What’s on offer in Digital insurance

The Insurance industry and its army of agents have predominantly been engaged in a physical, direct and relationship-based transaction. This is largely attributable to the complex nature of most products, the premium being sizeable amounts especially when it comes to traditional policies as well as the fact that insurance itself involves planning for something not-so-pleasant — be it loss of one’s life, a health issue or, say, a motor accident.

While the personalised relationship is still the bedrock of insurance, insurance is gradually leaning to a phy-gital structure — one that combines the reach of a digital presence with the personalisation of a physical network. The increasingawareness of the need to be insured, the need for faster penetration of insurance given the size of the population, and rise of fintech industry have all made it conducive for pick-up in digital insurance.

Here, we highlight what’s on offer if you would like to stay covered at the click of the mouse or the tap of your finger, from the comfort of your home. As much as the convenience may draw you in, we also draw your attention to other factors that you must be aware of before availing yourself of insurance services online.

Web aggregators

In insurance, the combination of right features at an agreeable price is key to the selection process. For the insured, this exercise can be incomplete without an exhaustive list of the service providers. This is where aggregators come in. Aggregators put together different insurers on a single platform to enable differentiation.

They are the online portals that list the different insurers, their products and price points, to enable policy seekers make an informed choice. Aggregators make it convenient to compare more than 20 insurers on product, pricing, and optional features.

For instance, under health insurance, for policy seekers looking for no co-pay, lower pre-existing disease limits, higher OPD coverage, and possible better accommodation limits, a comparison is enabled between such specific list of features. From there on, policy seeker can compare on prices. Trawling such platforms before a purchase can also introduce policyholders to new features, which they would not have been aware of otherwise.

A few such aggregators include Policybazaar.com (which is also a broker), insuranceDekho.com and plumhq.com, which is an aggregator for group insurance. There is even a 5 per cent discount for an online purchase.

However, while comparison among products and features is a big positive with aggregators, comparison on service levels is largely absent on such platforms, which tend to emphasise pricing as a proxy measure. Claim servicing ratio is mentioned but with every insurer boasting of more than 90 per cent claim service ratio, differentiation is largely absent, and policyholders will have to rely on their own discretion.

Direct portals

Many insurers are now actively promoting their own portals for insurance transactions. Filtering and comparison of other insurer options is still better executed on aggregator portals, which cannot be expected on company’s own portals. But the increasing digital reach of insurers is a useful addition. Prompt reminders for premium payment, one-touch payment options, and app-based claims processing have made post-purchase transactions with insurers accessible and useful. The cost of missing a premium payment can be easily avoided with a digital reach.

For geography-based services, such as OPD consulting in health, 24/7 roadside assistance for car insurance, emergency health services in travel insurance, digital reach enhances service levels. Insurers have taken it to the next level as well. In car insurance, a ‘pay as you use’ is a recent addition to switch on car insurance when in use and extend the life of the car insurance. In health insurance, wellness features that reward physical vitality rely on digital interfaces for measurement.

In a reaffirmation of digital approach in insurance, there are insurers who are largely digital-first. Digit, Acko and Niva Bupa have a larger digital presence. However, while this increases the size of the addressable market, it relies on self-serving customers who are adept at financial and digital literacy.

Insurance accessories

With insurance purchase and management moving online, a spurt in insurance services from third parties is also marking its presence in the digital field.

For instance, help in insurance claims can be found digitally. Insurance Samadhan, a web portal/mobile app, resolves insurance queries — for a fee. While approaching the Insurance ombudsman and/or other legal process is the final resort for policyholders, insurance samadhan too can be an effective tool, which is accessible digitally.

Besides, IRDAI’s latest announcement in making a demat issuance of policy mandatory and the setting up of Bima Sugam, a government-driven insurance marketplace, are other examples of digitisation gaining traction. Under the former, existing securities repositories including CAMS, Karvy, Central Insurance Repository of India will be holding the issued policy in dematerialised form and existing policies can be migrated to the repository as well. This should allow for digital access not only to the policyholder but other relevant parties as well, in case of an unforeseen event.

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