The facility to compare several insurance products at a glance, with only the bare facts thrown up, is a benefit that aggregators offer.
We are usually at an information disadvantage while buying financial products.
This asymmetry of information, as it is called, comes on top of our own disregard to seeking information. There is also hesitation that we may not understand it. There is also partial information and misinformation we often receive and then, there is poor application of mind when we do receive it.
The Internet is a great leveller with regard to information and just made for insurance, so to speak.
We are right in the middle of a public health crisis that has made us buy and pay for everything from vegetables to white goods online. Work, studies and entertainment have all embraced the digital way. Online banking is now quite mainstream and insurance need not be very far behind.
Insurance is most suited for the cyberspace-based buying process. It is anyway an intangible product and so, brick and mortar have limited value. It requires information (to decide), documentation (to buy and to claim) and two-way payment enablement (premiums and claims).
A great way to research your insurance needs is through a licensed intermediary called the insurance web aggregator (IWA) who presents product information and comparisons on a designated website on behalf of various insurers based on tie-ups. It then passes your inquiry on to insurers to pursue the sale.
IWAs’ services are governed by the Insurance Regulatory and Development Authority of India (IRDAI) (Insurance Web Aggregators) Regulations, 2017 and Guidelines on Insurance e-commerce.
You can recognise them by the words Insurance Web Aggregator Pvt. Ltd. being a part of their name. There are more than 20 IWAs and they are listed on IRDAI’s website (www.irdai.gov.in).
Insurance brokers, about whom we talked in the previous instalment of Cover Note, may enter into an agreement with insurers for sale of insurance products online by linking to the web portals of the insurers, and they are also guided by the same set of regulations and guidelines.
Some important dos and don’ts under these regulations are that product information should be displayed based solely on information received from insurers and no ratings, rankings, endorsements or bestsellers of insurance products should be displayed. The website content should be unbiased and factual without commenting on insurers or their products.
The IWA should not distribute the products of any particular insurer and not sell any other product or service, financial or otherwise, on the web portal meant for insurance.
They should not display any advertisement for insurance products or otherwise and should not operate the websites of other entities either.
So, when you visit an IWA, you can expect straightforward information about insurance policies. Product comparison is the huge advantage of the Internet and IWAs give you exactly that.
How insurance products should be classified under Life, General and Health insurance is specified in the regulations. Product features are listed and the order should be coverages, exclusions, benefits, terms, conditions and finally, the price.
This means we can compare like with like and wade through the confusing ocean of insurance products and hopefully emerging with some clarity on what will suit our needs and what will not.
Go have a look at IWAs’ websites. It would be a good start to your insurance journey.
(The writer is a business journalist specialising in insurance & corporate history)