Before choosing an insurance product, policyholders – more often than not — rely on the feedback given by people close to them. A recently-released consumer insights report from Policybazaar titled How India buys insurance came up with this observation.
The research examines the buying behaviour of 3,300 respondents from 27 cities across India including metros, tier-II and tier III cities.
These are some of the key observations of the survey:
Trust building is the key: Personal recommendation from friends or an agent who is a known person is the key reason in nearly 80 percent of cases.
In case of health insurance, recommendation played a role in 56 percent of cases whereas it stood at 54 percent in case of life insurance.
Association with the brand: Brand loyalty is also another key factor in trust building. 58 percent of respondents and 64 percent of respondents said that they trust the brands they are familiar with or the ones that have been around for a long time, both while purchasing health insurance and life insurance.
Affordability issues and lack of product understanding: Two key reasons that prevented the purchase of both health and life insurance included affordability issues and difficulty in understanding the product.
Before dropping out, more than 40 percent respondents cited high premiums as the reason for not purchasing health and life insurance, and nearly 53 percent dropped out because they found the products difficult to understand.
Adopting a blend of physical and digital: Nearly 80 percent respondents across health and life insurance looked online for information before purchasing the policy.
At the same time, more than 85 percent ended up purchasing offline primarily through an agent they knew or was recommended by friends and family.
On the launch of the report, Sarbvir Singh, CEO, Policybazaar, said, “With a detailed series of face-to-face interactions, we have gone beyond tier-I and tier-II cities in this research and also explored the perspectives of tier-III India. We hope that the insights from our research will pave the way for more relevant and consumer-centric solutions from the insurance industry.”
