by Kim S. Nash

Globalization: Choosing Technology That Fits Your Market

Sep 29, 2010
BPM SystemsE-commerce SoftwareFinancial Services Industry

U.S. customers think nothing of going online to buy insurance. But in India, one insurer is tapping an emerging middle class that’s only recently become ready to do business on the Web.

Aegon Religare wants to grow its insurance sales in tandem with the salaries of a burgeoning middle class in India. The fastest way to do it, company executives determined last year, would be to sell policies on the Internet—a novel way to market insurance in that country.

Six months after launching the site last October, the life and health insurer sold more than 4,300 policies—about eight times what it had projected. Now it averages 1,000 online policy sales per month. “This is a niche channel for us, but it allows us to get more sales from a different segment of the population,” says Srini Iyengar, director of IT and change management at Aegon Religare.

The company is a two-year-old joint venture of Aegon, an insurance firm in the Netherlands; Religare, a wealth-management company in India; and the Indian media powerhouse Bennett, Coleman. The online sales idea bubbled up during a strategy meeting of senior executives, including Iyengar, he says, and it puts Aegon Religare ahead of competitors that have yet to launch Internet businesses.

Hitting the New Sweet Spot

The company’s new sweet spot is Indians ages 25 to 40 who are comfortable buying products and services on the Web and whose incomes are growing—a segment anyone selling anything in India wants to target, Iyengar says. Middle-class Indians, defined as those spending $2 to $20 per day, make up 25 percent of India’s population, almost double the 1990 tally, according to the Asian Development Bank, which gives loans and advice to organizations working to decrease poverty in Asia.

Aegon Religare’s site provides forms that customers can fill out to qualify for various policies—a process familiar to many U.S. consumers. They can also make payments and schedule required medical exams. On the back end, Aegon Religare uses business-process management software from Cordys to integrate website transactions with its existing mix of customer-relationship management and policy-administration systems. Aegon Religare was already using the Cordys Business Operations Platform to coordinate sales and procurement among its 25 offices throughout India.

One of the biggest issues Iyengar had to deal with was convincing the business units that although online was a new channel for sales, the IT to make it work still had to be integrated with existing systems. They wanted at first to make the look and feel much different, which would have added to maintenance and support costs over time, he says.

According to Aegon’s surveys, online customers liked its prices, Iyengar says. Premiums for online policies are lower than the traditional ones because there are no agents’ commissions built into the rates.

Cannibalizing existing business doesn’t concern them, Iyengar adds, because the policies sold online aren’t available through agents and vice versa. In fact, the workforce liked the idea even more after seeing how the new channel creates leads for Aegon agents to sell add-ons such as accident riders.

Follow Senior Editor Kim S. Nash on Twitter: @knash99.