Insurance web aggregator

Buying insurance used to mean meeting somebody who sold one company's products. The insurance web aggregator is the regulatory answer to buying it on a screen instead.

The workbook defines it in one line. Insurance web aggregators are insurance intermediaries who maintain a website for providing online price comparison and information on the products of different insurers, and other related matters.

Three parts of that matter. It is an intermediary, so it is regulated, not a neutral bystander. Its medium is a website. And its function is comparison across insurers, which is what separates it from an insurance agent showing you one company's plans.

So a term plan comparison table you use to shortlist a policy is not journalism. It is a licensed intermediary's output.

That is worth knowing when the comparison ranks one product first.

Where it sits in the list. Section 1.8.3 enumerates the insurance intermediaries. Item 1 defines intermediary to include insurance brokers, reinsurance brokers, insurance consultants, surveyors and loss assessors. Items 2 and 3 cover the brokers and the agents. Item 4 is the web aggregator.

What the workbook does not say about it. This is the honest limit of the entry. Section 1.8.3 gives the web aggregator one sentence. It states no net worth requirement, no remuneration cap, no limit on the number of insurers, no lead-transfer rule and no registration fee. The X-B workbook carries no figure at all for a web aggregator, and any percentage or rupee threshold quoted for it would not come from this paper.

What the chapter does supply is the context that makes the model examinable. The web aggregator is the only intermediary in the list whose defining feature is comparison rather than representation. Section 1.8.4 requires agents to justify product suitability before selling and to hand over a signed benefit illustration at 4% and 8%. Section 1.8.5 exempts an IRDAI-registered agent or broker advising solely on insurance products from the SEBI (Investment Advisers) Regulations. Neither provision is written for a comparison website.

And the same chapter names the discount the model runs on. Section 1.7.1(d) notes that insurers may offer a discount on premiums for E-Insurance policies — policies issued in electronic form that are exempt from issuance in physical form. That is the cost advantage an online route can pass on, and the workbook attaches no percentage to it either.

Illustrative figures, because the workbook supplies none for this intermediary.

Mr Tandon, 34, wants Rs 1,00,00,000 of term cover and uses a web aggregator's site. It returns three quotes for a 30-year term:

The comparison is doing real work. The spread between the cheapest and dearest quote for the same Rs 1 crore of cover is Rs 5,400 a year, or Rs 1,62,000 over 30 years. No single agent appointed by one insurer could have shown him that.

Where the model has to be read carefully. A web aggregator is an intermediary, not a neutral comparison service. It earns from placing the business. So the ordering of a results page is not, by itself, advice, and the site is under no Regulation 16 duty to profile Mr Tandon before showing him prices.

What the workbook says he actually needs. Chapter 1 puts the sizing of cover through the human life value or needs-based calculation, and warns that under-insurance means the beneficiary is retaining part of the risk. If Rs 1 crore is the wrong number for his family, the cheapest Rs 1 crore quote on the screen is still the wrong policy. A comparison engine answers which insurer, never how much cover.

And the online discount. Had he bought the same policy in electronic form, the insurer may have offered a premium discount for an E-Insurance policy. The workbook names the discount; it puts no figure on it, so neither should an answer script.

Chapter 1 (Basics of Insurance), section 1.8.3, item 4, defines the insurance web aggregator as the fourth category in its list of regulatory aspects for insurance intermediaries, immediately after the brokers and the agents. Section 1.7.1(d) supplies the E-Insurance premium discount.

It is a one-line definition, so it is examined as a definition. Expect a match-the-intermediary question where web aggregator has to be picked out from broker, agent and corporate agent on the strength of the words website and online price comparison of products of different insurers. The distractor is usually a description of a direct broker, who also deals with multiple insurers but does so by representing the client rather than by running a comparison site.

• A web aggregator is an intermediary, not a media outlet. It is regulated under the same section that regulates brokers and agents.
• Comparison across insurers is the defining feature. An agent may represent more than one insurer in each line of business, but the agent solicits; the aggregator compares.
• It is not the same as a direct broker. Both deal with several insurers. The broker represents the client and can charge a client fee; the workbook's aggregator definition says nothing about representation or fees.
• The X-B workbook gives no figure for a web aggregator — no net worth, no remuneration cap, no insurer limit. A question demanding one is not set from this paper.
• The E-Insurance discount has no stated percentage either. The workbook says insurers may offer a discount on premiums for policies issued in electronic form and stops there.
• A comparison engine cannot answer how much cover is needed. That is the section 1.7.1(b) estimation step, and the under-insurance warning attaches to it, not to the price search.