull and has the potential to make insurance a "must" in every household's consideration set.
Key reasons for buying life insurance online:
Affordability
The online sales platform allows for lower distribution costs on account of absence of intermediaries and most insurers have passed on this benefit to customers through lower premium rates. Further, the level and nature of disclosures are accurate as the customer is directly involved in the form filling process thus resulting in a better mortality experience. Insurers are able to pass on the lower mortality risk benefit to the customers as well. This has resulted in online products, especially term products, being a lot cheaper than their offline versions.
Offline product:
Age: 30 years
Gender: Male
Policy Term: 25 years
Sum Assured: Rs 1 crore
Annual Premium: Rs 17,200
Online product:
Age: 30 years
Gender: Male
Policy Term: 25 years
Sum Assured: Rs 1 crore
Annual Premium: Rs 7,200
Convenience
Insurance companies have invested significantly in developing best-in-class user interface to ensure that their customers are easily able to complete the online sales process within a matter of a few minutes. Steps such as premium calculation, filling up the proposal form and payment completion are now simple and hassle free. This allows the customer to apply for insurance from the comfort of their homes or offices using any internet-enabled device, including hand held devices. Device and operating system agnostic platforms have meant that most insurers are well equipped to embrace the m-revolution.
Easy availability
The online sales platform has truly made life insurance available to all segments of customers across the country. Even in cases, where the risk cover opted for by the customer necessitates a medical check-up; insurers are able to offer medical test facilities across the country. Insurers are no longer constrained by issues of lack of physical infrastructure or the necessity to open branches in smaller towns.
Customer-centric service
Insurers are bundling their products with innovative and relevant benefits that provide a superior value and support to the customer. Online customers directly deal with the insurance company without any physical interface. This has led to customer care personnel being specifically trained to address any customer needs and queries that may arise. Besides this, insurers also offer the option of "Tele-Assist" as part of the "Buy Online" process for customers who might need some assistance at any stage of the online purchase process.
For instance, one life insurance company offers a feature bundled with its online term plan whereby in case of the death of the policyholder, the nominee will get a sum of Rs 1 lakh within 48 hours of claim intimation. This is to ensure that at times of distress, family members are not further burdened through procedural delays. This feature is not available for offline products.
The claims process remains the same for any nominee of the customer, whether offline or online. The only difference is that they will have intimate the company directly instead through an agent. The various self-service points of contact that insurance companies offer are toll free contact centre, services at branches and through SMS.
Transparent process
The non-existence of any intermediaries in the online insurance business have resulted in insurers introducing online products that are simple, easy-to-understand and have relatively uncomplicated pricing structures. The online purchase process is transparent with easy access to customer service personnel at all times. Customers are easily able to understand the product benefits online, read the terms and conditions of the policy and compare several products at aggregator sites to arrive at the best possible product that perfectly suits their needs. Insurers have also invested in live chat facilities to provide real time advice and assistance.
These are early days for the e-business and when compared to the traditional business, the online insurance segment is in its infancy. Insurers will need to adopt a test and learn approach to hit the sweet spot of online insurance. This could be a combination of simplified products, real time online advice and needs assessment to not just meet customer needs but anticipate them. With advances in technology and ever improving service infrastructure, the online medium will only gain unbridled momentum in the coming years and the customer will be the eventual winner.
The author is Chief Marketing Officer for Bharti AXA Life Insurance
