1. Introduction:

1.1. Standing in the current scenario of Indian Insurance sector we now need now a fully fledged IT support – through activation between customer and the servicing centre, on-line selling of products & online service to customers, dedicated back office support and effective MIS system. Indian insurers must take a serious look in this aspect and overcome their handicaps to cope up with the situation of this new age. Of course the future of marketing in non-life insurance in India holds exciting possibilities and promises to benefit the customers.


1.2. However, the customers are going to be the referee to determine in what measures, both, the existing PSUs and the relatively new Private players are continuously and consistently trying to come up to the customers’ expectations. The insurance market has expanded into the online, mobile, and retail / social worlds. But the key to success hasn’t changed since the days of traditional, brick-and-mortar business.


It’s still about service – we must be able to deliver quality service that meets customer expectations. IT / Web commerce applications helped us to achieve success, allowing us to market, interact, and transact across multiple channels in a predictable, consistent, and personalized manner.


1.3. We must admit the following facts:-

1. Our future is online insurance business.

2. In this de-tariff market it’s mainly relates to price.

3. Prompt claim settlement builds loyalty.

4. Customers really respond to cross-selling.

5. Insurers can’t influence customer retention.

6. Channel Amplification – Develop the right mix of assisted & self-service channels to provide a rich, unified and consistent insurance product befitting the customers’ requirement.

7. Service Accessibility – Incorporate technologies which can make insurance accessible for a broader base of population.
8. Customer Service ability – Develop a responsive, reliable and competent service model, accessible via various channels that continuously take feed-back to improve.

9. Data privacy & Security – Protect the identity of the customer and ensure appropriate mechanism and established to proactively guard against internal and external misuse of customer information.
10. Ominous need for the Simplified Process – Make insurance process sophisticated, yet simple, in terms of underwriting / claims process & service.


1.4. Now with the liberalization and internationalization in insurance, service quality has become an important means of differentiation and path to achieve business success. Such differentiation based on service quality can be a key source of competitiveness for insurance companies and hence have implication for leadership in such organizations.


1.5. Again with the increasing demands of customer, insurance sector has become competitive. The one for all or all for one syndrome is being given a go-by. Customers are becoming increasingly aware of their expectations, and demand higher standards of services, as technology is enabling them to make comparisons quickly and accurately – even to immediately go for the grievance redressal or complaint resolution in IRDAI’s IGMS System, on applying on-line to DPG, Ministry of Finance, CMO’s Office, Consumer Forum or Collectorate Office on various insurance requirements or resorting to RTI Applications (applicable to PSUs). Their perceptions and expectations are continually evolving, making it difficult for service providers to measure and manage services effectively.


1.6. The trend of insurance companies shifting from a product-focused view to a customer-focused one has been developing recently as insurance products become increasingly hard to differentiate in fiercely competitive markets. Insurance companies in India are consequently directing their strategies towards increasing customer satisfaction and loyalty through improved service quality. It is becoming desirable for insurance companies to develop a customer centric approach for future survival and growth.


1.7. The awareness has already dawned that prompt, efficient and speedy service alone will tempt the existing customers to continue and induce new customers to try the services of the company. Faced with the unprecedented challenges of troubled financial markets, changing regulatory oversight and economic uncertainty, there is a risk that some insurers may not be listening and responding to the most important voice of all – that of their customers.


1.8. For any insurer hoping to navigate through this difficult time, understanding how customer behaviors and attitudes are changing is critical. Previous assumptions and received wisdom about customers may no longer be reliable, and those insurers who are able to respond best to what customers want now are most likely to succeed.


Customers want products, and the purchasing process, to be simple and transparent so they can understand what they are buying. They want to build long-term relationships with insurance providers based on trust, and to have confidence that the products they are buying are right for them and meet their needs. In non-life insurance, price is often the main measure of value since products are more comparable and frequency of purchase drives greater customer familiarity.


1.9. But in some territories, brand and reputation are more important criteria. This may be a reflection of market structure (such as a recent history of price tariffs) or it may be a more fundamental desire from consumers to find a measure of quality they trust. In highly competitive markets characterized by price transparency, there is a tendency for prices to converge. This leads to non-price factors such as brand becoming more important selection criteria as customers search for a way to differentiate between providers.


1.10. Various market research recently concluded reveals that, while of course there are significant variations in customer attitudes and behaviors around the globe, driven by the diverse economic, demographic, competitive and regulatory environments, there are some underlying themes that are remarkably consistent.


Every business these days of cut throat competition need to focus on their customer to maintain themselves in the market. Moreover their competence depends more on the attribute that how they treat their customers their needs, demands and attitudes.


1.11. A study was conducted in the city of Lucknow concerning about 150 respondents all of which are the insurance customers to analyze the attitudes of the customers regarding the services especially after sale services provided by their insurers – result showed – high retention of the customers where customers believed that care are definitely taken by the insurers for them.


2. Online Selling of Insurance:

2.1. Now keep life insurance agents as well as auto insurance agents at bay. Directly buy pure term plans on the internet for a lower cost. Are you postponing getting a life insurance cover thinking about long hours you’ll have to spend with a slew of agents exploring various companies and their array of plans? Worry no more.


2.2. You can now directly buy insurance policies from the insurers online. The Internet has made the task far simpler. Buy a pure term insurance plan online from the comfort of your home or office and pay lower premiums. The premium of pure term plans, which solely cover the risk to life, is the lowest among all life cover plans, but when bought on the internet, the premium gets reduced further as the intermediary commission is passed on to the customers.


2.3. Online term plans are around 25 % cheaper than their offline version. Two strong reasons on why one should buy cover online are lower cost and the case of exploring various insurers’ websites in practically no time. Easy access to plans online allows every customer to take informed decisions based on features, price and availability.


3. The process of buying insurance policies online by yourself:

3.1. Before you start filling your cart with online plans, it is better to make a call to the insurers’ call centers and get clarity on the buying procedure. Get information on medical tests (required only for life & health products) needs to be carried out and note the list of documents to be sent to the concerned insurer. A few websites also offer live help through a chat facility. LIC had affected Interacting Voice Response System (IVRS) since 90s.


3.2. The related proposal form or may be called Application Form can be filled and the payments made online. However, documents such as date of birth proof and income proof, among others, have to be sent either by email or by post to insurers’ office.


Most insurers’ sites have tools that help you determine the amount of coverage needed. However, the thumb rule on the coverage amount is at least 10 times one’s annual income. Factor in your age, kids’ expenses over the years and the standard of living your family presently enjoys.


3.3. You may then top it up. If you have liability, such as home loan – declare it to arrive at the final premium figure. Review your insurance needs according to your requirements and preferably once in every four year.


3.4. Before you buy a plan online, check if the insurer is offering the online purchase feature in your city because, at present, all cities are not covered. Also, for online buying, one needs to have Net Banking Facility with one of the major banks or, alternatively, use credit or debit card.


3.5.Since this is a case of Direct Marketing and having no Agent’s / Broker’s involvement being in there, definitely insurance products in such case may be available at a much discounted price (compared to the traditional methods of buying insurance). Buying plans online keeps intermediaries or agents out of the picture.


That means the policyholder, including the nominee of the policy, deal directly with the insurer. However, this should not be a deterrent to online buying if one is comfortable with the features, premiums and insurers’ stability over the long term.


4. Requirement of inward mail records on online policies by the insurers:

4.1. Life Insurance, Auto Insurance, Health & / or Personal Accident or similar other Personal Line of Insurance Policies are now being sold by various Indian insurers on-line. Despite the popularity of the e-mail, physical delivery of letters by post curriers still continues heavily in India. In insurance offices, records in the form of paper may continue for few more years but there is a dire need that an efficient Inward mail department normally receives all the incoming mail in the form of letters, documents and cheques even.


5. The process of online buying of term plans:

5.1. Online term plans come at a lower cost. However, check if the insurer offers online buying of term plans in your city before proceeding further as the service you need in a place where you are living.


Step 1 – Go to the insurer’s website to open the specified page.

Step-2- Input personal details like -age, gender, date of birth, etc.

Step-3- Indicate if you are tobacco user or not and your frequency of smoking cigarettes.

Step-4- Choose term, sum assured befitting to the requirement.

Step-5- Premium figure gets shown – watch it properly.

Step-6- Modify term and/or sum assured, if need be there.

Step-7- Click on “terms and conditions” and read them very carefully all the fine prints.

Step-8- Input personal details in the online-application form including nominee details.

Step-9- Enter your health declaration as per prescribed format.

Step-10- Submit and preview the details you have entered. Edit if need be there.

Step-11- Choose to pay through credit / debit card or utilize your net banking option.

Step-12- Now submit documents at insurer’s office and receive policy document physically, as & when policy is issued by the insurer.


6. Certain aspects / feature of policies to be known by every prospect availing insurance cover online:

6.1. The life products have three basic elements –

1. Death Cover;
2. Accident Cover;
3. Investment / ULIP Type Cover.


6.2. All insurance plans are combinations of:

1. Term Assurance Plan with an unspecified period whole life policy; and
2. Term Assurance Plan along with a pure Endowment plan called an Endowment Assurance Plan.


6.3. The essentials for valid insurance contracts must be noted by the proposer / applicant that are:
a. The capacity of Proposer to contract – minors are not to adventure -policy holder must be a major, having sound mind and not convicted by any Court of Law, etc.

b. Insurance is a matter of solicitation – i.e. both the parties should be of common mind i.e. the Concept of “consensus ad idem” is maintainable- i.e. Free Consent may be given by both the parties of insurance contract to abide by the related terms & conditions.

c. Offer needs to be submitted by the insured i.e. the proposer through submission of application for the requisite insurance cover as well as the payment of money online on the basis of ‘Utmost good faith’ or “Uberrima fides” from both the parties. The insurance contract is issued on the basis of the Application / Proposal made & submitted by the person who wants to insure online. Similarly acceptance of the Proposal by the insurer is equally important in this case.

d. Insurance is lawful consideration i.e. it must follow all the laws of the land, laws applicable for this sort of legal commercial contracts – simply made on the basis of the Application / Proposal submitted on-line.

e. Legality of the object must be ensured.

f. Zero defect application to be ensured by creating ‘Options’ in appropriate columns and cautious approach of the Proposer while filling up the concerned application / Proposal Form.

g. When the insured receives the on-line policy it needs to be scrutinized thoroughly as the Policy Document is divided into the following seven aspects / features:

1) Preamble of the Policy – the Heading, details of Policy issuing office, code & details of development officer / agent of the insurer through which the policy is procured, etc. ;

2) Operative Clause;

3) Proviso;

4) Schedule;

5) Attestation;

6) Terms, conditions, warranties (if any – mainly may be applicable to online Auto Insurance, Health & / or Personal Accident or similar other Personal Line of Insurance Policies).

7) Privileges available on Maturity (if any – mainly applicable for on-line life policies).


7. Important aspects / elements of premium payment, lapse and renewal:

1. We need to focus first on ‘Premium’ that is the consideration on the part of proposer whereas the promise to indemnify the loss is the consideration on the part of insurer.

2. Surrender Value is benefit which is payable to a policyholder when he terminate his insurance contract.


3. Guaranteed surrender value is allowed as per the provision of section 113 of Insurance Act whereas special surrender value is allowed as per insurer’s premiums prospectus.

4. The paid -up value is that proportion of the sum assured which the number of premiums paid bears the number of originally payable.

5. The non forfeiture option is a fund created from the accumulation of (i) higher initial premium (2) interest earned on excess amount and (3) excess premium paid for survival benefits.

6. The non forfeiture option is to be earmarked for the policyholder and to be returned to him/her.

7. When policy Lapses the same can be revived during the life time of the life assured but before the expiry of Five years from the due date.

8. Lapsation of any policy is not in the interest of both, the insurer and the insured.

9. On revival of a lapsed policy the risk cover under the policy may also be increased.


8. Every prospect should have some basic knowledge on assignment, nomination & loans:

8.1. The Foreclosure is the action of closure or writing off a policy before its actual maturity.When an assignment is made the a) rights, b) title and c) interest of assignor are transferred to the Assignee. Section 38 of the Insurance Act, 1938 deals with the transfer or assignment of the life insurance policies. The assignment may be either (1) absolute or (2) conditional.


8.2. Section 39 of the Insurance Act provides for the nomination for delivering the policy money in the event of death. When a nominee is minor policyholder can appoint an appointee.


8.3. An assignment automatically cancels a nomination. Nomination can be made before or after issue of policy but assignment can be done after the issue of policy.


9. In case of claims, the points to know:

9.1. The categories of claim may be (1) Maturity claims (2) Survival Benefits and (3) Death claims.


9.2. When a claim by death arises within 2 years from the date of policy or subsequent revival, it is said early claim. Claim concession is concession granted for payment of full claim amount in respect of paid up policies.


9.3. Extended claim concession is an extension of claim concession for reduced paid up policy. The Indian Evidence Act provides that a person is presumed to be dead, in case a person has not been heard of for 7 years. So for any absconding person the LIC Policy has a waiting period of 7 years and the Policy pays simply on the 8th year.


10. Finally summing up:

10.1. Inward Mails are to be saved on both soft & hard forms in all along the currency of the policy in India. Despite the popularity of the e-mail, physical delivery of letters by post and couriers also continues in the current market. Sometimes online execution of all these insurance underwriting & claim settlement processes may automatically generate the printing of hard copy of the policy thus printed & issued are sent through the insurers’ dispatch department.


In insurance offices, the records in the form of paper may continue for many more years. The inward mail department will receive all the incoming mail in the form of letters, documents and cheques and record them – or it will also arrange for the collection of inward mail in bulk from the post bags or boxes in the post office in case of PLI (Postal Insurance cases)1. India is one of the few countries in the world where mail is still delivered by the post office at the premises of the addressee. Elsewhere, even individuals have post box addresses and have to collect their own mail from the post office.


10.2. Once the mail is received, they are to be marked with the date and time of receipt. This information receipt of each paper or cheque could be important for determining liabilities under the insurance contract. They have then to be sorted according to the section or department which has to take further action. While doing so, care must be taken to check that all the enclosures are also received, if the enclosure is missuing, the fact should be recorded so that necessary follow-up action can be taken subsequently.


10.3. In the case of e-mail, the communication will automatically reach the concerned department or person. The time when the message enters the system is deemed to be the time of receipt. Delays in retrieving the messages can affect the insurer’s interests adversely. In the case of Fax messages, it is possible that it may be received by someone other than the concerned department.


Arrangements have to be always made for immediate delivery of the same. This may be also part of the responsibility of the inward mail – in all the core insurance /all lines of businesses of insurers in all such departments ( moreover as per the RTI Act, 2005 all the PSUs are responsible to production of written reply in case of CIC Hearings).


10.4. Outward mail, often called the dispatch department, handles letters, documents, cheques and all other communications to be sent out through couriers or by post. It is more advantageous to send all outward mail through a dispatch department; whenever any hard form is being sent in whatever way is generated. Care must be taken to ensure that all enclosures, as detailed in the covering letter, are included in such cases.


The use of window envelopes makes it possible to save the effort of writing addresses on the envelopes. By using franking Machines, one may avoid the effort of pasting stamps on the envelopes and accounting for the stamps. The same advantage can be had by using the facility of bulk posting provided by the post offices and the couriers.


10.5. In these on-line insurance the main thing is keeping the records. This is the most important section with the context of online insurance operations. In fact this is the core process of the insurers’ offices – as well as keeping all his records on his / her finger-tips by the concerned proposer, as well as for all the nominees / individual person need to keep his record exclusively on his/ her possession on all along during his / her availing all the policy benefits – this part is very important on online selling of insurance policies as important like our brain holding all knowledge and memory – we also need very definite record keeping in this process of on-line selling & buying of insurance policies.


10.6. Depending on the nature of the information stored and the frequency of its use, the insurers may disperse the same within the operating departments or kept in one central location. In an insurance office, either in the underwriting side or claims settlement side the policy papers, including the proposal – all may be in soft form but must be available in a discrete location. This would be so partly because of large numbers and partly because of these papers may be required by different departments at different times / locations. They must be required for the renewal of the policy or for considering the claim.


References: Different contemporary discussions & information as collected & collated from various text materials available online & inhard copies. 

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