NEW DELHI: Berkshireinsurance.com, the first Indian venture of US conglomerate Berkshire Hathaway, is seeking to crack the country's fledgling online market, and thus position itself for long term growth.
Launched in March 2011, Berkshireinsurance.com serves as a corporate agent for Bajaj Allianz General, owned jointly by indigenous operator Bajaj Finserv and German multinational Allianz.
Arun Balakrishnan, Berkshireinsurance.com's chief executive, told the Wall Street Journal: "Our focus is on understanding the online insurance space and building … brand recognition for Berkshireinsurance.com in this sector."
Berkshire Hathaway, led by investment mogul Warren Buffet, runs insurance subsidiaries like GEICO, General Re, NRG and the National Indemnity Company, and believes India holds major potential.
"On a group level, Berkshire recognises the India opportunity and would like to be here for a long time. From a macroeconomic perspective, India will play a key role in the growth of the company," said Balakrishnan.
At present, its Indian arm offers travel, health and motor insurance, with the goal of becoming both profitable and one of the top three internet insurance firms domestically over the next three-to-five years.
"We believe the gap between the top three to four players selling insurance online and the others will widen. The top players will be the ones who could map the online buying behaviour and can understand what the customers want," said Balakrishnan.
Among the other major organisations in this space are ICICI Lombard and HDFC Ergo, but the broader issue lies in encouraging India's estimated web audience of over 120m people to buy via this route.
"Competition is one of the big challenges. It is difficult to try and bring an offline process online. But insurance is now becoming a part of the buying behaviour of people," said Balakrishnan.
In an indication of the market's potential, some 350,000 enquiries linked to car and motor insurance are entered on Google, the search engine, a month, a total which should "grow exponentially" in time.
Alongside advertising on Google, the aim is to provide superior service so customers talk about their experience. Premiums have risen by 20% year on year and acquisitions are up by the same level month on month, suggesting this may be working.
"Word of mouth has a great influence on the decision to buy a policy online. We would want our customers to become the brand ambassadors of the company," said Balakrishnan. "We currently are focusing on the quality of our acquisition process and not just the volumes."
Data sourced from Wall Street Journal; additional content by Warc staff