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IRDA’s draconian guidelines and the impact on insurance lead aggregators

Following IRDA’s draconian guidelines for websites aggregating information on insurance products of various companies and enabling comparison before buying, AlooTechie spoke to a few players in the business to understand their take on the same. Websites like PolicyBazaar, EasyPolicy, ApnaPaisa etc fall in this category.

Following IRDA’s draconian guidelines for websites aggregating information on insurance products of various companies and enabling comparison before buying, AlooTechie spoke to a few players in the business to understand their take on the same. Websites like PolicyBazaar, EasyPolicy, ApnaPaisa etc fall in this category.

Alok Bhatnagar, Co-founding CEO and Director, EasyPolicy.com said that the IRDA’s guidelines on Web aggregators are really not on the expected lines. “In our country, insurance sales are plagued by mis-selling. Web aggregators provide a transparent comparison of insurance products across Insurers and therefore serve a much wanted need of the market. To try to limit their functions is not in the best interest of end consumers.”

The regulations imposed would lead web aggregators, who until now, earned Rs 80-90 per lead from the insurer or broker, reduced to Rs10 per lead. Speaking on this, Alok Bhatnagar said, “There seems little logic in fixing CPL as Rs 10, as aggregators spend considerably more in acquiring the lead from Google and other sources. Similarly, why cap on 25 per cent on CPA? There seem to be really no reason for all these decisions by the IRDA in these guidelines.”

On the same issue, Mahesh Murthy, founder, Pinstorm tweeted “Dear idiot at IRDA, you regulated Rs. 10 cost-per-lead. Now regulate Rs. 0.50 @Google cost-per-click so I can deliver it.”

However, Bhatnagar welcomed the move on rampant selling of leads by some web-aggregators. “The number of players to whom one lead can be sold is now limited to either 3 insurers or one broker. This is a welcome move. However fixing CPL and CPA goes against the basic principle of internet of free pricing of leads,” Bhatnagar added.

According to Yashish Dahiya, CEO, PolicyBazaar.com the imposing guidelines would stop the advantages that aggregators provide the consumers. “Aggregation does two things. 1. Aware purchase – look at the proof, its mostly pure term and health products, which are barely sold in the retail markets by other channels. And 2. It reduces cost of acquisition. Why else would insurers use it,” Dahiya added

However Dahiya informed us that PolicyBazaar has requested the regulator for a hearing, and are awaiting their response.

However, some insurance players sounded happy with the move. A DNA report quoted GV Nageswara Rao, managing director and CEO, IDBI Federal Life Insurance, saying, “This regulatory action, which aims to ensure that the web aggregators refrain from displaying any biased information is a step in the right direction. But since they will now earn less from a lead, the aggregator business may not be as lucrative as before.”

“We are not too impacted as our core area was not lead generation and sales. We have been in fulfilment business through-out which thankfully is not majorly impacted. Easypolicy has not been a web aggregator in the sense of the term these guidelines have used. We do not sell leads as the primary revenue model. We prepare consumers by giving them relevant information on the products they want and sell it through our Brokerage house. Our existence is of a broker website than being a lead sales website. We would be happy to work with other web players to bring upon improvement in these guidelines,” Bhatnagar added.

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