distributors will be barred from
offering advisory services through
immediate relatives—spouse,
parents, brother, sister and children
—if the proposals are finalised in
their current form. “We will see
registered investment advisors
(RIA) selling these plans and
charging a fee. Once SEBI finalises
these guidelines, the direct segment
will get a push,” predicts Kaeley of
UTI AMC.
Insurance – traffic shifts
to assisted direct and direct
platforms
Globally, shifting investments
online has not been an easy process.
But the journey has been relatively
easier for the insurance sector
because customers like choice.
The open architecture model of
digital platforms allows customers
a lot more options while buying
insurance, which is not the case
while buying insurance through
a traditional channel. When
consumers go to digital platforms,
they can compare features of
products from different insurers.
Also, under existing rules, banks
are allowed to only partner with
up to three insurance companies
in each category (life, general and
health), which is restrictive for
customers. Moreover, some banks
with insurance subsidiaries have
stayed away from distributing other
insurance companies’ products.
Over time, customers of
insurance have learned to not
only research for products online
but also purchase them digitally.
Also, digital platforms have helped
companies issue policies at a much
faster pace than the traditional
channels. This puts at risk an army
of 20 lakh insurance agents across
the country.
The shift to direct or assisted
direct channels is best told through
data. Direct business for private life
insurers increased from `758 crore
Kshitij Jain
Managing Director & CEO,
Exide Life Insurance
While digital channels
are currently focussed
on providing protection
solutions, going forward
we expect to see growth
in online sales of savings,
investments and annuity
plans as well. In the next
3 years we see direct
channels contributing
between 15 to 20
per cent to our new
business
in the April-June period in FY18
to `942 crore in July-September
quarter of FY18, which shows a 24
per cent growth sequentially. The
online motor insurance market
has also grown by 50 per cent this
year compared to last year and is
further expected to grow by 100
per cent in 2018, claim research
reports. Most insurers claim that
traffic has increased three times
on their websites compared to
last year. The digital channel also
allows more flexibility to insurers
to grow their business. Says Deepak
Mittal, CEO and MD of Edelweiss
Tokio Life: “Thanks to the digital
channel, insurers can now reach
customers with a central suite of
products. Distribution is not open
in the physical world, as it is in the
digital world. Achieving scale in the
digital world is easier and, therefore,
growing market share too is easier
and faster in the digital space.”
Insurance, historically, has
worked on a catchment area
and focused on local areas. Like
India’s IT industry, the growth
of its business was linked to the
number of feet on the street. But
with customers preferring to shop
online for insurance products,
companies are now investing
more in marketing spends to build
their connect directly, rather than
spending money on their sales force
alone. Explains Subrat Mohanty,
senior executive vice-president
and head of strategy, HDFC Life:
“Consumers get a mix of price
advantage, convenience and control
over the purchase journey. In case
the customer needs any assistance,
that is also provided without the
need for a face-to-face-meeting.”
Numbers only strengthen the
case of digital sales in insurance.
Nearly 95 per cent of ICICI
Prudential Life’s new business
applications in the first half of
financial year 2017-18 were
logged digitally. Says Puneet
Nanda, Executive Director, ICICI
Prudential Life Insurance: “To
provide an additional layer of
convenience to our customers, we
have, since June 2017, begun issuing
policies on the basis of biometric
authentication. This process is
completely paperless and enables us
to issue (non-medical) policies in
less than 20 minutes.” A big reason
for this is the speed to market
and customer data that gets
captured online.
Invaluable customer data is
gathered by an insurer when
customers reach out to them
directly. “The direct mode ensures
full transparency and control for
the policyholders. As insurers, we
get to do more customer-oriented
research, understand them better
and offer more relevant solutions
suited to their needs,” says Arora of
Aegon Life.
The barrage of customer
information that comes through
digital channels is also helping
insurers design products that are
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