A mammoth digital revolution is sweeping across our life. It has dramatically changed the way we interact and transact with the external world. The corona virus pandemic, in particular, has acted as a catalyst and accelerated the process of adoption of a digital life. In that sense, analysing and buying insurance products is no different. Just a few years ago insurance was more of a personal affair. For most of us, one of our friends or relatives who was also an insurance agent would have come to our house one evening and over a cup of tea would have explained the intricacies and benefits of buying an insurance policy. There would have been no comparison, very few questions asked, and you would have got an insurance policy in your name a few days later.
The growth of e-commerce and the emergence of insurance web aggregators are factors that have changed this dramatically. Digital technology is a new force that is driving massive changes in the insurance sector. According to CRISIL Research, insurers are moving towards adopting a digital services' model, enabling customers to complete the entire insurance processes online right from discovery of information to advice and purchase either on their own or with the help of a service provider.
Insurers are now harnessing digital technology to scale their business model and provide a hassle-free experience to their customers. This is reflected in the growth in the business of insurance companies from various channels. The table below shows compounded annual growth rate (CAGR) of the different channels that sell insurance to individuals for the five-year ending FY21. It clearly shows that for most of the insurance companies direct business' has grown at a faster rate than any other channels - mainly driven by rise in online purchases. What has led to such growth is the increase in the use of smart phones and internet penetration.
Esta historia es de la edición March 28, 2022 de Dalal Street Investment Journal.
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Esta historia es de la edición March 28, 2022 de Dalal Street Investment Journal.
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