“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.
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