Insurance gets Net savvy
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- Published 19.03.14
|Alpesh Shah (right) with Vikas Agnihotri in Mumbai on Tuesday. (Fotocorp)|
Mumbai, March 18: Close to three out of four insurance policies sold in 2020 will be influenced by digital channels, a report released by Boston Consulting Group (BCG) and Google India said today.
This follows the sharp increase not only in Internet penetration in India, but also the rising popularity of smart phones. As a result, insurance sales from online channels will grow 20 times from today by 2020.
The report — Digital@Insurance-20X By 2020 — further added that the rising usage of the online route will also be beneficial to insurance companies in terms of lower costs and risks.
“The digital adoption could result in potential savings of 15-20 per cent of total costs in the case of life insurance and 20-30 per cent in the case of non-life, thereby showing the path towards profitability for the industry”, said Alpesh Shah, BCG senior partner and the author of the report.
Speaking to newspersons here today, Shah said that India was no different when it came to use of the digital mode as it already had one of the largest online user populations in the world. For instance, there are 900 mobile phones in the country (India is the second largest user in the world), 200 million Internet users and 92 million Facebook users.
He added that a 2013 digital influence study for India done by BCG’s Centre for Consumer Insight indicated that one in two urban Indian internet users acknowledged that there was a digital influence in their overall purchase basket.
At present, the online insurance sales market is over Rs 700 crore with life insurance sales accounting for Rs 300 crore and motor insurance around Rs 250 crore.
“Online life insurance sales are expected to grow to 3-5 per cent of the individual annualised new business premium by 2020 and non-life insurance sales are expected to grow to 15-20 per cent of non-life retail business. This means the online insurance sales market in India will be around Rs 3,500-6000 crore for life insurance and around Rs 11,500-15,000 crore for non-life insurance. A total of Rs 15,000-20,000 crore, up by over 20 times,” the report said.
Vikas Agnihotri, industry director, BFSI, travel, Google India, here added that while online purchases represent a small component of insurance activity in India today, the overall influence of Internet on insurance product purchase in the country was already six times and growing rapidly.