Online car insurance in vogue
Insurance policy aggregator Policybazaar is eyeing a higher market share in the online sale of motor insurance policies in 2018-19.
According to Sajja Praveen Chowdary, head of motor insurance at Policybazaar, around 18-19 lakh policies insuring private vehicles are expected to be sold online this year.
“We are assuming that our sales would be around 11 lakh,” Chowdary said. Last year, the aggregate number of such policies sold online was around 12 lakh and Policybazaar’s sales were around 5.7 lakh.
Chowdary said offering the option of different insurance companies to help consumers select a plan of their choice along with digital initiatives such as using mobile device to capture videos and register claims has helped the company retain its existing customers as well as bring in new ones.
However, Chowdary said even with the availability of online option, around 95 per cent of the new motor insurance policies were being sold through offline channels, particularly directly through motor dealers who package the car and policy payment. As a result, majority of the customers buying policy online are not first time buyers.
Moreover, with the introduction of a mandatory three-year third party insurance for cars and five-year third party insurance for two-wheelers from September this year, the company is gearing up to negate any impact of loss in the annual business of insurance renewals.
The cost of purchasing a motor insurance policy for new vehicle has significantly gone up following the introduction of long-term insurance. For instance, the mandatory third-party premium for a private car with an engine capacity of 1000-1500cc is now Rs 9,534 against Rs 2,863 payable earlier. Along with own damage premium, the overall cost of insuring a new car or a two-wheeler has increased multi-fold.
“The trend is expected to change in the long run as customers become more aware of the convenience and benefits of purchasing online policies. As online aggregators, we offer technology driven solutions for faster claims settlement,” Chowdary said.