DisclosureS made by the customer about health issues and habits is much higher in an online purchase of policy compared to offline purchases. Claim rejection is also lower in this category of policies, according to insurers.
Rejection of claims, including those filed before the end of the waiting period, is 1.5 per cent in digital policies, whereas it is 4 to 5 per cent in offline policies, finds insurance aggregator Policybazaar.
“The level of understanding of the policy and disclosure is higher in online purchases. An agent may try to hide exclusions and waiting period details from the customer on one hand and withhold details of the customer to the company on the other for the sake of a sale. An online customer, however, knows the risk of not disclosing details,” said Vaidyanathan Ramani, joint head, health insurance business unit, Policybazaar.com.
“Self-disclosure by the customer is always more detailed and credible. The customer buying online is in a risk reduction mode, hence the desire to clearly express and disclose health conditions and any other relevant information is high. Further email ID and mobile number capture is almost certain, thus the ability to contact a customer is higher,” said Gunjan Ghai, SVP and ntional head-branding and marketing and product development, SBI General Insurance Company.
Customers buying online or direct are more aware in general. Also the need to declare everything accurately to prevent any issues, at the time of claim, is a strong motivator, he added.
Sandeep Patel, MD and CEO, Cigna TTK Health Insurance too finds that the level of disclosures is high wherever customers self-declare. “This is because customers would rather err on the side of caution and online customers are far more educated and aware about claims rejection,” he said.
The customers who buy online would have usually researched the product and its fitment to their needs adequately. Hence the risk of mis-selling or not understanding the product being bought is lower. Further, distance marketing guidelines of the Irdai offer a great deal of protection to customer interests when buying online or direct. Hence post-purchase dissonance is also handled better, said Ghai.
Moreover, the communication made between the company or aggregator and the customer is transparent in an online transaction.
“All product and policy related documentation is available online at the convenience of a click / tap. All call recordings can be made available and are frequently referred to in case the need arises,’’ said Patel.
“The communication between us and the customer before the purchase is recorded and it is possible for the company to go back and check whether the customer was aware of the terms and conditions. Increased transparency and better disclosure leads to lesser claim rejections,” said Ramani.