When I was a child, I have seen people in the age bracket of 40 to 50, calling agents at home to buy their insurance product. But today in 2019, when I am an adult, things have not changed much. Amid the massive digitisation going on in India if one thinks of getting insurance plan, one thing that strike one’s mind is that he will have to go through lot of formalities and eventually that will cost lot of his time. And thus the recent report by PwC India, a consultancy firm, done along with the Confederation of Indian Industries (CII) testifies to the fact that Indian’s are reluctant to buy Insurance product directly. The report says that 55% of Indians still buy insurance products via agents or brokers.
The report titled as Competing in a new age of Insurance - How India is Adopting Emerging Technologies, also put forward that convenience plays a big role when It comes to buying an insurance product. That is the only reason that 55% Indians resort to this option of turning to agents in order to purchase their Insurance product. And 41% people opted convenience as the reason for buying these insurance product from the brokers and from agents too. For reaching to this data around 200 people, agents, Insurers were interviewed for the report.
Sandeep Ghosh, an expert talking about the possible reasons for this, says: “ People don’t wake up in the morning, thinking to buy a life product. It’s not a sexy product. It is a latent need and its not an obvious need fundamentally across the world. It is a product that needs to be explained. It’s not absolutely mandatory. The people are buying it via agent or broker because it’s a push product and it needs an intermediary.”
Also, the report came out with some significant observations and one is that the insurance penetration rate in India has not witnessed a drastic jump over the years. And insurance penetration in India has increased from 2.17 per cent in 2001 to 3.69 per cent in 2017. However, the global penetration of insurance stands at 6.19 per cent, which is far ahead of India.
Buying insurance also comes up with certain formalities and that also includes documentation. And according to many experts, they are complex and are not understandable to ordinary people, thus the role of an intermediary becomes inevitable. So young population who survives and thrive on the Internet finds it bit difficult to go for it.
Keeping in mind the complexities and formalities associated with buying insurance products, Sandeep Ghosh added that there is a strong need to make the process of buying an insurance policy smooth and completely tech-centric. Giving suggestion on how can we improve and what necessary things the companies should do, he says: “ As a young population is digitally savvy, the propensity to buy things online is much higher among them. So these instruments should be clicks away and they should be made accessible and should be made such that any one can buy after making five clicks on the phone and need not to fill five pages or multiple forms. And making these changes for sure will appeal millennial.”
Now, after this report comes into the fore, it becomes imperative for the insurance companies to make the process bit simpler so that more and more people buy the insurance policies on Internet without resorting to agents and brokers.