“Winning Trust of Customers through
Online Sales should be the objective of Insurance Web Aggregators in India”- Naval
Goel, Chief Executive Officer at PolicyX.com Insurance Web Aggregator Private
Limited.
By: Lakshay Aggarwal, Research
Analyst Level II at Ken Research Private Limited
While top
players in the industry have different priorities, starting from expanding
customer base to achieving profitability, small and medium sized players are
struggling to capture a piece of the pie. For understanding the right set of
priorities of PolicyX.com, we reached out to Naval Goel,
CEO at PolicyX.com, India.
This
discussion was a part of the interview series “A Roadmap for India Web Aggregator Industry” and revolved around
understanding the insights of the Web Insurance Aggregators Industry in India.
Here are
some edited excerpts of the interview:
What was the idea behind starting
PolicyX.com? What intrigued you to venture into this segment?
This idea
came up to me while I was working with AIG in New York, USA. The insurance market
dynamics in USA helped me to identify the unexploited opportunities in the
insurance industry in India. So, when I came back to India, I started selling
motor policies as an agent by hiring a few tele sales advisors. Over the course
of time, I realized the archaic nature of technology deployed by Insurance
Carriers then, which hindered the smooth functioning of agents. To simplify the
process for agents, I tried to build a simple premium calculator for Insurance
agents, helping them in generating quotations easily. PolicyX.com initially was
supposed to be a calculator for the agents but later, we expanded to online
lead generation and ultimately selling of policies.
What would be the major challenge
that PolicyX.com faced during the journey?
As a price
comparison website, we have to deal with many insurance carriers which differ
in terms of operating procedures, different technological processes and offer
varied products. Another major challenge is the compliance with the regulations
set by IRDA. The regulations restricted the revenue streams, operational
flexibility of web aggregators; ultimately restricting
the growth of the industry. Since then, there have been lots of positive
development in the regulatory framework and IRDA is working with the industry
to improve it further.
What are the distributions channels
opted by PolicyX.com to serve the customers?
PolicyX.com
emphasizes on offering a user-friendly and transparent interface for the
customers aiming to help consumers to buy insurance policies within few
minutes. Around 2012-13, we thought of having an agent connected, POS model,
for selling of policies. However, the regulations at that time did not support
this and we had to drop the idea.
When asked
about as to why PolicyX.com is now not venturing into the POS model, Naval
replied “Competition is too fierce in the POS Model which does not lend a
profitable opportunity to enter that space. Also, the regulations are not clear
on whether a web aggregator can recruit agents. We aim to capitalize on the B2C
market directly serving the customers through digital platform. We don’t see
much competition from the POS model as far as the digital B2C market is
concerned”.
What do you think should be the role
assumed by Insurance Carriers in the coming years?
Insurance
Carriers and other industry associations should focus on spreading awareness for
different insurance products in the Tier-II and Tier-III cities. For instance,
Life Insurance Council has launched a campaign “Sabse Pehle Life Insurance”
serving the purpose of spreading awareness. There is a lot more to be done and
I believe, industry players should collectively do it.
The stiff regulations imposed by
IRDA in terms of restriction on cross-selling opportunities detriment the
growth of revenue for aggregators. Do you think IRDA could relax such
regulations?
The goal
of IRDA is to protect consumer interest and specifically the customer data. We
do not see any potential upliftment on restricted cross-selling opportunities
or adding other financial products to the portfolio, in the near future.
What do you think about the entry of
direct online insurance companies such as Acko in the Indian market? Would it
pose a challenge to the Insurance Web Aggregators?
The
insurance industry in India is very huge and entry of a single player cannot
contribute or much affects the dynamics of aggregators. The direct online
insurers might do well in B2B segment but the need for comparison by the
individual customers would always be there. Therefore, entry of such new
players is good for the overall Insurance Industry but does not pose a major
challenge for the aggregators.
How does PolicyX.com plan to
mitigate and survive the fierce competition in the industry?
Competition
would always be there in the market and it is always prudent to focus on
achieving economic returns of the business. Owing to the stringent regulations
by IRDA, insurance aggregators are not allowed to increase prices or revenue
streams, which leave the players with an option of becoming a cost-efficient
player. PolicyX.com intends to continuously emphasize on profitability and keep
up the tag of “Most Cost Efficient Player” in the industry.
Peer companies such as PolicyBazaar
have recently expanded to UAE to provide scalability to their operations. Does PolicyX.com
have any such plan of expanding geographically?
For the
time being, we want to remain focused on Indian market, expanding our reach to
Tier-II and Tier-III Cities.
PolicyX.com
considers their biggest asset to be data driven technology while stating their
topmost priority to be driving up the profitable growth, simultaneously aiming
at enhancing our share in the industry.
For any
queries or feedback, reach out to the author at lakshay@kenresearch.com.
The
interview was conducted as a part of mapping the India Web Insurance Aggregator
Industry.
To
Find More Insurance Market Research Reports, refer to this link:-
Ken Research
Ankur Gupta, Head Marketing & Communications
ankur@kenresearch.com
+91-9015378249
