Within a month of launching an online point of sales (POS) system for its distribution channels, HDFC Life has seen 40 to 50 per cent of business coming in from this system. This is despite the fact that customers have the option to buy policies through the new online system, CLICK2BUY, or through the existing offline form.
HDFC Life, which has taken the POS technology available in the market and customised it for its users by collaborating with reinsurer Swiss Re, says that the system will help customers purchase insurance at a faster pace by reducing the policy issuance time.
Frederick D'Souza, senior vice-president (underwriting and claims), HDFC Life said: "CLICK2BUY is a sales tool with the objective of simplifying the insurance purchase process for customers, helping our sales team to submit a zero-defect proposal online via Internet."
The system is driven by a rule engine, which ensures that every question required for underwriting a proposal is asked up-front. On clicking the submit button, the underwriting decision or medical reports required to underwrite are communicated to customers.
The system sends an email to the customer with the copy of the proposal form immediately on submitting the proposal. All the 12-15 different forms and checklist are rolled into one electronic form.
As the application form is an electronic web page, the sequence of questions is more logical and interlinked that result in gathering relevant information.
CLICK2BUY enables the company's sales team to underwrite and communicate the decision or requirement up-front to customers right at the POS. The company expects it to bring down policy processing time by 50 per cent.
The insurance policy being taken on the life of an individual requires detailed information, including habits, health, past illnesses, occupation, family history, travel details, income and nominees. This information is gathered in an application form called Proposal Form, which forms the basis of the contract between the applicant and the life insurance company.
The underwriters (risk assessors) review the application form and decide if the application can be accepted for issuing the insurance cover, or should the application be rejected because of the risk, or if more information / clarification is required to assess the risk. Based on the details received, they may also ask the applicant to undergo medical examination.
CLICK2BUY has been designed in such a way that relevant questions would be put across to a consumer. "In a physical form, all the questions are asked, whether they are relevant to a customer or not. This is a static form and you have to capture all the information. This software gets us right information. If an individual is not in a risky occupation and does not have ailments, no irrelevant questions are asked. For others, the questions are asked and future instructions for medical examinations and other similar tests are given," added D'Souza. He explained that about 80-90 per cent people get accepted without medical examination.
D'Souza said that the initial form-filling process would only take 15 to 30 minutes for customers. However, the later part of the process involving physical submission of documents for identity and address proof may take time. "In our second phase in January, we will develop a system to upload scanned documents in this platform, where we can respond to the customer in a day," he said.
Over the next two-to-three years, the insurer expects more than 50 per cent of business to be logged on CLICK2BUY and also contribute significantly to reduction of operational cost. "CLICK2BUY would also lead to virtualisation of insurance offices in the long term," said D'Souza. Since the Insurance Regulatory and Development Authority (Irda) is contemplating on introducing the concept of demat policies, HDFC Life plans to link CLICK2BUY to the demat format, as and when it is brought into the insurance industry.