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Online insurance purchase is more secure than buying offline: Naval Goel of PolicyX

POLICYX Naval Goel web aggregator

While working with US-based insurance giant AIG, Naval Goel realised that insurance penetration in India was one of the lowest, making it a huge untapped opportunity. The year was 2010 and he decided to return home to create a platform for insurance agents to sell motor insurance.

With inadequate technology in the segment, Goel decided to launch PolicyX as a tech tool for agents. However, there were regulatory hurdles but by then he had learnt a lot about the insurance market in India and also connected with a lot of people in the business. So in 2013, he decided to launch PolicyX as an online insurance broker or web aggregator.

Traditionally in India, insurance has been driven by agents, where one-to-one physical interaction of agents and customers is the crux of most sales.

Even when it comes to the moment of truth in insurance, when an individual wants to lodge a claim, the agent or having a physical face provides a lot of comfort to people. 

“You now don’t need a face to buy insurance. Let’s say that you buy an insurance policy from a known person. Now, if the insurance company refuses to accept your claim, this known person or agent from whom you bought the policy cannot do anything to help you,” said Goel, Founder & CEO, PolicyX.com. 

“However, if you buy from us, you can be assured someone will pick up the phone. That’s because unlike agents, who operate solo, we are a large company with several people handling claims,” he added.  

With an employee strength of 260, PolicyX gets 25,000 to 30,000 daily visitors to its website. 

Why online insurance sales are more secure 

Goel said agents may make mistakes or commit fraud while filling the form. “But in the online scenario, it is you, the customer, who fills up the form. This reduces the chances of entering incorrect information, which in turn, increases the chances of a claim pay-out,” he said.

“We keep call recordings as proof. This eliminates the probability of mis-selling or misrepresentation of policies. So the online model is much more secure than the offline one.”

The size of the online insurance market or direct selling of online insurance is still very small in India. 

According to IRDAI annual report, online web aggregators saw 4.26 crore visitors in 2019-20; policies issued were 61,38,150 and the total premium received was Rs 3258 crore.

This is a drop in the ocean that is the Indian insurance industry. However, since insurance frauds are estimated to be 15 to 20 percent of the overall business, Goel argues that insurance companies have come to realise that online business is a much cleaner business. 

“They’ve realised that claim ratios are much lower for policies sold online, and see it as a qualitative market. For this reason, some online term life and health insurance policies also have lower premiums.”

Incidentally, with the traditional insurance industry being forced to turn digital overnight with the Covid pandemic and lockdowns last year, online selling of insurance also saw a huge pick-up. 

“Online sales picked up last year when Covid hit us. The months of April, May, and June saw huge demand for health insurance. Even term insurance purchases went up. Later on, though, sales tapered off. The second wave of Covid hasn’t led to any spike in sales,” Goel added.

The industry also saw a jump in sales of the Covid-specific policies – Corona Kavach and Corona Rakshak. Goel added that the first three months of the last fiscal saw a rush towards these policies but after that, most insurance companies announced that their existing health plans would cover hospitalisation due to Covid. 

“Also, people realised that most Covid patients did not need hospitalisation. So such policies lost their sheen. There is still a certain demand for Covid policies, but it has not jumped.” 

Also, in India, insurance is a highly regulated market. Goel agreed that the pace can be very slow and sometimes a deterrent to innovation but it also protects the sector from the competition. So despite Policybazaar being a much larger player controlling almost 70 percent of the online insurance market, the insurance regulations ensure that pricing is uniform and smaller web aggregators can offer policies without undercutting in pricing.

PolicyX, said Goel, has been profitable since inception and doesn’t need funding for day-to-day operations but may look at raising money in the future to scale up for serving higher volumes.

The company is eyeing growth in the health insurance segment and focus on claims experience of customers by backward integration.

(Mandar M Bakre is a Pune-based freelancer with more than 15 years in journalism and communication, primarily in the business domain)

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