Amongst various channels for distribution of health insurance policies, individual agents contributed a major share in total health insurance premium at 35 per cent, according to the IRDA annual report 2020-2021. But in the individual health insurance premium, their share was high at 74 per cent. Direct sales (other than online) is the second major channel for distribution of health insurance business. This channel contributed 27 per cent in total health insurance premium, though their share in government business was 100 per cent. The third important channel for distribution of health insurance business is brokers, who contributed 24 per cent of total health insurance premium. The share of brokers was high at 45 per cent in group health insurance premium. The ‘bancassurance’ channel contributed 9 per cent of total health insurance premium and ‘Online Sale’ channel contributed only 2 per cent in this.
Pros And Cons Of Buying Health Insurance From Different Channels
Health insurance industry is constantly evolving, so are its channels. Each channel has its own benefits and drawbacks. Therefore, the customers need to closely scrutinise the efficacy of the channel they choose. Here’s a look at the pros and cons of each channel.
Agents are the oldest channel of insurance sales in India. The physical accessibility of the person gives added credibility and ease of communication. However, mis-selling and focus on earning commission, bonus and offers have plagued this channel.
‘Bancassurance’ is another convenient model where the bank is the channel for selling insurance products from their branches. However, since one bank is allowed to partner with only one insurance company, there is limited choice for customers.
Direct selling is a self-service route. The challenge here is that customers have to approach different insurance companies separately to get details of their plans. It can be challenging for a customer to handle details and brochures from multiple insurers, collate the details and then compare in a smooth way.
Online buying is a newer method and which people are still exploring. “Online insurance aggregators help customers with complete information of all policies available in the market and give suggestions with the help of Artificial Intelligence based on the personal information fed by the customers without any human intervention which can sometimes involve personal interests. Their processes are fast in general and that helps customers save time and effort,” says Naval Goel, founder and CEO, PolicyX.com, an insurance web aggregator. As aggregators have tie-ups with insurers, all of them may not offer policies of all insurers.
Preferred Channels
Considering the current situation in which people are bound by movement restrictions in many areas, online channels seem to be a suitable and safe option for buying insurance plans. “Moreover, insurance is not a one-size-fits-all kind of product where the recommendations of peers work. Online channels such as brokers and aggregators help customers in getting access to information of various plans together on a single platform along with free premium quotes, plan comparisons and quick purchase facilities, which makes the buying process convenient and faster,” says Goel.
Things To Keep In Mind
Look for unbiased, quick and convenient buying. But the real thing to consider is the customer service given by the particular channel. “One must check how the channel could help the customers with complete service in terms of settling claims, filing forms, raising concerns on the behalf of customers and helping them until their query or claim is not settled,” adds Goel. So, look beyond lowest premiums.
