Selling of insurance has traditionally been the prerogative of Independent Financial Advisors (IFA). However, the advent of the internet changed the way people do business. With time, the sale of insurance policies over the Internet, especially personal and corporate insurance, has also seen a steady rise. Internet is the sole distribution channel for insurance products that has shown a remarkable growth of 170%. Most other channels such as banks, tied agents, direct writers, mobile sales force and telephone have shown negative growth.
There is a clear consensus from recent trends that people are looking to self-fulfil their insurance buying needs using the Internet and by help of broking firms. But, the number of people who are actually buying on the Internet is still low. The Internet is still considered as a comparative mechanism rather than a buying one, when it comes to insurance products. There could be a number of factors contributing to this:
- People feel more comfortable contacting an IFA and discussing their policies
- Underwriting as a process is not conducive for the instant decisions that people would like to take while buying on the Internet
- Lengthy processes might be dissuading the buyers who need instant decisions. Typically, out of the 55% of tele-interviews outsourced in the insurance selling process, over 33% take five days, according to Theta, a leading investment research company.
What Can Insurers Do to Move the Stumbling Block?
These are the certain points that can be considered
- The process of tele-interviews should be shortened as customers might tend to postpone the purchase, and finally not buy online at all. So when you have a customer interested in your product, it is wise to keep him engaged and provide him with the right environment to make the purchase.
- Insurers must review their rating engines and underwriting processes to present the right terms to prospective customers. The questions should capture the right issues related to a person, ensuring that the rates presented to the buyer are appropriate, while also considering alternate terms and exploring exclusions.
The reach of the Internet is undoubtedly growing. It’s time insurers make their policies ‘online-friendly’. And remember that this time, the competition will not be fought by the foot soldiers they have in agents, as it will be war in the online space with thousands to compete with in minutes!