Web-aggregators account for just 0.4% & Direct Online Sales at 2% of Health Insurance Premium
There is strong impetus of digitization in health insurance sales in India. A huge investment have already been made by Fintech’s in startups focusing in web-aggregation and online sales & distribution of insurance products in India. General and Health insurance which requires less capital infusion and has lower gestation period than life insurance has attracted huge investment in recent years. Major public and private banks in India have invested heavily in insurance sector and market health insurance products as part of general insurance business; most prominent being HDFC and ICICI.
A plethora of web-aggregators in the Indian market compete for third party online distribution model and a large number of Standalone Health Insurers (SAHI) have adopted online sales as a major distribution channel. Pandemic brought paradigm shift in the market as not only the health insurance companies, but regulator also became advocate of digital distribution channel of direct and third-party distribution.
So, how big the digital sales channel has grown into past few years?
Direct Health Insurnce Sales – Online and Web-aggregators
If we look at the IRDIA data on distribution channel of health insurance products than the share of direct online and web-aggregators remain small, in fact they are still miniscule. In FY22, Direct Sales – Online accounted for just 2% of all gross premium sales generated by health insurance companies. Contribution of web-aggregators in gross premium sales generation is at meagre 0.4%. Together, both Direct Sales – Online and web-aggregators account for just 2.4% of all health insurance product sales.
| Sales Channel -Health Insurance | Fy22 Sales Share % |
| Brokers | 26% |
| Corporate Agent – Banks | 8% |
| Direct Sale – Other than Online | 30% |
| Individual Agents | 31% |
| Direct Sale – Online | 2% |
| Web- aggregators | 0.39% |
| Others | 3% |
Individual agents remain the biggest distribution channel followed by Direct Sales by companies and Brokers, who together account for 87% of all healthcare insurance business in India.
Growth in share of distribution channel
If we look at the share of different distribution channels in health insurance gross premium over period of time, then there is a trend of slow acceleration in some channels and reduction in a few channels.
Web-aggregator business was non -existent in Fy15. It became somewhat visible in Fy18 when its share in health insurance gross premium grew to 0.47%. Despite pandemic onslaught which led to people looking for online solutions, web-aggregators of health insurance products have witnessed a major breakout in their business as its share in health insurance gross premium remained at 0.4% in Fy22. Share of Direct Sales – Online in the health insurance gross premium rose from 1.2% in Fy15 to 1.3% in Fy18 and by Fy22 its share doubled to 2.1%.
| Sales Channel -Health Insurance | 2014-15 | 2017-18 | 2021-22 |
| Brokers | 26% | 25% | 26% |
| Corporate Agent – Banks | 7% | 8% | 8% |
| Direct Sale – Other than Online | 29% | 29% | 30% |
| Individual Agents | 35% | 30% | 31% |
| Direct Sale – Online | 1.2% | 1.3% | 2.1% |
| Web- aggregators | 0% | 0.47% | 0.39% |
| Others | 2% | 3% | 3% |
Source: IRDAI
Growth of Direct Sales – Online and Web-aggregators
Direct Sales – Online channel of insurance companies have grown phenomenally in terms of value of gross premium generated over the period of time. In Fy15, Direct Sales – Online generated Rs239 crores worth of health insurance premium out of Rs 20,096 crore for the overall market. By Fy18, Direct Sales – Online gross premium had doubled to Rs476 crores. In Next four years, by Fy22, Direct Sales – Online gross premium had grown by 2.5x to Rs 1,524 crores. Despite its comparative small share amongst different distribution channel, Direct Sales – Online grew at CAGR of 33% for period of four years till Fy22.
| Sales Channel | Fy15 (Rs Cr) | Fy18 (Rs Cr) | Fy22 (Rs Cr) |
| Direct Sale – Online | 239.8 | 476.1 | 1524.4 |
| Web- aggregators | – | 173.8 | 288.1 |
Source: IRDAI
Web-aggregators being a small and new distribution channel managed to grow from Rs 173 crores in Fy18 to Rs 288 crores in Fy22. Web-aggregators value of gross premium generation grew at CAGR of 13% during this period.