E-Business in Insurance:

The world is on the verge of an Information Technology revolution, causing the profound change in the economy that came with the Industrial revolution.

Over the next couple of years one would no longer need to run after an insurance broker or agent to buy a policy or pay your policy premium. Closing an insurance transaction will be just a click away.

E-commerce is the new key challenge in the financial services industry. Life in the 21st century is longer, with more choice in more fields of activity. The financial consequences of an increased life span, particularly, are likely to be tough. Certainly, this will lead to more complexity, which, in turn, necessitates greater clarity and appeal from the service providers (just like the insurers).

Financial Services Industry and E-Insurance:

E-commerce is more relevant in the financial services market, which faces the problem of securing and retaining customers in an increasingly competitive market place.It also experiences the need for heightened relevance of the brand proposition in a world where brand has been termed the new religion.

Focus and strategy are essential to the development of e-business in any sector. If there was one industry which least considered e-commerce as an essentiality initially, it was the insurance industry. It was always felt as an abstract service, a fallback, and a safety net.

But with liberalization of the industry, players have started to realize the need for e-business in a competitive environment. Despite the consequences of whether the customer is the end-user or the intermediary, insurance companies need to strive for greater customer focus. The insurance companies have already started rebuilding their websites and make them more trendy and vibrant to the customer requirements.

The global insurance industry itself is witnessing a period of consolidation and companies are thinking about how e-business can work to their advantage. With the Internet redefining the way business is done, the e-business proposition needs to be convincing in a new dimension. In cyber space, clear corporate branding is even more crucial in the absence of physical presence, and issues of trust and reliability are more imperative.

The general insurers have a lot of work to do. There is hardly any e-business identity, at present. Adequate time, investment and longer-term management of the e-business are essential, not only for the success, but survival, as the technology is changing with every breath that one takes.

IRDA and Indian Insurance Industry:

Other additional factor is the strong sales direction which defines the way insurance companies operate. More often than not the industry fails to be market driven. Equally, lack of direct contact with the end user compounds targeting difficulties, which leads, cyclically, back to the question of whether the e-business strategy should always be focused on the customer.

Finally, the same principles apply whether it is positioning an insurance company or a cigarette. Customers want and expect good service. They need to be presented with credible and attractive propositions that deliver value, whether it is an everyday or once-a-lifetime option and hence as the English phrase goes – “it is the strongest of the species that survives, not the most intelligent, but the ones most responsive to change”.

The Insurance Regulatory and Development Authority (IRDA) and the Union Finance ministry have finally decided to utilize the strides information technology is taking and allow distribution of insurance products, and thereby transactions, over the internet.

But the move entails a greater significance in the sense that once insurance products are offered for transaction on the Net, information on various aspects like products, claim settlement procedures and tariff structures will be easily available to the common people who have so far been deprived of these, following the monopolistic nature of the Indian Insurance Market.

Customer Relations in India and E-Business:

With the newer players, including foreign insurance companies, domestic banks and non-banking financial institutions and corporates, set to make a foray into the Indian Insurance Market, the focus will be more on customer service and customer relation management (SCM and CRM) than on product differentiation.

Before on-line transactions begin full-scale, making a business lead on-line ad then closing it off-line will more likely be the practice. In that case, web-enabled call centers, rather than websites themselves, will be of more help to customers in finding a product suited to their specific needs.

This is where a company, with its call center network catering mainly to insurance, health and hospitality sectors, will play a part. The single-point call centers will be required to have interactive Voice Response (IVR) systems and co-browsing facilities. This means that a customer can access the call centers for his/her queries either through a phone call or through our URL (website address) on the web. Accessing the call centers should be absolutely free of cost.

Insurance Websites and Internet Economy:

The negative side is the fact that while on an insurance website, one may compare the insurance products on offer by almost all the companies operating in the country, at call centers, the comparability is limited to only those companies with which the centers have a tie-up.

Firms need new trust mechanisms to guarantee e-commerce. To mitigate the new risks of spontaneous e-commerce, firms will look to e-market places, third-party underwriters, and information brokers to guarantee transactions. Other options simply won’t fly because of the security. Early attempts at mitigating e-commerce risks have focused on securing transactions with technologies like firewalls (type of security software) and encryption’s (type of unreadable coding). But the risks of spontaneous e-commerce are far broader than simply ensuring identity and hack-proofing commerce sites. Litigation takes too long. Though even risky e-commerce transactions are governed by legally binding contracts, the last thing companies want is to find themselves in court of law due to the constraint of time and resources. The speed of the Internet economy dictates that rapid dispute resolutions must become a core competency of successful firms.