Private life insurance companies are aggressively putting in place digital solutions for the ease of onboarding customers that especially the millennial segment and the Life Insurance Corporation of India depends on an army of individual agents to source new business.
The state-run insurance behemoth that initial public offer and its mega listing are expected in mid-March, offers 35 products and six riders.
Only 11 individual products are sold through its website, according to the company’s DRHP.
In the company’s 1.34 million individual agents source 94% of the individual new business premium and sales through its website account for around 1% of the individual new business premium.
All the 23 private insurers together source 23% of their first-year premium through individual agents and around 3% through online direct and web aggregators.
In private insurers, customer acquisition and sales are being driven way web, apps for providing a smooth customer experience.
The state-owned behemoth is trying to reach out to customers, especially the millennials its Facebook page Life Insurance Corporation and virtual assistant Life Insurance Corporation Mitra, and mobile app Life Insurance Corporation Customer.
The rapid strides to compete with the private sector in digital services. The company is seeing a growing share of policyholders paying renewal premiums through its digital channels.
The CEO & principal officer of insurance brokerage firm Bonanza Insurance, opinion unlike motor insurance policies where policies are issued instantly, for life insurance policies additional documentation may be necessary due to underwriting requirements in some cases.
Experts say the agents of Life Insurance Corporation prefer to sell single premium policies instead of pure term plans as the former helps them reach business targets quickly.
The term plans have much lower premiums, the commission is also low, and the agents can convince individuals that endowment plans are better than term plans.
From FY22 till September that 71.6% of the individual new business premium of LIC came from endowment or participating products.
In the private insurers are gaining market share in term plans that unit-linked insurance plans in the urban market through digital sales.
Director that Probus Insurance says, Life Insurance Corporation had focused on more traditional products like endowment and whole life policies among others.
Private insurers have increased their digital presence in the last years have a larger share of term life policies which are predominately sold through online channels.
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