`Internet to Drive Insurance Sales of up to Rs 4 L-cr a Year’

Customers in non-metros will buy more policies online, shows a survey

The internet will help drive insurance sales of up to ` .4 lakh crore annually in about five years as customers in non-metro cities and youngsters buy more policies online than anticipated, a survey shows.

“Our studies indicate that the internet will influence ` . 3 lakh crore-4 lakh crore worth of insurance sales in India by 2020,“ said Vikas Agnihotri, industry director at Google India, which conducted a joint survey with private nonlife insurer ICICI Lombard. “The findings from this report clearly outline that consumers are shifting to the internet at a more rapid pace than perceived earlier.“ The survey did not indicate the proportion of sales from the internet. Life and general insurance companies did new business worth ` . 2 lakh crore in 2014-15, according to data collated by the industry . While life insurance earns income from the renewal of policies, general insurance is usually a one-year contract.Customers of non-life companies can move to other companies if they are unhappy with the present provider. Life insurance contracts are normally valid for a minimum of five years.

The survey found that non-metro ci ties are ahead of their metropolitan counterparts when it comes to buying or renewing health and motor policies online. Internet us ers in the age group of 25 to 35 were the most active in buy ing non-life insur ance products online. The offline survey covered more than 3,000 respondents who were active Internet users spread across 18 cities in India in the age group of 25 to 55.

“Our experience with our customers shows that those buying our products online are more evolved and long-term oriented,“ said Sanjay Datta, chief, underwriting & claims at ICICI Lombard General Insurance Company .

Among those who preferred the traditional route, the main reasons for not using the internet were personal contact with an agent and better post-sales service, according to the survey.

The poll showed that private insurance companies are using online chats to make up for the lack of a distribution network, what Life Insurance Corporation of India took decades to build. “Conversion ratio of customers who have approached the company using online chat is almost double for customers calling in,“ said Sanjeev S, head, marketing, e-business & bancassurance at ICICI Lombard.

The company has a 15-member team handling online chats, whereas 200 people at the call centre currently contribute less than 5% of retail sales. The share of online chat is less than half a percentage point. The chat facility on the website was introduced a year after it started the online business. Motor, health and travel insurance are the three segments sold through online chats

Source: Economic Times

Date: 13th May 2015

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