The digital India initiative has led to digitizing financial services and opening up and opportunity for motor insurance companies to tap into the digital market.
The growing population of 1.38 billion and the financial inclusion introduced by the federal government is getting many global players interested in the motor insurance segment. There was a reported growth rate for motor insurance of 8.91% to take a share of 38.08% of the total general insurance business in India in 2018-19, according to IRDA.
According to the Motor Vehicles Act, 1988, the owners of a motor vehicle must purchase third party motor insurance. But there are many slip-ups in the process, according to insurers.
Negligence is one of the top reasons for consumers faulting on motor insurance covers along with a lack of discipline and low level of awareness.
How insurance is consumed in India is being disrupted by the DIY approach. The insurance companies are expanding their presence in 3 online spaces which are direct purchase through the insurance company website, purchase through the online market place and purchase through Global Technology companies offering insurance.
The easiest way for consumers who are satisfied with their current insurance policies is to purchase the same policy through the company website. The advantage of the online mode is that the consumer tries to understand all aspects of the insurance policy that they are opting for. Consumers who want to try new policies can also explore directly on the company websites since all the insurance companies registered with IRDA have websites.
The purchase of insurance products through online marketplaces offer to main advantages, which are a wide range of options and ease of payment processes. Global Technology companies have identified financial services in digital space and are looking to convert their large databases of customers into business opportunities. Amazon announced its plans to sell motor insurance policies via its Amazon Pay platform in collaboration with Acko General Insurance. The companies are going beyond conventional modes to reach out to consumers like technology adoption beyond basics, providing risk-based solutions, usage-based policy models, zero-touch services, and telematics. Fully equipped and upgraded online portals for customers and channel intermediaries for all the processes like collecting premiums, issuing policies, claim intimation, etc. Companies are providing risk-based solutions based on telematics behavior along with usage-based policy models that give value to customers without compromising profitability. Motor Insurance companies are providing zero-touch experience with paperless insurance and cloud-based service to enhance the consumer experience.