IRDA web-aggregator guidelines and the response of online insurance comparison websites

Last November, the IRDA (Insurance Regulatory and Development Authority of India) introduced a series of guidelines pertaining to web-aggregators. The guidelines were largely aimed at standardizing information fields to consumers, customer data privacy and regulate (to some extent) the entities that can provide such a service.

Online insurance aggregators seem to be viewing these guidelines as restrictive especially with regards to caps put on commercials. Additionally, it builds an added pressure on a business model that most of them are yet to figure out. The online insurance comparison websites often play around with different revenue models like selling datapoints as leads to interested insurers, position as agents by telecalling on this data of insurance leads, marketing insurance products to online consumers etc.

Organizations like policybazaar.com, insuringindia.com, medimanage.com, myinsuranceclub.com etc. have been able to establish themselves as fore-runners in this growing space and would want to follow these guidelines in spirit. These guidelines came into force from February 1st. Here's a quick glance at the some insurance aggregator's response.

PolicyBazaar.com transfers visitors to a website called comparebima.com

i-save.com has taken a more careful approach by displaying their inability to display product comparisons pending registration of their website with the IRDA under the new guidelines

MyInsuranceClub.com too is not showing any results with a display indicating that they are in the process of obtaining IRDA approvals. They, however, do take visitor details and seem to pass on the information to insurers/brokers for fulfillment

Over the next few weeks, it will be interesting to see how online insurance aggregators make suitable changes in their revenue and operating models to uphold the guidelines and yet be able to deliver results as expected by their investors and insurance companies alike.

The opinion of insurance companies has been a bit muted to these guidelines although the growing trend of online users (as exhibited in a massive surge in online term insurance policy sales) might make few insurers to directly market their products to online consumers rather than through an aggregator mode. Companies like TATA AIG, Apollo Munich, ICICI Lombard and Max Bupa already have digital marketing budgets.

Per Google keywords tool, some of the more prominent insurer searches (in online space) are -

lic online (201,000 searches in India per month)

aviva insurance (49,500 searches in India per month)

i term insurance (60,500 searches in India per month)

I opine aggregators will get and seek more clarity on these guidelines in the next 2-3 weeks. But they are here to stay and make a big impression on the insurance distribution landscape.


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