What are Web Aggregators?

As per the definition of the Insurance Regulatory and Development Authority of India (IRDAI),
Insurance Web Aggregators compile and provide information about insurance policies of various
companies on a website. In other words, they collect data from various sources and databases, such
as insurance company websites, and compile this data to make it presentable to any potential
insurance policy buyers.

Role and Duties of Web Aggregators

Since these web aggregators have gained prominence in India, the Insurance Regulatory and
Development Authority has brought about a set of regulations for these aggregators, compiled as
the Insurance Regulatory and Development Authority (Web Aggregators) Regulations, 2013

(http://www.policyholder.gov.in/uploads/CEDocuments/IRDA%20Web%20Aggregrators
%20Regulatons%202013.pdf)

which define the role and duties of such aggregators. This set of regulations define the process of
attaining a license to act as a web aggregator, disclosure norms, penalties for aggregators without a
license, remuneration of web aggregators and other related matters.

While the role of web aggregators requires them to facilitate comparison of various insurance
policies by entering into agreements with insurers, it does not include endorsing any particular
insurer or advertising a particular insurance policy. The primary motive should be merely to provide
the required justified information to the potential buyer.

While performing its duties, an insurance web aggregator has to ensure that no inconvenience is
caused to the customer. It can act as an insurance broker or solicitor, contacting the potential buyer
directly. It may also provide the buyer's contact details to various relevant insurance companies,
provided the buyer is made aware of the fact that their contact details are going to be shared with
any such insurance company.

As per the final regulations of IRDA which have been finalised on 10th January, 2016, the insurance
web aggregator can be remunerated by charging a fee of Rs. 50,000 from the insurer for each
insurance policy or product of this insurer that it displays on its web page. Apart from this fee, it may
also charge premium or commission of sorts, of not more than 30%, for any conversions into a sale
and may also charge a pre-decided fee for certain other activities such as premium collection carried
out by it.

The Insurer's Reaction

Insurance is a large growing market. Various estimates say that there would be 450 million internet
users by 2020. The insurance industry has increased multiple-fold post the introduction of insurance
web aggregators in the market.
They have become extremely receptive to these aggregators and are rushing to enter into
agreements and tie-ups with them. They understand the reach of the internet and have played
wisely by embracing the power of the online aggregators, especially after the regulations provided
by the IRDA. The insurance web aggregators act as information providers, telemarketers, solicitors
and brokers.

They have made life so much more convenient for busy buyers today and have helped raise the
insurance industry of the country to an all-new high. The scope for them is enormous today since the
online market is one so vast that leaving it untapped would be a grave blunder on the part of the
insurance companies.

Capital Requirements

1. An applicant seeking to become an Insurance Web Aggregator under these regulations shall
have a minimum paid up capital/ contribution of rupees twenty-five lakhs.
2. The applicant shall also comply with the Rule, Regulation, Circular, Guidelines, etc. issued in
respect of Indian owned and controlled