Let me share two news in the media with respect to the Insurance services industry.
- LIC will bring out an online policy purchase option.
- IRDA will allow agents to sell/promote policies from more than one Insurer.
Just now I received a query about LIC’s online policy. And a friend wanted me to write on the pros and cons of the second news.
As far as I know, LIC doesn’t have online policy purchase yet. The IRDA circular or notification is also not there.
The Reality
My understanding is this: Some journalist would have asked this question from a Top Management guy in the IRDA/LIC on the sides of a seminar/conference/press conference and the top management would have used such words as “likely to do this” or “not ruling out this”
The enterprising correspondent would have his/her own interpretations and this turns into news.
Ofcourse, I may be wrong too. LIC may come out with an online policy purchase option soon and IRDA also notifies the above mentioned news.
But I have been listening about this for quite some time. According to some resources, LIC has been working on bringing out such an online facility since 2 years. My question is why would it be so difficult for such a resourceful Corporation to build something that should not take more than 2-3 months and take so much time?
Even the regulation about Agents should not take more than 3 months. Let us wait and watch.
My Understanding:
My understanding of the two issues is this. While the online direct sales channel of LIC and giving more choice to Agents appears forward looking and customer friendly, in reality they would be opposed tooth and nail inside the corridors of IRDA and LIC.
LIC and other Insurers would confront IRDA with their cost of getting an Agent and training them. Why would LIC share it’s 13.50 lakh agents with it’s competitors.
Interestingly these 13.50 lakh agents would not like LIC on the issue of bringing out the online sales channel.
In any case, let’s wait and watch.
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