How Web Insurance Aggregators in India Are Using Technology to Redefine the Insurance Space
Those of you who bought insurance in the pre-internet era must remember the struggle to find an insurance plan which would be a perfect fit for them and their dependents. To hire an insurance agent, the constant visits of the agents to your house, the fear of getting cheated due to inadequate information, all this could have a bad effect on your stress level.
With your busy lifestyle, you would not have the time to take up an extensive and time consuming process like this, eventually, leading to be inevitable. You would not find it necessary to buy a life insurance for an event that has an unlikely probability of happening, such as an unfortunate death.
You might simply get lazy, or busy, and keep on delaying until it gets too late. However, with the advent of Information Technology in the insurance sector, there have been changes for the better. Now, buying an insurance plan is just one click away just like buying clothes, phones, etc. online. Instead of hiring a local insurance agent or spending hours standing in a queue in insurance offices, you can directly log onto the website of an IRDA approved insurance web aggregator to get the necessary information about the plan you wish to buy.
The insurance web aggregators offer you a wide range of insurance policies and their providers in the market, on a single window. You can compare various insurance plans offered by the insurance giants rolling out in the market with costs, coverage of the policy, competing features, all on one screen.
Fintech in the Insurance Sector:
As per the global survey held in June by PricewaterhouseCoopers (PwC), cost-reduction is one of the most significant gains that have been noticed from the penetration of Fintech. The survey said, “A move in the direction of cloud-based platforms not only diminishes the up-front cost, but also the small ongoing spending on infrastructure. While making comparisons to computer-based technologies, only the fintech innovations can reduce the cost up to 10-fold.” It further added that the automation, self-servicing and disintermediation of core insurance products and functions will offer saving options for the insurers.
It is also believed that the digital innovations must be about operation improvement first. This will translate into a better consumer experience. Mr. Anuraag Sunder, the Director of PwC said, “Whether we like it or not, the general understanding of the word digital is online selling. What we need to understand is that this element is only a subset of the digital ecosystem.”
The introduction of technology in the insurance sector intends to employ current and the new data, analyse it, making use of machine learning and artificial intelligence to know and understand the problems faced by the consumers and look out for a solution.
Sunder said, “Data has really not been a strong point of the Indian industry, and that holds true across sectors, not just insurance. From that perspective, insurance sector has recognised this issue and there has been movement.”
The Chief Executive Officer (CEO) cum founder of RenewBuy said, “Many websites offer you options to capture and store insightful, rich and reliable consumer data. You can leverage this data to customise endorsing for individual consumers, depending on their past history.”
Going digital is all about improving business, it does not aim at making things look attractive, Sunder said, “Consumer ease or solving the problems of your customers is the most significant element in the entire journey.”
You usually have a lot of complaints about the transparency and lack of understanding while buying an insurance policy. Fintech can assist here. The co-founder of Turtlemint.com (an online insurance aggregator), Mr. Anand Prabhudesai said, “The contracts of insurance are defined in legal language. These contracts contain limitations and exclusions to safeguard the insurance companies, but are not easy to understand by the buyers. The job of the traditional agent was to make the buyer understand but this is not an easy task and does not always happen. We are trying our best not to leave any gap by using a blend of in-house professionals and technology.”
Now the question is what exactly web aggregators are. Let’s read further to know the answer.
Web Aggregators:
According to the Insurance Regulatory and Development Authority (IRDA) of India, Insurance Web Aggregators accumulate and offer information about the insurance plans offered by several insurance giants on single online platform. That is, they assemble data from several databases and sources like websites of insurance companies, and the obtained data is compiled to make it fit to present in front of the potential buyers of insurance policy.
Roles and Responsibilities of Insurance Web Aggregators:
IRDA has established a set of rules and regulations for these web aggregators looking at their growing prominence in India. These regulations are compiled by the IRDA under the Insurance Regulatory and Development Authority (Web Aggregators) Regulations, 2013. The IRDA (web aggregators) Regulations, 2013 defines the roles, responsibilities and duties of the aggregators.
These regulations define the disclosure norms, the process to attain the license to become a web aggregator, web aggregators’ remuneration, penalties to be collected (if someone is running a web aggregator without obtaining any license), and other relatable matters.
The role of the web aggregator is to facilitate for the insurance buyer, comparisons among various insurance plans, such as life and health insurance simply by agreeing with the insurers. Endorsement of any insurance company in particular or promoting any insurer through advertisements is not included in the set of roles of the aggregator.
While carrying out its duties, the aggregators have ascertained the convenience of its customers. The aggregator can play a role of a solicitor or an insurance broker, by making contacts with the potential buyers directly. These aggregators may also give the contact details of the buyers to several relevant insurers, provided that the buyer of the policy is aware of sharing of the contact details with the insurance companies.
The Insurance Web Aggregators can be compensated with a fee of Rs. 50,000 from the insurance companies for each insurance product of the insurance company or each insurance company itself that is displayed on its website. Along with this fee, the aggregator may also charge a commission or premium of sorts, of less than 30%, for a lead conversion into sale. You may also be charged with a pre-decided fee for some other activities like collection of premium executed by it.
How the Insurers React?
Insurance is a growing sector. It is estimated that by 2020, internet users would grow to be 450 million strong. After the insurance web aggregators were introduced, there has been a remarkable increase in the number of policyholders.
The insurance companies have become relatively responsive to these insurance web aggregators and are losing no time to enter into collaborations and associations with them. The insurers have a fair knowledge of the role of internet in today’s life of an individual. They are playing wisely and have embraced the online aggregators’ power, particularly after the IRDA introduced the regulations. These web aggregators of the insurance sector play the roles of brokers, solicitors, telemarketers and information providers.
The aggregators have made the life of the busy buyers simpler and easier. They assist in the raising the insurance sector of the country to new highs. They have an enormous scope today as the online market is so vast that avoiding it or leaving it untouched would be a great blunder.
On a Final Note:
The insurance industry has been marred by a lot of issues: consumers find policies complex, have many cases of being misguided and mis-sold and have many claim issues. This was majorly an issue of asymmetry of information between the buyers and the insurers. The traditional channels, i.e. the agents, have not been able to regularize the asymmetry, and sometimes, accidentally, even combined it with other relative problems.
Insurance sector has seen a remarkable change — from being a vendor’s market to becoming a consumer’s market. Fintech or the insurance web aggregators have been catalysts in bringing this change. The web aggregators have offered a seamless experience of buying insurance. Today, you have niche products, more choices, greater awareness related to savings and protection, etc. due to their emergence.
Those of you who bought insurance in the pre-internet era must remember the struggle to find an insurance plan which would be a perfect fit for them and their dependents. To hire an insurance agent, the constant visits of the agents to your house, the fear of getting cheated due to inadequate information, all this could have a bad effect on your stress level.
With your busy lifestyle, you would not have the time to take up an extensive and time consuming process like this, eventually, leading to be inevitable. You would not find it necessary to buy a life insurance for an event that has an unlikely probability of happening, such as an unfortunate death.
You might simply get lazy, or busy, and keep on delaying until it gets too late. However, with the advent of Information Technology in the insurance sector, there have been changes for the better. Now, buying an insurance plan is just one click away just like buying clothes, phones, etc. online. Instead of hiring a local insurance agent or spending hours standing in a queue in insurance offices, you can directly log onto the website of an IRDA approved insurance web aggregator to get the necessary information about the plan you wish to buy.
The insurance web aggregators offer you a wide range of insurance policies and their providers in the market, on a single window. You can compare various insurance plans offered by the insurance giants rolling out in the market with costs, coverage of the policy, competing features, all on one screen.
Fintech in the Insurance Sector:
As per the global survey held in June by PricewaterhouseCoopers (PwC), cost-reduction is one of the most significant gains that have been noticed from the penetration of Fintech. The survey said, “A move in the direction of cloud-based platforms not only diminishes the up-front cost, but also the small ongoing spending on infrastructure. While making comparisons to computer-based technologies, only the fintech innovations can reduce the cost up to 10-fold.” It further added that the automation, self-servicing and disintermediation of core insurance products and functions will offer saving options for the insurers.
It is also believed that the digital innovations must be about operation improvement first. This will translate into a better consumer experience. Mr. Anuraag Sunder, the Director of PwC said, “Whether we like it or not, the general understanding of the word digital is online selling. What we need to understand is that this element is only a subset of the digital ecosystem.”
The introduction of technology in the insurance sector intends to employ current and the new data, analyse it, making use of machine learning and artificial intelligence to know and understand the problems faced by the consumers and look out for a solution.
Sunder said, “Data has really not been a strong point of the Indian industry, and that holds true across sectors, not just insurance. From that perspective, insurance sector has recognised this issue and there has been movement.”
The Chief Executive Officer (CEO) cum founder of RenewBuy said, “Many websites offer you options to capture and store insightful, rich and reliable consumer data. You can leverage this data to customise endorsing for individual consumers, depending on their past history.”
Going digital is all about improving business, it does not aim at making things look attractive, Sunder said, “Consumer ease or solving the problems of your customers is the most significant element in the entire journey.”
You usually have a lot of complaints about the transparency and lack of understanding while buying an insurance policy. Fintech can assist here. The co-founder of Turtlemint.com (an online insurance aggregator), Mr. Anand Prabhudesai said, “The contracts of insurance are defined in legal language. These contracts contain limitations and exclusions to safeguard the insurance companies, but are not easy to understand by the buyers. The job of the traditional agent was to make the buyer understand but this is not an easy task and does not always happen. We are trying our best not to leave any gap by using a blend of in-house professionals and technology.”
Now the question is what exactly web aggregators are. Let’s read further to know the answer.
Web Aggregators:
According to the Insurance Regulatory and Development Authority (IRDA) of India, Insurance Web Aggregators accumulate and offer information about the insurance plans offered by several insurance giants on single online platform. That is, they assemble data from several databases and sources like websites of insurance companies, and the obtained data is compiled to make it fit to present in front of the potential buyers of insurance policy.
Roles and Responsibilities of Insurance Web Aggregators:
IRDA has established a set of rules and regulations for these web aggregators looking at their growing prominence in India. These regulations are compiled by the IRDA under the Insurance Regulatory and Development Authority (Web Aggregators) Regulations, 2013. The IRDA (web aggregators) Regulations, 2013 defines the roles, responsibilities and duties of the aggregators.
These regulations define the disclosure norms, the process to attain the license to become a web aggregator, web aggregators’ remuneration, penalties to be collected (if someone is running a web aggregator without obtaining any license), and other relatable matters.
The role of the web aggregator is to facilitate for the insurance buyer, comparisons among various insurance plans, such as life and health insurance simply by agreeing with the insurers. Endorsement of any insurance company in particular or promoting any insurer through advertisements is not included in the set of roles of the aggregator.
While carrying out its duties, the aggregators have ascertained the convenience of its customers. The aggregator can play a role of a solicitor or an insurance broker, by making contacts with the potential buyers directly. These aggregators may also give the contact details of the buyers to several relevant insurers, provided that the buyer of the policy is aware of sharing of the contact details with the insurance companies.
The Insurance Web Aggregators can be compensated with a fee of Rs. 50,000 from the insurance companies for each insurance product of the insurance company or each insurance company itself that is displayed on its website. Along with this fee, the aggregator may also charge a commission or premium of sorts, of less than 30%, for a lead conversion into sale. You may also be charged with a pre-decided fee for some other activities like collection of premium executed by it.
How the Insurers React?
Insurance is a growing sector. It is estimated that by 2020, internet users would grow to be 450 million strong. After the insurance web aggregators were introduced, there has been a remarkable increase in the number of policyholders.
The insurance companies have become relatively responsive to these insurance web aggregators and are losing no time to enter into collaborations and associations with them. The insurers have a fair knowledge of the role of internet in today’s life of an individual. They are playing wisely and have embraced the online aggregators’ power, particularly after the IRDA introduced the regulations. These web aggregators of the insurance sector play the roles of brokers, solicitors, telemarketers and information providers.
The aggregators have made the life of the busy buyers simpler and easier. They assist in the raising the insurance sector of the country to new highs. They have an enormous scope today as the online market is so vast that avoiding it or leaving it untouched would be a great blunder.
On a Final Note:
The insurance industry has been marred by a lot of issues: consumers find policies complex, have many cases of being misguided and mis-sold and have many claim issues. This was majorly an issue of asymmetry of information between the buyers and the insurers. The traditional channels, i.e. the agents, have not been able to regularize the asymmetry, and sometimes, accidentally, even combined it with other relative problems.
Insurance sector has seen a remarkable change — from being a vendor’s market to becoming a consumer’s market. Fintech or the insurance web aggregators have been catalysts in bringing this change. The web aggregators have offered a seamless experience of buying insurance. Today, you have niche products, more choices, greater awareness related to savings and protection, etc. due to their emergence.