Perception of complexity, risk hindrance to online insurance buying: Aviva-IMRB study

MUMBAI: Most Indian insurance-seekers are happy to research the product they intend to buy online, but they are unlikely to buy that insurance product online, a survey conducted by private life insurer Aviva India and Indian Market Research Bureau (IMRB) has found. What is surprising is that 40% of these individuals - termed Researching Online Purchasing Offline (ROPO) in the survey - don't have any problem buying lifestyle products online. Only 16% said they had invested in financial products through the online channel. "They are not even comfortable using financial instruments like credit cards (22%), net banking (23%) and debit cards (50%). There seems to be lack of trust in online transactions or sharing bank details," the study noted.

Perception of risk involved and the complexity of financial products has been identified as an obstacle to taking the final step. "As insurance is perceived to be a complex category, the human intervention in terms of an agent has a comfort factor for the buyers. 44% of ROPO would be concerned with the absence of an agent...the concept of ‘self-service’ online makes these customers uncomfortable in this high involvement and perceived high risk category," the report said. "This segment is uncomfortable about sharing their financial details whether its card or net banking on the online platform."

Overall, 44% of the ROPO segment attributed their aversion to online buying to absence of an agent. While 36% said that they liked suggestions from agents before making a purchase, 9% felt it was important to have an agent explain the policy features. Nearly 21% did not complete the process as they did not want to make the payment online. Lack of awareness of the claim settlement process was the hurdle for 21% of this segment.

In contrast, the actual online buyers were more confident about the medium, with 64% preferring the online mode for buying financial products. They were also comfortable using their credit card (53%), debit card (74%) and net banking (70%) online. "The consumers with higher disposition towards internet and netbanking/ online purchase have adopted online insurance purchase as well. While the offline mode for buying insurance is driven by the assurance (presence of a person/ agent and positive recommendations by acquaintances) resulting in better credibility perceptions, the online mode, on the other hand, is preferred for service convenience (self service, convenience of claim settlement, own online account), possibility of comparison with other products and ease of completing formalities," the study said.

The survey polled 733 respondents, who were regular Internet users, across Delhi, Mumbai, Bangalore, Pune, Ahmedabad, Lucknow and Chandigarh.