either by phone or in writing, and acknowledge them promptly.
The draft guidelines say that if the client evinces interest in buying insurance but does not prefer a particular insurer, web aggregators shall not transmit the lead to more than three insurers in the same insurance business.
So, in such a case, how will the aggregator pick up the three insurers where the lead can be communicated? Analysts say since no selection criteria is proposed in the draft regulations, the web aggregator is free to send the lead to any three insurers of his choice and this will depend on his business or working relations with the insurer.
Web aggregators compile information on various features and pricing of products, where a customer can compare the premiums and policy features to get the best deal. Also, online leads result in cost reduction for both the manufacturer and customers as 60% of India's population is below 30 years of age and is tech-savvy.
Dahiya of Policybazaar.com says, in the current scenario, most distribution channels in insurance push a product based on commission. On the other hand, a web aggregator is a pull channel where the consumer has himself logged on to buy a product. “So, to reduce cost, the focus needs to be on creating a good product that can sell on its own. If all energies are invested in developing better products, both the insurer and the aggregator can easily work together to bring down the cost of acquisition,” he says.
He adds that besides the obvious reduction in premium because of removal of commissions, comparison is a great advantage with web aggregators. “Buyers can compare and make an informed decision to buy the best policy from various insurance companies keeping in mind their financial goals. Decreased paperwork, speed in transaction, standardised service and a pre-determined turnaround time are also additional intangible benefits a customer can avail,” he says.
Analysts say online marketing is rapidly evolving as a new distribution channel. Initially, it will be characterised by simple products as complicated ones will require professional advice on various features and options, which may not be suitable for online sale unless the customer is highly informed.