IRDAI’s latest data on the status of insurance web aggregator shows that five online players have exited the online distributors business. Most of them did not opt to renew their distribution license.
These companies are Policies365, Mint Wise, Policy Mantra, Buy Smart Policy and MSF insurance.
Web aggregators compile and provide information on insurance policies of various companies on a website. IRDAI norms say that web aggregators have to provide unbiased information of insurance products like whole life insurance, term plan, health insurance, endowment, annuity on their portals.
These online distributors can charge an annual fee of Rs,50,000 per product for displaying its feature on their websites. They also charge for services at fixed rates for any other outsourcing work like collection of premiums from customers, telemarketing and advertisement. Apart from this, web aggregators can also charge commission in line with other insurance intermediaries such as agents and brokers.
With the exit of 5 players, the insurance industry has 27 web aggregators as on February 2019.
We spoke to two industry experts to understand the reasons for exit of online distributors.
“I think most web aggregators are doing well. However, since competition is cropping up in this space, making money may not be possible for a few of them,” said Kapil Mehta, co-founder, SecureNow Insurance Broker.
Seconding Kapil’s view, R Chandrasekharan, Secretary General of the General Insurance Council said that exit of a few players is natural in any business and it does not indicate any negative trend for the industry.
