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How Insurance Aggregators Can Convert Inquiries Into Actual Sales

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Web aggregators offer price comparisons, loss ratio, and general functionality, but remain silent on issues that may require individual discussion or explanation.

Insurance is not a commodity, which is why the buying and selling of insurance has always been channel-centric. The customer is rarely seen going to a seller and buying a policy, except in cases where the law requires insurance to secure their property or possessions. In 2013, the insurance regulator drew up regulations to introduce a new channel known as web aggregators to meet the needs of young people who prefer to do most of their financial transactions using the internet.

Common platform
Today we have over 20 web aggregators. These days we see a good number of extremely active web aggregators on almost every TV channel urging people to purchase term insurance or various health plans with the click of a mouse. But unfortunately, the ease of purchase alone cannot motivate the purchase of life, health or other insurance. Buying insurance is serious business and the decision once made has long term financial implications. Customers are sometimes duped by salespeople who lure them in with incomplete information about the important terms and conditions of a particular policy, thus vitiating the entire contract.

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Web aggregators offer price comparisons, loss ratio, and general functionality, but remain silent on issues that may require individual discussion or explanation. For example, the fees levied during the first year and subsequent years under ULIP policies and their impact on the number of units awarded against the renewal premium, the privilege applicable during the first years of the life cycle of the contract or as the contract proceeds are not eligible for Sec 10 (10) D deductions under certain circumstances under IT law are not explicitly mentioned.

Indicated price
Likewise, issues such as lack of coverage for an existing illness or mandatory copayment are not mentioned when selling policies on the aggregator platform. Most people therefore decide on the basis of the quoted price but regret it later. But as more and more people move from physical to digital interactions, the only option is to make the digital road more reliable. They should try to eliminate all apprehensions so that customers not only have ease of purchasing, but also sufficient accountability through proper disclosure to make the right choice. Besides the emphasis on price, all the other factors that distinguish one product from another should be highlighted. Indeed, aggregators must allow visitors to their website to make an informed choice. To achieve this, insurers will need to agree with aggregators that they must go beyond price transparency because the cheapest product is not necessarily the best product for a customer.

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Aggregators should understand that a term insurance policy is very different from an auto insurance policy. Insurers must differentiate themselves on the distinctive features that must be brought to the attention of the client. This will not only make the buying process satisfying, but also allow aggregators to achieve a high conversion rate from survey to actual sale. Such an approach can make insurance web aggregators a major channel for the industry struggling to break through.

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Prospective customers who are comfortable with digital transactions will continue to look to purchase insurance products online. It is up to the industry to live up to their expectations and join the digital wave to achieve breakthroughs in market penetration and match their performance with the best in the world.

The writer is the former Managing Director and CEO of SUD Life

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