What is the Role of Insurance Web Aggregator?
IRDA

What is the Role of Insurance Web Aggregator?

7 Mins read

Online insurance web aggregators are defined as systems whereby the insurance consumer can look for an insurance product in comparison with various products with different insurers under one roof. These websites assist in completing the whole process of buying insurance, where such crucial details as policies, premiums, coverage, and other relevant information are clearly available. One does not have to surf the net for several insurer’s websites or see an agent to give them options since one can have numerous options at the same place within the shortest time possible.

Usually, both the web source and the clientele are the strongest but not limited to hundreds or even thousands of insurance issuing firms, providing a variety of services such as life insurance, health insurance, vehicle insurance, and house insurance, among many others. They are more often than not dependent on technology resources in order to provide person-centric offers that take into consideration aspects such as the desired coverage, age, health or the budget of the person. More often than not, the aggregation providers make sure that they present some other helpful features like premium calculator reviews or exposure to policy documents.

The growth of web stats collecting resources proved to be very beneficial as potential clients in the insurance sector making choices of covers have resolved the indexed location of the highly used. It is sad, however, that rivals in the market, too, did not sit back while the insurers absorbed the monopolistic tendencies that these services could generate. Therefore, given the ease of using the insurance web aggregators, they have become a key pillar and an ally to twenty-first-century insurance consumers who need information before making a purchase.

Insurance Web Aggregator Under IRDAI Regulations

The Insurance Regulatory and Development Authority of India (IRDAI) is the official presiding authority that regulates the insurance industry sector and the insurance web aggregators are governed by the Insurance Regulatory and Development Authority of India (Insurance Web Aggregators) Regulations, 2017 [IRDAI (Insurance Web Aggregators) Regulations, 2017]. The application of these regulations on the insurance web aggregators shall position them under the mandates, embargoes, and approvals of the IRDAI. This shall also ensure that the web aggregator plays its role as an intermediary between the insurance buyer and the seller without any bias with respect to information offered about the products in question.

Section 2(o) of the Regulations defines an insurance web aggregator as a person registered by the Authority under these Regulations.

Also to note is Section 8 of the regulations, which lays down the provisions relating to the capital and net worth requirements for becoming an insurance web aggregator. Section 8(a) provides that –

(i) Any applicant who wants to become a web aggregator under these regulations shall need to have a minimum paid-up capital or contribution of Rupees Twenty-Five Lakhs

(ii) Where the applicant is a company registered under the Companies Act 2013, then the capital shall be issued and subscribed in the form of equity shares

(iii) In the case of a limited liability partnership, the contributions of the partners shall be only in cash

(iv) Any shares of the insurance web aggregator held as capital shall not be pledged in any form or manner to secure credit or any other facility and shall, at all times, be unencumbered.

While, Section 8(c) provides for the net worth requirements of the web aggregator and states that the net worth shall, at no time, fall below hundred percent of the minimum capital requirements or contributions as specified under Section 8(a).

The web aggregator regulations have been made to register them with the IRDAI prior to commencing any business activity. They have been entrusted with the responsibility of prohibiting the encroachment of the line separating their business as providers of information from the business of selling insurance. The major issue is to maintain objectivity in the promotion of insurance products, such that irrespective of the web aggregator’s recommendation, the customer should not be made to prefer any particular insurer.

Features of an Insurance Web Aggregator

The IRDAI (Insurance Web Aggregators) Regulations, 2017 shall, at all times, ensure, without fail, that clients receive the least biased and true information in respect of the various insurance products available in the insurance market. The IRDAI (Insurance Web Aggregators) Regulations, 2017 shall not recommend any particular products to clients unless such person is registered as an insurance broker.

The principal features of an insurance web aggregator is that they cannot collect fees from their customers but can get a majority of their earnings as commissions or charges from the insurer and they are under the statutory obligation that they have to strictly keep the personal information of the customers as safe, secured and confidential and must take all precautions against any breach of such information.

  1. Objectivity: Essentially, web aggregators are supposed to quote comparisons rather than the other websites that only provide a single or a few specifically targeted insurance companies’ product recommendations. This is their regulation that says they need to have more than one insurer.
  2. Standard display and systematic presentation: The product should have a uniform way of presentation in an easy-to-understand format so that the customers can evaluate and compare the product judged on one scale by its premium amount, cover, exclusions and benefits.
  3. Direct Selling prohibition: One of the key roles of aggregators is to compare and provide introductions to potential customers to the websites of insurers but they cannot sell the policies themselves unless they also become licensed insurers. Their purpose is not to attract customers but to just impart information only.
  4. Lead Generation: This can happen in different ways, like when the insurance web aggregator connects with the customers. Customer information is then submitted to the insurer as leads through insurance web aggregators. However, in this regard, customer consent would first have to be obtained as a prerequisite before it can be done.
  5. Cost effectiveness: The services do not cost anything for the consumer and the web aggregators receive a fee or commission from the service provider, that is, the insurance companies, within the guidelines. Such cost incurred by consumers for availing themselves for such services will not directly be borne by them, making the products quite cost effective and efficient.
  6. Consumer Data Security and Privacy: Aggregators are required to be compliant with the strict data guidelines where the customer details cannot be accessed or abused in any way. That comprises all aspects of data protection and data security.
  7. Consumer centered: Most of the insurance web aggregators offer more features to help educate the consumers with the help of linking tools and tutorials, ‘How To’ video clips or articles to prepare insurance comparison calculators and instructional videos to guide the customers of the products and services available at their portals.

Role and Benefits of an Insurance Web Aggregator

What is expected from insurance web aggregators in India is to facilitate the process of purchasing insurance by enabling consumers to compare and select from a variety of insurance products in one place. The role of insurance web aggregators is crucial when it comes to ensuring access and making informed options for use by consumers in the changing times of the Indian insurance sector. As per the provisions of IRDAI (Insurance Web Aggregators) Regulations, 2017, insurance web aggregators have a number of significant advantages in ensuring that their operations are transparent and focused on the customers’ needs.

So, an insurance web aggregator as per the IRDAI guidelines may increase the comfort and clarity of insurance related services received by the end users of insurance products through wider options and healthy competition among the providers.

  1. Easy Accessibility: Such websites are available all the time, and users can surf and buy such policies without any geographical or temporal restrictions.
  2. Informed Decision Making: The web aggregators provide tools like premium calculators, reviews, policy documents, etc., to the user with significant information so that the choices are appropriately made.
  3. Greater Competition: The increased internet aggregator is promoting a healthy competition for insurance companies in the market that eventually will mean a more affordable price and better products for the consumer.
  4. Value Addition: Many of such web aggregators have value-added elements on their sites in the form of educational blogs, explanations of certain policies to the users and premium calculators enabling the user to be active. This can also help the consumers to avail expert advice or consult experts before deciding which products to buy.
  5. Convenience: These tools are utterly time saving and allow customers to have multiple alternatives in one platform and no transferring between one insurer to another or even communication with brokers thus quickening the procedure to buy.
  6. Assessment of Insurance Products: Here, the web aggregators help the users compare the complete coverages of health, life, motor and diversified products of insurance in one page or screen from different providers. With better pricing and easy comparison, consumers can evaluate the pros and cons of policies on coverage, premiums, and other policy features.
  7. People-Centric: They are ready to assist the users and cut their waste spendings by offering them policies that have reasonable premiums that are friendly and better suited to their needs and their economic requirements. This also has the effect of raising consumer pricing of the services of insurance at a low level due to competition amongst the insurance companies making the products available to the consumers at cost effective prices.
  8. Sense of Assurance and transparency: Such practices allow the users of insurance web aggregators to expose the insurance transparency policy. Such users are able to appreciate the differences in products and understand that they do not need agents to do that for them.

Conclusion

To conclude, the developments in the insurance sector through Insurance Web Aggregators in India, as supervised by IRDAI under Insurance Web Aggregators Regulations 2017, are, therefore, pragmatic. They are providing an efficient, transparent, and simple internet-based platform for consumers to search and choose from a large package of available insurance facilities. Such comparative sites compare various policies offered by different companies by providing relevant data, such as premiums, cover, and terms, in an intelligible and uniform fashion.

Moreover, the IRDAI ensures that such online insurance web aggregators do not mislead customers or consumers with any biased information. In addition, they have to ensure the protection of customers’ information and their operation systems to reduce suspicion over online insurance platforms. In addition, the rules stipulate that aggregators shall practice corporate social responsibility in business so that their provision of leads does not compete unfairly in business, avoiding hidden charges and providing redressal mechanisms for consumer feedback.

Anyway, web aggregators appear to streamline and make short, though otherwise complicated and time-consuming, the process of buying an insurance policy, which in turn makes this process more transparent and spurs competition among the providers of insurance to the overall growth and development of the insurance sector in India. The true end benefit of the regulations on their activities is that such consumers receive more choices and convenience while improving the effectiveness and reach of the insurance sector in that country.

The Regulators of Insurance Aggregators, IRDAI Web Aggregators Regulations, 2017 provide certain features to enrich the consumer experience and bring due clarity to the process of buying insurance.

Related Services

Apply Insurance Web Aggregator License Online

Insurance Marketing Firm Registration

Bibliography

  1. IRDAI (Insurance Web Aggregators) Regulations, 2017
  2. www.irdai.gov.in
  3. www.policyholder.gov.in
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About author
I am a qualified Company Secretary with a Bachelors in Law as well as Commerce. With my 5 years of experience in Legal & Secretarial. Have a knack for reading, writing and telling stories. I am creative and I love cooking. Travel is my go-to for peace and happiness.
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