Kotak Life Insurance Company will soon launch sale of online life insurance products… [more] The online initiative would be kicked off in October 2010.
Currently there are some life insurance companies like Aegon Religare, ICICI Prudential and Bajaj Allianz Life Insurance which sell life insurance products online. The online channel is considered to be a cost effective channel where-in no payouts need to be made to the agent/distributor over the tenure of the product. Even if the insurance company incurs a one-time cost in acquiring a customer, it is much more profitable than the payouts which need to be made every year to the agents for every policy acquired by them.
The new IRDA norms for ULIPs may be a reason why new online life insurance products might see a major thrust among all life insurance companies. A lot of companies might find it less lucrative to make the handsome payouts to the agents anymore given that the largest are capped to a very large extent.
In fact, the new norms for ULIPs have forced a lot of life insurance companies to take a hard look at their own distribution channels and their internal cost structures. The internet can be used to source business form high-end customers who are familiar with making purchases on the web and the premiums levels are higher than the average.
The life insurance industry will see more and more companies testing the online medium for sale of their products. There are some distinct advantages to this mode. For one it is a transparent model where the chances of mis-selling are non-existent. Also the customers are generally better aware of the customer and the persistency levels are higher.
Online insurance purchase in India is set to pick up gradually in India.
