Online Insurance in India is welcome - by MKJ

As they say ‘change is inevitable’ or the only this that is constant is ‘change’.
Insurance in India fits this adage very well. I remember the times, when we heard
new generation of Insurance around 7-8 yrs ago when Indian Parliament had just
passed the revolutionary IRDA bill. Indian Insurance world changed since then.

All big MNC names were making rounds to find a suitable bride (Partners) for their
Indian Operations. I was lucky to be part of that change and was lucky to meet some
of the best minds with their recently appointed County Heads. Then, it was still AIG /
Allianz / Tokiyo, Lombard / AMP or Chubb. Things were moving very fast and
practically every one was looking at best Indian brand to partner with. Soon, durable
partnerships were announced (we see today) with the exception of Chubb and AMP
abandoning their Partner HDFC / Sanmar since they chose to exit the great Indian
Insurance market.

In those strategic meetings, mostly we discussed new innovative products and

effective but profitable channel of distribution. Particularly, for the General Insurance
segment, we were facing a daunting task of relevant data, including loss ratios so
that a smart insurance product could be built for Indian customers. The old players of
this industry i.e. the Govt. of Indian Insurance Companies were reluctant to share the
data and very much righty so as the winner in Insurance game is only that who could
underwrite the risk well. Other wise, what is the difference between FMCG and
Insurance business model?

Well with not much of luck, most of the Insurance companies now with their Indian
partner and rechristened names viz. Tata-AIG / Bajaj Allianz / ICICI Lombard / Iffco
Tokiyo picked the clues from international markets including re-insurance companies
like Swiss-Re / Munich-Re etc. And look at where we stand today. Indian Insurance
products are perhaps 30% cheaper than international markets and the best news is
that the Insurance companies are well on their profitable / break-even path. This is
our genius or I would say smartness of Indian Insurance Underwriters and Business
Development guys who managed to achieve critical mass with less loss ratio at an
amazing speed.

Why LIC is most famous and aggressive Life Player in India? Because, besides
products they have the extensive-most distribution channel any business
development or marketing guy could ask for. The Feet on Street (FOS) and branch
offices across big and small towns makes Life Insurance Corporation of India (LIC) as
giants. Naturally, new players could not afford to put so many new staff on their pay-
rolls so; they came out with an innovative strategy of Bankassurance, with terrific
success.

In my initial days with Insurance Industry as I came from Financial Services (FOREX
and CREDIT CARD) background, every thing was naturally raw and new. But I could
see that Insurance has terrific potential to create wealth for Indians besides heralding
a revolutionary new business model. The key catch for success in Insurance apart
Underwriting is DISTRIBUTION. You may be wondering, why I am sharing this. Well, as
we know Change is the only constant in this universe and here are some more
changes in the Indian Insurance Industry. This time it is for Online insurance.

The new buzz word is Online Distribution of Insurance today. The credit goes of ICICI
Lombard, who were the first player to see Insurance Online when their competition
were still hiring more Feet of Street (FOS), spending millions on wasteful advertizing
or opening new branches. ICICI Lombard perhaps is the only company in the world
that has huge a depth of Online Products ranging from Travel Insurance to Motor
Insurance. Bajaj Allianz followed suit and came out with their smart Online Products
too. Both these companies, if I am not wrong, are doing over USD 30 million worth of
business every year.

Of Course, if we look at the total Indian Insurance Size, which is over USD 30.00
billion, this sounds like a small amount. But mind you, 75% of total Insurance industry
in India is Life Insurance where we still don’t have a single Online player.

Looking at the opportunity and need for a neutral player not selling only A or B
Insurance company product, Bonsai Insurance Broking launched India’s first Online
Compare and BuyNow Insurance Portal in 2007. The concept is like a shopping Mall
where a customer could get all types of policies across Insurance companies at his or
her pace without any agent chasing them. The Online Brand is InsuranceMall. Being
an Insurance Brokers, unlike an Agent, Bonsai works for the customer. The USP of an
Insurance Broker is that it negotiates on behalf of its customer with Insurance
companies, hence a sort of guarantee of a right product at a right price. Since our
foray into On-line business, we have come a long way, servicing over 50,000
customers. Being the only player in the market is very lonely as traditional Insurance
Brokers are Off-line Corporate Sales focused.

But today, I am happy to share that we have competition. Competition is important

as it creates a demand pull and pressure back to players, be it Insurance Companies
or Insurance Brokers or Insurance Agents. To the best of my knowledge, now India
has 3 types of Online Insurance intermediaries who are changing the landscape of
how Insurance is bought or sold today. They are:

1 . Online Insurance Brokers – Neutral. You can Compare and Buy Policies Online
2 . Online Insurance Lead Generators – Collects your Info. Sells lead to Insurance
Companies
3 . Online Insurance Information Companies – Knowledge bank
Of Course, besides these 3 important players, we have Corporate Agents who solicit
business for a Life or Non Life Insurance Company. They are Banks, FI or Travel
Agents.

For simplicity sake, let me stick to the Online Insurance Intermediaries as they are
agent of change for Insurance in coming times. They are the one who would see the
maximum growth in penetration and also will be responsible for new products and
aggressive marketing campaigns. They are the one who will get VC or Private Equity
participation soon. Very soon.

1. Current Online Insurance Brokers in India (approved by IRDA)

1. Bonsai Insurance Brokers – www.InsuranceMall.in

2. A & M Insurance Brokers - www.insurancepandit.com
3. Insol Insurance Brokers – www.clicktocover.com

2. Current Online Lead Generators in India

1. Apna Loan Pvt Ltd. – www.apnainsurance.com

 2. Deals 4 Loans Pvt Ltd. – www.bimadeals.com
3. Peacock Financial Advisors Pvt. Ltd – www.Getmeinsure.com
3. Online Insurance Information Company in India

1. MFL Net Services Pvt. Ltd – www.bimaonline.com

You may have a direct question. Who will win this On-line race amongst Insurance
players in India?

I would say winner will be, absolutely the company that has knowledge and expertise
of Internet, SEO, SEM and Insurance Domain. We all know, many new-generation
companies were before Google in Search Space but what made Google the power-
house was its ability to understand Online Psyche which is way different from Off-line
business model. The Online customers are in hurry. Their tolerance level is far less
than a Brick & Mortar Insurance Agency set-up. Online customers don’t want GYAAN
(too much of Info or Processes before buying) but would want the easy and ability to
transact. Online Insurance Portals are not Social Networking Sites, where a visitor
would spend hours chatting or sharing his / her pictures with his or her friends. It is a
financial services site where the customers want the guarantee that their personal
information will be protected, their payment is secured and the quotes are accurate
to the last penny.

I am more than happy to see new players joining the Online Insurance market now in
India which only mean better products, better services and better premium for
consumers. The credit accrues to the Regulator IRDA who has this vision to see
Insurance Products reaching across length and width of India. Naturally what is better
way other than pushing Online! A customer sitting in Patna or Trivandrum or Kashmir
or Orissa has now a level playing field in terms of product availability as his security
is just a click away.

I am really excited with the future of Insurance in India particularly Online Insurance. I
will be thrilled, if soon we hear the news on India’s first Online Insurance Company
viz. GEICO.com or Progressive.com of America. Who knows, they may be on their way
to India as USD 30.00 billion market is not readily available any where in the world
other than China. Perhaps, that will be the epitome of growth of Indian Insurance and
we will all welcome it.

Cheers!

Manish K. Jaiswal
CEO – Bonsai Insurance Brokers Pvt. Ltd.
www.InsuranceMall.in