Study says 65% of respondents keen on buying insurance online

NEW DELHI: Supportive government policies and a covid-enforced spike in digital activity are pushing consumers, and their insurance needs, online, says a Swiss Re study released on 13 January. The survey results underline Indian consumers’ extensive use of digital platforms and their preference to purchase insurance through them.

However, traditional channels, such as agents, brokers or insurance aggregators are still the primary channels for insurance-related information searches in India.

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“Around 65% of Indian respondents are likely to use digital channels such as e-wallets, bank or insurance websites and e-commerce platforms to purchase insurance in the future, indicating there is potential for primary insurers to move their offerings online and engage new digital consumers,” said the study titled "Going Digital–Insights to Optimize Consumer Appetite for Online Insurance".

According to the reinsurance major, the growing presence of e-commerce and digital wallet apps presents opportunities for innovative partnerships between insurers and digital platforms to bridge the $369 billion health protection gap in India.

“Health and safety measures intended for curbing the spread of covid-19 have now driven a clear paradigm shift towards digitalization in the post-virus era,” said Hadi Riachi, market head, Swiss Re India. “With an increasing number of digital platforms extending their business reach into financial services, insurers need to adapt their business models to become more relevant and responsive to the latest customer needs,” he added.

Swiss surveyed 1,800 consumers in India, Indonesia, and Malaysia in June 2020 to understand their attitudes toward digital platforms and perceptions of buying insurance online. Respondents were household decision-makers aged between 18 and 65 and had used digital platforms at least once within three to six months prior to being surveyed.

The survey results indicate that digital platforms have a high penetration rate in India, with an average of 90% using these channels at least once a week.

Among the different types of digital platforms, consumers in India indicated a stronger preference for purchasing insurance through payment or digital wallet and e-commerce platforms.

However, respondents also expressed various concerns when buying insurance online. Around 45% of Indian respondents found it hard to decide on the best product while 37% said there is no agent to help explain the terms.

“The results reveal that while digital insurance is becoming more popular, offline support is still necessary due to the need for guidance and assistance for certain products. It is important for insurers to adopt an omni-channel approach to complement online customer journey with personal assistance to address consumer concerns,” said Hadi.

The survey illustrates that insurers should personalize their digital offerings to drive uptake. According to the survey, the majority of the respondents (69%) are willing to share some form of personal data for a more relevant experience. Around 20% are willing to share such information only when there is a premium discount.