In the life insurance segment alone, the total online business will grow to $21 billion by 2003. Premium income from the non-life policies will go up to $18 billion in the next three years.

However, will it be possible for private companies or even public sector monoliths to sell insurance online in India in the near future ? Insurance companies will probably have to wait for Internet penetration to increase and the still ambiguous e-commerce rules to take concrete form. However, what is not debatable is that new private entrants will change the rules of the game for the Indian insurance business, both in the life and the non-life segment, unfolding opportunities for software engineers and professional agents.

To peep into the possibilities and opportunities emerging out of the integration of insurance and information technology, the Associated Chambers of Commerce and Industry (Assocham) is organising a seminar on "Insurance@IT: New Paradigms", in New Delhi on Tuesday. The seminar, which will have speakers from both the insurance and the IT sectors, will explore the possibilities of selling insurance on the Net and gauge the opportunities for the growing Indian software industry. The speakers include IT secretary, PV Jaykrishna, Insurance Regulatory and Development Authority (IRDA) chairman N Rangachary, and representatives from public and private sector insurance companies.

According to a paper prepared by T Ramanan, chairman of the Assocham Committee on Insurance for the conference, life insurers were among the first to go online with informative content and features like actuarial calculators. However, he said that they have been relatively slow to embrace online commerce which currently makes up about 1 per cent of the total term life market. Only 12 per cent of insurance companies globally sell policies online.

Ramanan expects the percentage of term life sold over the Internet to increase from 1 per cent to 15 per cent by 2003, which in monetary terms works out to $21 billion. Although traditionally term life insurance has been sold through independent agents, the big shift will become manifest sooner than later. And more importantly, Ramanan said, Indians cannot watch from the sidelines as this paradigm shift in the insurance sector takes place.

In the non-life sector, automobile policies are popular over the Internet.Premium income, points out the paper, is expected to rise to $18 billion from about $1 billion currently. The growth of global online insurance business augurs well for the Indian IT sector. The exponential growth in the online insurance business will unfold significant business opportunities for software companies/consultants. The opportunities that rise out of this will be both global and local, because new entrants will have to either fine tune or prepare customised packages for the Indian market.

Online insurance will also help companies reduce costs and keep premiums low, a pre-requisite in a price sensitive market like India, said Ramanan. The government, however, will have to address problems relating to bandwidth on an urgent basis to make online insurance a reality in India.