Why buying an insurance policy online isn't an easy exercise

Insurance portals sell all kinds of policies. But jargon-heavy documents, complicated processes and unnecessary phone calls complicate matters for buyers

March 17, 2021 / 10:20 AM IST

In India, insurance is a USD 280 billion market as of 2020, and is a fast-growing sector. Catering to a variety of needs, products span life and non-life insurance (health, property, travel, motor, sachet insurance etc.).

Due to the rapid adoption of internet and mobile technologies, individuals and families can compare, access and purchase several products without ever having to visit the branch office.

However, in our interactions with the insurance user community on our platform we have observed that there are still certain areas that need more than just incremental improvements.

Here are such five areas of the insurance user experiences that need to be addressed with a degree of urgency.

Killing jargon: A Lexis Nexis survey conducted in 2017 showed that 57 percent of the individuals who bought insurance did not clearly understand all the terms, conditions, features and benefits. This can be attributed mainly to the complex nature of insurance content available today. Most of the content is either written for search engines or filled with industry jargon. Information on insurance often leaves users confused on the choices they need to make.

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Comparison facilities not helpful for direct purchase: In our interaction with hundreds of insurance users, we found that users spend hours and maybe even days trying to make sense of the comparison of products listed on various platforms. A few give up, and most of them finally depend on call centre executives or local agents to understand the products better.

Unnecessary chasing: This is a constant complaint from insurance buyers we have interacted with. Once you provide your mobile number, you will be constantly chased with phone calls. For users, this invasion of their privacy could get very annoying and make them lose faith in the entire ecosystem. Platforms are stuck in a vicious loop; the complicated comparison does not empower conversions with minimal or no assistance and hence is dependent on telemarketing sales.

Improving online purchase processes: Today, the online purchase process for insurance is simply a marginally improved version of the offline process. The forms, documentation etc. are near-replicas of the paperwork you would fill at a branch office 20 years back. So, while these forms are ‘available’ online, they do not leverage technology to reduce the efforts of a digital user. Every other industry has understood this changing preference and built a digital presence accordingly. But, insurance still lags behind.

Post-payment processes: Our study of the post-payment processes shows huge room for improvement. There is effort being put into making the purchase convenient by reducing paperwork using proxy data, bringing in tele & video underwriting. But the ecosystem players not making similar commitments to ensure the fulfilment from their end is seamless too.  The process with regards to medical check-ups, uploading of documents, and getting a policy can be extremely tedious with multiple phone calls from various stakeholders in the value chain.

Need revolutionary change, not evolutionary

In the two decades since insurance was privatised in India, the industry has made considerable progress in improving customer experience, but most of these changes were incremental. But for today’s digital native customer, this mindset might not be enough. What we might truly need is a rapid, revolutionary change.

Unless such a mindset change is achieved, insurance will continue to remain a sour grape to sell to any user.
Mahavir Chopra is the founder, Beshak.org, a consumer awareness platform for insurance
first published: Mar 17, 2021 10:20 am

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