India's First White Paper on Online Insurance Trends in India

1. © Page 1 of 40

2. Foreword
When I was asked to write a foreword for this report, ‘A New Beginning - Online Insurance
Trends’, I was not quite sure what to expect. A flip through the first few pages of the report
however, gave me a sense of the enormity of the impending change that is poised to soon sweep
the Indian insurance industry via online distribution. Most of the insurance bought till date is
offline; however going forward, it is clear that convenience and speed would influence the choice
of internet as preferred mode of distributing insurance in India.
MDI has been contributing to research in various fields of management and this report is a product
of the research interests of the institute’s faculty in combination with MDI’s initiatives to support
businesses, new and old. This is a proud moment for MDI since this white paper has been co-
authored by three of our students in partnership with InsuringIndia. What began as a research
initiative has shaped up into a ‘first-of-its-kind’ report on the topic of online insurance in India.
New ideas and new approaches can be the only way to progress forward and improve the quality
of life in society. This report is an attempt to think differently by analyzing trends in a field as
nascent as online insurance in India. Like all researches, this report is an attempt to point out new
possibilities and a new direction to the way in which the insurance sector operates in India.
I compliment the authors on the great job they have done in bringing out lucid presentation of the
report in simple language. I would especially like to congratulate the authors for bringing within
the ambit of their report, the study of both rural and suburban reach for insurance in the country. I
believe the trends are worth pondering over. I commend the report and have no hesitation in
saying that it deserves a serious reading.
Asha Bhandarker, PhD
RML Chair Professor of Leadership Studies & Dean Research
Management Development Institute, Gurgaon
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3. Acknowledgement
The idea to work on a research report titled ‘Online Insurance Trends in India’ was borne out of
the sheer lack of any existing available research on the topic. We got in touch with few business
schools in the National Capital Region about a partnership and all of them showed their interest.
After due diligence, we decided to go ahead with the Management Development Institute,
Gurgaon.
We specially thank Gourav, Saurabh and Harsh, the three student participants from MDI for
tirelessly working on the report. We also thank Dr. Asha Bhandarker for agreeing to do the
foreword for this report and her kind words. In the end we thank the entire InsuringIndia team for
their help in making this report possible.
We are very glad with the outcome of the research and are proud to be part of this initiative.
Bhavesh Sharma
Managing Director
InsuringIndia.com
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4. Table of Contents
1. Methodology ............................................................................................................................. 5
1.1 By Regions ........................................................................................................................... 5
1.2 By Cities............................................................................................................................... 6
2. Executive Summary ................................................................................................................... 7
3. The Trends ................................................................................................................................. 9
3.1 Overall................................................................................................................................. 9
3.2 Health .................................................................................................................................. 9
3.3 Term .................................................................................................................................... 9
3.4 Motor ................................................................................................................................... 9
4. The Big Picture ........................................................................................................................ 10
4.1 Geography ......................................................................................................................... 10
5. Health Insurance Trends .......................................................................................................... 12
5.1 Geography - Small is also Big ............................................................................................ 12
5.2 Cover – Average National Online Health Insurance Cover is INR 4.2 lakh....................... 13
5.3 Product - Family Always Comes First ................................................................................ 15
5.4 Age - Online health insurance is driven by 30 to 39 year olds .......................................... 16
6. Term Insurance Trends ............................................................................................................ 18
6.1 Geography - West and North driving the demand............................................................. 18
6.2 Age – Maximum term insurance seekers start at 31 years .................................................. 20
6.3 Cover – Average cover across India is more than INR 40 lakh .......................................... 21
6.4 Policy Period - People desire term insurance with bigger term periods ............................. 24
6.5 Gender - Females are highly under insured ....................................................................... 25
7. Motor Insurance Trends ........................................................................................................... 28
7.1 Geography - North India has the maximum demand ........................................................ 28
7.2 Product - Comprehensive policy is most popular .............................................................. 30
7.3 Insurers - Private insurers need to relook their strategy ...................................................... 31
8. The Last Word ......................................................................................................................... 35
9. Cases........................................................................................................................................ 36
9.1 Health Insurance needs of an Average Indian ................................................................... 36
9.2 A Farmer’s Quest for Agriculture Insurance ....................................................................... 37
10. About Us ................................................................................................................................. 38
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5. 1. Methodology
The main objective of the report is to highlight the emerging trends in Online Insurance in India.
For the purpose of this research, we used the primary data of the visitors who visited our portal
www.insuringindia.com from a six-month period preceding October 2011. The data was scrubbed
clean of all the personal information, i.e. names, numbers, email ids and addresses. Outliers in
different product categories were removed. In the end, out of nearly one million visitors, a sample
of more than 75,000 was selected for the study. Three products namely, Motor and Health
Insurance (Non-Life) and Term Insurance (Life) were compared. For this, the sample has been
compared against demographic data available from the Census of India, 2011 besides other
available research, references to which are given, both in the report and at the end of the report.
For the purpose of analysis, we have classified India by regions, states and cities.
1.1 By Regions
According to the administrative division of Government of India, the country is divided into 5
zones. We included the North-Eastern states as part of the East India region.
Region States
Delhi, Chandigarh, Punjab, Haryana, Jammu and Kashmir, Himachal
North India
Pradesh and Rajasthan
West India Goa, Gujarat, Maharashtra, Daman and Diu; and Dadra and Nagar Haveli
Karnataka, Andhra Pradesh, Tamil Nadu, Kerala, Lakshadweep,
South India
Pondicherry; and Andaman and Nicobar Islands
West Bengal, Jharkhand, Orissa, Bihar, Sikkim, Arunachal Pradesh,
East India
Meghalaya, Mizoram, Manipur, Nagaland, Assam and Tripura
Central India Madhya Pradesh, Uttar Pradesh, Chhattisgarh and Uttarakhand
Regions
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6. 1.2 By Cities
We have used a 5-point classification from Tier I through Tier V. The cities have been classified
according to their population. The population figures are from the recent Census of India, 2011.
The classification is as follows
City Classification Population Examples
Tier I 40 lakh and above New Delhi, Kolkata, etc.
Tier II 20 lakh to 40 lakh Jaipur, Lucknow, etc.
Tier III 10 lakh to 20 lakh Indore, Patna, etc.
Tier IV 5 lakh to 10 lakh Guwahati, Mysore, etc.
Tier V Below 5 lakh Palwal, Bilaspur, etc.
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7. 2. Executive Summary
The response to online insurance products has amazed everyone. What started as a novelty
product is being lapped up by the Indian consumers. The annual online sale projections of
companies have been met in less than two months. The Indian Insurance regulator, IRDA, recently
came up with an application to compare ULIP products (Unit Linked Insurance Product). So much
so that the public sector life insurance giant LIC has plans for coming up with a game changing
online term insurance product shortly. We believe these trends suggest how the future of
insurance is going to be in India. People are not just going online to check and compare insurance
quotes because it is convenient, for growing number of Indians; it has now become a necessity. As
with many sectors such as travel and retail, internet is now looking to transform the insurance
sector in India.
The regulators, and the insurers, have been trying very hard to increase the insurance penetration
in India. Despite that, insurance penetration (ratio of premium to GDP) is only 5.1% (IRDA Annual
Report 2010-11), which is less than the world average. With nearly 50 insurers, each having
multiple distribution channels, one hoped the insurance penetration would be better. Comparing
us with other countries with a more mature insurance market, one very clear difference is visible.
Indian insurance has a very nascent online presence as compared with countries like the US, UK,
Italy, Spain and Germany. Online insurance sales account for more than 30% of all sales in these
countries compared to roughly 3% in India. The insurance industry there has seen a gradual shift
from complete offline model to a more online, less offline, model. We think this is the way to go
forward for the Indian insurance industry as well.
A country as big and diverse as ours has many challenges. One of the biggest challenges always, is
to reach out to the maximum people at the lowest possible costs. Google is potentially reaching
out to a large chunk of India’s online population by providing customized searches in 10 Indian
languages. Warren Buffet’s Berkshire Hathaway recently opened its operations in India by ‘not
opening an office’ – pure online model. They are selling motor and travel insurance through the
internet and telephone, a model they have already proved to be highly successful. GEICO of US, a
USD 28 billion company, is the 3rd largest auto insurer in that country.
Online insurance may be a new and unchartered territory for many insurance shoppers in India;
however it seems to be the way forward. With only 10% of the population being online, the
potential is huge. India is the 3rd largest market for Facebook and it expects the country to reach
the 1st rank in a not so distant future. This growth of the internet, supported by the ever increasing
young population of this country, has fueled the growth of many online trends. Ecommerce is a
big success story. People have less time and an increased faith in products and services sold
online.
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8. In this report, we analyze insurance buying trends of visitors to our portal www.insuringindia.com.
The study reveals some interesting and surprising outcomes that should be of interest to all the
stakeholders in the Indian Insurance Industry. Some of key trends that we observed are
summarized below:
 1 out of every 3 visitors is from smaller towns - less than 10 lakh population - which
incidentally have the maximum internet density, even better than top 8 metros
Health Insurance
 Average age of online health insurance shopper is 39.9 years
 More than 50% of the population is looking for a cover size between INR 3.5 lakh to 4.5
lakh
 Average National Online Health Insurance Cover is INR 4.2 lakh
 Average health shopper in smaller cities is demanding bigger cover sizes compared to
fellow citizens from big metros
 Almost 80% shoppers are looking for Family Floater products
 2 out of every 5 people looking for health insurance are aged between 30 to 39 years
 The middle aged population (30 to 49 years) accounts for 2 out of 3 online health
insurance visitors
Term
 Top 5 states make up for almost 60% demand against a population share of almost 30%
 The urban term insurance demand is equally distributed amongst the bigger and smaller
cities at 50% each
 The average term insurance seekers start early at 31 years
 1 out of every 2 shoppers is aged between 30 to 39 years
 9 out of 10 shoppers are from age group of 20 to 49 years
 Average National Online Term Insurance Cover is INR 46.1 lakh
 Average term insurance cover across all 5 regions is more than INR 40 lakh
 10% of online term insurance shoppers are smokers
 Every 2nd customer is looking for a policy period of 25 years or more
 Females are highly underinsured with only 4% of the total term insurance sample
Motor
 Almost 90% of the visitors are looking for Comprehensive Policies
 At 56% of the total motor insurance demand, Comprehensive Renewal is the most popular
product
 7 out of every 10 shoppers reported their previous insurer to be a private insurance
company
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9. 3. The Trends
The data has been analyzed across different categories for all three (Health, Term and Motor
Insurance) products. The trends have been found across the following classification:
3.1 Overall
 Geography
3.2 Health
 Geography
 Age
 Cover
 Product
3.3 Term
 Geography
 Age
 Cover
 Policy Period
 Gender
3.4 Motor
 Geography
 Product
 Insurers
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10. 4. The Big Picture
4.1 Geography
Exhibit 1: Online insurance demand (Top 10 States)
Maharashtra
19% 18% Delhi
Andhra Pradesh
Karnataka
3%
Gujarat
4% 14% Uttar Pradesh
5% Tamil Nadu
Haryana
6%
9% West Bengal
6% Kerala
7% 8% Rest of India
Insurance is not being trended necessarily from the areas with maximum population. Delhi shows
a very high demand across the spectrum of products analyzed although it ranks very low in terms
of population as compared to the rest of the country.
The top 10 Indian states account for 81% of the study sample. These states make up for 63% of the
country’s population. Maharashtra, which ranked 2nd on the Census 2011 ranking, leads in the
online ranking with 18% of the total demand. Delhi surprises with its huge online demand. With
only 1% of the country’s population it is ranked 2nd in its online demand. Uttar Pradesh, the most
populated state of the country is a lowly 6th rank. Looking at the diversity across these states, one
expects exciting trends if insurance products and their information is available to these regional
visitors in the languages of their choice. (Exhibit 1)
Looking at the demand from a region wise perspective is even more interesting. Eastern and
Central India with a share of over 50% of the country’s population are only trending an online
demand of 20%. 8 out of every 10 online insurance shoppers are coming from the regions of
Western, Northern and Southern India. (Exhibit 2)
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11. Exhibit 2: Online Insurance Demand (Regions v/s Population)
28%
South
21%
26%
West
14%
26%
North
13%
10%
East
26%
10%
Central
25%
Enquiries Population
The urban population has been the traditional drivers of the internet revolution everywhere. It has
been assumed that internet is the privilege of the big cities only. It is time we changed such
notions. We compared the sample with the recent ICube 2011 report. (Exhibit 3)
Exhibit 3: Urban Online Insurance Demand (Demand v/s Internet Density)
Online Enquiries Claimed Internet Users
42%
35% 37%
25%
22%
18%
11% 11%
Top 8 Metros Other Big Cities 5-10 Lac Towns Less than 5 Lac Towns
1 out of every 3 visitors is from the smaller cities and towns, i.e., semi-urban centers with a
population of 10 lakh and below. An average citizen from Adampur and Dhule is showing that
they are curious enough like their friends from Ahmedabad and Delhi. This demand is completely
against the conventional logic of smaller cities not being aware of internet and insurance. In most
of these smaller cities, insurers have a smaller presence, catered mainly though agents or
extension counters. Traditional leaders of the online market, the big metros have 42% of the total
demand. Insurers have always been looking for a justification to reach out to this population. One
reason why, until now, insurers chose to ignore the smaller cities was a lack of sufficient demand
to support costs. Our research shows that a large part of the insurance market in these cities is
waiting to be tapped. Online insurance with its ease of access and low cost can be an answer to
address the problems of insurers and customers alike.
© Page 11 of 40

12. 5. Health Insurance Trends
Health Insurance is the product with the maximum potential in the general insurance sector. It is
also the most popular product trending with maximum enquiries out of the sample researched.
Consumers are comparing premiums and benefits for health products available in the market.
We classified the health insurance trends across the following categories:
 Geography
 Age
 Cover
 Product
5.1 Geography - Small is also Big
The Tier V cities show the maximum online health insurance visitors second only to the 8 big
metros. This is an eye opener against common perception of the people in smaller cities not being
aware of health insurance. It seems that the government schemes such as Rashtriya Swasthya Bima
Yojana are making the average citizen of these smaller towns more and more aware of the basic
right to good healthcare. Most of these Tier V cities are also centers of high rural activity. An
average citizen of these towns and the rural population around them now wants better hospitals
and facilities instead of depending on the traditional Indian medicinal system. High demand from
these towns along with their capability to serve as rural hubs makes for an exciting prospect.
(Exhibit 4)
Exhibit 4: Online Health Insurance Demand (Cities – Tier wise)
Tier I 42%
Tier II 6%
Tier III 16%
Tier IV 12%
Tier V 25%
© Page 12 of 40

13. The average North Indian is the most curious online health insurance consumer. 1 out of every 4
online insurance shoppers is from the North with the region only accommodating 13% of the
country’s population. This is followed by South and West respectively. Eastern India is the most
under-insured region in the sample.
The top 10 state rankings are similar to the overall rankings shown earlier except Uttar Pradesh
and Tamil Nadu trading places. The top 3, Maharashtra, Delhi and Andhra Pradesh have a
combined demand of 40%. Interestingly, two big western states of Maharashtra and Gujarat make
the top 5 and all the 4 southern states make the top 10 rankings. (Exhibit 5)
Exhibit 5: Online Health Insurance Demand (State wise)
Maharashtra
17% Delhi
19%
Andhra Pradesh
Karnataka
4% Gujarat
4% 13% Tamil Nadu
4% Uttar Pradesh
Haryana
6% 10%
West Bengal
7% Kerala
7% 8%
Rest of India
5.2 Cover – Average National Online Health Insurance Cover is INR 4.2 lakh
More than half the population is looking for a cover size in the range of INR 3.5 lakh to 4.5 lakh.
This is not surprising considering that online buyers are big ticket buyers who are considerably
better educated and with more money to spend in comparison with their peers who buy through
other channels. Widening the range to INR 2.5 lakh to 5.5 lakh gives an INR 3 lakh window in
which 90% of online health shoppers were found enquiring. This is an opportunity area for
providers of health insurance.
The national average online health insurance cover is INR 4.20 lakh. The regions of Western and
Northern India have their average slightly more than this and that for the remaining 3 regions is
below this. (Exhibit 6)
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14. Exhibit 6: Average Health Insurance Cover (INR lakh)
West 4.39
North 4.31
National Average 4.20
Central 3.99
South 3.97
East 3.85
We compared the value of sum assured with the total enquiries demanded by the cities across the
country. The result gives us a sense of what an average consumer from these cities demands as a
cover size. The average ticket sizes of the top 10 cities make a very interesting find. Only two Tier
I Cities make the list along with two Tier II Cities. The rest are all smaller cities and towns led by
Ludhiana with an average ticket size of INR 5.7 lakh. An average health insurance shopper from
Ludhiana is asking for more value per person as against his friend from Chennai. (Exhibit 7)
Exhibit 7: Average health cover demanded by average health shopper (Top 10 Cities)
Ludhiana 566,162
Pune 515,445
Bhubaneshwar 509,123
Gurgaon 507,248
Mumbai 499,753
Lucknow 467,881
Noida 458,465
Navi Mumbai 453,870
Thiruvananthapuram 451,061
Chennai 448,090
Average Ticket Size (in lakh)
© Page 14 of 40

15. 5.3 Product - Family Always Comes First
A huge 79% of the health consumers are looking for Family Floater products and the rest for
Individual products.
The success of the Family Floater Health product can also be seen in the online model. Family
Floater (Self, Spouse & Children) is the most popular product with 57% demand followed by
Individual (Self) at 20% and Family Floater (Self & Spouse) at 15%. (Exhibit 8)
Exhibit 8: Online Health Insurance Products Market Share (in %)
Family Floater -Self + Spouse + Children 57%
Individual -Self 20%
Family Floater -Self + Spouse 15%
Family Floater -Parents 5%
Individual -Parents 2%
Family Floater -Self + Children 1%
The average cover for a Family Floater policy is INR 4.2 lakh and that for an Individual policy is
INR 3.9 lakh. Average cover size for all the products in the health insurance segment is more than
INR 3 lakh. The ticket size for health insurance products searched online is big and insurers can
specifically target the online customer with bigger cover size. The average cover per person is a
different story with the Family Floater population seemingly under insured at INR 1.4 lakh. The
average Individual health insurer is however doing just fine at INR 3.9 lakh. (Exhibit 9)
Exhibit 9: Average Health Policy Size (in lakh)
Family Floater -Self + Spouse 4.3
Family Floater -Self + Spouse + Children 4.3
Family Floater - Average 4.2
Individual -Self 4.0
Individual - Average 3.9
Family Floater -Self + Children 3.6
Family Floater -Parents 3.5
Individual -Parents 3.1
© Page 15 of 40

16. The average cover size per person seems to suffer with most people not going beyond the limit of
INR 4.5 lakh per policy be it Individual or Family Floater despite different number of members in
each policy. Hence, Family Floaters seem to be an under-insured segment while the Individual
health insurance appears the most protected segment. We believe the reasons for higher sale of
Family Floater covers are a one-cover-for-all policy as well as Family Floaters being cheaper for
younger families.
Consumers seem to be more price conscious than product conscious. Health insurance cover size
does not change with policy type. The policy size for Self is almost 29% higher than parents in the
Individual category.
Only 7% families reported three or more than three children. 93% families report up to two
children while shopping for family floater products. Thus the profile for a family floater health
insurance shopper is most likely to be Self, Spouse and up to two children (Exhibit 10).
Exhibit 10: Family Floater Policies (No. of Children wise)
Four 1%
Three 6%
Two 48%
One 45%
5.4 Age - Online health insurance is driven by 30 to 39 year olds
The average age of the online health insurance seeker is 39.9 years. Post this there is a gradual
decline in health enquiries. 90% of the health insurance enquirers had an average of 37.3 years.
An age-slab analysis shows that in most probability (41%) the customers are 30 to 39 year olds
and 2 out every 3 persons demanding online health insurance would fall in the 30 to 49 years old
category or what is called the ‘middle-aged’ population. (Exhibit 11)
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17. Exhibit 11: Online Health Insurance Demand (Age wise)
41%
25%
15%
12%
7%
1%
<20 20-29 30-39 40-49 50-59 >=60
We established a human life-cycle through the health insurance demand data that we analyzed.
Individuals first (34.5 years) get themselves a health cover, and then they get a health cover for
complete family (Self, Spouse & Children) when they anticipate future illnesses for themselves and
their children (39.3 years). (Exhibit 12)
Only 7% of the total health cover enquiries were for parents. The average parental age seeking a
health cover was around 57.5 years. When seeking Individual parental insurance for single
parents, the shoppers are younger (54.8 years) than when searching for a couple or family cover
(58.5 years).
We hope that with more people becoming aware of online health insurance, the age of the
average online health insurance shopper should come down.
Exhibit 12: Online Health Insurance Shopper Life Cycle
54.8 yrs 58.5 yrs
41.9 yrs
39.3 yrs Individual (Parents) 2%
FF (S+S)
15%
36.1 yrs
FF (Parents) 5%
FF(S+C)
1% FF(S+S+C), 57%
34.5 yrs
Self, 20%
30 35 40 45 50 55 60
Age (in years)
© Page 17 of 40

18. 6. Term Insurance Trends
Online Term Insurance is one product which has made the entire insurance industry see the
potential of the online distribution channel. Term insurance is traditionally a simple product.
Therefore, it makes it easy to sell it online. One can buy an online term insurance policy within
minutes today.
We track online term insurance trends across the following categories:
 Geography
 Age
 Cover
 Policy Period
 Gender
6.1 Geography - West and North driving the demand
Generally, population seems to have an inverse ratio to the number of enquiries for term insurance
from that region. An average citizen of Western and Northern India shows the maximum appetite
for online term insurance. The highly populated regions of East and Central India appear to be
most underinsured in comparison to the rest of the country. (Exhibit 13)
Exhibit 13: Online Term Insurance Region wise (Demand v/s Population)
30%
27%
25% 26%
23%
21% West
North
14% South
13%
10% 10% Central
East
Total Enquiries Population
© Page 18 of 40

19. The top 5 states make for almost 59% of the demand and only 29% of the population. With just
1% of the country’s population and 14% of the total demand, Delhi shows its important position
in the online insurance space. (Exhibit 14)
Maharashtra and Delhi are ranked 1st and 2nd; however Andhra Pradesh drops down to 6th rank.
Kerala is not in the top 10 making way for a new entrant at 10th rank, Rajasthan.
Exhibit 14: Online Term Insurance Demand (State wise)
Maharashtra
18% Delhi
21%
Karnataka
Gujarat
3%
Andhra Pradesh
4%
Uttar Pradesh
5% 14% Tamil Nadu
Haryana
5%
West Bengal
6%
8% Rajasthan
7% 8% Rest of India
The demand for online term insurance is split equally between the bigger cities and the smaller
cities and towns. This demand is more evenly distributed across the smaller cities as compared to
the bigger cities. The online consumer from the smaller cities has become curious enough to
match up to their fellow citizen from the big metros.
Drilling down further, Tier I cities make up the biggest urban market for the online term insurance
industry. Out of the remaining city classes, the Tier V cities have a huge demand with customers
asking for almost a quarter of the total demand.
© Page 19 of 40

20. Exhibit 15: Online Term Insurance Demand (Cities-Tier wise)
24%
Tier I
43% Tier II
Tier III
10%
Tier IV
Tier V
16%
7%
The Top 10 cities cater to 50% of the total online term insurance demand. The share increases to
54% in terms of the total sum assured. (Exhibit 15)
6.2 Age – Maximum term insurance seekers start at 31 years
The ideal age to buy term insurance is when one starts earning and has dependents to support.
The maximum online term insurance shoppers start at the age of 31 years. At this age the average
Indian may have a family of his own and this explains his need for term insurance.
The average age is around 29 to 31 years. The number of enquiries shows a steep increase at the
age group of 22 to 25 years and again at 27 to 32 years, after which there is a steady decline until
the age of 60. Dividing the number of enquiries as per age slabs gives a clearer picture. More than
50 % of all enquiries for term insurance are coming from users in the age group of 30 to 39 years.
Users in the age group of 20 to 29 years and 40 to 49 years each have more than 20% of
enquiries. Thus, users in these age groups make almost the entire online term-insurance seeking
population in India. (Exhibit 16)
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21. Exhibit 16: Online Term Insurance Demand (Age wise)
50%
22% 21%
6%
0.5% 0.6%
<20 20-29 30-39 40-49 50-59 >=60
6.3 Cover – Average cover across India is more than INR 40 lakh
The cover amount was categorized into following segments:
 < 25 lakh – Less than 25 lakh
 25 lakh to < 50 lakh – 25 lakh to 50 lakh
 50 lakh to < 1 crore – 50 lakh to 1 crore
 1 crore < - More than 1 crore
The national average cover for online term insurance is INR 46.1 lakh with the North and West
India above this and the other 3 regions below this demand. It is notable that the average cover
across all regions is more than INR 40 lakh.
In two categories, demand for term insurance is more than others – INR 50 lakh to 1 crore (31%)
and INR 5 lakh to 25 lakh (31%). Generally speaking, consumers are looking to go for policies
with maximum protection for their dependants. This also gives a sense of the average consumer
because term insurance cover is a direct factor of one’s annual income. (Exhibit 17)
© Page 21 of 40

22. Exhibit 17: Online Term Insurance Demand (Cover wise)
16%
31%
< 25 lakh
25 lakh to < 50 lakh
50 lakh to < 1 crore
31% 1 crore <
22%
Geographically, Rs 50 lakh to Rs 1 crore is the top demanded term insurance category in the West
and North India. INR 5 lakh to 25 lakh is the most in-demand policy cover size in the South,
Central and East India. (Exhibit 18)
Exhibit 18: Online Term Insurance Demand (Cover v/s Regions)
30% 1 crore <
5% 27%
50 lakh to < 1 crore
5% 23% 25 lakh to < 50 lakh
4%
10% < 25 lakh
9%
7%
7% 5% 5% 10% 10%
1% 1%
3% 3%
8% 8% 8% 2% 2%
3% 4%
West North South Central East
© Page 22 of 40

23. INR 50 lakh to 1 crore is most demanded in the Tier I, Tier II, Tier III cities and towns of India.
Showing a lower appetite for term insurance, Tier IV and Tier V towns threw up more enquiries for
INR 5 lakh to 25 lakh category.
The online sample reveals a much lesser percentage of visitors reporting themselves as tobacco
users as compared to the national average. The sample reveals 10% tobacco users against Global
Adult Tobacco Survey (GATS) – India 2010 figures of 35%.
It is interesting to note that though tobacco-users have a greater risk of death compared to non-
users, they demand lower policy size. Tobacco-users demand more of INR 5 lakh to 25 lakh term
policies than any other policy while most non-users demand INR 50 lakh to 1 Crore closely
followed non-users demanding INR 5 lakh to 25 lakh policies. This could also be attributed to
non-users being more risk conscious and therefore insuring themselves for bigger cover amount.
Thus, the non-users are better insured as compared to tobacco-users despite the latter having a
bigger need for term insurance.
A surprise lies in the age group comparisons. 20 to 29 year olds and 40 to 49 year olds demanded
a policy cover of the size INR 5 to 25 lakh more than any other cover size. People in the age
group of 30 to 39 years perceived highest life risk with INR 50 lakh to 1 crore term insurance
shooting to the top spot by a clear margin. In fact, as the age progresses, we see a gradual decline
in size of policy demanded, probably due to a decrease in perceived life risk. 50 to 59 year old
prospective customers show a clear preference (3.1% out total 5.7%) for INR 5 lakh to 25 lakh
policy cover. This may also be due to existing savings already in place to support the family and
possible retirement of policyholder at the age of 60. (Exhibit 19)
Exhibit 19: Online Term Insurance Demand (Cover v/s Age Groups)
50.1% 1 crore <
50 lakh to < 1 crore
8.7%
25 lakh to < 50 lakh
17.0% < 25 lakh
22.4%
20.6%
3.5%
11.2% 3.4%
7.0% 6.1%
4.3% 4.7% 5.7%
0.5% 13.2%
7.7% 6.4% 0.6%
3.1%
<20 20-29 30-39 40-49 50-59 >=60
© Page 23 of 40

24. 6.4 Policy Period - People desire term insurance with bigger term periods
The policy period was divided into 3 segments:
 <15 years – Less than 15 years
 15-24 years - 15 years to 24 years
 >=25 years – 25 years and above
Every 2nd consumer is going for a policy period of 25 years and above. Since most people retire by
the age of 60, this suggests that the ages of most buyers in this segment are in the early to mid 30s,
a trend also proved earlier. Consumers are looking for maximum policy periods to cover their
dependants against any eventuality. The consumer here seems well informed and is not going for
short term plans to save on premiums or because they help save taxes over a smaller period of
time but are actually looking to take maximum benefits from this product over a long term period.
This trend is visible across different geographical regions of the country. A policy period of 25
years and above is the most popular category across all regions.
We see similar trends when we compare the policy period with the cover size. With policies of 25
lakh and upwards, consumers show the maximum need for a period of 25 years and above
followed by 15 to 24 years and less than 15 years respectively as shown in the figure below.
However, this trend is reversed in the under 25 lakh segment. People in the 50 years and above
age group, of online term insurance consumers are looking for ‘low cover-low policy period’
products i.e. below 25 lakh and less than 15 years. Most of them will retire by the age of 60 to 65
and may already have enough savings to take them through a comfortable retirement period. Also,
as the age increases, the premium increases substantially, making term insurance less lucrative as
one grows old. Thus, these consumers plan very carefully, spending only as much as is absolutely
necessary. (Exhibit 20)
Exhibit 20: Online Term Insurance Demand (Policy Period v/s Cover)
<15 Years
3%
15-24 Years
11%
8%
>=25 Years
3%
6% 2%
11%
4%
20%
12%
9% 10%
< 25 lakh 25 lakh to < 50 50 lakh to < 1 1 crore <
lakh crore
© Page 24 of 40

25. The age group of 30 to 39 years with a policy period of 25 years and above is the single most
lucrative segment. A total of 31% of the visitors are from this category, more than any other
category. Every 2nd enquiry for term insurance was from the age group of 30 to 39 years and 9
out of 10 were from 20-49 years age group. (Exhibit 21)
Exhibit 21: Online Term Insurance Demand (Policy Period v/s Age Groups)
50%
7%
12%
<15 Years
22% 15-24 Years
21%
>=25 Years
5%
4%
4% 31%
10%
6%
13%
0.5% 3% 0.6%
6%
2%
<20 20-29 30-39 40-49 50-59 >=60
6.5 Gender - Females are highly under insured
Females form a minority in the total term insurance sample at only 4% of the total visitors. The sex
ratio of India according to the Census 2011 is 933 females for 1000 males. This gives an
indication of the extremely high levels of uninsured female population in India’s life insurance
sector. We compared the male and female samples against each other to give a sense of fair
comparison. The trends are very interesting especially from the perspective of the female
population.
© Page 25 of 40

26. Average female term insurance buyer prefers buying policies with shorter policy period compared
to her male counterpart. (Exhibit 22)
Exhibit 22: Online Term Insurance Demand (Gender v/s Policy Period)
52%
43%
29% 29% 28%
Male
19% Female
<15 Years 15-24 Years >=25 Years
Younger and older females buy more term insurance as compared to the males in the same age
groups. The males are more prolific buyers in the middle age group. (Exhibit 23)
Exhibit 23: Online Term Insurance Demand (Gender v/s Age Groups)
Male Female
51%
36%
31%
22% 21%
15%
13%
5%
2%
0.5% 0.6% 2%
<20 20-29 30-39 40-49 50-59 >=60
© Page 26 of 40

27. Average females in bigger cities are buying more term insurance in comparison with their male
colleagues in these cities. The males overtake the females in smaller cities and towns. (Exhibit 24)
Exhibit 24: Online Term Insurance Demand (Gender v/s Cities Tier wise)
Male Female
51%
43%
24% 22%
16%
11% 11%
7% 8% 8%
Tier I Tier II Tier III Tier IV Tier V
Females are buying policies with lower cover amounts and the males lead in all categories except
25 lakh and below. (Exhibit 25)
Exhibit 25: Online Term Insurance Demand (Gender v/s Cover)
Male Female
41%
30% 32%
25%
21%
20%
16%
14%
< 25 lakh 25 lakh to < 50 lakh 50 lakh to < 1 crore 1 crore <
© Page 27 of 40

28. 7. Motor Insurance Trends
Motor insurance is one of the popular general insurance products being asked for online. Online
renewal of motor insurance is possible on most insurance websites today with the customer able
to buy a cover within minutes. In case of new policies, the online process helps speed up things
by doing all the application process in a jiffy. We trended motor insurance across the most
popular product in motor, car insurance.
We compared motor insurance across the following categories:
 Geography
 Product
 Insurers
7.1 Geography - North India has the maximum demand
North India shows the maximum appetite for online motor insurance with one of every three
customers mainly due to Delhi showing a great demand. West and South India are not very far
behind.
State wise, Delhi leads the way with the maximum enquiries for this product. Almost every 5th
visitor to our motor insurance page was from the state of Delhi. This could be attributed to the
high number of passenger cars in Delhi. The top 10 states make up for 3 out of every 4 visitors to
enquire about motor insurance in the sample. (Exhibit 26)
Exhibit 26: Online Motor Insurance Demand (Top 10 States)
Delhi
19%
Maharashtra
25%
Haryana
Karnataka
Gujarat
13% Andhra Pradesh
3%
Uttar Pradesh
4%
Kerala
4% Tamil Nadu
8%
5% Punjab
5% All Other States
8%
6%
© Page 28 of 40

29. Considering the response from Delhi, it is no surprise that the city with maximum hits on the
motor insurance page is from Delhi. Surprisingly, Mumbai is not ranked 2nd in this list and comes
only at rank 4. Bengaluru comes 2nd and Gurgaon is 3rd. All the top 10 cities hold a little less
than 50% share in the overall demand. Thus, a greater demand comes from all the smaller cities
and towns across the country. (Exhibit 27)
Exhibit 27: Online Motor Insurance Demand (Top 10 Cities)
New Delhi
19%
Bengaluru
Gurgaon
Mumbai
6% Hyderabad
51% Pune
6%
Chennai
5%
Noida
Surat
4%
3% Ahmedabad
2%
1%2%
1% All Other Cities
If one looks at the urban demand from a Tier I through V classification, one understands that both
the bigger cities and smaller cities and towns have the similar demand.
Tier I and II cities (population of 20 lakh and above) and Tier IV and V cities (population of less
than 10 lakh) both have a demand of 44% each.
The Tier III cities make up the remaining 12%. Thus, any insurer looking to capture this segment
can’t afford to have a localized strategy. (Exhibit 28)
© Page 29 of 40

30. Exhibit 28: Online Motor Insurance Demand (Cities Tier wise)
30%
Tier I
39%
Tier II
Tier III
Tier IV
Tier V
14%
5%
12%
7.2 Product - Comprehensive policy is most popular
An overwhelming majority, 88% online visitors searched for comprehensive motor insurance and
rest for third party insurance. As much as 64% of the online market comprises of renewals and the
rest 36% make for the new car insurance. The main reason behind this could be car dealers
offering new car insurance at the time of sale of a new vehicle whereas when it comes to renewals
the consumers have to mostly look for it themselves. With a huge 56% share of the entire online
motor insurance market, comprehensive renewal is the most trended product category. (Exhibit
29)
Exhibit 29: Online Motor Insurance Demand (Products)
88%
56%
Renewal
New
12%
32%
8%
4%
Comprehensive Third Party Liabilities
© Page 30 of 40

31. 7.3 Insurers - Private insurers need to relook their strategy
Prospective customers looking to renew their motor insurance gave interesting insights into their
previous insurers. As many as 71% visitors checking renewal quotes were from private insurers
and only 29% were from the four PSUs. The market share of the PSUs is 59% and that of the
private insurers is 41% (IRDA Annual Report 2010-2011). This does not seem to be good news for
the private sector insurers. Despite the four PSUs having a commanding share in the market, the
average insurance shopper seems to be happy with them and does not want to change. The trend
is completely opposite for the private insurers. (Exhibit 30)
Exhibit 30: Online Motor Insurance Demand (Public Sector Insurers v/s Private Insurers)
Public Insurers Private Insurers
71%
59%
41%
29%
Non-Life Market Share FY 2010 Enquiries
We publish the charts for the top 10 previous year insurers across the country and the 5 regions.
(Exhibits 31 to 36)
Exhibit 31: Nationwide Top 10 Insurers (Previous Year)
Bajaj Allianz
14% 17% ICICI Lombard
New India Assurance
4%
National Insurance
5%
TATA AIG
13%
5% Reliance
IFFCO Tokio
6%
United India Insurance
10%
HDFC Ergo
8%
Bharti Axa
8% 10%
All Other Insurers
© Page 31 of 40

32. Exhibit 32: Western Region Top 10 Insurers (Previous Year)
Bajaj Allianz
13% New India Assurance
21%
ICICI Lombard
5%
TATA AIG
5%
Reliance
5% Royal Sundaram
15% National Insurance
5%
Cholamandalam
5%
HDFC Ergo
6% 13% IFFCO Tokio
7%
All Other Insurers
Exhibit 33: Northern Region Top 10 Insurers (Previous Year)
Bajaj Allianz
10% ICICI Lombard
16%
4% National Insurance
5% Reliance
6% TATA AIG
13%
IFFCO Tokio
7% New India Assurance
Bharti Axa
8% 12%
HDFC Ergo
9% Oriental Insurance
10%
All Other Insurers
© Page 32 of 40

33. Exhibit 34: Southern Region Top 10 Insurers (Previous Year)
Bajaj Allianz
12% ICICI Lombard
17%
5% New India Assurance
Reliance
5%
TATA AIG
12%
6% United India Insurance
Royal Sundaram
7% National Insurance
9%
IFFCO Tokio
9%
9% Oriental Insurance
9%
All Other Insurers
Exhibit 35: Eastern Region Top 10 Insurers (Previous Year)
National Insurance
13% 15% Bajaj Allianz
New India Assurance
6% HDFC Ergo
12% ICICI Lombard
6%
IFFCO Tokio
7% Reliance
10% Royal Sundaram
7% Bharti Axa
8% TATA AIG
8%
8%
All Other Insurers
© Page 33 of 40

34. Exhibit 36: Southern Region Top 10 Insurers (Previous Year)
ICICI Lombard
10% 14% National Insurance
3%
New India Assurance
4%
Bajaj Allianz
4% TATA AIG
14%
6% United India Insurance
Cholamandalam
7% Reliance
14%
IFFCO Tokio
11%
Bharti Axa
13% All Other Insurers
© Page 34 of 40

35. 8. The Last Word
A recent report on Indian Digital Consumer Industry by Avendus Capital says online insurance
accounts for 3% of the total insurance sales today. As per the last IRDA Annual Report (2010-11),
the total premium booked was 335,400 crores. Thus, we could infer that Rs.10,062 crores of
insurance was booked online by the end of last financial year. With analysts projecting
approximately 10% of total insurance being booked online by 2015 and the insurance industry
looking to double by then, we are looking at the online insurance sector being pegged at 60,000
crores by 2015, a whopping 6 times in 4 years.
Customers like the benefits of instant policy issuance, fast and convenient purchase process and
easy customization. Online insurance is simple and fast, has low acquisition costs for the insurers,
provides ease of accessibility and can help save both the insurer and consumer up to 50% in
costs. Chances of mis-selling and overpricing are negligible as everything from proposal forms to
premium calculation is logic driven. Insurance consumers in the near future will become more
demanding in search for more customized products. This level of customization is only possible
through faster and smarter online platforms. Customers will seek the convenience of easy
information availability through smart phones and tablets. Intelligent platforms which educate the
customer and at the same time allow easy comparison of various insurance products are thus the
need of the hour.
Not only is the internet changing the way people buy products and services, it is changing how
people make their buying decisions. The consumer today likes to do their research before making
a decision. People use the internet to compare and choose the products and services with the right
fit for their needs. A company’s website can help create the first impact.
We hope that the understanding one derives from this study helps the Indian Insurance Industry
evolve towards a better future especially in the online space.
© Page 35 of 40

36. 9. Cases
We interviewed two people from different parts of India. Both the interviewees had an impending
need for insurance albeit for different products. The cases in point show the difficulties faced by an
average insurance shopper in India.
9.1 Health Insurance needs of an Average Indian
Rajesh Kumar is a cloth merchant from the town of Siwan in Bihar. At 32 years, he is the primary
bread winner of a family of six which includes his wife, two children and his parents. For the last
couple of months, he has been looking for a health insurance cover for his family including his
parents. A friend referred him to an agent selling health insurance products of a leading private
insurer. Rajesh was not satisfied with the information he received from the agent. The agent tried
to hardsell the insurance products of his insurance company. Rajesh wanted to know if there were
other insurers who could offer him better services and coverage within his budget. He also wanted
to know if there were separate products available for his parents with benefits specific to old age
and critical illness. The agent had no clue about these products. Rajesh then visited offices of three
insurance companies, two private and one public, on his next business trip to the state capital
Patna. The private insurers advised about different products and specific products for senior
citizens. However, he was not happy as they did not offer any comparisons with similar products
of competitors. As a layman it was difficult for him to understand the insurance jargon used by
private insurers. He visited the regional office of a public sector insurance company, from where
he was rudely turned away. He did not have enough time to visit a branch office as he had to
leave in the evening. Despite spending almost an entire day, his position as a health insurance
shopper had not changed much except having some brochures.
In the end, he had to buy health insurance from one of the private insurers.
Three months later, he recounts his ordeal to his cousin Sunil, who faced similar dilemma six
months back. Sunil had checked insurance quotes from different insurers and a couple of web
aggregators, online. In the end, the premium he paid for a cover similar to Rajesh’s was 20%
cheaper.
© Page 36 of 40

37. 9.2 A Farmer’s Quest for Agriculture Insurance
Mange Singh is a hardworking farmer with 20 acres of fertile land in the district of Sonipat,
Haryana. He has all the modern farm equipment such as a tractor, access to a harvester, pumpset,
seeder, etc. He is a modern day farmer who likes to be updated with the latest trends and practices
in agriculture. However, the last years below normal rainfall left him worried before the new
harvest. He had heard of schemes like crop insurance and farmer insurance, but never really
thought he would need them one day. On enquiring with the local cooperative bank’s branch in
his village and with the Block Development Office he only got names of some insurance
companies. He had no way of knowing how to reach these companies. He discussed his situation
with the village headman and panchayat and someone suggested the internet. Luckily the
government had recently installed a computer with an internet connection in the village
panchayat office as part of a pilot project. On checking Mange is disappointed that there was not
even a single website which provided information about different types of crop insurance schemes
or farmer policies on one platform. Almost all insurers’ websites were in English, a language he
did not understand. Nevertheless, he found someone to translate the information for him. He was
surprised to find that many general insurers have completely ignored the rural segment on their
websites. Only a few insurers provide information which did not seem sufficient.
Mange Singh is still looking to insure his assets and is yet to find a solution.
© Page 37 of 40

38. 10. About Us
InsuringIndia.com
InsuringIndia.com is India’s first multilingual ecommerce portal and one of the leading online
insurance aggregators.
We provide an intelligent customer-centric online platform for our clients, in their language of
choice, to compare, choose and purchase all types of insurance products.
www.insuringindia.com
Management Development Institute (MDI)
Management Development Institute (MDI) was formed as an autonomous body in 1973, in
collaboration with several reputed institutions like UNDP, UNIDO, World Bank and ILO. MDI is
recognized in the business and education community for the outstanding growth it has been able
to achieve in a short time span. The first Indian Business School and Second in Asia to be
accredited by the Association of MBAs (AMBA), United Kingdom, MDI is consistently ranked
among the Top 5 Business schools in India. Over the years, students have joined well renowned
corporations and have done their alma mater proud with their exceptional performance and
professional approach.
www.mdi.ac.in
Research Team
Bhavesh Sharma bhavesh@insuringindia.com
Gourav Dokania pg10gourav_d@mdi.ac.in
Harsh Maru pg10harsh_m@mdi.ac.in
Saurabh Gothoskar pg10gothoskar_n@mdi.ac.in
External Resources
Census 2011 http://censusindia.gov.in/
IRDA Annual Report 2010 http://www.irda.gov.in/
Internet in India (I-Cube) 2011 http://www.imrbint.com/ and http://www.iamai.in/
India Goes Digital-November 2011 http://www.avendus.com/
Global Adult Tobacco Survey (GATS) http://www.who.int
India 2010
Changing Channels-Accenture Multi- http://www.accenture.com
Channel Distribution Insurance Customer
Survey
© Page 38 of 40

39. Contact Details
For more copies or other information please contact:
Corporate Office: Plot-8, Sector-32, Urban Estate, Gurgaon-122001, Haryana, India
Phone: 0124 – 499 88 88
Email: research@insuringindia.com
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© Page 39 of 40

40. © Page 40 of 40