INTERNATIONAL JOURNAL OF MANAGEMENT RESEARCH AND REVIEW

INTERNATIONAL JOURNAL OF MANAGEMENT RESEARCH AND REVIEW E-COMMERCE ADOPTION BY IURANCE COMPANIES IN INDIA V Uma Maheswari* 1, Dr. Uma Chandrasekaran 2 1 PhD Research Scholar, Dept of Management Studies, School of Management, Pondicherry University, Pondicherry, India. 2 Assoc Prof, Dept of Management Studies, School of Management, Pondicherry University, ABSTRACT Pondicherry, India. 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 *Corresponding Author www.ijmrr.com 3300

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 3301

Table 1: Number of Life and General Insurance Companies in India (June 2013) 3.2 Model adaptation Type of Insurance Company Public Sector Private Sector Total Life Insurance 1 23 24 General Insurance 6 21 27 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 Stage Two - Enhanced Web Presence Stage Three - Interactive Web Presence Stage Four Transactional Sites serve as a public information source Static information on the government is provided FAQs may be found Contact information is provided 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 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 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 Contact Information, Company Information Insurance Overview/ FAQs Information about the products offered Feedback forms Detailed product information Media Centre Links to other sites Availability of various forms in PDF format Live Chat Online claim intimation Online Claim tracker Online Application tracker Online Policy Status Online Purchase Online premium payment Online account management Security features - https Copyright 2012 Published by IJMRR. All rights reserved 3302

Stage Five - Fully Integrated 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 N=24 Non-Life Insurance N=27 Private sector N=44 Public sector N=7 Stage One Emerging Stage Two Enhanced Stage Three Interactive Stage Four Transactional Stage Five Fully Integrated 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 24 (100) 27 (100) 44 (100) 7 (100) products offered Feedback forms 17 (71) 24 (89) 34 (77) 7 (100) Detailed product 24 (100) 27 (100) 44 (100) 7 (100) information 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 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) 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) Instant/Free quotes 2 (13) 8 (30) 10 (23) 0 Online Insurance Market 0 0 0 0 Place-Alliance with competitors Copyright 2012 Published by IJMRR. All rights reserved 3303

Stage One- Emerging 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 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 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 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. Copyright 2012 Published by IJMRR. All rights reserved 3304

Stage 5- Fully Integrated 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 phasewise 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: Stages Life (Non-Life) & Private (Public) Insurance Companies Stages of Web Presence 1. Emerging Phase 2. Enhanced Phase 3. Interactive Phase 4. Transactional Phase Hypotheses Life / Non-Life Private / Public Life / Non-Life Private / Public Life / Non-Life Private / Public Life / Non-Life Private / Public Means F F- Critical 90.80 / 93.4 0.12 5.317 90.80 / 100 2.67 90.75 / 89.75 89.25 / 96.50 22.80 / 32.40 29.60 / 16.80 79.67 / 64.33 69.67 / 75.33 0.009 0.684 2.589 8.192 3.301 0.179 5.987 5.318 7.709 Signific ance SIG In phase 3 indicating Interactive, 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. Copyright 2012 Published by IJMRR. All rights reserved 3305

Table 5: Content Analysis of web aggregator sites (N = 8) Type of support Website Attributes present Web aggregators 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 Copyright 2012 Published by IJMRR. All rights reserved 3306

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 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. LIMITATIO AND SUGGESTIO 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 Copyright 2012 Published by IJMRR. All rights reserved 3307

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: Prospects and Future. Electronic Commerce Research 2002; 2(1-2): 43-60. Ding X, Verma R, Iqbal Z. Self-service technology and online financial service choice. International Journal of Service Industry Management 2007; 18(3): 246 268. Grossman M, McCarthy RV, Aronson JE. E-Commerce Adoption in the Insurance Industry Issues in Information Systems 2004; V(2): 467-473. 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; 18(2): 24-41. 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 Copyright 2012 Published by IJMRR. All rights reserved 3308