E commerce adoption by insurance companies in india

IJMRR/ August 2013/ Volume 3/Issue 8/Article No-14/3300-3308 ISSN: 2249-7196

*Corresponding Author www.ijmrr.com 3300

INTERNATIONAL JOURNAL OF MANAGEMENT RESEARCH
AND REVIEW
E-COMMERCE ADOPTION BY INSURANCE COMPANIES IN INDIA
V Uma Maheswari*1,Dr. Uma Chandrasekaran2
1PhD Research Scholar, Dept of Management Studies, School of Management, Pondicherry
University, Pondicherry, India.
2Assoc Prof, Dept of Management Studies, School of Management, Pondicherry University,
Pondicherry, India.
ABSTRACT
Insurance companies in India are increasing their online presence and complementing their
traditional marketing channels with e-commerce features in their order fulfilment cycle. The
purpose of this study is to analyse the e-commerce adoption of life and general insurance
companies in India. Websites of insurance companies, web aggregators’ websites and bank
websites hosting insurance products form the universe and sample for this study. The
methodology used is content analysis and website characteristics and elements are coded for
their presence and role as a marketing channel. The presence of the characteristics is analysed
based on an adaptation of the UN-ASPA five stages of e-adoption framework. It is found that
the insurance companies are in the initial phases of e-commerce adoption and are yet to
develop an interactive and transactional web presence in order to work towards moving to a
fully integrated web presence. Web aggregators have elements that build product knowledge
for expanding the insurance market. Insurance companies that have banks as co-owners can
use cross-selling opportunities from the bank websites by promoting insurance products in a
more visible manner. This study has direct implications for marketing of insurance through
value-driven customer relationships by realising the complementary effect of the online
channel on the traditional insurance agents-led sales channel in a market that is crowded with
the creation of multiple, highly competitive and innovative insurance products. For
consumers, an interactive and transactional insurance website can provide informational
benefits, access, speed and engagement. This study has topical relevance especially at a time
when e-insurance is being explored as a major push to multi-channel marketing strategy of
insurance in India.
Keywords: e-insurance; e-adoption; insurance websites; online channel; web aggregators;
insurance marketing.
1. INTRODUCTION
E-commerce in India is in its nascent stage and promises high growth potential with revenues
set to increase by more than five times by 2016, jumping from US$1.6 billion in 2012 to
US$8.8 billion in 2016 (Forrester Research 2012). E-insurance involves the advertisement,
recommendation, negotiation, and purchase and claim settlement of insurance policies
through the Internet (Dasgupta and Sengupta 2002). The self-service option not only gives

customers more control over the service process but also reduces the workload of service
vendors (Ding et.al 2007). In developing countries, consumers and the company face a
number of barriers to successful e-commerce adoption due to less reliable
telecommunications infrastructures and power supplies, less access to online payment
mechanisms, and relatively high costs of personal computers and Internet access (Van Slyke
et al 2005). The insurance industry in India in particular is very slow in adopting e-commerce
due to lack of appropriate software infrastructure, non-awareness among customers and
security concerns (Dasgupta and Sengupta 2002). Although the insurance industry is slow in
e-commerce adoption, gains can accrue with increase in the pace of adoption, in terms of
reduction in transaction cost, introduction of competitive products due to flexibility and
speed, and the expansion of market due to generation of leads through the Internet (Grossman
et al 2004). The Insurance Regulatory and Development Authority (IRDA) of India
established to oversee the insurance sector also envisages promoting healthy competition and
protection of rights of policy holders by bringing more transparency to the provider client
relationships.
2. OBJECTIVES OF THE STUDY
To explore the e-Commerce adoption stages of insurance companies in India
To study the role of web aggregators websites in e-insurance in India.
To explore the cross selling role of websites of banks as co-owners of products of
insurance companies.
3. METHOD
Data has been collected by performing a Content Analysis of websites of life insurance and
general insurances companies in India and presence of elements have been coded to indicate
the extent of e-commerce adoption. The study has adapted the UN-ASPA Five Stages of E-Government
Model (2001) guidelines to the insurance sector in order to identify the stages of
e-commerce adoption. The study has also explored the role of web aggregators and of banks
as co-owners of products of Insurance companies. The analysis of the websites has been
carried out during the period March – June 2013. The list of websites has been accessed from
the IRDA website (www.irda.gov.in).
3.1 Study Population and Sample
The population and sample was websites of 24 life insurance companies and 27 general
insurances companies in the public and private sectors, 8 web aggregators and websites of 14
banks as co-owners of 10 Insurance companies. The study included the websites of all the life
and general insurance companies in India. The web aggregators included are: Policy
Bazaar.com, getmeinsure.com, easyinsuranceindia.com, myinsuranceclub.com,
insurancepandit.com, apnapaisa.com, eindiainsurance.com, and insuringindia.com.
Table 1 gives the details of the number of insurance companies in India. (Source:
www.irda.gov.in)
Copyright © 2012 Published by IJMRR. All rights reserved

Table 1: Number of Life and General Insurance Companies in India (June 2013)
Type of Insurance Company Public Sector Private Sector Total
Life Insurance 1 23 24
General Insurance 6 21 27
3.2 Model adaptation
The study has taken the United Nations and American Society for Public Administration’s
standard e-government model with five stages and has adapted the same for insurance
settings as in Table 2. The insurance website attributes that one should look for to infer
presence of elements indicative of each stage description have been derived.
Table 2: Adaptation of UN-ASPA Five Stages of E-Government for Insurance websites
STAGE
UN-ASPA Stage Description Insurance website attribute
Stage One -
Emerging Web
Presence
Sites serve as a public information
source
Static information on the government is
provided
FAQs may be found
Contact information is provided
Contact Information,
Company Information
Insurance Overview/ FAQs
Information about the products
offered
Feedback forms
Stage Two -
Enhanced Web
Presence
Access to specific information that is
regularly updated
A central government homepage may
act as a portal to other department sites
Useful documents may be downloaded
or ordered online
Search features, e-mail and areas for
comments are accessible
Detailed product information
Media Centre
Links to other sites
Availability of various forms in
PDF format
Stage Three -
Interactive Web
Presence
A National government website
frequently acts as a portal
Users can search specialized databases
Forms can be downloaded and/or
submitted online
Secure sites and passwords begin to
Emerge
Live Chat
Online claim intimation
Online Claim tracker
Online Application tracker
Online Policy Status
Stage Four –
Transactional
Web Presence
Users will be able to conduct complete
and secure transactions online
The government website will allow
users to customize a portal in order to
directly access services based on
specific needs and priorities
Sites will be ultimately secure
Online Purchase
Online premium payment
Online account management
Security features - https

Stage Five -
Fully Integrated
Web Presence
Country provides all services and links
through a single portal
No defined demarcation between
various agencies and departments
All transactional services offered by
government will be available online
Single Window / One-Stop Shop
Instant/Free quotes
Online Insurance Market Place
4. RESULTS AND DISCUSSION
4.1 Insurance companies’ web presence stages: Table 3 summarises the findings of content
analysis of 51 insurance companies’ websites including 24 providers of life insurance and 27
providers of non-life insurance products, covering the population of 44 private and 7 public
sector players in India as of June 2013.
Table 3: Stages of Online Presence: Insurance Companies’ Websites (N = 51)
STAGE
Elements Present on
Website
Life
Insurance
No. (%)
N=24
Non-Life
Insurance
No. (%)
N=27
Private
sector
No. (%)
N=44
Public
sector
No. (%)
N=7
Stage One
Emerging
Web Presence
Contact Information 24 (100) 27 (100) 44 (100) 7 (100)
Company Information 24 (100) 27 (100) 44 (100) 7 (100)
Insurance Overview/
20 (83) 21 (78) 34 (77) 7 (100)
FAQs
Information about the
products offered
24 (100) 27 (100) 44 (100) 7 (100)
Feedback forms 17 (71) 24 (89) 34 (77) 7 (100)
Stage Two
Enhanced
Web Presence
Detailed product
information
24 (100) 27 (100) 44 (100) 7 (100)
Media Centre 16 (67) 19 (70) 29 (66) 6 (86)
Links to other sites 24 (100) 27 (100) 44 (100) 7 (100)
Availability of various
23 (96) 24 (89) 40 (91) 7 (100)
forms in PDF
Stage Three
Interactive
Web Presence
Live Chat 4 (17) 8 (30) 11 (25) 1 (14)
Online claim intimation 5(21) 9 (33) 13 (30) 1 (14)
Online Claim tracker 3 (13) 9 (33) 11 (25) 1 (14)
Online Application
11 (46) 9 (33) 19 (43) 1 (14)
tracker
Online Policy Status 4 (17) 9 (33) 11 (25) 2 (28)
Stage Four
Transactional
Web Presence
Online Purchase 15 (63) 18 (67) 28 (64) 5 (70)
Online premium
21 (88) 16 (63) 33 (75) 4 (56)
payment
Online accounts 21 (88) 17 (63) 31 (70) 7 (100)
Stage Five
Fully
Integrated
Web Presence
Instant/Free quotes 2 (13) 8 (30) 10 (23) 0
Online Insurance Market
0 0 0 0
Place-Alliance with
competitors

Stage One- Emerging Web Presence
The analysis of the insurance companies reveals that all the companies, both life and non-life,
have given their contact and company information on their websites. 4 companies in life and
6 companies in general insurance have not talked about the importance of investing in
insurance and do not have a section for FAQs. All the websites have given details of the
products they deal with and 7 and 3 websites do not have feedback option for the consumers
in life and non- life respectively. It can be concluded that most of the life and non-life
insurance companies have crossed the first stage of emerging web presence.
Stage 2- Enhanced Web Presence
One of the satisfying features is that almost all the websites have a complete and detailed
description of their products (100%) and the facility to download the necessary documents
(96% in life and 89% in non-life) and links to other sites like IRDA, Insurance Ombudsman
and so on (100%). Only 16 life insurance companies and 19 general insurance companies
have media centre which includes Press releases, Press Coverage and TVCs. It can be
concluded that the Indian Insurance Companies have reached the enhanced web presence
stage. Consumers who use the on-line channel for information search are more likely to use
it for transactions (Montoya-Weiss et.al 2003) and thus an enhanced web presence is
definitely a key facilitator for increasing the market size through transactional web presence.
Stage 3- Interactive Web Presence
Indian insurance companies have a long way to go with respect to interactive web presence.
Only 4 life and 8 non-life companies have options for live chat. The consumers have the
facility of online claim intimation, claim tracker, application and policy tracker only in 9 out
of 27 general insurance companies; low presence is recorded for facility of online claim
intimation (5), claim tracker (3), application tracker (11) and policy tracker (4) in life
insurance. While application tracker that is a part of pre-sales and of immediate benefit to the
company records a much higher presence, the other facilities that are post-sales customer
service related initiatives lag far behind. Thus, interactive web presence that will help the
company reap customer and corporate related benefits of e-insurance like increase in sales,
better stakeholder relationships, transparency in transactions and so on (Odoyo and Nyangosi,
2011), is very weak for Indian insurance companies.
Stage 4- Transactional Web Presence
21 out of the 24 life insurance companies have online account and online premium payment
facility for their existing customers and 14 companies have the facility of online purchase of
insurance products. In general insurance, nearly 60% of the companies have these facilities.
Indian insurance companies have a better transaction web presence than interaction web
presence. But it should be noted that not all the policies are sold online and only a limited set
of products is available for online purchase as determination of premium for many insurance
products requires risk assessment through offline physical verification of documentary
evidence directly uploaded by the customer or by an insurance agent.

Stage 5- Fully Integrated Web Presence
None of the insurance companies have alliances with competitors with a view to help the
consumers in the selection of the right product and only 3 life and 8 non-life insurance
companies offer instant or free quotes.
4.2 Web presence stages ANOVA – Life/ Non-Life and Private / Public Insurance
Companies:
Taking the data from Table 3, percentage frequency scores for each attribute present phase-wise
were subjected to one-way ANOVA to test out the hypotheses that there is no
significant difference among Life/ Non-life and Private/Public providers on presence of
features signifying stages of web presence. It was seen that there was no significant
difference between the groups in web presence phases 1, 2 and 4. Table 4 shows the results:
Table 4: Web Presence Stages Life (Non-Life) Private (Public) Insurance Companies
Stages of Web
Presence
Web Presence
Hypotheses
Means F F-Critical
Signific
ance
1. Emerging
Phase
Life / Non-Life
Private / Public
90.80 / 93.4
90.80 / 100
0.12
2.67
5.317
NS
NS
2. Enhanced
Phase
Life / Non-Life
Private / Public
90.75 / 89.75
89.25 / 96.50
0.009
0.684
5.987
NS
NS
3. Interactive
Phase
Life / Non-Life
Private / Public
22.80 / 32.40
29.60 / 16.80
2.589
8.192
5.318
NS
SIG
4. Transactional
Phase
Life / Non-Life
Private / Public
79.67 / 64.33
69.67 / 75.33
3.301
0.179
7.709
NS
NS
In phase 3 indicating Interactive Web Presence, private insurance companies showed a
statistically significant higher mean than public providers. Private insurance companies had a
better presence on aspects related to customer interactions; viz., live chat, online claim
intimation, claim tracker, application tracker, and online policy status.
For phase 5, Fully Integrated web presence is shown by the single item ‘instant free quotes.’
Of the total 51 insurance companies, all the 10 companies that provide free quotes are private
providers and 8 of them are non-life insurance providers.
4.3 Analysis of Web Aggregator Websites
A total of 8 web aggregator websites were analysed out of which only 3 have registered
themselves with the IRDA (Insurance Regulatory Authority of India). This is a common
occurrence as many insurance providers are not fully IRDA compliant. The web aggregators
studied are policybazaar.com, getmeinsure.com, easyinsuranceindia.com,
myinsuranceclub.com, insurancepandit.com, apnapaisa.com, eindiainsurance.com, and
insuringindia.com. Table 5 presents the content analysis of the web aggregator sites.

Table 5: Content Analysis of web aggregator sites (N = 8)
Type of support
Website Attributes present Web aggregators
No. (%)
Company Information Support About us – Profile Info 8 (100)
IRDA registration 4 (50)
Information about partnership with
7 (88)
insurers
Careers 5 (63)
Consultative Support Free Quotes for life insurance 8 (100)
Free Quotes for General insurance 8 (100)
FQ for MF 2 (25)
FQ for Utilities 1 (13)
FQ for Loans 2 (25)
Ads of insurance companies 1 (13)
Knowledge centre 7 (88)
Leads to agents 1 (13)
Transaction Support Customer service support 5 (63)
FAQ 8 (100)
Interaction Support Online accounts for customers 3 (38)
Queries 6 (75)
Feed back 5 (63)
Web aggregators’ websites had the following elements and roles: Company Information
support, Consultative support, Transaction support and Interaction support (complaints,
queries, feedback etc). Seven web aggregators had disclosed the list of insurers with whom
they have a partnership (information). Five web aggregators offered to help customers in
tracking their claims, proposals, etc and customers were given options to download claim
forms from the aggregator’s website itself (transaction). The web aggregators posted blogs to
share views on various important issues related to insurance products and tried to answer
customer queries (consultative). Web aggregators for insurance serve more of customer
information and consultative function and less of an intermediary aid to sales agents. They
play an important role in acting as a comparison website for competitive insurance products
and providing free quotes to help customers make informed purchase decisions.
The web aggregators for insurance can thus be seen to be performing various roles and
providing a) comparison information on products b) customer service support and c)
consultation. The IRDA restrains web aggregators from hosting affiliate marketing programs
for competitive insurance companies on their websites and from acting as sales channels or
lead generation channels for companies. This role of the IRDA had to be factored into the
study as and when new guidelines were issued and aggregators that were found to be
performing roles of hosts of affiliate marketing programs at the start of the study had deleted
such content when their websites were accessed at a later point in time.
4.4 Analysis of bank websites offering insurance products and services
Thirteen (13) bank websites as co-owners viz., Canara HSBC OBC Life, HDFC Standard
Life, ICICI Prudential Life, IDBI Federal Life, ING VYSYA Life, Kotak Mahindra Life, SBI
Life, Star Union Dai-Ichi and India First Life Insurance Company have been analysed. Only
7 out of 14 banks websites have quick links to insurance sites and only 8 websites provide a

separate landing webpage for the insurance company of which they are the co-owners. (Table
5).
Table 6: Analysis of Bank websites offering insurance products and services
Attributes No. (%)
Quick Link from bank website to Insurance website 7 (54)
Separate webpage for Insurance 8 (62)
Facility of buying insurance/Enquiry from bank website. 6 (46)
The bank partners can benefit from cross selling insurance products on their websites. This
can be a highly potential opportunity as Internet Banking can be considered a relatively ‘high
velocity’ financial product / service in comparison to insurance which is ‘low velocity’ and
an unsought product; there being an unrecognised need for this category of financial
products. Customers logging in to a banking website can hence be prospects for insurance
using the ‘sales generator or accelerator’ idea employed in retail environments and the CRM
practice of the banks can generate targeted leads for cross selling of insurance products.
5. LIMITATIONS AND SUGGESTIONS FOR FUTURE RESEARCH
Content analysis of websites has the inherent limitation of sensitivity to the time period of the
study. At a time when e- insurance is on a high growth trajectory in registering a web
presence, the data is subject to dynamic changes. This study does not look at the efficacy of
the content in marketing of insurance and assumes that presence of website elements will
predict future outcomes. The inclusion of some websites has been limited by non-recognition
by the IRDA, the regulatory body for insurance providers in India.
Future researches in this area could look at the efficacy of multi-channel marketing of
insurance by analysing the linkage between e-adoption and goal achievement of insurance
companies and the effects on stakeholders including customers and sales agents as channel
partners.
6. CONTRIBUTION AND ORIGINALITY
This paper opens the discussion on e-insurance and website elements that can contribute to
effectiveness of this new channel in India. By adapting the UN ASPA model of stages of e-governance,
we have anchored the construction of the online channel to a set of measurable
and achievable sub-goals that is very important in a highly crowded market marked by the
introduction of innovative insurance products that require customer education. This study will
benefit the insurance companies, the regulatory authorities and the customers by enhancing
the benefits of the online channel that bears the promise of freed information access, speed,
and transparency that are much-needed attributes in the financial products market.
7. SUMMARY AND CONCLUSION
It is evident from the analysis that insurance companies in India have moved from the stages
of Emerging and Enhanced web presence to Interactive and Transactional web presence with
scope for reaching the stage of Fully Integrated web presence. If we try to link the insurance
companies’ objectives to their stages of e adoption for policy selection and recommendation,
policy purchase and e-certificates and online claim settlement (Prithviraj Dasgupta and

Kasturi Sengupta 2002), we can conclude that the companies are helping customers in
selecting the right products by giving a detailed description of the products and providing
premium calculators and other self-service or co-creation tools. Only half the companies offer
online purchase options and restrict it to a few select products. Most products require offline
verification of the information uploaded by the customer or agent. Online claim settlement is
still a distant dream for Indian customers.
The analysis of web aggregators reveals that other than providing instant quotes for life and
general insurance products, a majority of them provide customer support in terms of policy,
application and claim tracking. They definitely try to play a role in marketing of insurance by
providing comparison information, customer service and consultation services for e-insurance
in India.
The analysis of banking websites of insurance companies shows that the banks are yet to
utilize the potential for cross-selling and only half of them are using their banking websites
for promoting their insurance products.
REFERENCES
Dasgupta P, Sengupta K. E-commerce in Indian Insurance Industry:
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Ding X, Verma R, Iqbal Z. Self-service technology and online financial service choice.
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Grossman M, McCarthy RV, Aronson JE. E-Commerce Adoption in the Insurance Industry
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Lallana EC, Pascual PJ, Soriano ES. E-Government in the Philippines: Benchmarking
Against Global Best Practices. Kasarinlan 2002; 17(2): 235-272.
Montoya-Weiss MM, Voss GB, Grewal D. Determinants of online channel use and overall
satisfaction with a relational, multichannel service provider. Journal of the Academy of
Marketing Science 2003; 31: 448-458.
Odoyo FS, Nyangosi R. e-Insurance: An Empirical Study of Perceived Benefits. International
Journal of Business and Social Science 2011; 2(21): 166-171.
Van Slyke C, France B, Varadharajen S. A comparison of American and Indian consumers
perceptions of electronic commerce. Information Resources Management Journal 2005;
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Websites of 24 life insurance companies, 27 general insurance companies, 8 web aggregators
and 13 bank websites offering insurance products in India (March – June 2013).
Wigder ZD, Bahl M. Forrester Research, Trends In India’s eCommerce Market,
ASSOCHAM’s 2nd National Conference on e-Commerce 2012.
www.irda.gov.in

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