"Ullu mat Bano"; Premium compare nahi negotiate karo!

“ullu mat bano; premium compare karo” goes an advertisement of a leading online premium comparison website or web aggregators as they are legally known. But the question is whether the online comparison really ensures you the lowest premium always? Fact of matter is it doesn’t due to following reasons –

1. Mismatch of technologies with insurers - Web aggregators don’t tie-up with all insurers as many insurer may not have capabilities of handling the online requirements of clients of web aggregators. This makes sure that majority of the public sector insurers are out of reach of the clients, who may give you the most favorable premium in motor insurance, health insurance etc.
2. Business Model – Web aggregators generate leads for the insurers they have tied-up with. Apart from lead generation income they may have marketing/promotion tie-ups based on the varied commissions shared by the insurers within the stipulated commission by the insurance regulator. Though the regulation prohibits advertisement of the insurer on the website of web aggregators, being Indians there are many jugaad possibilities where the insurer may end up placing advertisement in the sister concerns in group companies of the web aggregator indirectly incentivizing your risk to be placed accordingly and in turn influencing the outcome of your search and comparison.
3. De-centralized underwriting – multiple underwriters of public sector general insurance companies operate and behave independent of each other. i.e. each divisional office or branch of a public sector insurer may quote for your motor and health risk differently with varied discounting. Hence it become a major hurdle for the web aggregator to tie-up with the public sector insurers. Whereas with private sector insurers all quotes generated are centralized and fixed discount can be agreed with the insurer against a volume commitment. But in the case of life insurance 'term assurance" products where the premium rate are fixed and they have no scope for negotiation, the web aggregrators may give favourable results if you search provided above mentioned point (no.2) has no bearing.

Hence it is quite evident that web aggregators may not offer you the best of premium rate. Then the question is who does it serve? Well it serves those who need convenience and ease of transaction without exposing themselves to lot of agents of different insurance companies. It also offers comparisons of premium among the insurers they have tied-up with (not all); this may give the educated user a feeling of well informed decision or justification of his decision.

Many hardcore users of these online web aggregators were surprised to see that the premium offered by insurance brokers by way of actual across the table negotiations with the underwriters at the insurance companies, are far lower. Moreover at the time of claim there is no across the table claim advocacy for the policies taken through these web aggregators, which the insurance brokers offers.