Online insurance sales

More and more life insurance companies are aggressively looking to sell policies online in an effort to make their operations more cost effective and keep a check on expenses. The Insurance Regulatory and Development Authority (Irda) has been sending reminders to insurance companies time and again asking them to tighten their expense management.

In order to encourage online sales, life insurance companies are offering various incentives to customers including policies at cheaper premium, easier and hassle-free buying procedures and instant verification. Some insurers have launched products to be sold exclusively through the online mode.

While Bajaj Allianz Life Insurance and Aegon Religare Life have launched products for exclusive online sales, companies such as ICICI Prudential Life, HDFC Life and Reliance Life Insurance have been offering their existing products for sale online.

Akshay Mehrotra, head, marketing, Bajaj Allianz Life, told Financial Chronicle, the insurer among the first life insurance companies in India to launch a unit-linked insurance policy – iGain – to be exclusively sold online. “The response to online sales has been so good that we have to create an entirely new vertical to handle the business generated from online sales,” he added. Bajaj Allianz’s Shield Plus plan is also sold online.

Aegon Religare Life’s iTerm Plan is also sold exclusively online. Yateesh Srivastava, chief marketing officer, Aegon Religare Life Insurance, said the iTerm Plan is available for a premium that is 70 per cent cheaper than the one being offered offline. “Pricing is key to the popularity of online products besides the convenience factor. We have ensured that the process of buying online does not take more than 10 minutes and the customer get instant verification. For instant verification, we send the policy statement through mail once the buying procedure is over,” he added.
HDFC Life Insurance is offering its Ulips for online customers at a special discount of 40 per cent on the first and second-year allocation charges, allowing a larger part of the premium to be invested

It also pays back the first-year annualised premium through a bumper addition. For policies with a term of 11 years and more, the customer gets the entire annual premium base and for policies with a term of 10 years, he gets 50 per cent of the original annual premium as bumper addition.

An easier and hassle-free process is a great sales pitch for online products. ICICI Prudential Life, which is offering term, wealth, health and retirement plans online, claims to that a customer can buy insurance plans in four easy steps with minimum paperwork. HDFC offers products in five simple steps with no medical information requirement.

Abraham Allapatt, head of branding, Future Generali Life Insurance, which is going to roll out its online sales model in first week of May, said from the insurance company's standpoint also, online products have many advantages. “Online sales is a wholly-owned and controlled channel, it allows the companies to have direct contact with the customer, besides improving the efficiency of process and turnaround time,” he added.